KASTURI LAL RALIA RAM JAIN V. THE STATE OF UTTAR PRADESH (1965)

1. CASE TITLE: Kasturi lal Ralia Ram Jain vs. The State of Uttar Pradesh

2. CITATION: 1965 AIR 1039, 1965 SCR (1) 375

3. COURT: Supreme Court of India

4. BENCH:The issue was heard by a five-judge Constitution Bench of the Supreme Court comprising:

1. Chief Justice P.B. Gajendragadkar
2. Justice K.N. Wanchoo
3. Justice M. Hidayatullah
4. Justice Raghubar Dayal
5. Justice J.R. Mudholkar

5. DATE OF JUDGEMENT: 29 September 1964 [1]

6. RELAVANT STATUTES AND KEY PROVISIONS :

The case involved a series of legal provisions that defined the arguments and judgment:

1. Article 300(1) of the Indian Constitution: This article enunciates the liability of the State or the Union as regards the acts of its servants in the following words: the government can be sued just as the East India Company could have been sued before 1858, except as provided in any law passed by the Parliament or the State Legislature.[2]

2. Section 54(1)(iv) of Code of Criminal Procedure (CrPC), 1898 (now Section 41(1)(c) of CrPC, 1973): The section empowered the police officers to arrest without warrant any person found in possession of property reasonably suspected to be stolen.[3]

3. Section 102(1) of the Code of Criminal Procedure, 1973: Although enacted later, the section resembles provisions in the 1898 CrPC, allowing police to seize property suspected to be stolen or in relation to an offense.[4]
4. Section 29 of the Police Act, 1861: This section punishes the police officers, either in terms of fine or imprisonment, for disobedience of court orders or dereliction of duty, laying down individual responsibility but not State responsibility.[5]
5. Indian Penal Code, 1860: The provisions were Section 378 (theft) and Section 405 (criminal breach of trust), which could be applied to the said misappropriation of the gold by the head constable.[6]
6. UP Police Rules: These regulated the behavior of the police officers of Uttar Pradesh, ranging from the handling of property confiscated, i.e., where it was to be stored, e.g., the police station malkhana.[7]

7. BRIEF FACTS:

In September 1947, Kasturilal Ralia Ram Jain, a partner in a registered firm dealing in bullion and other commodities at Amritsar, Punjab, traveled to Meerut, Uttar Pradesh, to sell gold and silver. On 20 September 1947, while passing through Chaupla Bazar in Meerut, he was detained and searched by three police constables who suspected that he had stolen goods. His valuables, including 103 tolas, 6 mashas, and 1 ratti of gold (a significant amount, worth much then) and 2 maunds and 6½ seers of silver, were seized by the police. These were deposited in the police malkhana (custody) against the head constable’s bail, Mohammad Amir.

Kasturilal was taken into custody for a day and released on bail the following day, 21 September 1947. Silver was restored to him but not the gold. Investigation further revealed that Mohammad Amir had departed for Pakistan with the gold on 17 October 1947, so that it cannot be retrieved. Kasturilal filed a suit in the civil court against the State of Uttar Pradesh for the restoration of the gold or its value, which was Rs. 11,075, together with interest. The trial court gave judgment in his favor that the State was vicariously liable for negligence on the part of its police officers. The Allahabad High Court, however, reversed this judgment, holding that the State was not liable on the grounds of the doctrine of sovereign immunity. Kasturilal appealed to the Supreme Court of India, objecting to the High Court’s judgment and seeking compensation for his loss.[8]

8. ISSUES INVOLVED:

The Supreme Court had to decide the following issues of law:

1. Negligence on the part of the Police Officers: Were the police officers negligent in not keeping the recovered gold safe from Kasturilal and letting the head constable appropriate it for himself?
2. State Liability: Would the State of Uttar Pradesh be held vicariously liable for the tortious actions (misappropriation or negligence) of its police officers while it was in their custody?
3. Sovereign Immunity: Does the doctrine of sovereign immunity, as applied under Article 300(1) of the Constitution, bar a suit against the State for torts committed by its servants during the performance of sovereign functions, such as police duties under statutory powers?[9]

9. ARGUMENTS:

• Appellant (Kasturilal Ralia Ram Jain):

1. Negligence: It was the contention of Kasturilal that the police personnel were negligent in performing their responsibility of keeping and maintaining the seized gold in a manner befitting the police malkhana. The gold was lost as a direct consequence of this negligence when the head constable misappropriated money.
2. Vicarious Liability: The appellant contended that the State of Uttar Pradesh would be held vicariously liable for the tortious actions of its employees because the gold disappeared when in the custody of the authorities. The State as the employer of the officers would be liable for the loss due to the negligence of its officers in protecting the seized property.
3. Violation of Rights: Kasturilal testified that the inaction of the State towards his property was a deprivation of his right to property (at that time safeguarded under Article 31 of the Constitution, prior to being repealed in 1978). Kasturilal testified that the State was obligated to restore the goods confiscated or pay him for their loss.
4. Precedent of Vidyawati: The appellant had relied heavily on State of Rajasthan vs. Vidyawati (1962) where the Supreme Court held the State liable for the tortious act of a government driver who had caused a fatal accident. Kasturilal argued that the doctrine of State liability for torts of the servants should be invoked in this case, as the negligence of the police officers was in the course of their duty.[10]

• Respondent (State of Uttar Pradesh):

1. Lawful Seizure: The State argued that the seizure of Kasturilal’s gold was a legal exercise of police powers under Section 54(1)(iv) of the CrPC, 1898, since the officers had a reasonable cause to believe that the gold was stolen property. The initial seizure was thus within their statutory powers.
2. Individual Misappropriation: The State had argued that the gold theft was the result of the individual wrongdoing of Head Constable Mohammad Amir, who had pilfered the gold. It was an individual criminal act rather than an administrative failure on the part of the State.
3. Sovereign Immunity: The State invoked the doctrine of sovereign immunity by arguing that the arrest, search, and seizure were acts of sovereignty and were effected in exercise of statutory powers. According to the maxim “the king can do no wrong,” the State invoked immunity against suit for torts committed by its servants in the exercise of such functions.

4. Distinction with Vidyawati: The State distinguished Vidyawati by noting that the tort there was one arising out of a non-sovereign act (use of a government vehicle for maintenance), whereas the seizure and detention of property by police officers were sovereign acts in themselves and were associated with law enforcement.[11]

10. JUDGEMENT :

The Supreme Court, in a unanimous ruling passed by Chief Justice P.B. Gajendragadkar, dismissed the appeal of Kasturilal and upheld the Allahabad High Court ruling that the State of Uttar Pradesh was not obligated to pay compensation to the appellant. The rationale of the Court was founded on the doctrine of sovereign immunity with the following key points:

Admission of Negligence: The Court held that the police officers were negligent in failing to take care of the gold in the malkhana, thus making it possible for the head constable to steal it. Failure to take proper care was a breach of duty.

Sovereign vs. Non-Sovereign Functions: The Court drew a crucial distinction between the sovereign and the non-sovereign functions of the State. The Court held that the power of arrest, search, and seizure under the CrPC were sovereign functions to the extent that they were inherent in the function of the State in enforcing law and order.

Application of Sovereign Immunity: Dependent upon the rule laid down in the case of P & O Steam Navigation Co. vs. Secretary of State (1861), the Court ruled that the State is not liable for torts committed by its servants while executing sovereign functions, except where the act was wholly outside the sphere of their duty. Since the seizure and detention of the gold were carried out in exercise of statutory powers, the State was not liable.[12]

Compare with Vidyawati: The Court distinguished Vidyawati, noting that in this kind of situation, the tort was consequential upon a non-sovereign act (driving of a vehicle for maintenance purposes), which was akin to commercial or private activities. Police actions like seizure of property were viewed as sovereign, and therefore had immunity.

Call for Legislative Reform: The Court was worried about the strictures of the sovereign immunity doctrine, noting that they inflicted injustice on Kasturilal, who lost a significant amount of money without any potential compensation. The Court did note, however, that it was bound by the existing law and was not in a position to judicially overrule sovereign immunity. It urged the legislature to reform the law such that the raw would be modified in light of the principles of State responsibility in a welfare state.

11. RATIO DECEDENDI:

The rule of law governing the ruling, or the ratio decidendi, is that the State is not vicariously liable for tortious conduct (e.g., negligence or misappropriation) of its servants in the discharge of sovereign functions, including the exercise of statutory powers of arrest, search, and seizure under the Code of Criminal Procedure. The English common-law principle of sovereign immunity, incorporated in Indian law under Article 300(1) of the Constitution, immunizes the State from liability in such a case, except where the act falls outside the purview of the servant’s delegated authority.

12. OBITER DICTA:

The Court made some non-binding observations that are persuasive in character:

1. The British maxim “the king can do no wrong” created the doctrine of sovereign immunity, which was labelled as archaic and out of place in a democratic welfare state where citizens hold the government to account.
2. The difference between sovereign and non-sovereign functions was becoming increasingly difficult to achieve, since modern governance is a combination of traditional and welfare-related functions. The Court added that such differentiation had the tendency to produce unjust results, as in the case of Kasturilal.
3. The Court used the Law Commission of India’s First Report of 1956, wherein it had suggested removing sovereign immunity in respect of tortious actions of State officials. It had suggested to Parliament that legislative changes be contemplated so that citizens can seek redress for losses incurred due to State negligence.
4. These obiter dicta, while not contained in the binding judgment, reflected the distaste of the Court for the doctrine and the call to rethink State liability in tort law.[13]

13. FINAL DECISION:

The case was decided in favor of the State of Uttar Pradesh. The Supreme Court upheld the verdict of the Allahabad High Court and dismissed the claim of Kasturilal for compensation. The Court held that the State was not liable for the loss of the gold on the principle of the doctrine of sovereign immunity as the actions of the police officers were sovereign actions in exercise of statutory powers. Kasturilal’s claim for recovery of the gold or its value (Rs. 11,075) was dismissed, and no compensation was awarded.

14. REFRENCES:

14. Kasturilal Ralia Ram Jain vs. The State of Uttar Pradesh, AIR 1965 SC 1039, 1965 SCR (1) 375.
15. State of Rajasthan vs. Vidyawati, AIR 1962 SC 933.
16. P & O Steam Navigation Co. vs. Secretary of State, (1861) 5 Bom HCR App 1.
17. Constitution of India, Article 300(1).
18. Code of Criminal Procedure, 1898, Section 54(1) (iv).
19. Code of Criminal Procedure, 1973, Sections 41(1)(c) and 102(1).
20. Police Act, 1861, Section 29.
21. Indian Penal Code, 1860, Sections 378 and 405.
22. UP Police Regulations.
23. Law Commission of India, First Report on Liability of the State in Tort (1956).

[1]  Kasturilal Ralia Ram Jain vs. the State of Uttar Pradesh, AIR 1965 SC 1039, 1965 SCR (1) 375.

[2] Constitution of India, Article 300(1), as cited in Kasturilal Ralia Ram Jain vs. The State of Uttar Pradesh, AIR 1965 SC 1039.

[3] Code of Criminal Procedure, 1898, Section 54(1)(iv) (now Section 41(1)(c) of CrPC, 1973).

[4] Code of Criminal Procedure, 1973, Section 102(1).

[5]  Police Act, 1861, Section 29.

[6] . Indian Penal Code, 1860, Sections 378 (theft) and 405 (criminal breach of trust).

[7] UP Police Regulations, as referenced in Kasturilal Ralia Ram Jain vs. The State of Uttar Pradesh, AIR 1965 SC 1039

[8]  Kasturilal Ralia Ram Jain vs. The State of Uttar Pradesh, AIR 1965 SC 1039

[9]  State of Rajasthan vs. Vidyawati, AIR 1962 SC 933, as cited in Kasturilal Ralia Ram Jain vs. The State of Uttar Pradesh, AIR 1965 SC 1039,

[10] . Kasturilal Ralia Ram Jain vs. The State of Uttar Pradesh, AIR 1965 SC 1039

[11] P & O Steam Navigation Co. vs. Secretary of State, (1861) 5 Bom HCR App 1, as cited in Kasturilal Ralia Ram Jain vs. The State of Uttar Pradesh, AIR 1965 SC 1039,

[12]  Kasturilal Ralia Ram Jain vs. The State of Uttar Pradesh, AIR 1965 SC 1039,

[13]  Law Commission of India, First Report on Liability of the State in Tort (1956).