PETITIONER: <NAME> Vs. RESPONDENT: THE STATE OF UTTAR PRADESH DATE OF JUDGMENT: 29/09/1964 BENCH: GAJENDRAGADKAR, P.B. (CJ) BENCH: GAJENDRAGADKAR, P.B. (CJ) WANCHOO, K.N. HIDAYATULLAH, M. DAYAL, RAGHUBAR MUDHOLKAR, J.R. CITATION: 1965 AIR 1039 1965 SCR (1) 375 CITATOR INFO : D 1967 SC1885 (7) R 1971 SC2255 (8) RF 1974 SC 890 (20) MV 1975 SC1331 (187) RF 1990 SC1480 (73) ACT: Constitution of India, 1950, Art. 300(1)- <ORG> Liability for tortious acts of its servants. HEADNOTE: Some police officers of the <ORG> seized gold from the appellant in exercise of their statutory powers, but were negligent in dealing with its safe custody. As a result of such negligence the gold was not returned to the appellant and so, he filed the suit against the <ORG> claiming the value of the gold. The suit was decreed by the trial court but was dismissed by <ORG> on appeal. In the appeal to <ORG>, HELD : The power to arrest a person, to search him. to seize property found with him, are powers conferred on specified officers by statute and are powers which could be properly characterised as sovereign powers. Therefore, though the negligent act was committed by the employees of the respondent-<ORG> during the course of their employment, the claim against the <ORG> could not be sustained, because, the employment in question was of the category which could claim the special characteristic of sovereign power. [390 G-H; 391 A]. <CITATION> for India, (1868-69) 5 Bom. H.C.R. App. A. 1, approved. The Stale of Rajasthan v. Must. <NAME> and another,  Supp. 2 S.C.R. 989, distinguished. The passing of legislative enactments to regulate and control the liability of the <ORG> for the negligent acts of its servants, suggested [391 B]. JUDGMENT:

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 105 of 1963.

Appeal from the judgment and decree dated March 18, 1960 of <ORG> in First Appeal No. 67 of 1950. <NAME> and <NAME> for <NAME>, for the appellant.

<NAME> and <NAME>, for the respondent.The Judgment of the Court was delivered by <NAME> The short question of law which arises in this appeal is whether the respondent, the State of Uttar Pradesh, is liable to compensate the appellant, M/s. <NAME> for the loss caused to it by the negligence of the police officers employed by the respondent. This question arises in this way. The appellant is a firm which deals in bullion and other goods at Amritsar. It was duly registered under the Indian Partnership Act . <NAME> was one of its partners. On the 20th September, 1947 <NAME> arrived at Meerut by <ORG> about midnight. His object in going to Meerut was to sell gold, silver and other goods in the Meerut market. Whilst he was passing through the Chaupla Bazar with this object, he was taken into custody by three police constables. His belongings were then searched and he was taken to the Kotwali Police Station. He was detained in the police lock-up there and his belongings which consisted of gold, weighing 103 tolas 6 mashas and 1 ratti, and silver weighing 2 maunds and 6 1/2 seers, were seized from him and kept in police custody. On the 21st September, 1947 he was released on bail, and some time thereafter the silver seized from him was returned to him. <NAME> then made repeated demands for the return of the gold which had been seized from him, and since he could not recover the gold from the police officers, he filed the present suit against the respondent in which he claimed a decree that the gold seized from him should either be returned to him, or in the alternative, its value should be ordered to be paid to him. The alternative claim thus made by him consisted of Rs. 11,075-10-0 as the price of the gold and Rs. 355 as interest by way of damages as well as future interest.

This claim was resisted by the respondent on several grounds. It was urged that the respondent was not liable to return either the gold, or to pay its money value. The respondent alleged that the gold in question had been taken into custody by one <NAME>, who was then the Head Constable, and it had been kept in the police Malkhana under his charge. <NAME>, however, misappropriated the gold and fled away to Pakistan on the 17th October, 1947. He had also misappropriated some other cash and articles deposited in the Malkhana before he left India. The respondent further alleged that a case under section 409 of the Indian Penal Code as well as s. 29 of the Police Act had been registered against <NAME>, but nothing effective could be done in respect of the said case because in spite of the best efforts made by the police department, <NAME> could not be apprehended. Alternatively, it was pleaded by the respondent that this was not a case of negligence of the police officers, and that even if negligence was held proved against the said police officers, the respondent <ORG> could not be said to be liable for the loss resulting from such negligence.

On these pleadings, two substantial questions arose between the parties; one was whether the police officers in question were guilty of negligence in the matter of taking care of the gold which had been seized from <NAME>, and the second was whether the respondent was liable to compensate the appellant for the loss caused to it by the negligence of the public servants employed by the respondent. <ORG> found in favour of the appellant on both these issues, and since the gold in question could not be ordered to be returned to the appellant, a decree was passed in its favour for Rs. 11,430-10-0.

The respondent challenged the correctness of this decree by an appeal before <ORG> and it was urged on its behalf that <ORG> was in error in regard to both the findings recorded by it in favour of the appellant. These pleas have been upheld by <ORG>. It has found that no negligence had been established against the police officers in question and that even if it was assumed that the police officers were negligent and their negligence led to the loss of gold, that would not justify the appellant's claim for a money decree against the respondent. The appellant then moved for and obtained a certificate from the said <ORG> and it is with the said certificate that it has come to this Court by an appeal. On behalf of the appellant, Mr. <NAME> has urged that <ORG> was in error in both the findings recorded by it in favour of the respondent. The first finding is one of fact and the second is one of law.

In dealing with the question of negligence, it is necessary to refer to the evidence adduced in this case. The material facts leading to the seizure of gold are not in dispute. The only question which calls for our decision on this part of the case is whether the loss of gold can be legitimately attributed to the negligence of the police officers in charge of the police station where the gold and silver had been kept in custody. <NAME> is the first witness to whose evidence it is necessary to refer. He was Class II Officer in Meerut Kotwali at the relevant time. He swears that <NAME> who was in charge of the <ORG>, had fled away to Pakistan without delivering the keys to any one and without obtaining permission for leaving his post of duty. The <ORG> was accordingly checked and it disclosed that considerable properties kept in the <ORG> were missing. On the 26th October, 1947, <NAME> returned the silver articles to the appellant. Gold was, however, not found in the <ORG>, and so, it could not be returned to it. <NAME> then refers to the investigation carried out against <NAME> for an offence of misappropriation and his evidence shows that <NAME> had absconded, and since the police department was unable to apprehend him from Pakistan, the investigation in question became ineffective. According to this witness, the silver and gold of the appellant had not been attached in his presence. He admits that the goods of the .appellant remained in the <ORG> of the Kotwali. No list of these goods was forwarded to any officials. This witness further added that valuables are generally kept in the wooden box and the key is kept by the officer-in-charge of Malkbana. The gold -and silver articles seized from the appellant had not been kept in that box in his presence. He could not explain why the said gold and silver articles were not kept in the <ORG>. The next witness is <NAME>. He was Sub-Inspector II in the Kotwali in September, 1947. He swears to the seizure of the ,gold and silver articles from <NAME> and deposes to the fact that they were not kept in the <ORG> in his presence. Both the arrested person and the seized articles were left in charge of the Head Constable who had been instructed by <NAME> to keep the goods in the <ORG>. This witness admitted that no list was prepared of the seized goods and he was not able to say whether proper precaution were taken to safeguard the goods in the <ORG>.

The third witness is <NAME>. He was station officer of the police station in question in September, 1947. He swears that it was a routine requirement that every day in the morning one Sub-Inspector had to inspect the, Malkhana under his order. He knew that <NAME> had been kept in the lock-up and his articles were kept in the Malkhana, but he added that in his presence these articles were neither weighed nor kept in the Malkhana. He claims to have checked up the contents of the Malkhana. but he conceded that he had made no note about this check in the Diary. He purported to say that when he checked the Malkhana, gold and silver were there. He kept the valuables in the Malkhana without any further instructions from the officers, and he was not present when they were kept in the box. This witness claims that valuables are not sent by the police officers to the <ORG> unless they got orders to that effect. That is the whole of the material evidence bearing on the question of negligence of the police officers.

In appreciating the effect of this evidence, it is necessary to refer to some of the relevant provisions, in regard to the custody of the goods seized in the course of police investigation. Section 5 4 (I) (iv) of the Code of Criminal Procedure provides that any police officer may, without an order from a Magistrate and without a warrant, arrest any person in whose possession anything is found which may reasonably be suspected to be stolen property and who may reasonably be suspected of having committed an offence with reference to such thing. It is under this provision that <NAME> was arrested at midnight. It was apprehended by the police officers that the gold and silver articles which he was carrying with him might be stolen property, and so, his arrest can be said to be justified under section 54 (I) (iv). Section 550 confers powers on police officers to seize property suspected to be stolen. It provides inter alia, that any police officer may seize property which may be suspected to have been stolen; and so, gold and silver in the possession of <NAME> were seized in exercise of the powers conferred on the police officers under s. 550 of the Code. After <NAME> was arrested and before his articles were seized, he was searched, and such a search is justified by the provisions of s. 51 of the Code. Having thus arrested <NAME> and searched his person and seized gold and silver articles from him under the respective provisions of the Code , the police officers had to deal with the question of the safe custody of these goods. Section 523 provides for the procedure in that behalf. It lays down, inter alia, that the seizure by any police officer of property taken under s. 51 shall be forthwith reported to a Magistrate, who shall make such order as he thinks fit respecting the disposal of such property or the delivery of such property to the person entitled to the possession thereof, or, if such person cannot be ascertained, respecting the custody and production of such property. These are the relevant provisions of the Code in respect of property seized from a person who has been arrested on suspicion that he was carrying stolen property.

That takes us to the U.P. Police Regulations. Chapter XIV of these Regulations deals with the custody and disposal of property. Regulation 165 provides a detailed procedure for dealing with the disposal of movable property of which the police takes possession. It is not necessary to refer to these provisions; it would be enough to state that these provisions indicate that when property is seized by the police officers, meticulous care is required to be taken for making a proper list of the property seized, describing it, weighing it, and taking all reasonable steps to ensure its safety. Clause (5) of Regulation 165 provides that when the property consists of gold, silver, jewellery or other valuables, it must be sent in a sealed packet after being weighed, and its weight must be noted in the general diary and on the list which accompanies the packet. It requires that a set of weights and scales should be kept at each police station. Regulation 166 is important for our purpose. It reads thus :-

"Unless the Magistrate otherwise directs, property of every description, except cash exceeding Rs. 100 and property of equal value and_property pertaining to cases of importance, which will be kept by the Prosecuting Inspector in a separate box under lock and key in the treasury, will remain in the custody of the malkhana moharrir under the general control and responsibility of the Prosecuting Inspector until it has been finally disposed of."

The wording of the Regulation is somewhat complex and con- fusing, but its purport and meaning are clear. In substance, it provides that property of every description will remain in the custody of the malkhana moharrir under the general control and responsibility of the Prosecuting Inspector until it has been finally disposed of. This provision is subject to the instructions to the contrary which the Magistrate may issue. In other words, unless the Magistrate directs otherwise, the normal rule is that the property should remain in the <NAME>. But this rule does not apply to cash exceeding Rs. 100 and property of equal value and property pertaining to cases of importance. Property falling under this category has to be kept by the Prosecuting Inspector in a separate box under lock and key in the treasury._ If the Magistrate issues a direction that property not falling under this category should also be kept in the treasury that direction has to be followed and the property in such a case cannot be kept in the custody of the malkhana moharrir. It is thus clear that gold and silver which had been seized from <NAME> had to be kept in a separate box under lock and key in the <ORG>; and that, admittedly, was not done in the present case. It is in the light of the provisions contained in Regulation 166 that we have to appreciate the oral evidence to which we have already referred. Unfortunately, in dealing with Regulations 165(5) and 166, <ORG> has erroneously assumed that there was no obligation on the police officers to deposit <NAME>'s property in the <ORG>. This conclusion is apparently due to the fact that the words used in Regulation 166 are not as clear as they should be and their effect has been misconstrued by <ORG>. It is in the light of this position that the oral evidence in the case has to be considered.

Thus considered, there can be no escape from the conclusion that the police officers were negligent in dealing with <NAME> property after it was seized from him. Not only was the property not kept in safe custody in the treasury, but the manner in which it was dealt with at the Malkhana shows gross negligence on the part of the police officers. A list of

-articles seized does not-appear to have been made and there is no evidence that they were weighed either. It is true that the respondent's case is that these goods were misappropriated by Head Constable <NAME>; but that would not assist the respondent in contending that the manner in which the seized property was dealt with at the police station did not show gross negligence. Therefore, we are satisfied that <ORG> was right in coming to the conclusion that the loss suffered by the appellant by the fact that the gold seized from <NAME> has not been returned to it, is based on the negligence of the police officers employed by the respondent; and that raises the question of law which we have set out at the commencement of our judgment.

Mr. <NAME> for the appellant has argued that once he is able to establish negligence of the police officers, there should be no difficulty in our decreeing the appellant's claim against the respondent, because he urges that in passing a decree against the respondent in the present case, we would merely be extending the principle recognised by this Court in <CITATION> . <NAME> and <NAME>. (1). In that case, respondent No. 1's husband and father of minor respondent No. 2 had been knocked down by a <ORG> jeep car which was rashly and negligently driven by an employee of the <ORG> of Rajasthan. The said car was, at the relevant time, being taken from the repair shop to the Collector's residence and was meant for the Collector's use. A claim was then made by the respondents for damages against the <ORG> of Rajasthan and the said claim was allowed by this Court. In upholding the decision of <ORG> which had granted the claim, this Court observed that the liability of the <ORG> for damages 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. In support of this conclusion, this Court observed that the immunity of the <ORG> in the United Kingdom on which basically the <ORG> of Rajasthan resisted the respondents' claim, 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. Such a notion, it was said, was inconsistent with the Republican form of <ORG> in our country, particularly because in pursuit of their welfare and socialistic objectives, <ORG>s in India undertook various industrial (1)  Supp. 2 S.C.R. 989.

and other activities and had to employ a large army of servants. That is why it was observed that there would be no justification, in principle, or in public interest, why the State should not be held liable vicariously for the tortious acts of its servants. It is ,on these observations that Mr. <NAME> relies and contends that the said observations as well as the decision itself can be ,easily extended and applied to the facts in the present case. It must be conceded that there are certain observations made in the <NAME> case(1) which support Mr. <NAME>'s argument and make it prima facie attractive. But, as we shall presently point, out, the facts in the <NAME> case fall in a category of claims which is distinct and separate from the category in which the facts in the present case fall; and that makes it necessary to ,examine what the true legal positionis in regard to a claim for damages against the respondent for loss caused to a citizen by the tortious acts of the respondent' servants. This question essentially falls to be considered under Art. 300 (1) of the Constitution. This article reads thus :-

"The Government of India may sue or be sued by the name of the Union of India and the Government of a State may sue or be sued by the 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."

It would be noticed that this article consists of three parts. The first part deals with the question about the form and the causetitle for a suit intended to be filed by or against <ORG>, or <ORG>. The second part provides, inter alia, that a <ORG> may sue or be sued in relation to its affairs in cases like those in which a corresponding Province might have sued or been sued if the Constitution had not been enacted. In other words, when a question arises as to whether a suit can be filed against <ORG>, the enquiry has to be : could such a suit have been filed against a corresponding Province if the Constitution had not been passed ? The third part of the article provides that it would be competent to the <ORG> or (1) [1962] Supp. 2 S.C.R. 989.

<ORG> State to make appropriate provisions in regard to the topic covered by Art. 300(1). Since no such law has been passed by the respondent in the present case, the question as to whether the respondent is liable to be sued for damages at the instance of the appellant, has to be determined by reference to another question and that is, whether such a suit would have been competent against the corresponding Province.

This last enquiry inevitably takes us to the corresponding provisions in the respective Constitution Act s of India; they are s. 65 of the Government of India Act, 1858, S. 32 of the Government of India Act, 1915 and s. 176 of the Government of India Act, 1935. It is unnecessary to trace the pedigree of this provision beyond s. 65 of the Act of 1858, because the relevant decisions bearing on this point to which we will presently refer, are ultimately found to be based on the effect of the provisions contained in the said section. For convenience, let us cite s. 65 at this stage :

"The Secretary of <ORG> in <ORG> shall and may sue and be sued as well in India as in England by the name of the Secretary of <ORG> in <ORG> 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 <ORG> in <ORG> 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 <ORG>, 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."

The first decision which is treated as a leading authority on this point was pronounced by <ORG> at Calcutta in 1861 in the case of <ORG> v. <ORG> for India(1). It is a remarkable tribute to the judgment pronounced by Chief Justice <NAME> in that case that ever since, the principles enunciated in the judgment have been consistently followed by all judicial decisions in India, and except on one occasion, no dissent has been expressed in respect of them. It seems somewhat ironical that the judgment of this importance should not have been reported in due course (1) 5 B. H.C.R. Appendix A, p. 1 in Calcutta, but found a place in the Law Reports in 5 Bom. H.C.R. 1868-69.

Let us then consider what this case decided. It appears that a servant of the plaintiff company was proceeding on a highway in Calcutta driving a carriage which was drawn by a pair of horses belonging to the plaintiff. The accident which gave rise to the action took place on the highway, and it was caused by the negligence of the servants of the <ORG> who had been employed in the <ORG> dockyard at Kidderpore. 'Me said servants were carrying a piece of iron funnel, and the manner in which they were carrying the <NAME> funnel caused an injury to one of the horses that were drawing the plaintiffs carriage. It is this injury caused by the negligence of the servants of the <ORG> employed in the <ORG> dockyard that gave rise to the action. The. plaintiff company claimed damages against the Secretary of <ORG> for India for the damage caused by the said accident. The suit was tried by the <ORG> at Calcutta. He found that the defendant's servants were wrongdoers inasmuch as they carried the iron funnel in the centre of the road. According to the learned Judge, the servants were thus liable for the injury caused by their negligence. He was, however, not clear on the question of law as to whether the defendant Secretary of <ORG> could be held liable for the tortious act of the <ORG> servants which led to the accident. That is why he referred the said question to <ORG> of Calcutta, and <ORG> held that the Secretary of <ORG> in <ORG> would be liable for the damages occasioned by the negligence of servants in the service of <ORG> if the negligence is such as would render an ordinary employer liable. This question was considered by <ORG> in the light of s. 65 of the Act of 1858. "The main object of that section," observed <NAME>, "was to transfer to Her Majesty the possession and government of the British territories in India, which were then vested in <ORG> in trust for the <ORG>, but it does not appear to have been the intention of the <ORG> to alter the nature or extent of liabilities with which the revenue of India should be chargeable." The learned Chief Justice then considered the scheme of the other relevant provisions of the said Act and posed the question thus: would <ORG> have been liable in the present action, if the 21st and 22nd Vict., c. 106, had not been passed ? Dealing with this question, the learned Chief Justice observed that "the origin and progress of <ORG> are too well-known to require any detail for the purpose of the present case. It is sufficient to state that after the passing of the 3rd and 4th Wm. IV., c. 85, they not only exercised powers of government, but also carried on trade as merchants." It was then observed by the learned Chief Justice that in determining the question whether <ORG> would, under the circumstances, have been liable to an action, the general principles applicable to Sovereigns and <ORG>s, and the reasoning deduced from the maxim of the English Law that the King can do no wrong, would have no force, because he concurred entirely in the opinion expressed by Chief Justice <NAME> in the earlier case of <ORG> v. <ORG>) that the fact of the Company's having been invested with powers usually called sovereign powers did-not constitute them sovereign. That is one aspect of the matter which was emphasised in that judgment.

Proceeding to deal with the question on this basis, the learned Chief Justice remarked that if <ORG> were allowed, for the purpose of <ORG>, to engage in undertakings, such as the bullock train and the conveyance of goods and passengers for hire, it was only reasonable that they should do so, subject to the same liabilities as individuals; and in that view of the matter, the Chief Justice expressed the opinion that for accidents like the one with which the <ORG> was dealing, if caused by the negligence of servants employed by <ORG>, <ORG> would have been liable, both before and after the 3rd and 4th Wm. IV., c. 85, and that the same liability attaches to the Secretary of <ORG> in <ORG>, who is liable to be sued for the purpose of obtaining satisfaction out of the revenues of India. "We are of opinion," said the learned Chief Justice emphatically, "that this is a liability, not only within the words, but also within the spirit, of the 3rd & 4th Wm. IV., c. 85, s. 9 , and of the 21st and 22nd Vict., c. 106, S. 65 , and that it would be inconsistent with commonsense and justice to hold otherwise."

It then appears to have been urged before the <ORG> in that case that the Secretary of <ORG> in Council must be considered as the <ORG> or as a public officer employed by the <ORG>, and the question of his liability determined on that footing. This argument was rejected on two grounds, that the relevant words of the statute did not justify it, and that "<ORG> were not sovereigns, and therefore, could not claim all the exemption of a sovereign." That is how the learned Chief Justice took the view that the case "did not fall under the principle of the cases with regard to the liabilities of such persons--[that is to say, public (1) <NAME>, Rep. p. 120.

<NAME>

servants employed by the Sovereign]; but they were a company to whom sovereign powers were delegated, and who traded on their own account and for their own benefit, and were engaged in transactions partly for the purposes of government, and partly on their own account, which, without any delegation of sovereign rights, might be carried on by private individuals."

It is in respect of this aspect of the matter that the Chief Justice enunciated a principle which has been consistently followed in all subsequent decisions. Said the learned Chief Justice : "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." Having thus enunciated the basic principle, the Chief Justice stated another proposition as flowing from it. He observed that " where an act is done, or a contract is entered into, in the exercise of powers usually called sovereign powers; by which we mean powers which cannot be lawfully exercised except by sovereign, or private individual delegated by a sovereign to exercise them, no action will lie." And, naturally it follows that where an act is done, or a contract is entered into, in the exercise of powers which cannot be called sovereign powers, action will lie. '<NAME>, in brief, is the decision of <ORG> in the case of <ORG> (1).

Thus, it is clear that this case recognises a material distinction between acts committed by the servants employed by the <ORG> where such acts are referable to the exercise of sovereign powers delegated to public servants, and acts committed by public servants which are not referable to the delegation of any sovereign powers. If a tortious act is committed by a public servant and it gives rise to a claim for damages, the question to ask is : was the tortious act committed by the public servant in discharge of statutory functions which are referable to, and ultimately based on, the delegation of the sovereign powers of the <ORG> to such public servant ? If the answer is in the affirmative, the action for damages for loss caused by such tortious act will not lie. On the other hand, if the tortious act has been committed by a -public servant in discharge of duties assigned to him not by virtue of the delegation of any sovereign power, an action for damages would lie. The act of the public servant committed by him during the course of his employment is, in this category of cases, an act of a servant who might have been employed by a private individual for the same (1) 5 B.H.C.R. Appendix A, p. 1.

purpose. This distinction which is clear and precise in law, is sometimes not borne in mind in discussing questions of the State's liability arising from tortious acts committed by public servants. That is why the clarity and precision with which this distinction was emphasised by Chief Justice <NAME> as early as 1861 has been recognised as a classic statement on this subject.

We have already indicated that this distinction has been uniformly followed by judicial decisions in India. In that connection, we will refer to a few representative decisions. In <NAME> in <ORG> v. Moment(1), the Privy <ORG> had occasion to consider the effect of the provisions of s. 41 (b) of Act IV of 1898 (Burma), which is similar to the provisions of s. 65 of the Government of India Act, 1858. While holding that a suit for damages for wrongful interference with the plaintiff's property in land would have lain against <ORG>, the Privy <ORG> has expressly approved of the principles enunciated by Chief Justice <NAME> in the case of <ORG>).

In <NAME> v. Secretary of <ORG> for India, this point arose for the decision of <ORG>. In that case, a suit had been instituted against the Secretary of <ORG> in <ORG> to recover damages on account of the negligence of a chief constable with respect to goods seized; and the plaintiffs claim was resisted by the Secretary of <ORG> in <ORG> on the ground that no action lay. <ORG> upheld the plea raised by the defence on the ground that the chief constable seized the goods not in obedience to an order of the executive Government, but in performance of a statutory power vested in him by the <ORG>. The principle on which this decision was based was stated to be that where the duty to be performed is imposed by law and not by the will of the party employing the agent, the employer is not liable for the wrong done by the agent in such employment. In discussing this point, <NAME>, referred to the decision in the case of <ORG>) and observed that though he entertained some doubt about its correctness, the said view had stood so long unchallenged that lie thought it necessary to accept it as an authority binding on the <ORG>. It is on this solitary occasion that a whisper of dissent was raised by Chief Justice <NAME>, but ultimately, the learned C. J. submitted to the authority of the said decision.

(1) (1912-13) 40 I. A. 48. (2) 5 B. H.C. R.

Appendix A p.1.

(3) (1904) I.L.R. .28 Rom. 314.

In the Secretary of <ORG> for India in <CITATION> .(1), a claim for damages against the Secretary of <ORG> arose in respect of injuries sustained by the plaintiff in a carriage accident which was alleged to have been due to the negligent stacking of gravel on a road which was stated in the plaint to be a military road maintained by <ORG>. <ORG> held that the plaintiff had in law no cause of action against the Secretary of <ORG> for India in <ORG> in respect of acts done by <ORG> in the exercise of its sovereign powers. This conclusion was based on the finding that the provision and maintenance of roads, especially a military road, is one of the functions of Government carried on in the exercise of its sovereign powers and is not an undertaking which might have been carried on by private persons.

In the Secretary of <ORG> for India in <CITATION> (2), it was held by <ORG> that a suit for damages does not lie against the Secretary of <ORG> for India in Council for misfeasance, wrongs, negligence or omissions of duties of managers appointed by <ORG>, because the acts giving rise to the claim, were done by officers of <ORG> in the course of exercise of powers which cannot be lawfully exercised save by the sovereign power. It is in this connection that <NAME>, enunciated the principle that no action in tort lies against the Secretary of <ORG> for India in Council upon the 'respondent superior'. The learned C. J., however, recognised that a suit may lie against the Secretary of <ORG> for India in Council for torts committed by the <ORG> in connection with a private undertaking or an undertaking not in exercise of sovereign power. The same view has been taken by <ORG> in <NAME> & Anr. v. <ORG> of United Provinces. (3) In <NAME> v. The Secretary of <ORG>(4), certain property which had been stolen from the plaintiff was recovered by the police and was thereafter kept in the <ORG> under orders of the Magistrate during the trial of the thieves. It appears that the receiver, <NAME>, the man in charge of the <ORG>, absconded with it. That led to a suit by the plaintiff for the recovery of the property, or in the alternative, for its price. <ORG> held that the liability in the case having clearly arisen under the provisions of the Criminal Procedure Code , the defence plea that the act was an act of <ORG> could not succeed. Even so, the Court (1) (1914) I.L.R. 39 Mad. 351.

(3) I.L.R. [1957] 1. All. 94.

(2) (1932) I.L.R. 59 Cal. 1289.

(4) (1936) I.L.R. 18 Lah. 380.

came to the conclusion that the Secretary of <ORG> could be held liable only under circumstances in which a private employer can be rendered liable. The Court then examined the question as to whether in circumstances like those which led to the claim for damages in the case before it, a private employer could have been made liable; and this question was answered in the negative on the ground that no liability attached to the Secretary of <ORG> on account of the criminal act of the man in charge of the Malkhana; the said act was a felonious act unauthorised by his employer. We would like to add that some of the reasons given by <ORG> in support of its conclusion may be open to doubt, but, in substance, the decision can be justified on the basis that the act which gave rise to the claim for damages had been done by a public servant who was authorised by a statute to exercise his powers, and the discharge of the said function can be referred to the delegation of the sovereign power of the <ORG>, and as such the criminal act which gave rise to the action, could not validity sustain a claim for damages against the <ORG>. It will thus be clear that the basic principle enunciated by <NAME> in 1861 has been consistently followed by judicial decisions in dealing with the question about the <ORG>'s liability in respect of negligent or tortious acts committed by public servants employed by the <ORG>.

Reverting then to the decision of this Court in the <NAME> case(1), it would be recalled that the negligent act which gave rise to the claim for damages against the <ORG> of Rajasthan in that case, was committed by the employee of the <ORG> of Rajasthan while he was driving the jeep car from the repair shop to the Collector's residence, and the question which arose for decision was : did the negligent act committed by the <ORG> employee during the journey of the jeep car from the workshop to the Collector's residence for the Collector's use give rise to a valid claim for damages against the <ORG> of Rajasthan or not? With respect, we may point out, that this aspect of the matter has not been clearly or emphatically brought out in discussing the point of law which was decided by this Court in that case. But when we consider the principal facts on which the claim for damages was based, it is obvious that when the <ORG> employee was driving the jeep car from the workshop to the Collector's residence for the Collector's use, he was employed on a task or an undertaking which cannot be said to be referable to, or ultimately based on, the delegation of sovereign or govern- mental powers of the <ORG>. In dealing with such cases, it must (1) [19621 Supp. 2 S.CR. 989.

L2Sup./64-12 be borne in mind that when the <ORG> pleads immunity against claims for damages resulting from injury caused by negligent acts of its servants, the area of employment referable to sovereign powers must be strictly determined. Before such a plea is upheld, the <ORG> must always find that the impugned act was committed in the course of an undertaking or employment which is referable to the exercise of sovereign power, or to the exercise of delegated sovereign power; and in the <NAME> case(1), this <ORG> took the view that the negligent act in driving the jeep car from the workshop to the Collector's bungalow for the Collector's use could not claim such a status. In fact, the employment of a driver to drive the jeep car for the use of a civil servant is itself an activity which is not connected in any manner with the sovereign power of the <ORG> at all. That is the basis on which the decision must be deemed to have been founded; and it is this basis which is absent in the case before us. It is not difficult to realize the significance and importance of making such a distinction particularly at the present time when, in the pursuit of their welfare ideal, the Governments of the <ORG>s as well as the Government of India naturally and legitimately enter into many commercial and other undertakings and activities which have no relation with the traditional concept of Governmental activities in which the exercise of sovereign power is involved. It is necessary to limit the area of these affairs of the <ORG> in relation to the exercise of sovereign power, so that if acts are committed by Government employees in relation to other activities which may be conveniently described as non- governmental or nonsovereign. citizens who have a cause of action for damages should not be precluded from making their claim against the <ORG>. That is the basis on which the area of the state immunity against such claims must be limited; and this is exactly what has been done by this <ORG> in its decision in the <NAME> case(1). In the present case, the act of negligence was committed by the police officers while dealing with the property of <NAME> which they had seized in exercise of their statutory powers. Now, the power to arrest a person, to search him, and to seize property found with him, are powers conferred on the specified officers by statute and in the last analysis, they are powers which can be properly characterised as sovereign powers; and so, there is no difficulty in holding that the act which gave rise to the present claim for damages 'has been committed by the employee of the (1) [19621 Supp. 2 S.C.R. 989.

respondent during the course of its employment; but the employment in question being of the category which can claim the special characteristic of sovereign power, the claim cannot be sustained; and so, we inevitably hark back to what Chief Justice <NAME> decided in 1861 and hold that the present claim is not sustainable.

Before we part with this appeal, however, we Ought to add that it is time that the Legislatures in India seriously consider whether they should not pass legislative enactments to regulate and control their claim of immunity in cases like this on the same lines as has been done in England by the <ORG> Proceedings Act, 1947. It will be recalled that this doctrine of immunity is based on the Common Law principle that the King commits no wrong and that he cannot be guilty of personal negligence or misconduct, and as such cannot be responsible for the negligence or misconduct Of his servants. Another' aspect of this doctrine was that it was an attribute of sovereignty that a <ORG> cannot be sited in its own courts without its consent. This legal position has been substantially altered by the <ORG> Proceedings Act, 1947 ( 10 & I I Geo. 6 c. 44). As <NAME> points Out, "claims against the <ORG> which might before 1st January, 1948 have been enforced, subject to the ,-rant of the royal flat, by petition of right may be. enforced as of right and without a fiat by legal proceedings taken against the <ORG>."(1) That is the effect of s. I of the said Act. Section 2 provides for the liability of the <ORG> in tort in six classes of cases covered by its clauses (I) to (6). Clause (3), for instance, provides that where any functions are conferred or imposed upon an officer of the <ORG> as such either by any rule of the common law or by statute, and that officer commits a tort while performing or purporting to perform those functions, the liabilities of the <ORG> in respect of the tort shall be such as they would have been if those functions had been conferred or imposed solely by virtue of instructions lawfully given by the <ORG>. Section 11 provides for saving in respect of acts done under prerogative and statutory powers. It is unnecessary to refer to the other provisions of this Act. Our only point in mentioning this Act is to indicate that the doctrine of immunity which has been borrowed in India in dealing with the question of the immunity of the <ORG> in regard to claims made against it for tortious acts committed by its servants, was really based on the Common Law principle which prevailed in England; and that principle has now been substantially modified by the <ORG> Proceedings Act. In dealing with the present appeal, we have ourselves been disturbed by the thought that a citizen (1) <NAME>'s Laws of England, 3rd ed., Vol. II, p. 8.

whose property was seized by process of law, has to be told when he seeks a remedy in a court of law on the ground that his property has not been returned to him, that be can make no claim against the <ORG>. That, we think, is not a very satisfactory position in law. The remedy to cure this position, however, lies in the bands of the <ORG>. The result is, the appeal fails, but in the circumstances of this case, we direct that the parties should bear their own costs throughout.

Appeal dismissed.


JUDGMENT <NAME>, C.J.

1. This appeal originally came on before <ORG>, who considered it desirable that it should be heard by <ORG> in view of the conflict between decisions of this <ORG>.

2. The appeal is against an order of the Subordinate Judge of Ottapalam remanding a suit to the District Munsiff of Chowghat for disposal on the merits. The suit was filed by the first respondent for eviction of the appellant (first defendant) from a building that had been leased to him by the first respondent's predecessor in 1936. There were also prayers for arrears of rent and for recovery of damages in respect of an annexe to the building constructed by the first respondent. The appellant deposited into Court the entire arrears of rent and interest claimed in the suit, and therefore that part of the plaintiff's claim was satisfied. Following the decision in <CITATION> . (1945) 1 M.L.J. 44 the District Munsiff held that the suit, so far as it related to eviction, was not maintainable, because of the provisions of the Madras Non-Residential Buildings Rent Control Order, 1942, hereinafter referred to as the Rent Control Order. On appeal, the learned Subordinate Judge, following certain decisions of this Court subsequent to <CITATION> . (1945) 1 M.L.J. 44 held that the suit was maintainable and passed an order of remand as mentioned above.

3. The relevant provision of the Rent Control Order is Clause 8, the material portions of which are as follows:

* * * * * * (i) A tenant in possession of a non-residential building shall not be evicted therefrom, whether in execution of a decree, or otherwise and whether before or after the termination of the tenancy, except in accordance with the provisions of this clause. (2) A landlord wishing to evict a tenant in possession shall apply to the Controller for a direction in that behalf.

The Controller shall make an order of eviction only if he is satisfied that one or other of the conditions mentioned is satisfied. These conditions briefly are, non-payment of rent, absence of readiness and willingness to pay a fair rent in future, sub-letting except under certain circumstances and user of the building for a purpose other than that for which it was leased, and absence of occupation of the building for a continuous period of four months without reasonable cause. Then follow provisions for execution of an order for eviction passed by the Controller.

4. Before dealing with the several decisions on the effect of this clause, let us examine its plain language. Sub-clause (1) lays down that a tenant shall not be evicted from a non-residential building of which he is in possession. "Evict" literally means "expel by legal process". Eviction consists in the physical act of throwing out the tenant from the building which he is occupying. This sub-clause therefore, prevents the tenant from being thrown out. One of the methods of such eviction is by the process of execution of a decree for possession. The sub-clause makes it clear that even this method is prohibited. The eviction can only be in accordance with the provisions of Clause 8. There is nothing in this clause, or in any of the other clauses of the Order expressly prohibiting the institution of a suit for possession, or prohibiting <ORG> from passing a decree for possession. No doubt, even though a decree for possession is passed, it may be not be capable of execution by <ORG>. But the passing of the decree itself is not in terms prohibited.

5. Is there any such prohibition which can be necessarily implied? Is there anything in this clause which takes away, by necessary intendment, the ordinary jurisdiction of <ORG> to entertain a suit by a landlord for recovery of possession of his property in the occupation of a tenant ? As their Lordships of the Judicial Committee pointed out in Secretary of State for <CITATION> . (1940) 2 M.L.J. 140 : L.R. 67 I.A. 222 : I.L.R. 1940 Mad. 599 at 614 (P.C.) It is settled law that the exclusion of the jurisdiction of <ORG> is not to be readily inferred, but that such exclusion must either be explicitly expressed or clearly implied.

I fail to see any such clear implication to oust the jurisdiction of the civil <ORG>.

6. The earliest decision dealing with this question is that of <NAME>, J., in <CITATION> . (1945) 1 M.L.J. 44 where the learned Judge held that there was an ouster of the jurisdiction of Civil Courts. His reasoning was as follows:

Mr. <NAME> ingeniously contended that there could be no objection to a decree being passed in this suit though after the decree it might be that he might have to go before the Controller to get possession. This argument fails to take note of two answers. One is that when a special tribunal is indicated for obtaining a particular relief, it is that tribunal that has got exclusive jurisdiction to grant that relief, and to that extent the jurisdiction of Civil Courts is ousted. Secondly, even if it is held that the Court has jurisdiction to grant a decree for eviction it cannot be called upon to indulge in a mere pastime and pass orders which would be brutum fulmen and which cannot be carried into effect without resort being had to other persons or tribunals in whom a discretion is vested to decide if eviction is to be ordered or not. The remedy of the plaintiff is to go before the Controller.

Neither of the two grounds on which the learned Judge based his conclusion commends itself to me. No doubt, when a special tribunal is indicated for obtaining a particular relief, that tribunal has got exclusive jurisdiction to grant that relief. But then that relief must be a relief not available to a party under general law. Further, the relief for which the special tribunal, namely, the Controller, is indicated, is the relief of eviction, that is, the actual throwing out of the tenant. That may only mean that a <ORG> which passed the decree may not have jurisdiction to execute the decree for possession. But I fail to see how the jurisdiction of the Civil <ORG> to entertain a suit and to pass a decree for possession is necessarily ousted. I cannot agree with the learned Judge that a decree for eviction which cannot be executed for a certain time, in this case during the continuance of the Rent Control Order, can be called brutum fulmen or that, passing a decree for eviction which cannot be at once executed, would be indulging in a mere pastime. One can easily give instances of cases in which the decrees duly passed by competent <ORG> cannot be immediately executed. But that fact has never been understood to mean that there is an implied ouster of jurisdiction of the <ORG> to entertain and dispose of the suit. This decision of the learned Judge was expressly dissented from by <NAME>, J., in the two decisions in <NAME> In re (1946) 1 M.L.J. 134, and <CITATION> (1945) 1 M.L.J. 135. He held that the language was not such as to-deprive the Civil <ORG> of their power to entertain suits for eviction and to adjudicate upon them. His conclusion is thus tersely expressed:

It cannot be said that these words are wide enough to deprive <ORG> of their jurisdiction to pass decrees; all that the rule contemplates is the control of the relief of eviction.

Apparently, it was in view of these latter decisions that <NAME>, J., observed as follows in a recent decision, vide <CITATION> (1948) 2 M.L.J. 359.

It must now be taken to be well settled that a decree in ejectment could be passed by <ORG> and all that the order provides is that during the subsistence of the order, <ORG> cannot execute the decree but the landlord will have to take appropriate steps under the provisions of the order.

There are certain general considerations which, in our opinion, support this view, namely, that the order does not take away the jurisdiction of <ORG> to entertain a suit by a landlord against the tenant and pass a decree therein for possession. Many of these considerations are found set out in an unreported decision of Wadsworth, J., in <NAME> v. Fathima Bibi Saheba S.A. No. 80 of 1946. These are such considerations : (1) The cause of action for an application to the Controller would be quite different from the cause of action for a suit in <ORG>; (2) The grounds on which the Controller can order an eviction may be quite different from those on the strength of which <ORG> would grant a decree; (3) The failure by the plaintiff to claim a decree for eviction in <ORG> on grounds which would not justify eviction by the controller might result in grave complications by way of limitation for a suit filed after the Control order ceases to operate; (4) The period during which the execution of a decree is prohibited is limited. The order itself is only for a short duration; and when it is repealed or it expires, a decree of <ORG> can be executed in the ordinary way immediately I hereafter.

7. Having regard to all these considerations and to the language of Clause 8 of the order, I am of opinion that the jurisdiction of <ORG> to entertain and pass a decree in a suit for eviction by a landlord against his tenant is not expressly or impliedly taken away by the provisions of the Rent Control Order.

8. The Civil Miscellaneous Appeal is therefore dismissed with costs.

<NAME>, J.

9. I respectfully agree with my Lord in his reasoning as well as in his conclusion. I wish only to add a few words with reference to one particular view-point expressed by <NAME>, J., in <CITATION> . (1945) 1 M.L.J. 44. Possibly, the learned Judge had in mind the observation of Lord <NAME> in <CITATION> (1888) L.R. 15 I.A. 211 : I.L.R. 11 All. 47 at 56 (P.C), which I shall presently refer to, in making his observations in the case of <CITATION> . (1945) 1 M.L.J. 44 that even if it is held that the Court has jurisdiction to grant a decree for eviction it cannot be called upon to indulge in a mere pastime and pass orders which would be brutum fulmen. The observation of Lord <NAME> that:

It would be an inconvenient state of the law if it were found necessary for a man to institute a perfectly vain litigation under peril of losing his property if he does not.

was made in connection with the discussion of a question of limitation which arose in the case before their Lordships of <ORG> and has since been considered in a number of later decisions of <ORG> in India. According to the interpretation placed upon that observation of the learned Lord by these later decisions it will be too much for any litigant to contend that where the rights as between himself and his adversary have been subjected to adjudication by a competent <ORG>, limitation for other suits between the parties based on such rights should be computed from the date of their final determination. It has been further ruled by these later decisions of <ORG> as well as by decisions of <ORG>, that Courts have, in fact, no power on considerations of hardship or equity to invent new grounds of exemption from the bar of limitation not recognised by the statute. It seems to me, therefore, that the principles laid down by these decisions are a fortiori applicable to a question of limitation which may arise, as pointed out by <NAME>, J., in his unreported decision in S. A. No. 80 of 1946, in relation to a suit in the ordinary <ORG> based on grounds of eviction under the general law, which are by no means identical with the grounds constituting the cause of action for an application to the Controller.


JUDGMENT <NAME>, J.

1. The assessee, in the course of its assessment for the assessment year 1961-62, claimed to deduct under Section 10(2)(vib) of the Income-tax Act, 1922, development rebate in respect of eight new trucks purchased in the relevant previous year, namely, Samvat Year 2015. The claim was disallowed by the Income-tax Officer and, on appeal, the disallowance was confirmed by the Appellate Assistant Commissioner and, on further appeal, by the <ORG>. The ground of disallowance was the proviso introduced in Section 10(2)(vib) of the Income-tax Act, 1922, by Section 4 of the Taxation Laws (Amendment) Act, 1960, with effect from 1st April, 1960. The proviso was in the following terms:

"Provided further that no allowance under this clause shall be made in respect of any machinery or plant which consists of office appliances or road transport vehicles."

2. The assessee, being aggrieved by the disallowance of the claim, applied to the <ORG> for a reference and, on the application of the assessee, the <ORG> referred the following question for the determination of the court:

"Whether, on the facts and in the circumstances of the case, was the assessee entitled to the disallowance of development rebate on lorries purchased during the relevant previous year for the assessment year 1960-61?"

3. It was indisputable that if the proviso applied, no allowance by way of development rebate could be claimed by the assessee in respect of the eight new trucks purchased by the assessee during the relevant previous year and an attempt was, therefore, made on behalf of the assessee to exclude the applicability of the proviso by contending that the proviso had no retrospective operation and could not be so construed as to affect the vested right of the assessee to claim development rebate in respect of the said trucks. The argument of the assessee was that the Taxation Laws (Amendment) Act , 1960, which introduced the proviso in Section 10(2)(vib) was enacted on 6th September, 1960, and was, therefore, ineffective to affect the right which became vested in the assessee on 1st April, 1960, to claim development rebate under the then existing law. This argument is plainly incorrect, for it overlooks Section 1 , Sub-section (2), of the Taxation Laws (Amendment) Act , I960, which says in terms that, subject to any special provision made in this behalf in that Act, it shall be deemed to have come into force on 1st April, 1960. By reason of this sub-section the proviso is introduced in Section 10(2)(vib) of the Income-tax Act with retrospective effect from 1st April, 1960, and the effect of the amendment is as if the proviso were in Section 10(2)(vib) on and from 1st April, 1960. Now it is well settled that though the subject of charge is the income of the previous year, the law to be applied is that in force in the assessment year unless otherwise stated or implied and any amendment which is in force at the beginning of the assessment year must govern the case, though the amendment is made after the income under assessment is earned : vide <CITATION> ,  13 I.T.R. 221 (P.C.). and Commissioner of Income-tax v, Scindia Steam Navigation Company Ltd.,  42 I.T.R, 589 (SC). The law in force on 1st April, 1960, would, therefore, govern the assessment in the present case and that law was clearly Section 10(2)(vib) read with the proviso. The proviso being in force on 1st April, 1960, was clearly and indubitably applicable and by reason of the proviso no allowance could be claimed by the assessee in respect of the eight new trucks purchased during the year of account. This would appear to be clear on principle and no authority is necessary to support it. But if any authorities were needed, they may be found in <CITATION> .,  34 I.T.R. 143 (S.C.).

and <CITATION> ,  52 I.T.R. 921.

4. One answer to the question referred to us is, therefore, in the negative. The assessee will pay the costs of the reference to the Commissioner.