Citation: Supreme Court of India, decided on 29th September 1964
Bench: Chief Justice P.B. Gajendragadkar, Justices K.N. Wanchoo, M. Hidayatullah, Raghubar Dayal, J.R. Mudholkar
Parties:
- Appellant: Kasturi Lal Ralia Ram Jain
- Respondent: The State of Uttar Pradesh
Facts of the Case
Kasturi Lal Ralia Ram Jain, a partner in an Amritsar-based business dealing in bullion, arrived in Meerut on September 20, 1947, to trade gold and silver. He was arrested by police officers on suspicion of possessing stolen property, and his belongings, including gold and silver, were confiscated. Although the silver was returned, the gold could not be recovered as a constable in charge of the police station malkhana (storeroom) had stolen it and fled to Pakistan. Kasturi Lal filed a lawsuit against the State of Uttar Pradesh, seeking compensation for the lost gold.
Issue Involved
- Negligence: Whether the police officers were negligent in safeguarding the gold confiscated from Kasturi Lal.
- State Liability: Whether the State is liable to compensate for the damage caused by the negligence of its employees when performing sovereign functions.
- Sovereign Immunity: Can the State claim immunity in cases where public servants commit tortious acts while exercising statutory authority?
Contentions Raised
- Appellant’s Arguments:
- The appellant argued that the State of Uttar Pradesh should compensate for the negligence of police officers, as their careless handling of the confiscated goods led to the loss of the gold.
- Respondent’s Arguments:
- The State argued that the claim pertained to property misappropriation, not negligence. Additionally, it maintained that even if negligence were established, the State was not liable for the actions of its employees when performing sovereign functions.
Judgment
The Supreme Court ruled in favor of the State, upholding the doctrine of sovereign immunity. It held that police officers, though negligent, were performing a sovereign function—exercising their statutory authority to arrest, search, and confiscate property. Since these acts were carried out within the scope of their lawful authority, the State could not be held liable for damages.
Critical Analysis
In its judgment, the Supreme Court drew upon historical precedents, including Chief Justice Peacock’s 1861 ruling, which established that the State is not liable for acts done in the exercise of sovereign functions. By affirming this distinction, the Court limited the State’s liability for tortious acts to non-sovereign functions, thereby extending immunity to cases involving statutory authority.
The decision, however, received criticism as it overlooked evolving principles of state accountability. While the ruling in Kasturi Lal remains technically binding, subsequent cases have limited its scope, recognizing the need to protect individuals’ rights against wrongful acts by the State. Notable cases include:
- Rudul Sah v. State of Bihar: The Supreme Court awarded compensation for wrongful detention, establishing a remedy through writ petitions under Articles 32 and 226.
- Bhim Singh v. State of Rajasthan: The Court awarded damages for illegal arrest and detention, reinforcing state accountability for actions violating personal liberty.
- State of A.P. v. Challa Ramakrishna Reddy: This case further questioned the relevance of sovereign immunity, emphasizing the need for accountability under Article 21 for breaches of fundamental rights.
Modern Developments
The Supreme Court’s stance on sovereign immunity evolved in cases such as N. Nagendra Rao & Co. v. State of Andhra Pradesh, where it held the State liable for the improper handling of seized property, rejecting the sovereign immunity defense. This case underscored that mere performance of statutory duties does not automatically confer immunity, especially when those duties involve improper or negligent actions.
Conclusion
The ruling in Kasturi Lal v. State of Uttar Pradesh has been moderated by later decisions that emphasize state accountability over the rigid application of sovereign immunity. Today, courts are more inclined to recognize the government’s liability for wrongful acts in cases where fundamental rights or personal liberties are violated, setting limits on the scope of sovereign immunity in favor of individual rights and justice.
