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In Kasturi Lars case Ralia Ram Jain, one of the partners of the
plaintiff firm was arrested by the police and his belongings con-
sisting of gold, silver and other goods, were seized from him and
kept in police custody. Subsequently he was released but the
articles, except the silver, were not returned to him. Those articles
were misappropriated by a police head constable who absconded
and who was not subsequently traced. The police had not complied
with the relevant provisions of the Uttar Pradesh Police Regulations
in the safe-keeping of the gold which resulted in the loss. The
suit was to claim either the return of the gold or its value. Two
questions arose: (1) whether the police officers were guilty of
negligence in the safe custody of the gold ,and (2) whether the State
of Uttar Pradesh was liable to compensate the appellant for the
loss caused by the negligence of its public servants. The U. P.
High Court, reversing the decision of the trial court, held that no
negligence had been proved against the police officers and that
even if they were negligent, the state would not be liable for the loss
of gold. Under certificate from the High Court, an appeal was
preferred to the Supreme Court. On the question regarding
negligence the court was positive. But the court negatived the
claim for damages against the State.
The question of liability against the state depends upon
the interpretation to be given to the scope and ambit of Article
300 (1) of the Constitution of India. 5 Article 300 (1) reads :
"The Government of India may sue or be sued by the name of the
Union of India and the Government of a state may sue or be sued by the
name of the State and may, subject to any provisions which may be made
by Act of Parliament or of the Legislature of such State enacted by virtue
of powers conferred by this Constitution, sue or be sued in relation to
their respective affairs in the like cases as the Dominion of India and the
corresponding Provinces or the corresponding Indian States might have
sued or been sued if this Constitution had not been enacted".
(1) the first part provides for the form and the cause-title
in a suit and says that a State (omitting any reference to the Govern-
ment of India) may sue or be sued by the name of the State.
5• The said Article comes under Part XII, Chapter III dealing with "Property,
Contracts, Rights, Liabilities, Obligations and Suits."
6. A.I.R. 1965 S.C. 933 at p.935.
NOTES AND COMMENTS 93
Ref: S. 176.
Ref: S.32.
Ref: S.65.
(1861) 5 Born. H.C.R. App.1
A• I.R. 1962 S.C. 933. at p . 939. But the line of thought seems to be differ-
ent in Kasturilal's case. (See A.I.R. 1965 SC. 1039 at p 1046)-"Thus it
is clear that this case recognises a material distinction between acts
committed by the servants employed by the State where such acts are
referable to the exercise of sovereign powers delegated to public servants
and acts committed by public servants which are not referable to the
delegation of any sovereign powers This distinction which is clear
and precise in law, is sometimes not borne in mind in discussing questions
of State's liability arising from tortious acts committed by public
servants." Such a distinction was denied by the American Supreme Court
in New York v. United States, 326 U.S • 572 (1945). The question there
was whether the State of New York was liable to the Federal Tax on the
sale of Mineral waters from its State-owned and operated Springs. The
rule that the liability to taxation depended on the distinction between the
State as government and the State as trader was denied. See also, Indian
Towing Co, v U.S. 350 U • S. 61 (1950) Per Frank further, J. and Davis,
Administrative Law Treatise Vol. 3, pp. 482-505 (1958)Edn,
94 KERALA UNIVERSITY LAW REVIEW
Supra.
Holmes J. in Kawananakoa v. Pol J'blank, 205 U.S. 349 (353).
See the comment on Vielhyawbtrs case by Dr. A.T. Markose vol.
4 p. 282)
96 KERALA UNIVERSITY LAW REVIEW
M. Krishnan Nair *