totious and contaectual liability in thr admoinitrative law

all about administration law and contractual and tortious liability

1. Tortious Liability
Contractual Liability,
Tortious Liability
Unit IV
B.B.A. LL.B. (H.) | Semester V
Megha Garg | Assistant Professor | Faculty of Law, GLS University


Administrative Law
Academic Year: 2025-26
Contractual LiabilityIntroduction
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2. Contents
Introduction
Contractual Liability
Tortious Liability
3
4
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2

3. Introduction
England
●Traditionally: “The King can do no wrong” → King could not be sued in his own courts.
●The Crown was immune from liability; wrongs were attributed to Ministers’ faulty advice.
●Practical problem: no remedy against the King despite theoretical accountability.
●Change: Crown Proceedings Act, 1947 → Crown placed on par with an ordinary litigant.
India
●Maxim “The King can do no wrong” never accepted.
●Union and States = legal persons.
●They can sue and be sued for breach of contract or tort.
●Reflects principle that State is subject to law , not above it.



Key Idea: Rule of law demands that government bears
its fair share of liability and is answerable for wrongs
done to its citizens.
3

4. Contractual Liability
Examples of Government Contracts
●Public Works Contracts
○Building of highways, bridges, airports, dams.
○Example: National Highway Authority
contracting a company for road construction.
●Supply Contracts
○Purchase of goods or materials for public purposes.
○Example: Railways contracting for supply of coal,
steel, or uniforms.
●Service Contracts
○Hiring services of professionals or private entities.
○Example: State govt hiring private security agency
or IT consultants.
●Defence & Procurement Contracts
○For purchase of arms, ammunition, equipment.
○Example: Union govt contracting with HAL for
aircraft manufacture.

●Natural Resources & Mining Contracts
○Grant of leases or licences to private companies.
○Example: Petroleum/mining leases, spectrum
allocation.
●Public–Private Partnership (PPP) Agreements
○Joint contracts for infrastructure or urban projects.
○Example: Metro rail projects, toll roads, airports.
●Employment/Service Contracts with Govt.
Employees
○Appointments, terms of service (though governed
largely by service rules).
●Miscellaneous Commercial Contracts
○Printing of textbooks, supply of mid-day meal
ingredients, outsourcing sanitation.
4

5. cont.
Contractual Liability of the Government (Pre-Constitution)
●Recognised even before 1950.
●East India Company (set up for trade) → treated as subject to municipal court jurisdiction when acting as a
private trader.
○Moodalay v. Morton, (1785) 1 Bro CC 469: Company liable in ordinary courts for contractual matters.
●Statutory recognition in successive laws:
○Government of India Acts, 1833, 1858, 1915, 1935.
●Shows continuity: Government could be held liable for breach of contract even in colonial period.
Constitutional Provisions on Contractual Liability
Contractual liability of the Union of India and the States is recognised by the Constitution itself. The essence of this
liability is contained in the following articles:
●Article 294 – Succession to property, assets, rights, liabilities and obligations in certain cases.
●Article 298 – Power to carry on trade, etc.
●Article 299 – Contracts.
●Article 300 – Suits and proceedings.


5

6. Power to carry on trade, etc.

“The executive power of the
Union and of each State
shall extend to the carrying
on of any trade or business
and to the acquisition,
holding and disposal of
property and the making of
contracts for any purpose:”
“(b) all rights, liabilities and
obligations of the
Government of the
Dominion of India and of the
Government of each
Governor's Province,
whether arising out of any
contract or otherwise, shall
be the rights, liabilities and
obligations respectively of
the Government of India
and the Government of
each corresponding State,”
Succession to property,
assets, rights, liabilities and
obligations in certain cases.

CONSTITUTIONAL PROVISIONS ON CONTRACTUAL LIABILITY - RELEVANT CLAUSES
Article 294 Article 298
Suits and proceedings.

“(1) 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…”
“(1) All contracts made in
the exercise of the
executive power of the
Union or of a State shall be
expressed to be made by
the President, or by the
Governor of the State, as
the case may be, and all
such contracts and all
assurances of property
made in the exercise of that
power shall be executed on
behalf of the President or
the Governor by such
persons and in such
manner as he may direct or
authorise.”
Contracts.

Article 299 Article 300
6

7. cont.
Conditions of a valid contract with the government - Article 299
1) Written Contract
●Requirement:
○Contract must be in writing, “expressed” in the name of President/Governor, and “executed” by an authorised person.
○Oral contracts not binding on Government.
●Judicial Interpretation:
○Not every contract needs a formal deed.
○Offer + Acceptance (through correspondence or tender) by an authorised officer can form a valid government
contract.
●Key Cases:
○Chatturbhuj Vithaldas v. Moreshwar Parashram, AIR 1954 SC 236 → impractical to require ponderous legal documents for
every small govt contract.
○Union of India v. A.L. Rallia Ram, AIR 1963 SC 1685 → tender + acceptance = valid contract; no need for formal execution
if authorised officer signs.


7
Essence:
Constitution does not demand a rigid form; substance of offer and
acceptance by duly authorised person = binding contract.

8. cont.
8
2) Execution by Authorised Person
●Rule:
○Govt. contracts valid only if executed by a person authorised by the President/Governor.
○Contract signed by unauthorised officer → void & unenforceable.
●Key Cases:
○Union of India v. N.K. (P) Ltd., (1973) 3 SCC 388 → Contract signed by Secretary, Railway Board
(not authorised) → invalid.
○Bhikraj Jaipuria v. Union of India, AIR 1962 SC 113 → Divisional Superintendent had implied
authority → contracts valid.
Essence:
●Authority need not always come from formal
rules/notifications.
●Can be shown by evidence of delegation or special
authorisation.

9. cont.
9
3) Expression in the Name of President/Governor
●Rule:
○Contract must be expressed in the name of the President (Union) or Governor (State).
○Without this expression → contract unenforceable, even if authorised person signs.
●Key Cases:
○Bhikraj Jaipuria v. Union of India, AIR 1962 SC 113 → Authorised officer, but not expressed in
Governor General’s name → invalid.
○Karamshi Jethabhai Somayya v. State of Bombay, AIR 1964 SC 1714 → Agreement for canal water
supply based only on letters by Engineer, not in Governor’s name → void.
○State of Punjab v. Om Parkash Baldev Krishan, AIR 1962 SC 113 → Executive Engineer accepted
tender for bridge, but contract not expressed in Governor’s name → no valid contract.
Essence:
●Mandatory requirement, rooted in public interest.
●Cannot be waived or dispensed with by courts.

10. cont.
10
Indian Contract Act, 1872
S. 196. Right of person as to acts done for him without
his authority. Effect of ratification.— Where acts are
done by one person on behalf of another, but without his
knowledge or authority, he may elect to ratify or to
disown such acts. If he ratify them, the same effects will
follow as if they had been performed by his authority.
Indian Contract Act, 1872
S. 230. Agent cannot personally enforce, nor be bound
by, contracts on behalf of principal.—In the absence of
any contract to that effect, an agent cannot personally
enforce contracts entered into by him on behalf of his
principal, nor is he personally bound by them.
Presumption of contract to contrary—Such a contract
shall be presumed to exist in the following cases:— (1)
& (2) * * *
(3) where the principal, though disclosed, cannot be
sued.
Effect of non-compliance with Article 299(1)
Mandatory Nature:
●Provisions are not directory; strict compliance required.
●Aim: Protect govt. from unauthorised contracts and safeguard
public funds.
Effect of Non-Compliance:
●Contract = void and unenforceable against the govt.
●No rights/liabilities arise under such a contract.
Ratification:
●Earlier view → Govt. could ratify defective contracts and accept
liability
●Mulamchand v. State of M.P., AIR 1968 SC 1218 → No contract in
law if Art. 299(1) not followed; cannot be ratified.
Personal Liability of Officers:
●Sec. 230(3), Indian Contract Act, 1872 not applicable.
●Govt. officer executing unauthorised contract → not personally
liable either.

11. cont.
11
Effect of valid contract
●If the provisions of Article 299(1) are complied with, the contract is valid and it can be enforced by or against the
government and the same is binding on the parties thereto.
●Once a legal and valid contract is entered into between the parties, i.e. government and a private party, the relations
between the contracting parties are no longer governed by the provisions of the Constitution but by the terms and
conditions of the contract .



299. Contracts.—(2) Neither the President nor the Governor shall be personally liable in respect of
any contract or assurance made or executed for the purposes of this Constitution, or for the
purposes of any enactment relating to the Government of India heretofore in force, nor shall any
person making or executing any such contract or assurance on behalf of any of them be personally
liable in respect thereof.

12. cont.
12
Quasi-Contractual Liability of Government
●Problem:
○If Article 299(1) not complied with → contract = void & unenforceable.
○Innocent parties left without remedy.
●Solution (Sec. 70, Indian Contract Act, 1872):
○Prevents unjust enrichment.
○Govt. liable to compensate if it accepts benefit of work/goods.
●Conditions under Sec. 70:
○Person must lawfully do something/deliver goods for another.
○Act must not be intended to be gratuitous.
○Other party must accept or enjoy the benefit.
●Key Case: State of W.B. v. B.K. Mondal, AIR 1962 SC 779
○Contractor built house at govt. officer’s request; govt. used it but refused payment.
○SC: Contract unenforceable under Art. 299, but govt. liable under Sec. 70 (quasi-contract).
Essence:
Sec. 70 supplements Art. 299 → ensures equitable compensation
even when formal contract is void.
Indian Contract Act, 1872
70.Obligation of person enjoying benefit of
non-gratuitous act.—Where a person lawfully does
anything for another person, or delivers anything to him,
not intending to do so gratuitously, and such other
person enjoys the benefit thereof, the latter is bound to
make compensation to the former in respect of, or to
restore, the thing so done or delivered.

13. cont.
13
Grant of State Largess
●Modern Role:
○From “police state” → “welfare state” → Govt. engages in trade & distribution of benefits.
○Examples: contracts, licences, quotas, petrol pumps, plots, mineral leases.
●Key Principle:
○State is not a private individual; it must act fairly, reasonably, without arbitrariness or discrimination.
○Rooted in Rule of Law & Art. 14 (equality).
●Key Cases on State Largess:
●Erusian Equipment & Chemicals Ltd. v. State of W.B. (1975) → Firm blacklisted from govt. contracts without hearing; SC
held govt. must act fairly and equally in granting contracts.
●Ramana Dayaram Shetty v. International Airport Authority of India (1979) → Tender rejected arbitrarily despite
meeting conditions; SC held govt. action must be free from arbitrariness under Art. 14.
●V. Punnen Thomas v. State of Kerala (1969) → Govt. favoured certain groups in contracts/licences; court said govt. cannot
discriminate on political or religious grounds.
●Common Cause (Petrol Pumps Matter) v. Union of India (1996) → Minister allotted petrol pumps from discretionary
quota to relatives/supporters; SC quashed allotments, stressing ministers hold public trust.
Essence:
●Distribution of state largess = public power.
●Courts can review for arbitrariness, discrimination, or irrationality, though not policy merits.

14. cont.
14
Contract of Service & Government Servants
●General Rule:
○At appointment stage → relationship begins with offer & acceptance (contract).
○After appointment → employee acquires status; governed by Art. 309 rules &
constitutional provisions, not ordinary contract law.
●Key Case: Roshan Lal Tandon v. Union of India, AIR 1967 SC 1889
○Govt.–servant relationship ≠ ordinary master–servant contract.
○It is a status, with duties & rights fixed by law, not by agreement.
○Society has an interest in regulating this status (public service = public trust).
Essence:
Govt. employment is not purely contractual; it is a legal
status subject to constitutional protections (Arts. 309–311).
Article 309 empowers Parliament/State
Legislatures (or President/Governor by
rules) to regulate recruitment and
service conditions of persons appointed
in connection with Union or State affairs.

15. cont.
15
Statutory Contracts vs. Executive Contracts
●Executive Contracts
○Entered under govt.’s executive power.
○Must comply with Article 299 (written, authorised, expressed in President/Governor’s name).
○Examples:
■Govt. supply contracts (e.g., foodgrains, uniforms).
■Construction contracts (roads, bridges).
●Statutory Contracts
○Entered under authority of a statute.
○Governed by that statute, not Article 299.
○Examples:
■Electricity supply agreements (Electricity Act).
■Mining leases (Mines & Minerals Act).
■Telecom licences (Telegraph Act)
■Transport permits (Motor Vehicles Act).
Essence:
●Article 299 applies only to executive contracts.
●Statutory contracts are regulated by their parent law.

16. cont.
16
Contractual Liability & Writ Jurisdiction
Case: Radhakrishna Agarwal v. State of Bihar, (1977) 3 SCC 457
●Three categories of State contracts:
1.Pre-contractual promise (Promissory Estoppel)
○Rule: If a person acts on State’s promise/assurance (even if not a valid Art. 299 contract), State may be bound.
○Remedy: Writ petition maintainable under Art. 226.
○Example: Govt promises industrial land concessions → party invests → later withdrawn arbitrarily.
2.Statutory Contract
○Rule: Contract entered under statutory power; breach = breach of statutory duty.
○Remedy: Writ petition maintainable (public law element).
○Example: Electricity supply agreement under Electricity Act; refusal to supply power contrary to statute.
3.Purely Contractual (Executive Contract)
○Rule: Rights/liabilities flow only from contract terms; breach is a private law matter.
○Remedy: Only civil suit for damages/specific performance; no writ normally.
○Example: Govt. contract for road construction; payment dispute = civil court matter.
Recent Trend
●Shrilekha Vidyarthi v. State of U.P., (1991) 1 SCC 212 → Even in contractual matters, judicial review applies if State action is
arbitrary, unfair, or discriminatory under Art. 14.

17. CONTRACTUAL LIABILITY OF STATE - SUMMARY
●Constitutional Basis → Recognised under Arts. 294, 298, 299, 300.
●Two Types:
○Executive Contracts (Art. 299) – must be:
■In writing.
■Expressed in name of President/Governor.
■Executed by authorised person.
■If not → void & unenforceable.
○Statutory Contracts – entered under specific statutes (e.g. Telegraph Act, Electricity Act) → governed by statute, not Art.
299.
●Non-compliance with Art. 299 → No valid contract; cannot be ratified.
○But Section 70 Contract Act (quasi-contract) → compensation if benefit enjoyed by State (e.g. B.K. Mondal).
●Grant of State Largesse → Must follow Art. 14 (fairness, equality, non-arbitrariness) (Erusian Equipment, Ramana Shetty).
●Contracts of Service → Once appointed, govt. servant’s status is governed by service rules (Art. 309–311), not by contract (Roshan
Lal Tandon).
●Judicial Review → Purely contractual matters → civil suits.
○But if public law element (promissory estoppel, statutory contract, Art. 14 violation) → writ jurisdiction possible
(Radhakrishna Agarwal, Shrilekha Vidyarthi).
17
The Union and States are liable for their contracts like
private parties, but Art. 299 safeguards public funds by
mandating strict formalities; still, fairness under Art. 14
and quasi-contract principles prevent injustice.

18. Tortious Liability
18
Doctrine of Vicarious Liability & the State
●Meaning: Liability of the State for torts committed by its servants in the course of employment.
●Basis: State acts only through its agents → responsibility arises for their wrongs.
●Maxims:
a.Respondeat superior → Let the principal be liable.
b.Qui facit per alium facit per se → He who acts through another acts himself.
●The doctrine of vicarious liability of State is based on social convenience & rough justice.
●Application to State:
a.Crown/State can be held vicariously liable for servants’ torts.
b.Otherwise, victims would be remediless, since govt. employees may lack means to
compensate.

19. Constitutional Provisions on State Liability
●Article 294(b) → Govt. liability may arise “out of any contract or
otherwise” → includes tortious liability.

●Article 300(1) → Fixes extent of Union/State liability:
○Same as that of Dominion of India & Provinces before Constitution.
○Liability continues as if the Constitution had not been enacted.


cont.
19
“(b) all rights, liabilities and
obligations of the
Government of the
Dominion of India and of the
Government of each
Governor's Province,
whether arising out of any
contract or otherwise, shall
be the rights, liabilities and
obligations respectively of
the Government of India
and the Government of
each corresponding State,”
Succession to property,
assets, rights, liabilities and
obligations in certain cases.

Article 294(b)
Suits and proceedings.

“(1) 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 and may, subject to any
provisions which may be made by Act of Parliament or of the Legislature of such State
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.”
Article 300(1)
19

20. cont.
20
Sovereign & Non-Sovereign Functions (Pre-Constitution)
Background – Rise of Sovereign vs Non-Sovereign Functions
●Early British Period: East India Company (EIC) = trading concern.
●1600: Charter of Queen Elizabeth I → monopoly of trade.
●1765: EIC obtained Dewani rights → became trader + sovereign.
●1833: Charter Act gave powers → acquire territory, maintain army, wage war, conclude treaties.
●Dual character of EIC created confusion in law: when is it acting as a sovereign vs a trader?
●This debate laid the foundation of State tortious liability in India.
P. & O. Steam Navigation Co. v. Secretary of State (1861)
●Facts: Plaintiff’s carriage was damaged by Govt. employees while being transported on a highway.
●Issue: Can State be sued in tort?
●Holding: Yes, when acting in non-sovereign capacity.
●Principle:
○Sovereign acts (war, peace, defence, justice) → immunity.
○Non-sovereign acts (commercial activities, undertakings that private individuals could carry on) → liability.
●Essence: Laid down the sovereign vs non-sovereign test.

21. cont.
21
Broader Observations in P&O (Criticism)
●Court also remarked: State would not be liable for:
○Acts during hostilities (military/naval actions).
○Judicial functions of its officers.
●Criticism:
○These remarks were unnecessary (obiter dicta).
○Wrongly clothed EIC (a trading company) with sovereign immunity it didn’t deserve.
○Yet, these remarks influenced later decisions.
Nobin Chunder Dey v. Secretary of State (1875)
●Facts: Plaintiff deposited money for a licence to run a ganja shop. Govt. refused to issue licence, refused refund.
●Issue: Can the plaintiff sue for refund/damages?
●Holding: No.
●Reasoning: Grant of licences = sovereign function.
●Principle: Extended sovereign immunity to regulatory/licensing functions.
●Criticism: Misapplied P&O → created broader immunity than intended.

22. cont.
22
Secy. of State v. Hari Bhanji (1882, Madras HC)
●Facts: Plaintiff had to pay enhanced excise duty on salt due to delay by Port Authority employees. Sued
State for refund.
●Govt Argument: Claimed immunity under P&O & Nobin Chunder.
●Holding: Action maintainable → immunity wrongly applied.
●Principle Laid Down:
○Correct test = Act of State vs Municipal Law.
○Acts of State (peace, war, treaties, defence) → outside municipal law → immune.
○Acts done in administration of domestic affairs → regulated by municipal law → liable.
●Essence: Shifted focus from “sovereign vs non-sovereign” to whether act falls inside/outside
municipal law.

23. cont.
23
Distinction – Sovereign vs Non-Sovereign Functions
●Sovereign Functions (immune under old law):
○Defence, war, foreign affairs.
○Administration of justice, police powers.
○Granting licences/quasi-sovereign regulatory functions (Nobin Chunder).
●Non-Sovereign Functions (State liable):
○Commercial activities (trading, transport, industry).
○Activities private individuals could also perform.
○Municipal functions (water, sanitation).
Concept of “Act of State” (Hari Bhanji)
●Acts of State:
○Done in sovereign capacity, outside municipal law.
○E.g., making treaties, waging war, acquiring territory.
●Not Acts of State:
○Domestic administration, commerce, routine governance.
○Regulated by municipal law → courts have jurisdiction.

24. cont.
24
Sovereign & Non-Sovereign Functions (Post-Constitution)
Post-Constitution Beginning – State of Rajasthan v. Vidyawati (1962)
●Facts:
○Jeep owned/maintained by Rajasthan govt. for Collector’s use.
○Driver, returning jeep from workshop, drove rashly → killed a pedestrian.
○Widow sued driver & State.
●Holding:
○Constitution Bench held State vicariously liable.
●Principle:
○English Crown immunity never applied in India.
○In a Republican, Welfare State → no justification for immunity.
○State should be liable for torts of its servants like any employer.
●Essence:
○Marked a progressive step towards abolishing sovereign immunity.

25. cont.
25
Retreat – Kasturi Lal v. State of U.P. (1965)
●Facts:
○Police seized gold & silver from Kasturi Lal on suspicion of theft.
○Property stored in govt. malkhana; Head Constable misappropriated and fled to Pakistan.
○Kasturi Lal acquitted → sued for damages.
●Holding:
○State not liable: seizure = exercise of sovereign power (police investigation).
●Principle (per Gajendragadkar CJ):
○Test = Was tortious act committed in discharge of statutory functions based on delegation of sovereign
power?
○If yes → immunity.
○If no → liability.
●Distinction from Vidyawati:
○Driving jeep for Collector’s use ≠ sovereign power.
○Police seizure/investigation = sovereign power.
●Essence:
○Revived “sovereign vs non-sovereign” immunity.
○Major setback after Vidyawati.

26. cont.
26
Criticism of Kasturi Lal
●Even SC acknowledged later → Kasturi Lal not a sound precedent.
●Courts often avoided referring to it, or distinguished it.
●Result = inconsistent case law → “shadow of sovereign immunity still haunts.”
Correction Begins – State of Gujarat v. Memon Mohammed Haji Hasam (1967)
●Facts:
○Customs seized respondent’s goods as smuggled.
○Appeal pending; Magistrate ordered goods disposed.
○Appeal later allowed → seizure invalid → owner sought return of goods.
●Holding:
○Govt. stood in position of bailee → duty to preserve goods till appeal finalised.
○Liable for return/value of goods.
●Essence:
○Applied private law bailment principles → limited sovereign immunity.

27. cont.
27
Basavva Patil v. State of Mysore (1977)
●Facts:
○Police recovered ornaments during investigation; produced in criminal court.
○Ornaments stolen from police custody before trial ended.
○Magistrate/HC refused compensation → “property never in court custody.”
●Holding (SC):
○State must pay equivalent value unless it shows it exercised due care.
●Essence:
○Compensation ordered despite police custody; avoided reliance on Kasturi Lal.
Shyam Sunder v. State of Rajasthan (1974)
●Facts:
○Govt. jeep used for famine relief work; employee killed in accident due to negligent driving.
○Widow sued; State argued famine relief = sovereign.
●Holding:
○Famine relief is not a sovereign function.
○Private entities can also provide such relief.
○State held vicariously liable.
●Essence:
○Expanded liability, limited sovereign immunity.

28. cont.
28
N. Nagendra Rao v. State of A.P. (1994)
●Facts:
○Goods seized for confiscation; confiscation later declared illegal.
○Appellant sued for return/value of goods.
●Holding (SC):
○State liable → sovereign immunity not defence.
○Test: If officer interferes with life/liberty or commercial activities → State must compensate.
●Principle:
○“Watertight compartmentalisation of sovereign vs non-sovereign unsound.”
○Sovereignty vests in people → State cannot act arbitrarily.
●Essence:
○Doctrine of immunity diluted; nature and manner of act matters, not its “sovereign” label.

29. cont.
29
Chandrima Das v. Railway Board (2000)
●Facts:
○Bangladeshi woman gang-raped in Yatri Niwas (guest house run by Railways).
○Petition filed under Art. 226 claiming compensation.
●Holding:
○SC awarded compensation under Art. 21.
○Rejected State’s reliance on Kasturi Lal.
●Principle:
○Rape in govt. premises = violation of fundamental right → compensation under public law.
○Welfare State’s functions manifold; not all can be shielded as “sovereign.”
●Essence:
○Kasturi Lal effectively eroded; focus shifted to constitutional torts & Art. 21.

30. cont.
30
Conceptual Analysis
●Traditional principle:
○Sovereign functions → immunity.
○Non-sovereign functions → liability.
●But tests failed:
○What counts as sovereign? (Railways = sovereign in one HC, non-sovereign in another).
○Statutory basis not decisive (treaty-making = non-statutory but sovereign; Railways = statutory
but non-sovereign).
●Modern critique:
○Distinction outdated; sovereignty now vests in people.
○Public interest = accountability.

31. cont.
31
Summary
●Post-Constitution, courts leaned towards greater liability of State.
●Kasturi Lal (5-judge bench) technically still stands, but watered down in later cases.
●Modern trend:
○Compensation in cases of custodial deaths, police brutality, wrongful detention.
○Expansion of public law remedies under Arts. 32 & 226.
●Law Commission Recommendation: Scrap sovereign vs non-sovereign distinction; treat govt. like any employer.
●Liability must be based on nature of activity, not old feudal fiction of sovereign immunity.
Essence:
●Pre-Constitution → “sovereign vs non-sovereign”
(P&O).
●Post-Constitution → Vidyawati progressive, Kasturi
Lal regressive.
●Later cases → steadily diluted immunity, recognised
constitutional tort under Art. 21.
●Modern law → State is increasingly treated like a
private employer; sovereign immunity is outdated.

32. TORTIOUS LIABILITY OF STATE - SUMMARY
Constitutional Basis → Art. 300 → Union/States can sue and be sued.
Early Rule (P&O Steam Navigation, 1861) →
●Sovereign functions → No liability (war, defence, justice, policing).
●Non-sovereign functions → Liability (trade, transport, commercial).
Post-Constitution Cases:
●Vidyawati (1962) → State liable for negligence of jeep driver; English immunity rejected.
●Kasturi Lal (1965) → Immunity revived for sovereign functions (police seizure). Criticised.
●Later cases (Memon Mohammed, Basavva Patil, Shyam Sunder) → steadily diluted Kasturi Lal.
●Nagendra Rao (1994) → Sovereign immunity outdated; depends on nature/manner of act.
●Chandrima Das (2000) → Rape in railway guest house → compensation under Art. 21.
Modern Principle:
●Distinction between sovereign & non-sovereign = outdated, unclear, unfair.
●State liable even for “sovereign” acts if FRs violated → constitutional torts (e.g., custodial death, police brutality).
●Relief available both via civil suits (private law) and writs (public law compensation).
32
The State today is liable in tort like any private
employer, and courts award even constitutional
compensation when wrongful State action violates
life, liberty or dignity.