2 s.c.R.

SUPREME COURT REPORTS 989

THE STATE OF RAJASTHAN

MST. VIDHYAWATI AND ANOTHER (B. P. SINHA, c. J., J. L. KAPUR, M. HIDAYATULLAII,

J.C. SHAH and J. R. MUDHOLKAR, JJ.) Tort-Suit for damages-Liability of State for tortious aci of its Bervant acting as such-Con•titution of India, Arts. 300 (I), 294, 295-Government of India, Act 1935 (25 and 26 Geo. v. C.

42) s. 176 (1)-Gavernment of India Act, 1915 (5 & 6 Geo.

V. C. 61), s. 32-Government of India Act, 1858 (21 and 22

Victoria Ch. U.V. 1)" a. 65.

The respondent l's husband and father of minor respondent 2 was on February 11, 1952, knocked down by a Government jeep car rashly and negligently driven by an employee of the State of Rajasthan, while being taken from the repair shop to the Collector'• resodence, and mbsequently died in hospita'. On a •uit by the respondents for damages, the trial court decreed the same exparte as against the driver but dismissed it as against the State, holding that a• the car was being maintained for he use of the Collector, in discharge of his official duties, even though it was not being used for arty purposes of the State at the time of the occurrence, that was sufficient to absolve th" State of any vicarious liability as the employer. The High Court on appeal, disagreoiug with the trial court, decreed the suit as against the State as well.

Held, that the liability of the State for d images in respect of a tortious act committed by its servant within the scope of his employment and functioning as such was the same as that of any other employer.

The relevant provisions for determining the.extent of that liability were not those contained in Arts. 294 and 295 which were primarily concerned with the devolution of rights, assets and Iiabili ties but those of Art. 3o0 ( 1) of the Constitution, which by using the expression "in like cases" in its second part defined the extent of t!1at liability and referred back to the legal position obtaining before the promulgation of the Constitution.

Article 300 (1), read in the light of s. 176 (l) of the Government of India Act of 1935 , s. 32 of the Government of India Act, 1915, , md s. 65 of the Government oflndia Act, 1858, left no manner of doubt that ihe extent of the liability of a State must be :lie same as that of the East India Company as decided by the Supreme Court of Calcutta, in the case of Peninw.lar "nd- Onental Steam Navigation Co. v. The SecrefJl, ry of State for , India.

l~6S

F eiruar.v 2.

IHI

T/t, St.t,.f

Rojutltan

•• Msl. Vidriyawah

990 SUPBEME OOURT REPORTS [1962] SUPP.

Ptnin.na1ar and Oriental Buam N avi4alion Co. "· Tht. l'lecrda'rg of 8'attfor India, (1868-69) 5 Born.

H. C.R. 1, approved.

R•gard beln11: had to the stai:ies by which the State of RaJa<than wu ultimately formed, it was not possible in order to 'udl!'o the Hability of that State under Art, 300 (1) to go lvvond the last stall:O of inte11:T3tion leading to the formation of the Rajasthan Union on the eve of the Constitution and that l.'nion would be the corresponding State as contemplaterl by the Article.

Jn the ahsence therefore, of any law providino otherwise, the Union of Rajasthan, just as the Domin-.

Ion of India or anv of its constituent providences, would be vicarioW1ly liable for the acts of its servant.

Viewed fmm the stand-point of the first principle., tbe conch,, ion could not be otherwise. Ever since the days of the

P.ast India Companv, the Sovereil!ll was held liable to be sued In tort or in contract and the En11l!.h Common law immunity as it existed in F.neland before the enactment of Crown Pror.•din"' Act. 1947, never operated in India. With the advent of the Constitutfon and ina1111uration of th• Republic with a vi•w to "tabli<hincr a Sociali•tic State with its varied industrial and oth-r activitiC' •ncrai:?in11: larire numben of employeeo thrrc rould no iutifi,_ation, in principle or public iritettt, that the State •hould not be held vicariowly liahle for the tortious acts of it:s servant~.

Stat• of Rihar v.-Abdul Majir1, 02541 S.C.R. 786, rerferred to

As neither the Parli .. ment nor any State Legislature had thou11ht fit to rnact tlny law on the matter, a right saved by hv Art, 300 of the Comtitution,.the law must continue to be the same as it had been since the days of the East India Companv. ·

Crvn. APPRLLATE JURISDIOTION: Civil Appeal No. 263 of 1 !l."i8.

Appsl from the judgment and decree dated March 22, 1~:17 of the Rajasthan Hiizh Court in D. B. Civil First Appeal No. 36 of 1954.

G. C. Ka.'lliwal, Adoocate-General, jaBthan, H.R.

Khanna, B.}{.. Kapur, P.T>. Mt11l>n, for thll appellant.

8. N. Andley, Ramuhwar Nath and P.L. Vohra, for the reapondenta. .. "

-< •

1962. February 2. The Judgment of thE" Court was delivered by

SINHA, C. J.-This appeal, on a certificate granted by the High Court of Rajasthan under Art. 133(l)(c) of the Constitution, raises a question of considerable importance, namely, the extent of the vicarious liability of Government for the tortious acts of its employees, acting in the course of their employment as such. The Trial Court dismissed the claim for compensation as against the State of Rajasthan, which was the second defendant in the suit for damages for tortious act of the first defendant. Lokumal, who is not a partyto this appeal.

On appeal by the plaintiffs against the judgment and decree of the Trial Court, the High Court of Rajas thnn passed a decree in favour of the plaintiffs allowing compensation of Rs. 15,000/· against the State of Rajasthan also, which is the appellant in this Court.

The facts of this case may shortly be stated as follows. The first defendant Lokumal, was a tempo rary employee of the appellant State, as a motor driver on probl>.tion. In February, 1952, he was employed as the driver of a Governmi>nt j iep car, registered as No. RUM 49, under the Collector of Udaipur. The car had been ent to a workshop for necessary repairs. After repairs had been carried out, the first defendant, while driving tho car back along a public road, in the evening of February 11, 19'i2, knocked down one Jagdishlal who was walking on the footpath by the side of the public road in Udaipur city, mmsing him multiple injuries, including fractures of the skull and backbone, resulting in in his death three days later, in the hospital where he had been removed for treatment. . The plaintiffs who are Jagdishlal's widow and a minor daughter, aged three years, through her mother as next friend sued the said Lokumal and the State of Raja, sthan for damages for 'the tort aforesaid. They claimed the compensation of Rs. 25,000/· from both the

Th, State of

Rojatlaon ...

Jlst. Vidhjawcti.

Sinh• C. J,

ntSt•ef ilV-IMa

1111. V; A,,_.i;

sw..c J.

1!92 SUPREME OOUR'.l' llEl'OHTS (1002] SUPP.

defendants. The first defendant remained llX-parte.

The suit was contested only by the second defendant on a number of issues. But in view of the fact that both the Courts below have agreed in finding that the first dE>fendant was rash and negligent in driving the jeep oar resulting in the accident and the ultimate death of Jagdiahlal, it is no more necessary to advort to all the questions raised by way Of answer to the suit, except the one on which the appeal has been preesed before us.

The second defendant, who was the resp'ondent in the High Court, and is tho appellant before us, conte1led the suit chiefly on the ground that it was not liable for the tortious act rif its employee. The Trial Court, after an elaborate discuseion of the evidence, decreed the suit against the first defendant e:i:-parte; and dismissed it without oosts against the second defendant. On appeal by tho plaintiff•, the High Court of Hajasthan (Wenchoo C.J., and D. S. Dave J.) allowed the appeal and .lecreed the suit against the second deftndant also, with costs in both the Courts.

The State of Rajasthan applied for and obtained the necessary certificate "that the case fulfils the require men ta of Art. 1 :~3( I Xe) of the Uomtitution

of India". Tlie High Court rightly observed that an important pciint of law of general publio importance, namely, the extent of the liability of tho State in tort, was involved. '

In s11pport of the appeal, couns<.'l for the Appellant raised substantially two questions, namely, (1) that under Art. 300 of tho Constitution, the State of

Ra.jaathan, was ..iot liable as the corresponding Indian State wollld not have been liable if the ~.ase had arisen before the Constitution came into force; and

(2) that the jeep oar, the rash and negligent driving of wt:ch led to the claim in the suit was being ma.intained "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 oar was being driven back from the repair shop to the Collector's place, when the accident took place, it was doing anything in connection with the . exercise of sovereign powers of the State? It has to be remembered that the injuries resulting .in the. death of Jagdishlal were not caused while the jeep car was being used in connection with sovereign powers of the State. On the findings of the Courts below it is clear that the tortious a<it complained of had been committed by the first defendant in circumstances wholly disriociated from the exercise of sovereign powers.· The Trial Court took the view that as the oar 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 uf the category of cases where vicarious liability of the employer could a.rise, even though the oar was not being use at the time of the occurrence for any purposes of the State. The Trial Court accepted the contention of the State of Raja.sthan, on reaching the conclusion, after a discussion of the lega.l position, in these words : .

"Therefore it foilows that the constitution and control of the Collector's office at the Uda.ipur is an instance of exercise of 11overeign

powers." On appeal, the High Court disagreed with the Trial Court on the lega.l issue. Its finding on this issue is in these words :

''In our opinion, the Sta.ta is in no better position in so far as it supplies cars a.nd keeps drivers for its civil service. It may be clarified that we are not here considering the case of drivers 11mployed by the Sta.ta for driving vehicles which are utilised for military or public service."

Jffl

Ti., Stat.•/

Rojaslhatt

•• Mst. Yidhvawlll

Sinlui C. J.

"" n,811111 •f bjutW

•• -Jt, iYii

s;..w c. "·

994 SUPREME COURT REPORTS [l!l82) SUPP.

In ihe result, the High Court granted & decree to the plainWfs as against the second defendant also for the SUQl of Rs. 15,000/-. In our opinion, the High Court has t&ken the correct view of the legal

poaition, in view of the ciroumstan(){'S in which the occurrence took place.

Th~ more important question raised on this appeal rt>sta upon the true construction and effect

of Art. 300(1) of the Constitution, which is in these terms:·

"The Government of India may me or bf' sued by the name of the Union or India and the Government of a State may sue or he sued by the name of the State and may, subject to "' any provisions which may be made by Act of Parliaft'lent or of the Liislature of suoh State enacted by virtue of powers conferred by this Constitution, sue or be sued in relation to 1 heir respective affairs in the like cases as the Dominion or India and the corresponding Provinces or the corresponding Indian States might have sued or been sued if this Consitution had not been enacted."

It will be noticed that this Article consists of three pa.rte, namely, (I) the first part provides for the form and the cause-title in a suit and says that a State (omitting any reference to the Government of Ind; a.) may sue or Jie sued by the name of the State, and

(2) that a state may sue or be sued in reltion to its affairs in like cases as the corresponding Provinces vr the correflponding IndianSte.te might have ued or been sued if this Constitution had not been enacted; and (3) tha~ the second p:ut is subject to any provi- 11ions which may be made by an Act of the Le, eislature of tbe 13tate concerned, in due exorcise of its

legislative £unctions, in pursuance of po,:-ers c<•nferred bv the Constitution. The learned Adv0<ate- Ge.neral for the State of Rajaethan argued that the

second part of the artiole ba.s referenoe to the ex, tent 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, whioh 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 iu whose name suits and prooeedings may be commenced, in which the Government of a State may figure as plaintiff or as defendant, and that the Arti cle is not concerned with defining the extent of liability of a State. In other words, it was contended that Art. 300 was irrelevant for determining the vicarious liability of the defendent State in this case, and that there was nothing .in this Article definitive of that liability. In our opinion, it is not correct to argue that the provisions of Art. 300 are wholly out of the way for determining the liability of appellant State. It is true that arts. 2114 and 295 deal witlr rights to property, assets, liabilities and obligations of the erstwhile Gcivemers' Provinces or of the Indian States (specified in Part B of the. First Schedule). But Arts. 294 and 295 a.re primarily concerned with the devolution of those rights, assets and liabilit-ies, 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, hut only provi:ie for substitution of one Government in place of the other. It is also true that fust part of Art. 300, as already indicated, deals onlj with. the nomenclature of the parties to a suit or proeeeding but the second part defines the extent of liability by the use of the words. "in the Jike cases" and refers back for the determination . of s11oh cases to the legal position before the. eQ&otment of the

J961 -n. 81"'4"'

Rqj..UU..

•• Mtt. Yidh,....,, i

Si•ha C. J.

IHI

T/wdtDl.,, f v.

M1t.I'"~

s;, Ma c. J.

996 SUPREME COURT REPQRTI:j (1962) SUPP. t

Constitution.

That legal position is indicated in the Government of India Act, 1935 (25 & 26 Geo.

V c. 42), s. 176(1) which is in these words:

"The Federation may sue or be sued by the name of the Federation of India and a Provincial Government may sue or be sued by the aame of the Province, and, without prejudice to the subsequent provisiona of tt1is chapter. may subject to any provisions which may be m&de

by Act of the Federal or a Provincial Legislature enacted by virtue of powera conferred on that Legislature by this Act, sue or be sued in relation to their reapeotive affairs in the like caeee as the Secretary of State in council might have sued or been sued if this Act had not been passed." It will be noticed that the provisions of Art. ~00( J) ands. li6(l) are mtttatis mutandis substantially the eame. Section 176(1) refers b&ck to the legal poai tion as it obtained before the enactment of that Act, that is to eay, as it emerged on the enactment ofs. 32 of the Government of India Act, 1915 (5 & 6 Geo.Vo. 61) Sub-es. (l) and (2), which only are relevaat for our present purpoees, are in theae words:

"(l) The Secretary of State in Council may 111e and be sued by the name of the Secretary of State in Council, as a body corporate.

(~) Every person shall have the u.me remedies against the Secretary of State in Counoil as he might have h&d against the E&Bt India Company if t.he Government of Ind!,& Act, 1858, and this Act h&d not been paeeed.

As compared to the terme of Art. 300, it will be noticed that part (I) of that Article corresponde to sub-s. (1) of 11. 32 above, pa.rt (2) roughly, though not eI&ctly, corresponds to sub-a. (2), and pa.rt (3J of the Artiole, a.a indioated above, doea noi f'md 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, referted further back to the Act 21 & 22 Victoria Ch. CVI, entitled "An Act for _ the better Government of India.." As thia 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 wlrlle

vested in the said Company have been liable to in respect of debts and liabilities lawfully contracted. and incurred by the said Company." - It Will thus be seen that by the chain of enactments, beginning with the Act of 1858 and ending with the Constitution, the word "shall and may have and take the same suits, remedies• and proceedings"

in s. 65 above, by incorporation, . apply the Government of a State to the same extent, as they applied to the East India Company.

J'h, SIMI of

Rajas than

•• Jlsl. V idhyowoli

Sinil• C. J.

TlwSl,,..of

.~'""" v.

Mst. Vid•JawGti

liiMii c. J.

998 SUPRE¥E COURT REPORTS (1962] SUPP.

The question naturally a.rises : What was the extent of liability of the East India Company for the tortious aoti! of its sen ants committed in course of their employment as such 1 The exa.ct question now before us a.rose in a case in Calcutta, before the StJ.Preme Court of Calcutt&, in the ca.se of TM. Penif&sular and Oriental Ste.am Navigaliqn Company v. The Secretary of St.arefo-r lndia ('). The Calcutta oase appears to have been cited before the High Court in .Bombay in the case of Narayan K rish1W Land v. Gerard N &rman, Collector of Bombay(').

The Bom ba.y case related to an action of trespass, brought by the plaintiff against the Collector of Bombay in respect of certain land, which the Collootor believed was Government property. Of immediate importance to us in his case is the repo'rt of the Calcutta case, which does not appear to have been reported in any Calcutt& legal, journal though, on the face of it, it was judgment of far reaching importance and bas always been cited as the lea.ding case on the subject. It was a cas~ decided by a Full Bench, consiHting of Pea.cock, C.J., aud Ja.kson

and Wells, JJ., of the Supreme Court of Calcutta.

It arose out. of a reference by the Small Ca.use Court Jud~ under s. 5.i of .Act IX of 1850. The

case, as stiLted to the Supreme Court, was to the following etrect. A servant of the plaintiffs wa.s prooeeding on & highway in Calcutt& driving a carriage drawn by a pair of horses belonging to the plaintiftil.

The a.ocideat, which toolr. place on the highway,

was caused by the servantB of the Government, employed in the Government dockyard at Kidderpore, acting in a negligent rash manner. As a reeu.lt. of the negligent manner in which the Government employOOl!fu the dockyard were carrying a piece of iron funnel, one of the horses drawing the plaintiffa

" (I) D<cided, io 1861 and reporte4 ill the Newspaper "Enalllhman' ol

Octobu 23. 1861, lllld republlahocl in AW-UX •A'. to lho -bay Hilb Qilurt Rcporta, Vol. V, of die year 1861-69,

(2) (1868) V Bc.m. H.C.R. 1.

~.

carriage was injured. The plaintiff company claimed dama.ges against the Secretary of State for India for the damage thus caused. The learned Small Cause Court Judge came to the finding that the defendant's servants were wrongdoers in carrying the' iron funnel in the centre of the road, and were, thus, liable for the consequences of what occurred. But he was in doubt as to th, e liability of the Secretary of State for the tortious acts of the Govornment servants concerned in the occurrence in which the injury was ca.used to the plaintiffs' horse.

So the question, which was referred to the Court for its answer, was whether the Secretary of State was liable for the damage occasioned by the negligence of the Government servants, assuming them to have been guilty of such negligence as would have rendered an ordinary employer liable. In the course of their judgment, their Lordships began by examining the question whether the proviso to the jurisdiction of the Small Cause Courts to the following effect could be a bar to the suit:

"Provided lwa.ys 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 Col.iiloil 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 exooution of his office, or by any person in p'lii'SuancE) of any judg mentor order of any Court, or any such Judge or Judicill.i ()iijoer, or in 11.JlY suit for libel or slandec .'' (Pro\iiso to s. 25 of the Small Cause Court A.ct.). .

The Court came to'the oonolusion that the proviso was. not a ba.r to the sbit. Havillg disposed .-0f the preliminary question, the Court addresaed itself to

Tiu Sta" of

Bajaathan

Msl. Vidhyaw•ti

Sinha C. J.

n.si.1 .. 1 ••

1111. Yi<IA,.....ii

/lirtMC.J.

1000 SUPREME OOURT REPORTS (1962) SUPP.

the main controversy, which it described as "one

of very comiderable 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 oould have been, it was ueceaeary to provide by that section the mode for enforcing the liabilities of the Companynowdevolv ed upon the Secretary of State. Then the Court addressed iteelf to the question. Would the East India Company have been liable in the present action if the Aot (21 & 22 Vict. ch. 106) had not been p&Blled ? With reference to the provisions of 3 & 4 Wm IV, o. 85, it was pointed out that the Cqmpany not only exercised powers or 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 oommercial business and oeue to have any interest in the territorial acquisitions in India, whioh were to be held by the Company until April 30, 1854, in irust for the Crown. Seetion 10 of the Act, which may be charaoteriBed aa the anoestor of s. 66 or the Act or

1858, provided u follows :

"That so long 1111 the ion and government of the B&id territories shall be oontinued to the B&id Company, all persona and bodies politic shall and may have and take the same suits, remedies, and prooeedinga, legal and equitable, against the e&id Company, in reepect of debts and liabilitiea aa aforesaid ; and the prope~ vested in the eaid Company in trust as aforeeaid shall be subject and liable to ti. same judgments and execution, in the same manner and form reepeotively aa if the eaid property were hereby continued to the B&id Company to their own 11116." It is noteworthy that the provisions of s. 10, quoted &hove, are materially s•milar 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 la; d it down that the Secretary of State for India Wll.B subject to the same liabilites as those which previously attached to the East India Company.

Before the Supreme Court of Calcutta, it was contended by the learned Advocate-General, on behalf of the defendant, that the State cannot be liable for damages occasioned by the negJi. gence 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. The Attmney- General" (1). That decision was based upon the principle that the King cannot be guilty of personal negligence or misconduct, and oonsequently cannot be responsible for the neglig:mce 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 as was available to the sovereign. This view was based on the opinion expressed by Grey, C.J., in the case of the Bank of Be:r11Jal v. The East India Company ('); that

"the fact of t, he Company's having been invested with powers usually called sovereign powers did not constitute them sovereigns". This dictum \oas

also founded upon the recit.al in 53 Geo.III o.155, by which the territories in the possession and under the government of the East India Company were vested in them without prejudice to the undoubted

(I) (1843) I Philip& 306: 41 E.R. 6t8, ( 4) llignell Rep. p. 120,

J9fll

Tiu Bi.te of

a,;.,111M ..

Jlsl. Vidh,111W•I/

Sina C J.

19'2 n. s .... •f

Rof•sl\.,.

Jl1l. Vidlry-Jua'i

5inha C. J.

1002 SUPREME COURT REPORTS (1962] SUPP. t

sovereignty of the Crown. The Court also pointed out that the liability of the Secretary of State was in no sense 11 personal liability, but had to be satisfied out of the revenues of India.

This case also meet.~ the second branch of the argument that the St.ate cannot be liable for the tortious acts of its servants, when such servants are engagt•d on an activity connected with the affairs of the State. In this connection it ha11 to be remembered that under the Constitution we have established a welfare state, whose functions are not confined only to maint."ining law and order, but extend to engaging in all act.ivities including induHtry, public transport, state trading, to name only a few of them. In so far as th~ State activities have such wide ramifications involving not only the use of sOTereign 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 employmer't as such. In this respect, the present sut up of the Government is analogous to the p09ition of the East India Company, which functioned not only as a Government with sovereign powers, as 11 delegate of the Bdtish Government, but also carri.ed on trade and commerce, as also public transport like railways, poets and telegraphs and road transport busine88. It was in the context of those facts that the Suprt>me Court of Calcutta repelled the a, rgument

advanced on behalf of the Secretary of State in these terms :

"It was contended in argument that the Secretary of State in Counoil, 88 regards his liability to be sued, must be oonsidered -.ii the State, or as a public officer employed by the

state. But, in our opinion his liability to be sued depends upon an express enactment in the 21st & 22nd Viot. c. l 06, by weich he is oonstitututed a mere nomial defendant for the purpoee of enforcing payment, out of the

l'evenues 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 sovereigns, and therefore, could not claim all the exemption of a sovereign ; and that they. were not the public servants of Government, and, therefore, did not fall under the principle of the cases with regard to the liabilities of persons; but they were a company to whom sovereign powers were delegated, and who traded on their own account and for their own account and for their own benefit, and were engaged in transactions partly for the purposes of government, and partly on their own account, which without any delegation of sovereign rights, might be carried on by private in di vi<luals. There is a great and clei>r distinction betwetm 'acts done in the exercise of what are usually termed sovereign powers, and acts done in th:J conduct of undertakings which might be carried on by private individuals without having such powers delegated to them : Moodaley v. 'L'he East Indw Company and 'l'he Same v. Morton (1 Bro. 0. O. 469) ".

It was also argued before that Court tha.t the East India Company having the two-fold character of a sovereign power and of a .trading company, it would be very difficult to determine whether a particular act had been done in the exercise of sovereign powers or of its activity in relation to business. In answer to this contention, it was pointed out by the Court that the Company would not have been liable for any act done by its officers or soldiers in carrying on hostility or in seizing property as prize property or while engaged in

1 h< St.te of

Bajasu.an

M 81. Vidh)•<Jwali

Sinha C. J.

IHI

TMSW.o.f

B.;.slAa ..

J/14. Yid.tr.-;

s-.o .J.

1004 SUPREME COURT REPORTS [1962] SUPF. i

military or al action. In such cases no action would have lain even against the offioel'8 them selves. But the Comp1my would hi.ve been liable for the negligenoe of their servants or officers in navi gating a. river steamer or in repairing the same or in doing any act in connection with such repairs.

The argument that a distinction had to be drawn between the liability under a contract and that arising out of a wrongful act, and that the latter category of liability would not. be within the mischief of the words of the section ( R. 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' wou Id include a liability arising out of a tortious a.ct. The Court, after an• elaborate consideration of all possible argument in favour of the Seoreta.ry of State, came to the folloll'ing conclusion, which is rightly BUID med up in the head-note in these words :

''The Secretary of State in Council of India is liable for the damages occasioned by the negligence of servants in the service of Government if the Legligence is such as would render an ordinary employer liable.~

But it was further urgued that Art. 300 speaks of 'like cases' with reference to the liability of the corresponding Indian States. In this connection, it was further argued that the plaintiff', in order to suooeed in his action against the Sta.to of Rajastha.n, must prove that the State of Udaipur which would be deemed to be the corresponding State, would have been liable in similar oiroumstanoee btfore the Con11titution was enacted. The history of event.a lea.ding up to the formation of the Stat.$ of Rajastha.n has to be adverted to in this oomiection. It is clear, on a reference to ihe Government publication oalled "The White Paper on Indian States" paragraphs 134 to 138, at pa.gea

(53-55) that the integration of the Rajasthan States into one single state was effected in several stages.

The Rajasthan Union was originally formed by the smaller States, whioh later united and formed the United State of Rajasthan, inaugurated on March 25, 1948.

Subsequently, bigger States joined and the second Rajasthan Union was inaugurated on April 18, 1948. By a further process of integration of some bigger States, new United State of Rajoisthan 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 l,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 aforsaid, which brought into existence the Sta\e just before the coming into effect of the Constitution. As al ready pointed ciut, the provisions of the second part of Art. 300 have to be traced backwards until we reach the Government of India Act 1858 (s.65), which itself was based upon s. IO of the Act (3 & 4 Wm. IV c. 85) of which the relevant portions have been set out above.

From the resume of the formation of the State of Rajasthan given above, it is clear that we need not travel beyond the stage when the Rajas. than 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 :

196!

Th• State of

RajastJur11 ••• M st. V idll.JW<lli

Sinha C. J.

lHI

Tit• Stol< of

Rojas I,,..

•• Jlsl. Yati

SW.. C. J.

1006 St:PREME COURT REPORTS (1002) SUPP. t

"Whether the State ofRajasthan is not liable for the act of Defendant No. l ?"

The State of Rajasthan haa not shown that the Rajasthan Union, it11 predeoessor, wu not liable by any rule of positive enactment or by common Law. It is clear from what hu been said above that the Dominion of India, or any constituent Province of the Dominion, would have been liable in view of the provisions afore11aid of the Govern ment of India Act, 1858. We have not been shown any provision of law, statutory or otherwise, which would exonerate the Rajastban Union from vicarious liability for the acts 0f its servant, analngous to the Common Law of Enii; land. It was impossible, by reason of the maxim "The King can do no wrong", to sue the Crown for the tortious Rct of its servant. But it was realised in the Unit.ed Kinp; dom that that rule had become outmoded in the context of modern developments in statecraft, and Parliament intnvened by enacting the Crown Proceedings .Act, 194 7, which came into force on

Januar~ I, 1948. Hence the very oitadel of the absolute rule of immunity of the sovereign has now been blown up. Section 2 (I) of the Act provides that the Crown shall be subject to all those liabili ties, in tort, to which it would be subject if it were a privat~ prson of full ago and capacity, in respect of torts committed by it.s servants or agents, 1mbjeot to the other provisions of the Act. As aln•ady pointed out, the law applicable to India in respect of torta committed by a servant of the Government was very much in advance of the Common law,

bofor!l the enactment of the Crown Proceedings Act, I9-i7. which has revolutionised the law in the United Kingdom. also. It ha, not been claimed before us that tho common law of th13 United Kingdom before it was altered by the said Act with dl'oot from 1048, applied to the Rajasthan Union in 1949, or even earlier. It must, therefore,

' .

be held that the State ofRajasthan has failed to discharge the burden of establishing the case raied in Issue No. 9, set out above.

Viewing the case from the point of view of first principles, there should be no difficulty in holding that the State should be as much liable

for tort in respect of a tortious act committed by its servant within the scope of his employment and functioning as such as any other employer. The immunity of the Crown in the United Kingdom, was b&sed on the old feudalistic notiom of Justice, namely, that the King was incapable of doinli a wrong, and, therefore, ofauthorising or instigating one, and that he coll.Id not be sued in his own courts.

In India, ever since the time of the E11.st Indie Compam, 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 he held liable vicariously for the tortious act of its sArvant. The Court has deliberately departed from the Common Law rule that a civil SPrvant cannot maintain a suit against the Crm>rn.

In the case of State of Bihar v. Abdul Majid (1), thia 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 recognising the old established rule, going back to more than 100

(I) [1954] S.R.C.c786.

"196'

TM •tote of

Bajasilum

•• Ms,, YidhJawati

Sin!za C. J.

Tiii Stall of

BttjaJIAa

v •• Jlsl. VidAJ...,.,;

SW.. C. J.

1008 SUPREME OOURT REPORTS [1962] SUPP. l

years at lea.at, if we uphold the vioarioua lia.billty of the St&t.e. Art. 300 of the Constitution itself has saved the r.ight of Parliament or the Legislature

of a State tq enact such law as it may think fit and proper ip this behalf. But so long as the Legis. lature has not expressed its intention to the contrary, it mu&t be held that th~ law i1 what it has been ever ilinoo the days of the East India Company.

In view of these considerations, it mnat be held that there is no merit in this appeal, &Dd it i& accordingly dismissed with costs.

A pptal dismissed.