Sovereign and Non-Sovereign Functions: The Distinction, its Application and Why It Has Almost Disappeared

The State is liable in tort for acts done in the exercise of non-sovereign functions and, on the traditional view, not liable for acts done in the exercise of sovereign functions. Everything therefore turned on classifying the activity, and the classification proved unworkable. A State that runs railways, hospitals, factories, buses and fair price shops performs most of its functions in ways indistinguishable from a private employer, and the courts, unwilling to leave victims without a remedy, narrowed the sovereign category case by case until almost nothing remained inside it. This topic sets out the distinction, traces how it was narrowed through the cases, and identifies the small residue that survives.

1. The Distinction

Basis	Sovereign function	Non-sovereign function
Description	Functions that only a sovereign can perform and that cannot be delegated to a private person	Functions that a private individual or body could equally perform
Classical instances	Defence, the making of war and peace, treaty-making, the administration of justice, the maintenance of law and order, the levy of tax	Commercial and welfare activities, transport, industry, hospitals, education, supply of goods
Liability in tort	Traditionally none	Full, as for a private employer
Basis of the immunity	The East India Company's dual character, carried into Article 300	No immunity arises
Present position	Confined to inalienable functions, and unavailable where a fundamental right is violated	Liability is the rule
Relevance today	Diminished; the plea rarely succeeds	The ordinary position

2. Welfare Activity Is Not Sovereign

📖 Shyam Sunder v. State of Rajasthan, (1974) 1 SCC 690

Facts: A truck engaged in carrying material for famine relief work caught fire on account of a defect, and a person travelling on it to the site was killed. A claim was made against the State, which contended that famine relief is a sovereign function discharged by the State in the performance of its duty towards its subjects, so that no liability in tort arose for the negligence of its servants in carrying it out.

Held: The Supreme Court held the State liable. It held that the carriage of material for famine relief is not a sovereign function: it is an activity that a private person could equally undertake, and the fact that the State performs it as part of its welfare obligations does not convert it into an exercise of sovereign power. The Court held that the immunity is confined to acts done in the exercise of functions which only a sovereign can perform, and that the expanding range of State activity in the welfare field cannot be brought within it merely because the activity serves a public purpose; if it could, the immunity would swallow the rule of liability, since almost everything the modern State does is done for a public purpose. The claim was accordingly decreed.

Ratio: Welfare and relief activities are not sovereign functions merely because they serve a public purpose. The immunity extends only to functions that only a sovereign can perform.

3. Statutory Power Is Not Sovereign Power

📖 State of Gujarat v. Memon Mahomed Haji Hasam, AIR 1967 SC 1885

Facts: Vehicles were seized by customs authorities under statutory powers and remained in the custody of the State pending proceedings. The confiscation was subsequently set aside and the owner became entitled to their return, but the vehicles had in the meantime deteriorated and been disposed of through want of care. The owner claimed compensation, and the State contended that the seizure and detention were done in the exercise of sovereign powers, so that no liability could attach.

Held: The Supreme Court held the State liable. It held that when goods are seized and retained under statutory power, the State holds them as a bailee, and the obligations of a bailee to take reasonable care of the goods and to return them when the owner becomes entitled attach to it as they would to any other person: the position of a bailee is created by the fact of possession, and the source of that possession in a statutory power does not displace the duty. The Court held that the plea of sovereign immunity was not available, since the duty arose not from the exercise of sovereign power but from the ordinary law of bailment which the State attracted by taking the goods into its custody, and it observed that the State's liability to return or to account for the property is in no way different from that of an ordinary custodian.

Ratio: The State holds seized goods as a bailee and owes the ordinary duties of a bailee. Possession obtained under a statutory power does not attract sovereign immunity for failure to take care of the goods.

4. How the Classification Has Been Applied

The activity	Classification
Military operations and defence of the country	Sovereign
Administration of justice and the legislative process	Sovereign
Maintenance of law and order in the strict sense	Sovereign in form, but immunity unavailable where Article 21 is violated
Carrying material for famine relief	Non-sovereign (Shyam Sunder)
Custody of goods seized under statute	Non-sovereign; the duty is that of a bailee (Memon Mahomed)
Running a government hospital	Non-sovereign
Operating transport, railways and public utilities	Non-sovereign
Maintaining roads, buildings and public works	Non-sovereign
Manufacturing and trading activities	Non-sovereign
Military vehicle used for ordinary transport duties	Non-sovereign; the use rather than the department decides

5. Why the Distinction Has Almost Disappeared

The category was defined negatively, by asking what a private person could not do, and the range of what private persons do has expanded enormously.
The welfare State performs most functions commercially, so classifying by public purpose would have made the immunity universal (Shyam Sunder).
Statutory power was held not to be sovereign power, which removed the largest category of cases from the immunity.
Public law liability bypassed the question entirely, since constitutional tort attaches to the violation of a fundamental right and admits no immunity.
The immunity rests on a colonial distinction drawn from the East India Company's dual character, which has no counterpart in the constitutional scheme.
Legislation was repeatedly recommended and never enacted, so the narrowing was accomplished by the courts case by case.

6. What Survives

Acts of State, which are not cognisable by municipal courts at all and are pleadable only against persons not owing allegiance.
Functions which only a sovereign can perform, described as inalienable, such as the conduct of foreign affairs, defence and the administration of justice.
Statutory immunities, where a particular Act confers protection for acts done in good faith under it.
But not where a fundamental right is violated, since public law liability is strict and admits no immunity.
And not where the State acts under municipal law, since acts done under statutory authority are justiciable.
And not in respect of property held or possession taken, where ordinary duties of custody attach.

⚠ The test is what the function is, not which department performs it

The most common error in applying this distinction is to classify by department rather than by activity. A vehicle belonging to the armed forces is not engaged in a sovereign function merely because the army owns it; what matters is what it was doing at the time, and carrying supplies from one place to another is something any transport operator does. Conversely a function may be sovereign though performed by a civilian department. The question the cases ask is whether the particular activity is one that only a sovereign could undertake, and answering it requires looking at the act complained of rather than at the identity or the general character of the body that performed it.

7. The Position in Summary

A sovereign function is one that only a sovereign can perform and cannot be delegated to a private person; a non-sovereign function is one a private person could equally perform, and liability in tort follows the classification.
Welfare and relief activities are not sovereign merely because they serve a public purpose, since otherwise the immunity would swallow the rule of liability (Shyam Sunder).
The State holds goods seized under statutory power as a bailee and owes the ordinary duties of custody, the source of possession not attracting immunity (Memon Mahomed Haji Hasam).
The distinction has almost disappeared because the category was defined negatively, the welfare State performs most functions commercially, statutory power is not sovereign power, and public law liability bypasses the question.
What survives is acts of State, genuinely inalienable functions and specific statutory immunities, and none of these avails where a fundamental right has been violated.

8. Related Topics and Provisions

Doctrine of Sovereign Immunity (Topic 134) and Government Liability in Tort (Topic 132).
Sovereign Immunity in its Several Senses (Topic 177) and Immunity vs Constitutional Tort (Topic 137).
Liability for Negligence (Topic 135) and Vicarious Liability of the State (Topic 136).
Public Law Remedy vs Private Law Remedy (Topic 210).
Constitutional Tort (Topic 131) and Public Law Compensation (Topic 133).
Constitution of India: Articles 21, 32, 226, 294, 300 and 361.