Since state is not a living entity but a legal entity which cannot function without human agency. It is therefore, that the state has to act through its servants. The concept of tortious liability of the state refers to situation when the state can be held vicariously liable for the wrongs committed by its servants. State may sue and be sued by the name of the Union of India or by the name of the State as the case may be.
The above mentioned concept triggered the makers of the constitution to mention the liability of Union and State Government that they can be sued under any contract(tortuous liability as well). The government and state can be sued or sue with regard to their respective affairs under under article 294B.
Liability of State in contract
Article 298 empowers Union and State to enter into contract on carrying on any trade or business and acquisition, holding or disposal of any property.
The first part of Art 299 lays down the manner of formulation of such contract which specifically provides that all contract in the exercise of executive powers of Union or State shall be expressly to be made by the president or governor as the case may be. The second clause of Art 299 makes it clear that neither President or Governor shall be held liable personally in respect of any contract or assurance made or executed for the purposes of the constitution. As soon as the contract is executed with the Government of India in accordance with this article 299 , the whole law of contract as contained in the Indian Contract Act comes into operation. Even the principle of promissory estoppel will also apply in any case of written or unwritten contract.
Liability of State in Torts
For the beginners, tort is a civil wrong arising out of breach of civil duty or breach of non contractual obligation remedy against which is through damages or compensation.
In India, king can do no wrong theory hardly applies. Even during the rule of the East India Company this concept of immunity was not followed. The state is held vicariously liable, which means when the responsibility of the act of one person falls on another person it is called vicarious liability. For example, if a waitor in a restaurant drops a hot pot of coffee on you and burns you, the restaurant is liable for the waitor actions. In pursuance , Article 300 of the Indian Constitution states that the Government of India or a state government may sue or be sued in the name of the Union of India or the state, depending on the circumstances, and that any legal proceeding against the Government of India or a state government may be instituted in any court of law within the territory of India. In addition, it states that any legal proceeding against the Government of India or a state government may be instituted in any court of law within the territory of India.
It further stipulates that no act or proceeding against government of India or state shall be called in question by any court on ground that it is not an act or proceeding of government of India or state unless proved. This means that the government’s actions or proceedings are generally presumed to be valid and authorized, and the burden of proof is on anyone challenging the validity or authority of such actions or proceedings. Article 300 establishes the legal process for initiating and resolving disputes involving the government and sets out the rights and obligations of the government in such matters. The liability of the State was dependent on the nature of the act and the category of power in which it was placed viz sovereign or non-sovereign power of the State.
Difference between sovereign and non- sovereign functions.
Sovereign functions of the state can be defined as those functions where the state is not answerable before the court of law for their performance. These functions are mainly concerned about the defence of the country, maintenance of the armed forces of the country, and maintenance of peace in the territory. These functions can only be performed by the state for external sovereignty and that is why they are not amenable to the jurisdiction of ordinary civil courts and are primarily inalienable functions. But apart from this, there are various sovereign functions of the state which are also not primarily inalienable which include taxation, police functions comprising maintenance of law and order, legislative functions, administration of law and policies, and grant of pardon.Non-sovereign functions are those functions that are amenable to the jurisdiction of an ordinary civil court and if the state does any tortious act or breach of contract, it will be liable for the wrong done. But today, it has become very difficult to differentiate between the sovereign and non-sovereign functions of the state. The courts have started holding most of the governmental functions as non sovereign thereby increasing the tortuous liability of the state.