Report No. 01
Conclusions and Proposals
60. In the context of a welfare State it is necessary to establish a just relation between the rights of the individual and the responsibilities of the State. While the responsibilities of the State have increased, the increase in its activities has led to a greater impact on the citizen. For the establishment of a just economic order industries are nationalised. Public utilities are taken over by the State.
The State has launched huge irrigation and flood control schemes. The production of electricity has practically become a Government concern. The State has established and intends to establish big factories and manage them. The State carries on works departmentally. The doctrine of laissez faire-which leaves every one to look after himself to his best advantage has yielded place to the ideal of a welfare State-which implies that the State takes care of those who are unable to help themselves.
61. Some of the activities are entrusted to public corporations to run the business on sound economic and business lines efficiently. Public Corporations like the Air Corporations, Damodar Valley Corporation, etc. (vide Appendix IV for a list) are such examples. For all these it employs labour on a large scale. There is no convincing reason why the Government should not place itself in the same position as a private employer subject to the same rights and duties as are imposed by statute.
62. When the Constitution was framed, the question to what extent, if any, the Union and the States should be made liable for the tortious acts of their servants or agents was left for future legislation. The point for consideration, therefore, is on what lines the legislation should proceed. This, indeed, is a difficult question to decide, as it involves the question of demarcating the line up to which the State should be made liable for the tortious acts. It involves, undoubtedly, a nice balancing of considerations so as not to unduly restrict the sphere of the activities of the State and at the same time to afford sufficient protection to the citizen.
Even conservative countries like England realise that the law should progress in favour of the subject in the context of a welfare State and should not remain stagnant. Even under the law obtaining before the Crown Proceedings Act in England, when the immunity of the Crown extended to the departments of State and the injured party had no remedy at all in respect of claims founded on tort, the State mitigated the hardship by paying compensation though this was as a matter of grace and not as of right.
63. The tendency in England, therefore, is towards relaxation of the immunities of the Crown in favour of the subject. But it has not gone far enough.
64. The liberalisation of the law in England and other countries should not be ignored in framing the law in this behalf. Our country also must formulate the law suitably having regard to the changed conditions and the provisions of our Constitution. In America, as has been seen, the liability is very restricted. In Australia, which was the first to give the lead in reducing the immunity of the Crown, a simpler formula that the "rights of the parties shall as nearly as possible be the same as in a suit between subject and subject" was adopted.
This was judicially interpreted to exclude liability for discretionary duties. The Crown Proceedings Act is more liberal than the legislation in the United States but in respect of statutory duties and powers, the scope is very restricted. Though the State is the biggest employer, industrialist and factory owner, the legislation which imposes certain duties on the employer has not been adopted in its entirety.
In other words, the whole of the industrial legislation except the Factories Act was excluded on the principle that the Crown is not bound by any statute unless it is expressly mentioned or is bound by necessary implication. The Act is silent regarding discretionary powers and duty but that may be on the principle that the officer who committed the tort was not liable at common law in the absence of additional damage caused by negligence in the exercise of discretion.
65. It would, therefore, not be advisable to adopt the legislation in this respect in England, America or Australia. It is necessary that the law should, as far as possible, be made certain and definite instead of leaving it to courts to develop the law according to the view of the judges. The citizen must be in a position to know the law definitely. The old distinction between sovereign and non-sovereign functions or governmental and non-governmental functions should no longer be invoked to determine the liability of the State. As Professor Friedman1 observes:
1. Law and Social Change, p. 273.
"It is now increasingly necessary to abandon the lingering fiction of a legally indivisible State, and of a feudal conception of the Crown, and to substitute for it the principle of legal liability where the State, either directly or through incorporated public authorities, engages in activities of a commercial, industrial or managerial character. The proper test is not an impracticable distinction between governmental and non-governmental functions, but the nature and form of the activity in question."
This was also what was decided in Haribhanji's case1. We would recommend that legislative sanction be given to the rule laid down in that case.
1. ILR 5 Mad 273. See also in this connection the observations of Mukerjea, J., (as he then was), Saghir Ahmed v. State, (1955) 1 SCR 707 (731).
The following shall be the principles on which legislation should proceed:-