Doctrine of Sovereign Immunity: Origin, the Comparative Position and its Decline in India

Sovereign immunity is the rule that the State cannot be sued for wrongs committed in the exercise of its sovereign functions. It descends from the feudal maxim that the King can do no wrong, which meant not that the King was incapable of wrongdoing but that no court of his own creation could entertain a claim against him. England abolished it by statute in 1947 and the United States largely did so in 1946. India did neither, and the doctrine survives through Article 300, which preserved the pre-Constitution position instead of stating a new one. What has happened since is not abolition but erosion: the category of sovereign functions has been narrowed to almost nothing, and the growth of constitutional tort has made the plea irrelevant in the cases that matter most. This topic traces that history.

1. Origin and Rationale

The doctrine rests on three ideas of different ages and different merit.

Rex non potest peccare, the King can do no wrong. In its original sense this was jurisdictional rather than moral: the royal courts derived their authority from the Crown and could not issue process against their own source.
The nature of sovereign power. Certain functions, such as defence, the administration of justice and the maintenance of order, are exercised by the State alone and involve choices of policy and judgment for which ordinary tort standards were thought inapt.
Protection of the public revenue. An unrestricted liability for the acts of a vast body of officials could impose an unpredictable burden on public funds and deter officials from acting decisively.

The first rationale disappeared with the constitutional settlement, since courts in a republic derive their authority from the Constitution and not from the executive. The second retains some force for genuinely discretionary and policy-laden functions. The third is an argument for limiting the extent of liability rather than for excluding it, and is met in most legal systems by defining the liability carefully rather than by immunity.

2. The Indian Source: A Historical Accident

📖 Peninsular and Oriental Steam Navigation Co. v. Secretary of State for India, (1861) 5 Bom HCR App 1

Facts: A servant of the plaintiff company was driving a horse-drawn carriage on a highway in Calcutta. Workmen employed in a government dockyard were carrying a heavy piece of iron funnel casing across the road for repair of a government steamer. They dropped it, the noise startled the horses, and one horse was injured. The company sued the Secretary of State for India in Council for the negligence of the government servants.

Held: The Supreme Court of Calcutta, in a judgment by Peacock, C.J., held the Secretary of State liable. It held that the East India Company, and after it the Secretary of State, had a dual character: it exercised sovereign powers delegated by the Crown, and it also carried on trading and other activities that a private individual could carry on. For acts done in the exercise of sovereign powers no action would lie; but for acts done in the conduct of undertakings which might be carried on by private persons without sovereign powers, the liability was the same as that of any other employer. The maintenance of a dockyard was an activity of the latter kind, so the plea of immunity failed.

Ratio: The origin of the sovereign and non-sovereign distinction in Indian law. Liability attaches to acts a private person could perform without sovereign power, and immunity to acts done in the exercise of sovereign power.

The distinction was devised to describe a trading company that had acquired governmental powers, which is what the East India Company was, and it made sense in that setting. Article 300 carried it into the Constitution by preserving the pre-existing position, with the result that the tort liability of the modern Indian State still depends on a test designed for a commercial corporation in the mid-nineteenth century.

3. The Comparative Position

Jurisdiction	Position
England	The Crown Proceedings Act, 1947 abolished the general immunity; the Crown is liable in tort as a private person of full age and capacity, subject to specified exceptions such as certain acts of the armed forces and judicial acts
United States	The Federal Tort Claims Act, 1946 permits suits against the United States for the negligent acts of employees, subject to exceptions, the most important being the discretionary function exception protecting policy choices
France	No immunity of this kind; liability of the administration is developed by the Conseil d'Etat under droit administratif, with faute de service and liability without fault in some fields
Australia and Canada	Immunity abolished by statute on the English model, with Crown liability legislation
India	No statute has been enacted. Article 300 preserves the pre-Constitution position, so the sovereign and non-sovereign distinction survives, narrowed by case law

The Indian anomaly is therefore not that a distinction exists, since the American discretionary function exception performs a comparable role, but that it rests on judicial decisions about a trading company rather than on a statute defining the State's liability. The Supreme Court called for such a statute in Kasturi Lal in 1965, and the Law Commission recommended one, but none has been enacted.

4. The Narrowing of the Doctrine

📖 N. Nagendra Rao and Co. v. State of Andhra Pradesh, (1994) 6 SCC 205

Facts: Stocks of fertiliser and foodgrains belonging to a dealer were seized by officials under the Essential Commodities Act. The proceedings were eventually dropped and the goods ordered to be returned, but by then they had deteriorated and become unusable through negligent storage over a long period. The dealer claimed damages, and the State pleaded sovereign immunity on the strength of Kasturi Lal, the seizure having been made under statutory powers.

Held: The Supreme Court held the State liable and confined the doctrine severely. It held that in the modern sense the distinction between sovereign and non-sovereign power does not exist as it once did: it depends on the nature of the power and the manner of its exercise, and only those functions which are inalienable, meaning functions which no private person can undertake and which the State alone can perform, can be classed as sovereign, such as defence of the country, raising armed forces, making peace or war, foreign affairs, the acquisition and retention of territory, the administration of justice and the exercise of legislative power. The vast range of activities of a modern welfare State, including the regulation of trade, the maintenance of supplies and the custody of goods seized under a regulatory statute, are not sovereign functions merely because they are performed under statutory authority, and an officer exercising such statutory powers owes a duty of care in the exercise of them. The Court observed that in a welfare State the rule of law requires that the citizen should not be left without remedy against the State.

Ratio: Sovereign functions are confined to those inalienable functions the State alone can perform. The exercise of statutory powers in a regulatory or welfare field is not sovereign, and an officer exercising them owes a duty of care for which the State is answerable.

5. What Remains and What Has Gone

Activity	Sovereign?
Defence of the country and operations of the armed forces in that capacity	Yes, on the inalienable-function test
Foreign affairs, treaty-making, acquisition of territory	Yes
Administration of justice and judicial acts	Yes, and separately protected
Exercise of legislative power	Yes
Police powers of arrest, search and seizure	Held sovereign in Kasturi Lal; the later cases treat statutory power as not sovereign by itself
Custody of property seized under a regulatory statute	No (N. Nagendra Rao)
Running hospitals, schools, transport and public works	No; ordinary welfare activity
Maintenance of government vehicles	No (Vidhyawati)
Commercial and industrial undertakings of the State	No
Any act violating a fundamental right	The plea is unavailable altogether in public law

6. The Criticisms

It is inconsistent with the rule of law. Dicey's second meaning of the rule of law is the equal subjection of officials to the ordinary law, which an immunity for the State contradicts.
The rationale has disappeared. The maxim was jurisdictional in a monarchy and has no application to a republic whose courts derive authority from a written Constitution.
The test is unworkable. Whether an activity is sovereign has produced inconsistent results, and the same act may be classified differently depending on the level of generality chosen.
It falls on the least able to bear it. The victims of custodial violence and administrative negligence are rarely in a position to absorb the loss the immunity leaves with them.
Other systems have abandoned it, through the Crown Proceedings Act, the Federal Tort Claims Act and equivalent legislation elsewhere.
The courts have invited legislation repeatedly, in Kasturi Lal and since, without response.

⚠ The doctrine has been outflanked rather than overruled

It is worth being clear about how sovereign immunity actually died in India, because it did not die in the usual way. No decision overruled Kasturi Lal, and no statute abolished the immunity. What happened instead is that two routes were built around it. The first narrowed the category of sovereign functions to inalienable ones, so that almost nothing the modern State does falls inside it. The second created the constitutional tort, in which the plea is not available at all, so that a claimant alleging a violation of Article 21 need never confront it. The doctrine therefore remains on the books, intact and almost unusable, which is a good description of its present condition.

7. The Position in Summary

Sovereign immunity descends from the maxim that the King can do no wrong, which was jurisdictional in origin and has no application to a republic.
Its Indian source is the P. and O. Steam Navigation case, decided about the dual character of the East India Company, carried into the Constitution by Article 300.
England abolished the immunity by the Crown Proceedings Act, 1947 and the United States largely by the Federal Tort Claims Act, 1946; India has enacted no such statute despite repeated judicial invitations.
Sovereign functions are now confined to inalienable functions which only the State can perform, and the exercise of statutory powers in a welfare or regulatory field is not sovereign (N. Nagendra Rao).
The plea is wholly unavailable in public law claims for the violation of fundamental rights, so the doctrine survives formally while being outflanked in practice.

8. Related Topics and Provisions

Government Liability in Tort (Topic 132): Article 300 and the Vidhyawati and Kasturi Lal line.
Vicarious Liability of the State (Topic 136) and Liability for Negligence of Public Servants (Topic 135).
Constitutional Tort (Topic 131) and Public Law Compensation (Topic 133): where the plea does not lie.
Rule of Law (Topic 8) and Dicey's Rule of Law (Topic 9): equal subjection of officials to the ordinary law.
Droit Administratif (Topic 12): the French approach to administrative liability.
Constitution of India: Articles 21, 32, 226, 294 and 300; Crown Proceedings Act, 1947; Federal Tort Claims Act, 1946.