Case Summary: Kasturi Lal Ralia Ram Jain v. State of Uttar Pradesh

1. Case name: Kasturi Lal Ralia Ram Jain v. State of Uttar Pradesh
2. Citations: 1965 AIR 1039, 1965 SCR (1) 375
3. Bench: P.B. Gajendragadkar, K.N. Wanchoo, M. Hidayatullah, Raghubar Dayal, J.R. Mudholkar
4. Date of judgement: 29 September 1964
5. Relevant Statutes:

• Section 54(1)(iv) of the Code of Criminal Procedure.
• Section 550 of the Code of Criminal Procedure.
• Section 51 of the Code of Criminal Procedure.
• Section 523 of the Code of Criminal Procedure.
• U.P. Police Regulations.
• Regulation 165 of the U.P. Police Regulations.
• Regulation 166 of the U.P. Police Regulations.
• Article 300(1) of the Constitution of India.
• Section 65 of the Government of India Act, 1858.
• Section 32 of the Government of India Act, 1915.
• Section 176 of the Government of India Act, 1935.
• Section 409 of the Indian Penal Code.
• Section 29 of the Police Act.
• Indian Partnership Act.
• Crown Proceedings Act, 1947.
• Section 41(b) of Act IV of 1898 (Burma).

Facts

The case of Kasturilal Ralia Ram Jain vs. The State of Uttar Pradesh (1964) involves a claim for the value of seized gold that was lost due to the negligence of state employees. The following are the brief facts of the case:

• The Incident and Seizure: On September 20, 1947, Ralia Ram, a partner in a bullion-dealing firm, arrived in Meerut carrying a significant amount of gold and silver. At midnight, he was arrested by three police constables on suspicion of possessing stolen property. The police seized his belongings, which included 103 tolas, 6 mashas, and 1 ratti of gold, as well as over 2 maunds of silver.
• The Loss of Property: Ralia Ram was released on bail the following day, and his silver was eventually returned to him. However, the gold was kept in the police Malkhana (storage) under the charge of Head Constable Mohammad Amir. Amir misappropriated the gold and fled to Pakistan in October 1947. Despite police efforts, he could not be apprehended.
• Negligence of the Police: The Supreme Court found that the police had been grossly negligent in handling the property. Under U.P. Police Regulation 166, valuables like gold and silver were required to be kept in a separate box under lock and key in the Treasury; instead, they were left in the Malkhana. Furthermore, the police failed to prepare a proper list or accurately weigh the seized goods.
• Legal Proceedings: The appellant sued the State of Uttar Pradesh for the return of the gold or its value (Rs. 11,075-10-0 plus interest). While the trial court decreed in favor of the appellant, the High Court dismissed the suit.
• Supreme Court Ruling: The Supreme Court ultimately dismissed the appeal. It held that while the police were negligent, the acts of arresting a person and seizing property are characterized as sovereign powers conferred by statute. Because the negligence occurred during the exercise of these sovereign functions, the State was immune from liability for the tortious acts of its employees.

The Court noted that this was an unsatisfactory position in law and suggested that the Legislature should pass enactments to regulate and control the State’s claim of immunity, similar to the Crown Proceedings Act in England.

Arguments of the Appellant (Kasturilal Ralia Ram Jain)

The appellant sought to hold the State liable for the value of the lost gold based on the following points:

• Negligence of Public Servants: The appellant argued that the loss of the gold was a direct result of the gross negligence of the police officers in their failure to follow safety regulations for the custody of seized property,.• Vicarious Liability: It was contended that the State, as an employer, must be held responsible for the tortious acts committed by its servants during the course of their employment, just as any private employer would be,.
• Extension of Precedent (State of Rajasthan v. Mst. Vidhyawati): The appellant relied heavily on the Vidhyawati case, where the State was held liable for a driver’s negligence. They argued that the principle of state immunity based on “the King can do no wrong” was inconsistent with a Republican form of Government and the socialistic objectives of modern India,.
• Failure of Duty: Since the property was seized by process of law and not returned, the appellant argued it would be unjust for the citizen to be left without a remedy against the State.

Arguments of the Respondent (The State of Uttar Pradesh)

The State resisted the claim by distinguishing between different types of government functions:

• Sovereign Immunity: The State argued that even if the police officers were negligent, the State could not be held liable because the acts of arresting, searching, and seizing property were performed in the exercise of sovereign powers,.
• Statutory Authorization: The respondent maintained that the officers were acting under specific statutory powers (such as Sections 54, 51, and 550 of the Code of Criminal Procedure), which categorizes their employment as a delegated sovereign function.
• Criminal Act of an Individual: The State pleaded that the gold was lost due to the felonious act (misappropriation) of Head Constable Mohammad Amir, for which the State should not be held responsible, especially as the police had made “best efforts” to apprehend him,.
• Historical Legal Limits: The State argued that under Article 300(1) of the Constitution, its liability was limited to cases where the East India Company could have been sued, and historical precedents (like the P. & O. Steam Navigation Co. case) established immunity for acts done in the exercise of sovereign power.

Judgement 

The Supreme Court of India dismissed the appeal in Kasturilal Ralia Ram Jain vs. The State of Uttar Pradesh, ruling that the State was not liable for the loss of the gold. While the Court found the police officers were negligent, it held that the State was protected by the doctrine of sovereign immunity because the negligence occurred during the exercise of core governmental functions.