Rights and Liabilities of the Government

Articles 294 to 300 in Part XII of the Constitution deal with the property, contracts, rights, liabilities, obligations, and suits of the Union and the states. The Constitution treats the Union and the states as juristic (legal) persons — capable of holding property, entering contracts, and being parties to legal proceedings.

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1. Succession (Article 294 & 295)

All property and assets previously vested in the Dominion of India, provinces, or princely states became vested in the Union or corresponding state upon the Constitution's commencement. Likewise, all rights, liabilities, and obligations of predecessor governments transferred to the respective successor governments.

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

• Escheat: Death of a person intestate (without a will) without any heir — property goes to the government.
• Lapse: Termination of rights through disuse or failure to follow appropriate procedures.
• Bona Vacantia: Property found with no apparent owner.
• In all three cases, property accrues to the state where the property is situated, or to the Union in any other case.

3. Sea-Wealth (Article 297)

All lands, minerals, and other things of value under ocean waters within India's:

• Territorial waters (12 nautical miles from the baseline)
• Continental shelf
• Exclusive Economic Zone (up to 200 nautical miles) ...vest in the Union. A coastal state cannot claim jurisdiction over these.

4. Compulsory Acquisition by Law

• Parliament and state legislatures may enact laws for compulsory acquisition of private property.
• The 44th Amendment Act, 1978 abolished the constitutional obligation to pay compensation except in two cases:
  • Acquisition of property of a minority educational institution
  • Acquisition of land held under personal cultivation within statutory ceiling limits

5. Acquisition under Executive Power (Article 298)

The Union or state can acquire, hold, and dispose of property under executive power. They can also carry on trade or business within and outside the state.

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• The Government of India may sue or be sued as the "Union of India".
• A state government may sue or be sued by the name of that state (e.g., "State of Andhra Pradesh").
• Thus, the Union of India and states are the legal entities for suit purposes — not the abstract "Government of India" or "Government of a State".

Liability for Contracts

The Union or a state can enter contracts under executive power. Such contracts must satisfy three conditions:

1. Expressed to be made by the President or Governor
2. Executed on behalf of the President or Governor
3. Executed by such person in such manner as the President or Governor directs

These conditions are mandatory, not directory. Non-compliance renders the contract void and unenforceable.

• The President, Governor, and executing officer are not personally liable for such contracts.
• This immunity is personal only — it does not immunise the government itself from contractual liability.
• Government contractual liability mirrors that of an ordinary individual under contract law (same since the East India Company era).

Liability for Torts (Civil Wrongs)

The evolution of governmental tort liability is a major area of constitutional law:

Historical Position:

• Originally based on the English maxim: "The King can do no wrong" — sovereign immunity.
• The East India Company was suable as a trader but immune as a sovereign.
• P & O Steam Navigation Company case (1861): Established the distinction between sovereign and non-sovereign functions. Government is only suable for torts committed in non-sovereign functions.

Post-Independence:

• Kasturilal v. State of UP (1965): Supreme Court reaffirmed immunity for sovereign functions. Government not liable for torts in exercise of sovereign powers (e.g., administering justice, constructing military roads, commandeering goods during war).

Judicial Liberalisation:

• After Kasturilal, the SC began giving a restrictive interpretation to sovereign functions, awarding compensation in many cases.

• N. Nagendra Rao & Co. v. State of AP (1994): SC criticised the doctrine of sovereign immunity. Held:

  • The distinction between sovereign and non-sovereign functions is largely outdated.
  • The State must be liable for negligent acts of its servants causing damage to citizens.
  • Only a few primary functions (administration of justice, maintenance of law and order, repression of crime) may still attract limited immunity.
  • Kasturilal is applicable only in rare and limited cases.

• Common Cause Case (1999): SC rejected the sovereign immunity rule more firmly. Held that the P & O rule is outmoded; the State should be liable for all tortious acts of employees, whether in sovereign or non-sovereign capacity. Kasturilal's precedent value was significantly eroded.

• Prisoner's Murder Case (2000): SC ruled that Kasturilal has paled into insignificance through judicial advancement and is no longer of binding value.

Key trend: Indian courts have progressively dismantled the old doctrine of sovereign immunity and moved toward full State liability for tortious acts.

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1. President and Governor

(a) Official Acts:

• Cannot be sued (during term or thereafter) for acts done in performance of official duties.
• However, official conduct can be reviewed by a court/tribunal authorised by Parliament for impeachment proceedings.
• Aggrieved persons may sue the Union/State instead of the President/Governor.

(b) Personal Acts:

• No criminal proceedings can be initiated against President/Governor for personal acts during their term; they cannot be arrested or imprisoned during their term.
• Civil proceedings may be initiated for personal acts during their term, but only after 2 months' advance notice.

2. Ministers

• No constitutional immunity for official or personal acts.
• Not required to countersign presidential/gubernatorial acts (unlike in Britain), so they are not liable in courts for those acts.
• Courts cannot inquire into advice given by ministers to the President/Governor.
• For personal acts: ministers are fully suable for crimes and torts like any ordinary citizen.

3. Judicial Officers

• Enjoy immunity from civil liability for official acts under the Judicial Officers Protection Act, 1850.
• No judge, magistrate, or other person acting judicially can be sued in civil court for acts done in discharge of official duty.

4. Civil Servants

• Personal immunity for official contracts — the government is liable, not the servant.
• If contract was made without fulfilling the constitutional conditions (Article 299), the servant is personally liable.
• Immunity from tort liability for sovereign function acts; otherwise, same liability as an ordinary citizen.
• Civil proceedings against civil servants for official acts require 2 months' advance notice; no notice needed for acts outside official scope.
• Criminal proceedings for official acts require prior sanction of the President or Governor.

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• The Chandra Kumar case (1997) is relevant to Tribunals — note that the case on governmental liability is P & O Steam Navigation (1861) and Kasturilal (1965).
• Know the three conditions for valid government contracts under Article 299 — non-compliance makes the contract void.
• The trajectory of tort liability cases — P & O → Kasturilal → Nagendra Rao → Common Cause → Prisoner's Murder — shows the erosion of sovereign immunity.
• President/Governor immunity: personal acts during term = no criminal proceedings, civil proceedings with 2-month notice.
• Ministers have no immunity — unlike the British system where ministers countersign and bear liability.
• The Crown Proceedings Act, 1947 abolished crown immunity in Britain — India has no such equivalent legislation, though courts have achieved similar results through judicial interpretation.