Kasturi Lal Ralia Ram Jain v State of U.P. (1965) and N. Nagendra Rao & Co v State of A.P. (1994)

These two decisions are the twin poles of State liability in tort in India. Kasturi Lal gave sovereign immunity a second life in 1965 after Vidhyawati had seemed to bury it. Nagendra Rao, thirty years later, took almost everything back — without formally overruling anything.

The examiner's favourite trap is a question asking whether Kasturi Lal is still good law. The honest answer, and the one that gets the marks: it has never been formally overruled, but it has been distinguished, doubted and confined so severely that it will almost never decide a modern case. Write that sentence, then justify it.

Kasturi Lal — the gold in the malkhana

The firm of Kasturi Lal Ralia Ram Jain dealt in bullion at Amritsar. On 20 September 1947 — weeks after Partition — one of its partners, Ralia Ram, arrived at Meerut by the Frontier Mail at about midnight, carrying gold weighing 103 tolas 6 mashas and 1 ratti and silver weighing 2 maunds and 6½ seers, meaning to sell in the Meerut market.

Walking through the Chaupla Bazar with all this on him at that hour, he was stopped by three police constables and taken into custody. He was searched, taken to the Kotwali police station and locked up; the gold and silver were seized and kept in police custody. He was released on bail the next day, and after some time the silver came back to him.

The gold did not. Ralia Ram asked for it repeatedly, got nowhere, and sued the State of U.P. for the gold or its value — Rs 11,075-10-0 as price, plus Rs 355 as interest.

The State's answer explained the loss without excusing it. The gold had gone into the custody of a Head Constable, Mohammad Amir, and been kept in the police malkhana under his charge. Mohammad Amir misappropriated it — along with other cash and articles from the malkhana — and on 17 October 1947 absconded to Pakistan. A case under s. 409 IPC and s. 29 of the Police Act was registered, but he was never apprehended.

The trial court found the police negligent and decreed the suit. The Allahabad High Court reversed on both points. The Supreme Court restored the finding of negligence in full: Regulation 166 of the U.P. Police Regulations required valuables of that kind to be kept by the Prosecuting Inspector in a separate box under lock and key in the treasury, not the malkhana; that was not done; no list of the seized articles appears to have been made, and there is no evidence they were even weighed. "The manner in which it was dealt with at the Malkhana shows gross negligence on the part of the police officers."

And then it dismissed the suit anyway.

Nagendra Rao — the fertiliser that rotted

N. Nagendra Rao & Co dealt in fertiliser and foodgrains under licence. On 11 August 1975 the Vigilance Cell Police Inspector visited its premises and seized huge stocks of fertiliser, foodgrains and even non-essential goods. On 31 August the District Revenue Officer, acting under s. 6-A of the Essential Commodities Act 1955, directed the fertiliser to be handed to the Assistant Agricultural Officer for distribution to needy cultivators, and the foodgrains to the Tehsildar for immediate sale.

The Assistant Agricultural Officer did nothing. The firm wrote in September 1975 and again in February 1976 warning that the fertiliser would deteriorate and be rendered useless, and asked that it be diverted to places of higher demand or released for sale. No order was passed; no action taken.

On 29 June 1976 the s. 6-A proceedings concluded. The only violation found was improper maintenance of accounts. Part of the stock was confiscated; the rest was released to the firm. The officer still did not hand it over. Approaches to the Chief Minister, the Revenue Minister, the Agriculture Minister and departmental heads produced nothing. Finally, in the last week of March 1977 — twenty months after seizure — the firm was told to come and take delivery. It went, and found the stock spoilt in both quality and quantity. It got its objection endorsed by the officer, refused delivery, and sued for the value.

The trial court decreed Rs 1,06,125.72 with interest. The Andhra Pradesh High Court reversed, on Kasturi Lal: the seizure was an exercise of statutory power, therefore sovereign, therefore no liability.

1. Kasturi Lal: does an action lie against the State for the negligence of police officers in keeping property seized under statutory powers of arrest, search and seizure?
2. Nagendra Rao: is the State vicariously liable for negligence of its officers in discharging statutory duties under the Essential Commodities Act — and does confiscation of part of the goods extinguish the claim for the rest?
3. Running through both: what is a "sovereign function"?

In Kasturi Lal, counsel for the firm argued simply that once negligence was proved, Vidhyawati supplied the rest; there was nothing to distinguish the two situations. In Nagendra Rao, the State pleaded sovereign immunity, discharge of statutory duty in good faith, and the ingenious proposition that the owner of seized goods has a right only to get his goods back — in whatever condition they happen to be — and no right to their value.

Kasturi Lal: appeal dismissed. The police officers were negligent; the State was not liable. The powers to arrest, to search and to seize property found on a person are conferred by statute, and "in the last analysis, they are powers which can be properly characterised as sovereign powers". The tort was committed in the course of an employment "of the category which can claim the special characteristic of sovereign power", and the claim failed.

Nagendra Rao: appeal allowed, the trial court's decree restored with costs. Regulating and controlling essential commodities, and delegating powers of inspection, search and seizure for that purpose, is not a function for whose negligent exercise the State can claim immunity.

Kasturi Lal. Where a public servant commits a tort in the discharge of statutory functions which are referable to, and ultimately based on, the delegation of the sovereign powers of the State, no action for damages lies against the State. Gajendragadkar CJ set the test as a single question to be asked of every case:

"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 State 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."

Note the pro-plaintiff half of the ratio, which is usually forgotten: "when the State 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."

Nagendra Rao. Sovereign functions are confined to the primary and inalienable functions of a constitutional Government — those which no private person can lawfully perform. Sahai J's formulation:

"Barring functions such as administration of justice, maintenance of law and order and repression of crime etc. which are among the primary and inalienable functions of a constitutional Government, the State cannot claim any immunity."

And on the older dichotomy: "Any watertight compartmentalization of the functions of the State as 'sovereign and non-sovereign' or 'governmental and non-governmental' is not sound. It is contrary to modern jurisprudential thinking."

Kasturi Lal, said the Court, survives only in this residue: "Ratio of Kasturi Lal is available to those rare and limited cases where the statutory authority acts as a delegate of such function for which it cannot be sued in court of law."

Why Kasturi Lal did not follow Vidhyawati. The Court did not disapprove Vidhyawati; it re-explained it. The negligent act there was the driving of a jeep from a workshop to a Collector's bungalow — an undertaking "not connected in any manner with the sovereign power of the State at all". Gajendragadkar CJ noted, with judicial politeness, that "this aspect of the matter has not been clearly or emphatically brought out" in Vidhyawati itself. That is how a Constitution Bench avoids overruling a Constitution Bench.

Why the police were different. Ralia Ram's arrest was traced to s. 54(1)(iv) of the old Criminal Procedure Code (arrest without warrant of a person possessing suspected stolen property), his search to s. 51, the seizure to s. 550, and the custody of the property to s. 523. Each is a statutory power exercisable only by a public officer; a private individual cannot arrest a man on suspicion and take his gold. So the employment was of the sovereign category — even though what actually happened, the loss of the gold, had nothing sovereign about it.

Gajendragadkar CJ's own discomfort is the most quoted part of the judgment, and it is obiter:

"In dealing with the present appeal, we have ourselves been disturbed by the thought that a citizen 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 he can make no claim against the State. That, we think, is not a very satisfactory position in law. The remedy to cure this position, however, lies in the hands of the legislature."

He had already said "it is time that the legislatures in India seriously consider whether they should not pass legislative enactments to regulate and control their claim from immunity in cases like this on the same lines as has been done in England by the Crown Proceedings Act, 1947." The Government (Liability in Tort) Bill 1965 was introduced in response, withdrawn, reintroduced in 1967, and lapsed. Nothing has been enacted since.

How Nagendra Rao got round it. Three moves. First, the statutory route: s. 6-C(2) of the Essential Commodities Act obliges the Government to return goods not confiscated, and if for any reason they cannot be returned, to pay their price with interest. Goods which have rotted are no longer "essential commodities" at all, so return had become impossible and the price was payable. On this ground alone the appeal succeeded — which means everything said about sovereign immunity is strictly obiter, though the Court plainly intended it to be authoritative and it has been treated as such ever since.

Second, the bailment route, drawing on State of Gujarat v Memon Mahomed Haji Hasam (1967) and Basavva Kom Dyamangouda Patil v State of Mysore (1977): a State holding seized goods stands as a bailee, bound to preserve the property intact until confiscation becomes final.

Third, the conceptual route. "Sovereignty" and "act of State" are different things: the first is supremacy, the second a political act of a delegate of the sovereign, not cognisable in a municipal court. It is acts of State — war and peace, foreign affairs, acquisition of territory — that lie outside the courts, and that has nothing to do with an Assistant Agricultural Officer sitting on a consignment of fertiliser. Sahai J revived the older Madras line in Secretary of State v Hari Bhanji (1882), which had confined immunity to acts of State, and invoked Lord Blackburn in Geddis v Proprietors of Bann Reservoir (1878): "an action does lie for doing that which the Legislature has authorised if it be done negligently." His closing point is the one to memorise: if the officer can be sued personally — and he can — "there is no reason to hold that it would not be maintainable against the State."

The erosion of Kasturi Lal has come from four directions.

The constitutional tort. Beginning with Rudul Sah v State of Bihar (1983) and settled in Nilabati Behera v State of Orissa (1993), the Court held that compensation may be awarded in a petition under Article 32 or 226 as a public-law remedy, based on strict liability for contravention of fundamental rights. This is the single most important development, and it is set out separately below: it does not touch Kasturi Lal on its own ground, it gives the claimant a different door.

Common Cause, A Regd. Society v Union of India (1999). A three-Judge Bench, in the petrol-pump allotment litigation, mapped the public law / private law boundary and confirmed that public-law remedies extend into the realm of tort — passages quoted at length in Chandrima Das. On review it set aside the Rs 50 lakh exemplary damages imposed personally on the Minister and the direction to prosecute him, misfeasance in public office not being made out on that material. Use it for the doctrine, not the outcome.

State of A.P. v Challa Ramkrishna Reddy (2000). An undertrial and his father were attacked with bombs in a sub-jail; the authorities had been warned and had not strengthened the guard; the father died. Sovereign immunity was rejected: a prisoner does not lose the protection of Article 21, and a claim founded on a fundamental right cannot be met by the plea. Kasturi Lal, said the Court, "has paled into insignificance and is no longer of any binding value" — strong language, but from a two-Judge Bench.

Chairman, Railway Board v Chandrima Das (2000). A Bangladeshi national was gang-raped at the Rail Yatri Niwas at Howrah by railway employees. Running the railways is commercial, not sovereign; Article 21 protects "persons", not only citizens; and "the theory of sovereign power which was propounded in Kasturi Lal case has yielded to new theories and is no longer available in a Welfare State."

And yet. Kasturi Lal is a Constitution Bench decision; Nagendra Rao, Challa Ramkrishna Reddy and Chandrima Das are two- or three-Judge Benches. None could overrule it and none purported to. It stands, formally, as good law on its own facts: a private-law suit for damages, not founded on any fundamental right, arising from negligence in the exercise of powers of arrest, search and seizure under the criminal procedure law. A genuinely narrow slot — but not an empty one.

The constitutional tort — the practical escape route

Because no legislature ever passed the statute Gajendragadkar CJ asked for, the Supreme Court built the remedy itself, out of Articles 32 and 226 rather than out of the law of torts. Four cases mark the line, and they should be learned as a sequence.

Rudul Sah v State of Bihar (1983). Rudul Sah was acquitted of murder by a Sessions Court in 1968 and then kept in Muzaffarpur jail for a further fourteen years, until 1982. He petitioned under Article 32 for habeas corpus, and was released while the petition was pending. The State's answer was that the only surviving question — money — belonged in a civil suit. Chandrachud CJ refused to accept that Article 32 is exhausted by an order of release. If the Court could do no more than order what had already happened, the fundamental right to liberty would be reduced to a paper guarantee, since a released prisoner is rarely in a position to fight a civil suit through the ordinary courts. The Court awarded Rs 30,000 as a "palliative", in addition to Rs 5,000 already directed, expressly without prejudice to the petitioner's right to sue for damages in the ordinary way. It is the foundational case, but it was cautious: the sum was interim in character and the theory was left undeveloped.

Bhim Singh v State of Jammu and Kashmir (1985). Bhim Singh was a sitting member of the Jammu and Kashmir Legislative Assembly. On the night of 9–10 September 1982, on his way to Srinagar for a session of the Assembly, he was arrested by the police, held in custody, and deliberately prevented from attending the House at which a vote was taken. He was not produced before a magistrate within twenty-four hours as the law required, and the remand orders that were obtained were passed mechanically without his being produced. By the time the matter reached the Supreme Court he had long since been released, so habeas corpus was pointless. Chinnappa Reddy J nevertheless awarded Rs 50,000 as exemplary damages, holding that where a citizen has been robbed of his personal liberty by the mischievous or malicious act of a public officer, the Court will not content itself with a declaration; it will "compensate the victim by awarding suitable monetary compensation". The case does two jobs at once: it is the standing authority on false imprisonment in India, and it establishes that constitutional compensation may be exemplary, punishing the abuse of power rather than merely measuring the loss.

Nilabati Behera v State of Orissa (1993). Suman Behera, aged twenty-two, was taken into custody at Jeraikela police station in Orissa on suspicion of theft. The next morning his body was found on a railway track, with multiple injuries. His mother, Nilabati Behera, wrote a letter to the Supreme Court, which was treated as a petition under Article 32. The State's defence was that he had escaped and been run over by a train; the medical evidence showed injuries consistent with a beating and not with a railway accident. The Court awarded Rs 1,50,000 to the mother, and this time it supplied the theory the earlier cases lacked. Verma J's statement is the one to memorise, and it is quoted with approval in Nagendra Rao itself:

"Award of compensation in a proceeding under Article 32 by this Court or by the High Court under Article 226 of the Constitution is a remedy available in public law, based on strict liability for contravention of fundamental rights to which the principle of sovereign immunity does not apply, even though it may be available as a defence in private law in an action based on tort."

Dr Anand J added the sentence that supplies the justification: "The purpose of public law is not only to civilize power but also to assure the citizen that they live under a legal system which aims to protect their interests and preserve their rights." The Court also drew support from Article 9(5) of the International Covenant on Civil and Political Rights, which gives an enforceable right to compensation to victims of unlawful arrest or detention.

Chairman, Railway Board v Chandrima Das (2000). Smt Hanuffa Khatoon, a Bangladeshi national, was gang-raped by railway employees at the Rail Yatri Niwas at Howrah station. A practising advocate of the Calcutta High Court, Mrs Chandrima Das, moved the High Court under Article 226; it awarded Rs 10 lakh, and the Supreme Court upheld the award. Three holdings matter. (i) Standing: the petition was not a private claim for damages but a public-law proceeding, so an advocate unconnected with the victim could bring it. (ii) Nationality: Article 21 protects "person", not "citizen"; a foreign national on Indian soil is entitled to the right to life and to live with human dignity, and following Bodhisattwa Gautam v Subhra Chakraborty (1996) rape is itself a violation of Article 21. (iii) Sovereign immunity: running the railways for a charge "is a part of the commercial activity of the Union of India and this activity cannot be equated with the exercise of sovereign power… Kasturi Lal decision therefore, cannot be pressed into aid." The Court added, decisively for our purposes, that "we are dealing with this case under the public law domain and not in a suit instituted under the private law domain."

#### Public law remedy versus private law action — the distinction that carries marks

Write it as a contrast, because that is how it is examined.

| | Private law action in tort | Public law remedy (Arts. 32 / 226) | |---|---|---| | Forum | Civil court, ordinary suit | Supreme Court or High Court, writ petition | | Basis of claim | Breach of a duty recognised by the law of torts | Contravention of a fundamental right | | Nature of liability | Fault-based; vicarious liability must be proved | Strict liability of the State for the infringement | | Sovereign immunity | Still technically available (Kasturi Lal) | Not available at all (Nilabati Behera) | | Procedure | Pleadings, evidence, limitation, court fees, appeals | Summary; no court fee; can be initiated by letter | | Measure | Compensatory damages | Compensation, often described as a palliative; may be exemplary (Bhim Singh) | | Effect on other remedies | The whole claim | Does not bar a subsequent civil suit for full damages |

The two are alternatives, not substitutes. The public law remedy is available "notwithstanding that a suit could be filed for damages under private law", as Chandrima Das put it — but the Court has repeatedly said the writ jurisdiction is meant for cases where the infringement is patent and undisputed, and a claimant who needs a trial on contested facts will still be sent to the civil court. In Common Cause, A Regd. Society v Union of India (1999), a three-Judge Bench mapped the boundary and confirmed that "the public law remedies have also been extended to the realm of tort".

Why this matters to Kasturi Lal. Look again at the facts of that case: Ralia Ram's loss was of property, not of life or liberty. It is exactly the kind of claim that the constitutional-tort route does not reach, because no fundamental right of the kind that attracts Article 32 was infringed (the right to property ceased to be a fundamental right in 1978). So the constitutional tort has not made Kasturi Lal irrelevant; it has left it stranded in the small, unattractive corner of purely proprietary loss caused by police powers. That is why Nagendra Rao's redefinition of "sovereign function" in private law still does independent work.