Union and States as Juristic Persons
Part XII of the Indian Constitution, encompassing Articles 294 to 300, meticulously outlines the framework governing the property, contracts, rights, liabilities, obligations, and legal suits of both the Union and the States. In essence, these provisions elevate the Union and the States to the status of juristic persons—legal entities endowed with the capacity to own assets, enter binding agreements, bear responsibilities, and participate in litigation as distinct parties in the eyes of the law.
Continuity Through Succession
Upon the commencement of the Constitution of India on January 26, 1950, a seamless transfer of authority ensured the nation's administrative continuity. All property and assets previously vested in the Dominion of India, its provinces, or the princely states automatically passed to the Union of India or the corresponding successor states. In the same vein, the rights, liabilities, and obligations of the erstwhile Dominion government, provincial administrations, or rulers of Indian states became those of the Government of India or the relevant state governments. This principle of legal succession bridged the gap between the colonial and republican eras, preserving institutional stability without disruption.
2. Escheat, Lapse, and **Bona Vacantia
In the pre-independence era, properties without a rightful owner in India would revert to the British Crown—through the King of England—or to the rulers of princely states under doctrines like escheat, lapse, or bona vacantia. Today, under Article 296 of the Indian Constitution, such properties vest instead in Indian governments, reflecting a seamless transition of sovereign rights.
Escheat occurs when a person dies intestate (without a will) and leaves no legal heirs, causing their property to pass to the state. Lapse refers to the termination of property rights due to prolonged disuse or failure to adhere to required legal procedures. Bona vacantia, Latin for "vacant goods," applies to unclaimed or ownerless property, such as abandoned assets. In all three scenarios, the absence of a legitimate claimant ensures the property accrues to the government: to the concerned State Government if the property is located within its territory, or to the Union Government in any other case. This mechanism upholds public interest by preventing properties from remaining in limbo.
3. Sea-Wealth
The vast resources beneath India's oceans— including lands, minerals, and other valuables—within its territorial waters, continental shelf, and exclusive economic zone (EEZ) exclusively belong to the Union government. This constitutional provision ensures that no coastal state can assert jurisdiction over these marine assets, centralizing control to promote national interests and uniform management.
For clarity, India's territorial waters stretch 12 nautical miles seaward from the designated baseline, marking the area where the country exercises full sovereignty, akin to its land borders. Beyond this, the EEZ extends up to 200 nautical miles, granting India sovereign rights over exploration, exploitation, conservation, and utilization of natural resources, such as fish stocks and seabed minerals, while allowing innocent passage for foreign vessels on the surface.
4. Compulsory Acquisition by Law
Both Parliament and state legislatures hold the authority to enact laws enabling governments to compulsorily acquire or requisition private property. This power stems from the constitutional framework under Article 300A, which protects property rights while permitting such actions through lawful procedures. A significant shift occurred with the 44th Amendment Act of 1978, which eliminated the earlier constitutional mandate for compensation in these cases. However, two key exceptions remain: first, when acquiring property belonging to a minority educational institution, ensuring the institution's protected rights are not unduly impaired; and second, when taking land that a person holds for personal cultivation, provided it falls within the statutory ceiling limits prescribed by law. This balanced approach underscores the tension between public needs and individual property safeguards in India's legal landscape.
Acquisition under Executive Power
Under the Indian Constitution, the executive authority of the Union or a State extends broadly to the acquisition, holding, and disposal of property. This power forms a cornerstone of governmental operations, enabling efficient management of assets without needing legislative intervention in every instance.
Beyond property matters, the same executive power empowers the Union or a State to engage in any trade or business. Crucially, this authority is not confined to its own territory; it reaches into other States as well, fostering economic activities across jurisdictional lines while respecting federal balance.
Suits by or Against the Government
Article 300 of the Indian Constitution governs the legal framework for suits involving the government. It stipulates that the Government of India may sue or be sued in the name of the Union of India, while a state government may do so in the name of the state itself—for instance, the State of Andhra Pradesh or the State of Uttar Pradesh. This provision recognizes the Union of India and the states as distinct legal entities, or juristic persons, capable of initiating or defending legal proceedings. Notably, it is not the "Government of the Union" or a "state government" that holds this status, but the named entities.
The scope of governmental liability under Article 300 mirrors the position that prevailed before the Constitution's adoption. The Union of India or a state can sue or be sued in relation to their respective affairs, just as the Dominion of India and the corresponding provinces or Indian states could have prior to 1950. This rule remains subject to any future legislation enacted by Parliament or a state legislature, though no such law has been passed to date. Consequently, the pre-Constitutional regime continues to apply.
During the pre-Constitution era—from the East India Company's dominance through to 1950—the government could be held liable for breaches of contract but enjoyed immunity from suits in tort for wrongs committed by its servants, particularly those arising from sovereign functions. This distinction forms the cornerstone of governmental accountability in civil litigation today.
Constitutional Requirements for Government Contracts
The Union or a state government, exercising its executive authority, routinely enters into contracts—for acquiring, holding, or disposing of property; conducting trade or business; or pursuing any other legitimate aim. Yet, the Constitution imposes three strict conditions on these agreements to ensure their validity.
First, the contract must explicitly state that it is made by the President (for the Union) or the Governor (for the state), as applicable. Second, it must be executed on behalf of the President or Governor. Third, execution must occur by a duly authorized person or in the precise manner directed by the President or Governor.
These requirements are mandatory, not optional. Any deviation renders the contract void and unenforceable in court, protecting public interest from informal or unauthorized dealings.
Moreover, neither the President nor the Governor bears personal liability for contracts entered in their name, nor does the executing officer. This personal immunity shields individuals but leaves the government fully accountable. In essence, the Union and state governments face the same contractual obligations as any private individual under India's ordinary law of contracts—a principle rooted in practices dating back to the East India Company era. This ensures that the government remains suable, upholding fairness and accountability in public dealings.
2. Liability for Torts
The East India Company began as a mere trading entity, but over time, it expanded into a territorial sovereign in India. While it could be sued for commercial activities as a trader, the Company enjoyed immunity for its sovereign functions, drawing from the English common law maxim that "the King can do no wrong." This principle shielded the Crown from liability for the torts committed by its servants. Britain later abolished this immunity through the Crown Proceedings Act, 1947, yet India retained the doctrine even after independence.
Under Indian law, the Union or state governments remain suable for torts—civil wrongs—committed by their officials only during non-sovereign functions. Sovereign acts, such as administering justice, building military roads, or requisitioning goods in wartime, attract no liability. This pivotal distinction originated in the P&O Steam Navigation Company case (1861) and was reaffirmed by the Supreme Court in the post-independence Kasturi Lal case (1965). However, in subsequent rulings, the Court adopted a narrower view of sovereign functions, granting compensation to victims in numerous instances.
A landmark shift occurred in the Nagendra Rao case (1994), where the Supreme Court sharply critiqued sovereign immunity. It held that the State must compensate citizens for harm caused by its servants' negligence, rejecting immunity as a defense. In a modern welfare state, the Court argued, rigid divisions between sovereign and non-sovereign functions are outdated and untenable. No civilized system, it observed, can allow the executive to claim unchecked power under the guise of sovereignty, especially when public interest has evolved with societal changes. Progressive jurisprudence now treats the State like any other legal entity, eliminating archaic protections. The State's role extends far beyond core duties like defense, justice, and law enforcement—it permeates education, commerce, and social welfare. Thus, except for essential functions such as maintaining order or repressing crime, the State cannot evade tortious liability. While not explicitly overruling Kasturi Lal, the Court limited it to exceptional circumstances.
The Supreme Court built on this in the Common Cause case (1999), deeming the P&O rule obsolete amid the State's expanded role in citizens' lives. Distinguishing sovereign from non-sovereign functions has become impractical, the Court noted, as governmental activities now touch every sphere. State liability must align with welfare state ideals, extending to all torts by its employees, regardless of function. The binding force of Kasturi Lal was further eroded.
Finally, in the Prisoner’s Murder case (2000), the Court declared Kasturi Lal insignificant in light of judicial evolution, stripping it of precedential value. This progression reflects India's commitment to accountability, ensuring the rule of law prevails over outdated immunities.
Immunities of the President and Governors
The Indian Constitution grants the President of India and state Governors specific immunities, shielding them from legal action for both their official duties and personal conduct. These protections ensure they can perform their high constitutional roles without undue interference, while incorporating safeguards to uphold accountability.
For official acts, neither the President nor a Governor can be sued—either during their term or afterward—for actions taken in exercising their powers and duties. This absolute bar on personal liability promotes fearless decision-making in public office. However, it is not without checks: the President's official conduct may come under judicial or parliamentary scrutiny during impeachment proceedings, as authorized by either House of Parliament. Additionally, anyone harmed by such an act can seek redress by filing proceedings against the Union of India (in the President's case) or the relevant state government (for a Governor), bypassing the individual officeholder entirely.
In contrast, immunities for personal acts are more circumscribed, applying only during their tenure. No criminal proceedings can be initiated against the President or a Governor, nor can they be arrested or imprisoned, for private matters. This temporary shield prevents politically motivated harassment. Civil proceedings, however, remain possible even while in office, provided the aggrieved party issues two months' prior notice. Once their term ends, all such protections lapse, restoring full legal exposure.
2. Ministers
Unlike some protections afforded to other constitutional functionaries, India's Constitution offers ministers no blanket immunity for their official acts. This means they can, in principle, face legal accountability for such actions. However, key structural features limit their exposure in practice. For instance, unlike in Britain—where ministers must countersign executive orders—Indian ministers need not authenticate the official acts of the President or Governors. As a result, they cannot be held liable in court for those acts.
Further shielding arises from the constitutional bar on judicial scrutiny of ministerial advice. Under Article 74(2) for the Union and Article 163(3) for states, courts are explicitly prohibited from inquiring into the advice tendered to the President or Governors. Consequently, ministers remain insulated from responsibility for any official actions those heads take on such advice.
This protection, however, is far from absolute. Ministers enjoy no immunity for personal acts and stand equal to ordinary citizens before the law. They can be prosecuted for crimes or sued for torts in regular courts, ensuring accountability where it truly matters.
3. Judicial Officers
Judicial officers in India are shielded by a robust immunity for their official actions, protecting them from civil lawsuits. This safeguard ensures they can perform their duties without fear of personal liability. The cornerstone of this protection is the Judicial Officers Protection Act, 1850, which explicitly states that no judge, magistrate, justice of the peace, collector, or other person acting in a judicial capacity can be sued in any civil court for acts done in the discharge of their official duties. Enacted during the British colonial period, this law underscores the principle that judicial independence must be preserved to uphold the rule of law.
4. Civil Servants
The Indian Constitution grants civil servants personal immunity from legal liability when entering contracts in their official capacity. Instead, the responsibility falls squarely on the government—either Central or State. This protection ensures that public officials can perform their duties without fear of personal financial ruin from legitimate official agreements. However, this shield evaporates if the contract fails to meet the strict conditions outlined in the Constitution, leaving the civil servant personally accountable.
Civil servants also enjoy immunity for tortious acts—civil wrongs like negligence—committed while performing the government's sovereign functions, such as defense or law enforcement. Beyond these core duties, their liability mirrors that of any ordinary citizen: they can be held responsible for torts or other illegal acts just like anyone else.
To initiate civil proceedings against a civil servant for actions taken in their official role, plaintiffs must provide two months' advance notice. No such notice is required, however, for acts falling outside the scope of official duties. Criminal proceedings for official acts demand prior approval from the President or Governor, as applicable, underscoring the balance between accountability and the protection of public service.