Rights and Liabilities of the Government

I. Property of the Union and the States:

• Articles 294-300 (Part XII): Constitution deals with property, contracts, rights, liabilities, obligations, and suits of the Union and states, treating them as juristic (legal) persons.

  • Succession:
    • Property vested in Dominion of India, provinces, or princely states before the Constitution now vests in the Union or corresponding state.
    • Rights, liabilities, and obligations of the Dominion of India/provinces/Indian states now belong to the Government of India or the corresponding state.
  • Escheat, Lapse, and Bona Vacantia:
    • Property that would have gone to the King of England or an Indian ruler through:
      • Escheat: Death without an heir.
      • Lapse: Termination of rights through disuse or failure to follow procedures.
      • Bona Vacantia: Property found without an owner.
    • Now vests in the state if the property is there; otherwise, in the Union if no rightful owner is found.
  • Sea-Wealth:
    • Lands, minerals, and valuables under the ocean within India's territorial waters, continental shelf, and exclusive economic zone vest in the Union.
    • Territorial waters: 12 nautical miles from baseline.
    • Exclusive economic zone: up to 200 nautical miles.
  • Compulsory Acquisition by Law:
    • Parliament and state legislatures can make laws for compulsory acquisition/requisitioning of private property.
    • 44th Amendment Act (1978) removed the constitutional obligation to pay compensation, except:
      • Acquisition of minority educational institution property.
      • Acquisition of land held by a person under their personal cultivation and within statutory ceiling limits.
  • Acquisition under Executive Power:
    • The Union or a state can acquire, hold, and dispose of property under executive power.
    • The Union or a state can carry on any trade or business within and in other states also.

II. Suits By or Against the Government:

• Article 300: Government of India can sue/be sued as "Union of India"; a state can sue/be sued by its name. Union and states are legal entities.
• Government liability: Same as the Dominion of India/provinces before the Constitution, subject to parliamentary law (none enacted yet).
• Pre-Constitution: Government was suable for contracts but not for torts (wrongs) related to sovereign functions.

III. Liability for Contracts:

• Under executive power, the Union/state can enter into contracts for property, trade, etc.

  • Conditions for contracts:
    • Must be expressed as made by the President/Governor.
    • Must be executed on behalf of the President/Governor.
    • Must be executed by an authorized person in a directed manner.
    • Non-compliance voids the contract.
  • President/Governor/officer are not personally liable; the government is suable. Contractual liability is the same as for individuals under contract law since the East India Company.

IV. Liability for Torts:

• East India Company initially suable as a trader, not as a sovereign.

• Government can be sued for torts committed by officials in non-sovereign functions, NOT sovereign functions (administering justice, military road construction, etc.).

  • Distinction established in P and O Steam Navigation Company case (1861).
  • Reaffirmed in Kasturilal case (1964).
  • However, Supreme Court started restrictive interpretation and awarded compensation in many cases.

• Nagendra Rao case (1994):

  • Criticized sovereign immunity doctrine.

  • Adopted a liberal approach and ruled the State liable for negligent acts causing damage.

  • Modern sense: no distinction between sovereign and non-sovereign functions.

  • Observations:

    1. No system can allow the executive to act without legal constraints. Public interest has changed.
    2. Progressive societies are against archaic state protection; the state should be at par with any legal entity. The state's functions as "sovereign" and "non-sovereign" are not distinguishable and are unsound.
    3. Reconcile the state's needs, officials' duties, and citizens' rights in a welfare state. Functions are not only defence, administration, or order but also include regulating all aspects of life.
    4. The line between powers has disappeared. Therefore, barring certain primary functions, the State cannot claim immunity.

• Supreme Court did not overrule Kasturilal but limited it in the Common Cause case, rejected the sovereign immunity rule.

• In Prisoner's Murder case (2000), it was ruled that Kasturilal case has paled into insignificance and is no longer of any binding value.

V. Suits Against Public Officials:

• President and Governor:

  • (a) Official Acts: Cannot be sued during/after term for official acts.
  • Official conduct can be reviewed by a court/tribunal authorized by Parliament for impeachment charges. Proceedings can be brought against the Union/State instead of the President/Governor.
  • (b) Personal Acts: No criminal proceedings or arrest/imprisonment during the term.
    • Civil proceedings allowed with two months' advance notice.

• Ministers:

  • No immunity for official acts (not required to countersign official actions).
  • Not liable for acts on their advice (courts cannot inquire).
  • No immunity for personal acts; can be sued like ordinary citizens.

• Judicial Officers:

  • Immunity for official acts.
  • Judicial Officers Protection Act (1850): No judicial officer is liable for any act done in the discharge of duty.

• Civil Servants:

  • Personal immunity for official contracts (government is liable).
  • Personally liable if the contract doesn't meet constitutional requirements.
  • Immunity for torts related to sovereign functions.
  • Other cases: liability is the same as any ordinary citizen.
  • Civil proceedings require two months' notice, except for acts outside official duties.
  • Criminal proceedings require prior permission from the President/Governor.

VI. Table 75.1: Articles Related to Rights and Liabilities of the Government at a Glance

Article No.	Subject-matter
294	Succession to property, assets, rights, liabilities and obligations in certain cases
295	Succession to property, assets, rights, liabilities and obligations in other cases
296	Property accruing by escheat or lapse or as bona vacantia
297	Things of value within territorial waters or continental shelf and resources of the exclusive economic zone to vest in the Union.
298	Power to carry on trade, etc.
299	Contracts
300	Suits and proceedings
361	Protection (immunities) of President and Governors