Rights and Liabilities of the Government

Articles 294–300:These Articles (in Part XII of the Constitution) answer a basic question:

👉 “If the Government owns property or commits a wrong — who is responsible? How does the Government sue others, or get sued?”

To make this possible, the Constitution treats both the Union and the States as juristic persons — meaning they act like a legal person in the eyes of the law.
They can own property, enter contracts, and even go to court, just like any individual.

Property of the Union and the States

Succession

When the Constitution came into effect (1950), whatever property earlier belonged to:
  • Dominion of India,
  • Provincial Governments, or
  • Princely States,
automatically passed on to:
  • Union of India, or
  • Respective States.

Similarly, their earlier rights, liabilities, and obligations also shifted to the new governments.
So, the Constitution ensured a smooth legal transfer from the old regime to the new one.

Escheat, Lapse and Bona Vacantia

These are situations where property has no rightful owner.

Let’s understand:

TermMeaning
EscheatWhen a person dies intestate (without a will) and has no heirs.
LapseWhen rights terminate due to non-use or not following legal procedure.
Bona VacantiaProperty that is truly “ownerless“.

Earlier, such property went to the King of England or ruler of princely states.

Now:

  • If property is within a State → it vests in the State Government.
  • Otherwise → it vests in the Union Government.

Key idea: Whenever there is no owner, the government steps in

Sea-Wealth

Anything of value under the sea — minerals, oil, gas, resources — belongs to the Union, not to coastal states.

This includes:

👉 A state like Tamil Nadu or Gujarat cannot claim oil or minerals from the sea.
These are national resources under the Union.

Compulsory Acquisition by Law

The Government (Central and State) can compulsorily acquire private property.

After the 44th Constitutional Amendment (1978), the Government is not constitutionally required to pay compensation except:

  1. If it acquires property of a minority educational institution, or
  2. If it acquires personally cultivated land within ceiling limits.

Otherwise, compensation is based on what the law provides — not a fundamental right.

Acquisition under Executive Power

The Union or State governments can:
  • Acquire property,
  • Hold property,
  • Sell property, and
  • Even carry out trade or business.

This is part of their executive power.

Suits By or Against the Government (Article 300)

Article 300 clarifies something important:

👉 Government can sue or be sued only in the name of “Union of India” or the “State of X”.

Not in the name of “Government of India” or “Government of Maharashtra”—
These are not legal entities.

Before the Constitution, the Government (like East India Company) could be sued for contracts,
but not for torts (civil wrongs) committed in sovereign functions.

This continues today — unless changed by the legislature (no such law yet).

Liability of the Government

Liability for Contracts

The Union or State can enter into contracts.
But to be valid, the Constitution mandates 3 conditions:

  1. Contract must be expressed in the name of the President or Governor.
  2. It must be executed on their behalf.
  3. It must be executed by someone authorized by them.

If any requirement is violated →
❌ The contract becomes void and unenforceable.

Personal immunity:
  • The President/Governor is not personally liable.
  • The officer executing the contract is also not personally liable.

But the Government itself is liable — just like any private party.

Liability for Torts (Civil Wrongs)

Historical background
  • East India Company = trader → could be sued.
  • Later, became sovereign → enjoyed immunity for sovereign acts (based on “King can do no wrong”).

In Britain, this immunity was removed by the Crown Proceedings Act (1947).

👉 But in India, it still continues (with major reforms via judiciary).

Sovereign vs. Non-Sovereign functions

Government can be sued for:

✔ Non-sovereign functions
✘ Not for sovereign functions like:

  • Administering justice
  • Military activities
  • Policing
  • Wartime actions

Important Judgements

1. P & O Steam Navigation Company case (1861)

First case to distinguish sovereign vs non-sovereign functions.

2. Kasturilal Case (1964)

Reaffirmed immunity for sovereign functions.

3. Shift in Judicial Thinking

Later, Supreme Court started restricting sovereign immunity.

Nagendra Rao Case (1994) – landmark shift

SC held:
  • State cannot claim immunity for the negligence of its officers.
  • Distinction between sovereign and non-sovereign functions is outdated.
  • Unless the function is core sovereign (law & order, crime repression, justice administration), State must pay compensation.

Common Cause Case (1999)

SC said the old rule in P & O case is outdated.

👉 Modern welfare State performs vast functions →
Govt should be liable for almost all torts.

Prisoner’s Murder Case (2000)

SC declared Kasturilal has “no binding value” anymore.

Net effect for UPSC:
India is moving toward full governmental liability — very limited sovereign immunity remains.

Suits Against Public Officials

President and Governors

(a) For Official Acts

  • Cannot be sued even after leaving office.
  • But their official conduct can be examined for impeachment.
  • Instead of suing them, a citizen can sue the Union/State.

(b) For Personal Acts

  • No criminal proceedings during their term.
  • Cannot be arrested or imprisoned during term.
  • Civil cases can be filed with 2 months’ prior notice.

Ministers

  • No special immunity for official acts.
  • Cannot be held liable for acts of President/Governor done on their advice (courts cannot inquire into the advice).
  • Personally liable for personal wrongs or crimes.

Judicial Officers

Protected under Judicial Officers Protection Act, 1850.

They cannot be sued for acts done in the discharge of judicial duty.
This protects judicial independence.

Civil Servants

  • Not personally liable for contracts made officially.
  • Government is liable.

But:

  • If they violate constitutional conditions while making contracts → they become personally liable.

For Torts:

  • Enjoy immunity only when performing sovereign functions.
  • Otherwise treated like ordinary citizens.

Civil cases:
Require two months’ notice (if act done in official capacity).

Criminal cases:
Require prior sanction of President/Governor (where applicable).

Conclusion

Articles 294–300 create a coherent legal framework by:

  • Defining government property and succession
  • Allowing compulsory acquisition
  • Making the Union and States legal persons
  • Clarifying their liability
  • Protecting key officials while ensuring State accountability

The evolution through case law shows India’s shift from colonial-style sovereign immunity to a modern welfare state where the Government is increasingly accountable for its acts.

Articles related to Rights and Liabilities of the Government at a Glance

Article No.Subject-matter
294Succession to property, assets, rights, liabilities and obligations in certain cases
295Succession to property, assets, rights, liabilities and obligations in other cases
296Property accruing by escheat or lapse or as bona vacantia
297Things of value within territorial waters or continental shelf and resources of the exclusive economic zone to vest in the Union
298Power to carry on trade, etc.
299Contracts
300Suits and proceedings
361Protection (immunities) of President and Governors


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