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Rights and Liabilities of the Government

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Rights and Liabilities of the Government

Rights and Liabilities of the Government

  • Articles 294–300 deal with the Rights and Liabilities of the Government.
  • Article 297 vests maritime resources in the Union.
  • Article 298 empowers the Union and States to carry on trade or business.
  • Article 299 prescribes mandatory requirements for Government contracts.
  • Article 300 governs suits by or against the Union and States.
  • Article 361 grants constitutional immunity to the President and Governors.
  • The Judicial Officers Protection Act, 1850 protects judges from civil suits for judicial acts.
  • Government liability in tort continues to be largely judge-made law since no comprehensive legislation has been enacted under Article 300.

Articles 294–300 (Part XII) deal with the property, contracts, rights, liabilities, obligations and suits of the Union and the States.

Property of the Union and the States

A.Succession (Articles 294–295)

  • All property and assets vested in the Dominion of India, Provinces or Indian Princely States before the commencement of the Constitution vested in the Union or the corresponding State.
  • Likewise, all rights, liabilities and obligations of the Government of the Dominion of India and the Governor’s Provinces, whether arising from contracts or otherwise, became the rights, liabilities and obligations of the Government of India and the corresponding State Governments, respectively.

B.Escheat, Lapse and Bona Vacantia (Article 296)

  • Any property in the territory of India that, if the Constitution had not come into force, would have accrued to the King of England or the Ruler of an Indian State by escheat, lapse, or bona vacantia (for want of a rightful owner), shall vest in the State Government if the property is situated within that State, and in the Union Government in all other cases.

Terms

  • Escheat: Property devolving on the government when a person dies intestate without leaving any legal heir.
  • Lapse: Termination of rights through disuse or failure to follow appropriate procedures
  • Bona Vacantia: Ownerless property or property with no lawful claimant.

C.Sea-Wealth (Article 297)

  • All lands, minerals and other valuable resources lying beneath the sea within India’s territorial waters, continental shelf and Exclusive Economic Zone (EEZ) vest in the Union Government.
  • Further, all other resources of the Exclusive Economic Zone (EEZ) also vest in the Union.
  • Accordingly, coastal States cannot claim ownership or jurisdiction over these resources.

Extent

  • Territorial Waters: Up to 12 nautical miles from the appropriate baseline.
  • Exclusive Economic Zone (EEZ): Up to 200 nautical miles from the appropriate baseline.

Note: The limits of the territorial waters, continental shelf, EEZ and other maritime zones are determined by Parliament through law and may be modified from time to time.(Article 297)

D.Compulsory Acquisition of Property 

Both Parliament and the State Legislatures are empowered to enact laws for the compulsory acquisition or requisition of private property by the government.

Following the 44th Constitutional Amendment Act, 1978, the Right to Property ceased to be a Fundamental Right, and the Constitution no longer mandates payment of compensation for compulsory acquisition, except in the following cases:

  • Acquisition of the property of a minority educational institution by the government.
  • Acquisition of land held under the personal cultivation of a person, where such land is within the statutory ceiling limits by the government.

E.Acquisition under Executive Power (Article 298)

  • The Union and the States have the power to acquire, hold and dispose of property in the exercise of their executive authority.
  • The executive power of the Union or a State also extends to the carrying on any trade or business within and in other states.

Suits by or Against the Government (Articles 300)

The Constitution recognises the Union and the States as juristic (legal) persons, enabling them to sue and be sued in courts of law.

  • The Government of India may sue or be sued in the name of the Union of India.
  • The Government of a State may sue or be sued in the name of the State.

Thus, it is the Union of India or the State, and not the Government of the Union or the State Government, that is the legal entity for the purposes of legal proceedings.


Extent of Government Liability

Article 300 provides that the Union and the States may sue or be sued in relation to their respective affairs in the same manner as the Dominion of India and the corresponding Provinces or Indian States could before the commencement of the Constitution.

This position is subject to any law made by Parliament or the State Legislature. However, no such law has been enacted so far. Consequently, the pre-Constitution legal position continues to apply.

Under the pre-Constitution law:

  • The Government was liable for contractual obligations.
  • However, it enjoyed immunity from liability for torts (civil wrongs committed by its servants) arising out of sovereign functions.

A.Liability for Contracts

Under its executive power, the Union or a State may enter into contracts for the acquisition, holding or disposal of property, carrying on trade or business, or any other governmental purpose.

Article 299 lays down the constitutional requirements for contracts entered into by the Union or a State in the exercise of their executive power. These provisions are intended to ensure that government contracts are entered into only through duly authorised procedures.

Constitutional Requirements

Every contract made in the exercise of the executive power of the Union or a State must satisfy the following conditions:

  • It must be expressed to be made in the name of the President (for the Union) or the Governor (for the State).
  • It must be executed on behalf of the President or the Governor by a person authorised by them.
  • It must be executed in the manner prescribed or authorised by the President or the Governor.

These requirements are mandatory.A contract that does not comply with these constitutional requirements is not enforceable against the Government.

Personal Liability

  • The President or the Governor is not personally liable for any contract or assurance made in the exercise of the executive power.
  • Likewise, any person executing such a contract on behalf of the President or the Governor is not personally liable for obligations arising out of the contract.

This immunity is personal in nature and does not exempt the Government from contractual liability. Accordingly, the Union and the State Governments can be sued for breach of contract, and their contractual liability is governed by the ordinary law of contracts, a position that has existed since the days of the East India Company.


B.Liability for Torts

A tort is a civil wrong (other than a breach of contract) for which the law provides a remedy in the form of compensation.

Unlike contractual liability, the Constitution does not specifically define the tortious liability of the Government. Under Article 300, the liability of the Union and the States continues to be governed by the principles that existed before the commencement of the Constitution, as no law has been enacted by Parliament or the State Legislatures to alter this position.

Evolution of Government Liability

Initially, the East India Company functioned as a trading body and was liable for acts performed in its commercial capacity. However, after acquiring sovereign powers, it enjoyed immunity for acts performed in the exercise of sovereign functions, based on the English common law principle that “the King can do no wrong.”

Although this doctrine was abolished in the United Kingdom by the Crown Proceedings Act, 1947, it continued to influence the law relating to government liability in India.

Traditional Position

The Government can generally be sued for torts committed by its servants while performing non-sovereign (commercial or welfare) functions. However, it traditionally enjoyed immunity for torts arising from sovereign functions, such as:

  • Administration of justice
  • Maintenance of law and order
  • Defence and military operations
  • Commandeering property during war

The distinction between sovereign and non-sovereign functions of the Government, and the corresponding doctrine of sovereign immunity, was first laid down in the landmark P & O Steam Navigation Company v. Secretary of State (1861). This principle was reaffirmed by the Supreme Court in Kasturi Lal v. State of Uttar Pradesh (1965). However, in subsequent decisions, the Court progressively adopted a narrower interpretation of sovereign functions, thereby expanding the scope of State liability and awarding compensation to victims in numerous cases.

Important Judicial Developments

P & O Steam Navigation Co. v. Secretary of State

1861
  • Laid down the distinction between sovereign and non-sovereign functions.
  • Held the Government liable for torts committed in the exercise of non-sovereign functions, but not for sovereign functions.

Kasturi Lal v. State of Uttar Pradesh

1965
  • The Supreme Court reaffirmed the doctrine of sovereign immunity.

N. Nagendra Rao & Co. v. State of Andhra Pradesh

1994

The Supreme Court took a liberal approach towards the tortious liability of the State and criticised the doctrine of sovereign immunity. The Court held that:

  • The State is liable to compensate a citizen for loss or injury caused by the negligent acts of its servants.
  • The State cannot escape liability merely by invoking sovereign immunity.
  • In a modern sense, the distinction between sovereign and non-sovereign functions has largely lost its relevance.
  • Except for a few primary and inalienable sovereign functions, the State cannot claim immunity from tortious liability.

Common Cause v. Union of India

1999

The Supreme Court re-examined the doctrine of sovereign immunity and adopted a more progressive approach to the tortious liability of the State. The Court held that:

  • The doctrine of sovereign immunity, as laid down in the P & O Steam Navigation Company case (1861), had become outdated.
  • In a modern welfare State, it is increasingly difficult to draw a clear distinction between sovereign and non-sovereign functions, as the State is involved in almost every sphere of public life.
  • The liability of the State should be commensurate with its expanding functions, and the State should ordinarily be liable for the tortious acts of its employees, irrespective of whether they are performed in the exercise of sovereign or non-sovereign powers.
  • The precedential value of Kasturi Lal v. State of Uttar Pradesh (1965) had been substantially eroded by subsequent judicial developments.
Significance: The judgment further narrowed the scope of sovereign immunity and reinforced the principle that a modern welfare State should be accountable for the wrongful acts of its officials.

Prisoner’s Murder Case

2000
  • The Supreme Court observed that Kasturi Lal had largely lost its significance and was no longer of substantial binding value in light of subsequent judicial developments.

Present Position

The judicial trend has been towards restricting the doctrine of sovereign immunity and expanding the liability of the State.

Today, the Government is increasingly held liable for negligent acts of its officials, particularly where they result in the violation of constitutional or legal rights, although limited immunity continues to exist for certain core sovereign functions such as:

  • Administration of justice
  • Maintenance of law and order
  • Defence and national security
  • Repression of crime

Suits Against Public Officials

While public officials are accountable under the law, the Constitution and certain statutes provide limited immunities to enable them to perform their official functions independently and without fear of vexatious litigation.

President and Governor (Article 361)

The Constitution grants certain immunities to the President of India and the Governors of States in respect of both their official and personal acts.

Official Acts

  • The President or Governor is not answerable to any court (either during their term of office or thereafter) for the exercise and performance of the powers and duties of their office or for any act done (or purported to be done) in their official capacity.
  • However, the conduct of the President may be examined by a court, tribunal or any authority appointed by either House of Parliament during impeachment proceedings under Article 61.
  • This immunity does not prevent a person from instituting appropriate legal proceedings against the Union of India (instead of the President) or the concerned State Government (instead of the Governor).

Personal Acts

  • No criminal proceedings shall be instituted or continued against the President or a Governor during their term of office.They cannot be arrested or imprisoned while in office.This immunity applies only during their tenure and does not continue after they leave office.
  • Civil Proceedings (Article 361)
  • No civil proceedings can be instituted against the President or a Governor during their term of office for any act done in their personal capacity until the expiry of two months after a written notice has been served, stating:
    • the nature of the proceedings,
    • the cause of action,
    • the name, description and place of residence of the plaintiff, and
    • the relief claimed.

Ministers

The Constitution does not confer any special immunity on Ministers for their official or personal acts.

Official Acts

  • Ministers are not personally liable for the official acts of the President or the Governor because, unlike the British system, they are not required to countersign such acts.
  • Further, courts cannot inquire into the advice tendered by Ministers to the President or the Governor (Article 74(2) and Article 163(3)). Consequently, Ministers cannot be held legally liable for official acts performed by the President or Governor on their advice.

Personal Acts

  • Ministers do not enjoy any immunity for acts done in their personal capacity.
  • They can be prosecuted or sued for criminal offences, civil wrongs (torts), or other legal liabilities in the same manner as any ordinary citizen.

Judicial Officers

  • Judicial officers enjoy immunity for acts performed in the discharge of their judicial functions.
  • Under the Judicial Officers Protection Act, 1850, ‘no judge, magistrate, justice of peace, collector or other person acting judicially  can be sued in a civil court for any act done in the exercise of his or her judicial duties.
  • This protection is intended to preserve judicial independence and enable judges to decide cases without fear of personal liability.

Civil Servants

Civil servants enjoy personal immunity from legal liability for contracts entered into in their official capacity.

  • Where a contract is executed in accordance with the constitutional requirements under Article 299, the Government (Union or State), and not the civil servant, is liable under the contract.
  • However, if the contract does not comply with the constitutional requirements, it is not binding on the Government, and the civil servant who executed the contract may become personally liable.

Liability for Torts

  • Civil servants enjoy immunity from liability for tortious acts performed in the exercise of the sovereign functions of the Government.
  • For torts or illegal acts committed outside sovereign functions, their liability is the same as that of any ordinary citizen.

Civil Proceedings

  • A civil suit against a civil servant for an act done in an official capacity can be instituted only after giving two months’ prior notice.
  • No such notice is required where the act was outside the scope of official duties.

Criminal Proceedings

  • Criminal proceedings may be instituted against a civil servant for acts performed in the discharge of official duties only with prior sanction of the competent authority (President, Governor, or the appropriate authority, wherever required by law).

The constitutional framework governing the rights and liabilities of the Government seeks to balance effective governance with accountability under the rule of law. While Articles 294–300 enable the Union and the States to function as legal entities capable of owning property, entering contracts and defending legal claims, judicial developments have progressively narrowed the doctrine of sovereign immunity, reinforcing the principle that in a constitutional democracy, governmental power must increasingly be accompanied by legal responsibility and accountability.

FAQs

1.What are the Rights and Liabilities of the Government?

They refer to the constitutional provisions governing the property, contracts, legal rights, liabilities and legal proceedings relating to the Union and the States under Articles 294–300.

2.Which Articles deal with the Rights and Liabilities of the Government?

Articles 294 to 300 of Part XII of the Constitution.

3.What is Article 299?

Article 299 prescribes the constitutional procedure for Government contracts and lays down mandatory conditions for their validity.

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