Introduction 

• The concept of vicarious liability of the State is a fundamental principle in administrative law that determines the extent to which the government can be held responsible for the tortious acts of its employees.  
• This doctrine has evolved significantly from the days of the East India Company to the present constitutional framework in India.  
• Understanding this concept is crucial as it directly impacts citizens' rights and remedies against state actions, while also defining the boundaries of state accountability in both sovereign and non-sovereign functions. 

Historical Evolution of State Liability 

• The foundation of state liability in India can be traced through a series of legislative acts and constitutional provisions.  
• Article 300 of the Indian Constitution serves as the cornerstone, drawing its essence from previous legislation including the Government of India Act 1935, the Government of India Act 1915, and the Government of India Act 1858.  
• This legislative lineage establishes a connection between the current government's liability and that of the East India Company. 

The Peninsular Case: A Landmark Decision 

• The 1861 case of Peninsular and Oriental Steam Navigation Company v. Secretary of State (1861) for India-in-Council marked a watershed moment in defining state liability.  
• Chief Justice Sir Barnes Peacock established a crucial distinction between sovereign and non-sovereign functions of the state.  
• The case involved government workmen's negligence that resulted in injury to horses, leading to the fundamental question of whether the Secretary of State-in-Council could be held liable for damages caused by government servants' negligence. 

Evolution Through Judicial Interpretation 

The Haribhanji Case: 

• In Secretary of State v. Haribhanji (1882), Chief Justice Turner provided a different perspective, emphasizing that the East India Company's possession of sovereign powers did not grant it sovereign immunity.  
• This interpretation suggested that the scope of state liability could extend beyond what was initially conceived in the Peninsular case. 

The Kasturi Lal Decision: 

• The Supreme Court's approach in Kasturi Lal v. State of Uttar Pradesh (1965) marked a return to the sovereign/non-sovereign distinction.  
• The case involved the misappropriation of seized gold by a police officer, where the court held that the state was not liable as the act occurred during the exercise of sovereign powers. 

Classification of State Functions 

Sovereign Functions: 

• Courts have identified various activities as sovereign functions, including: 
  • Police actions in maintaining law and order. 
  • Military operations and related activities. 
  • Actions taken for national security. 

Non-Sovereign Functions: 

• Activities classified as non-sovereign include: 
  • Commercial undertakings. 
  • Transportation of goods and personnel. 
  • Maintenance of public facilities. 

Modern Developments and Constitutional Remedies 

• A significant development in state liability has emerged through constitutional remedies under Articles 32 and 226.  
• Cases like Rudul Sah v. State of Bihar (1983) and Nilabati Behra v. State of Orissa (1993) have established that compensation can be awarded for fundamental rights violations, regardless of sovereign immunity.  
• This approach has created a parallel system of liability based on constitutional law rather than tort law. 

Dual System of Remedies 

• The current legal framework provides two primary avenues for seeking remedies against state actions: 
  • Traditional tort law remedies under Article 300 of the Constitution. 
  • Constitutional remedies under Articles 32 and 226 for fundamental rights violations. 

Conclusion 

The doctrine of state liability in India has evolved significantly from its colonial origins to its present form. While the traditional distinction between sovereign and non-sovereign functions continues to influence tort liability, the emergence of constitutional remedies has provided additional protection for citizens' rights. This dual system ensures better accountability of the state while maintaining necessary immunities for essential sovereign functions. However, there remains scope for legislative intervention to clarify and modernize the law of state liability in accordance with contemporary needs and expectations.