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6. Shri M.R. Kotwal, the learned Government Pleader, appearing for the appellant State. Sprat from challenging the finding as to negligence of Defendent No. 1 contended that running of hospitals is part of the regal functions of the State and the State can never be held liable for the tortuous acts of its servants when the complained acts of negligence are claimed to have been committed by the servants in the discharge of such regal functions. Reliance is placed on a Division Bench judgment of this Court (Baidya & naik. JJ.). in First Appeal No 620 of 1968 with First appeal No, 852 of 1968 dated 15-4-1977. *. The judgment no doubt, supports his contention. One Chandrikabai in that case died in the Government owned hospital after her delivery and sterilisation operation,. The two doctors attending to her operation were alleged to have sutured the wound without caring to remove the cotton swab inserted during the operation. Her death was attributed to this negligence of the doctors. Here husband and children claimed compensation for these tortuous acts from the doctors and also from the Government for its vicarious liability for the negligence of its servants. The trial Court held the doctors to be guilty of negligence and passed a decree against the doctors and the Government. The Division Bench, however, did not find evidence enough to sustain the finding of negligence. The question of any liability for compensation of either of the defendants for any such negligence, obviously could not arise on this finding. Further question whether running hospitals was
*Reported in ILR (1980) Bom 660.
Part of its regal functions and whether Government could not be vicariously liable for the negligence of its servants also could not arise for decision. Even 46, the learned Judges discussed this point in paras 238 to 253 of their judgment and held that running the hospital was part of the regal functions of the Government and the Government can never be held liable for the tortuous acts of its servants in the discharge of any such delegated regal junctions amongst other, the learned Judges relied on the judgment of the Madras High Court in the case of Etti v. Secretary of State, reported in AIR 1939 Mad 663 and the judgment of the Supreme Court in the case of Management of Safdar Jung Hospital. New Delhi v. Kuldip Singh Sethi, reported in AIR 1939 Mad 663 and the judgment of the Supreme Court in the case in the case of Management of Safdar Jung Hospital. New Delhi v. Kuldip Singh Sethi. Reported in : (1970)IILLJ266SC . Ratio of the earlier Supreme Court judgment in Hospital Mazdoor Sabha's case reported in : (1960)ILLJ251SC was found to have been overruled. The Division bench also seems to have though the ratio in Safdar Jung Hospital case had the effect of making the Supreme Court Judgment in the case of State of Rajasthan v. Mst. Vidhyawati reported in : AIR1962SC933 and Kasturi Lal v. State or U. P. Reported in : (1966)IILLJ583SC and Division Bench judgement in the case of Union of India v, Sugrabai reported in : AIR1969Bom13 , irrelevant. The Division Bench also thought that the Government has to run such hospitals to comply with the directive principles of the Constitution and functions required to be so discharged in compliance with the Constitution, cannot but be held to be regal.
7-8. Shri B. P. Apte, the learned Advocate appearing for the plaintiff, however, relied on a subsequent judgment of the larger Bench of the Supreme Court (Seven Judges) in the case of Bangalore Water Supply v Rajappa reported in : (1978)ILLJ349SC in which ratio of its judgment in Mazdoor Sabha's case is affirmed and that of Safdar Jung Hospital's case is overruled, and contended that ratio of the Division Bench judgment, based on Sardar Jung Hospital case, is no more a good and binding law, This contention appears to us to be well founded.
9. Immunity of the Government from any claim for damages against the 'act of the State' is based on the English common law doctrine that the King could do no wrong, The extent of its application to India was considered by a Full Bench of the then Supreme Court of Calcutta in its classic judgment in the case of Peninsular Oriental Steam Nabigation Co. V. Secretary of State reported in (1861) 5 Bom HCR 1 hereinafter referred to as the Calcutta supreme Court case.' The case pinpoints the distinction between the acts falling beyond the limits of such functions and which can be performed by any private individual.
10. The law laid down in this case has been uniformly followed by the privy Council and all the High Courts in India. The Supreme Court had an occasion to consider the impact of the Constitution thereon in the light of Art. 300 of the Constitution in the case of State of Rajasthan v. Vidhyawati reported in : AIR1962SC933 and in the case of Kasturi Lal v. State or U. P, reported in : (1966)IILLJ583SC . The State was held liable in the former for fortions act of its employee-driver in driving the truck negligently, while it was held not so liable for seizure of the goods negligently in the course of its regal function of investigating an offence. In the latter case Gajendragadkar. C. J. Approvingly summarised the ratio of the Calcutta Supreme Court judgment as follows (at p. 1046) : -
'Thus, it is clear that this case recognises a material distinction between acts committed by the servants employed by the State where such acts are referable to the exercise of sovereign powers delegated to public servants, and acts committed by public servants which are not referable to the delegation of any sovereign powers. It a tortuous act is committed by a public servant and gives rise to a claim for damages, the question to ask is: was the lotions act committed by the public servant in discharge of statutory functions which are referable to and ultimately based on, the delegation of the sovereign powers of that State to such public servant? If the answer is in the affirmative, the action of damages for loss caused by such fortions act will not lie. On the other hand, if the tortuous act has been committed by a public servant in discharge of duties assigned to him not be virtue of the delegation of any sovereign power, an action for damages would lie.'
11. The learned Judge then emphasised the importance of such distinction in the post Constitution area in India in the following words (at p. 1048):-
'It is not difficult to realize the significance and importance of making such a distinction particularly at the present time when, in pur suit of their welfare ideal, the Government of the States as well as the Government of India naturally and legitimately enter into many commercial and other undertakings and activities which have no relation with the traditional concept of government activities to which the exercise of sovereign power is involved. It is necessary to limit the area of these affairs of the State in relation to the exercise of soverign power, an that if acts are committed by Government employees in relation to other activities which may be conveniently described as non-government or non-sovereign, citizens who have a cause or action for damages should not be precluded from making their claim against the State. That is the basis on which the area of the State Immunity against such claims must be limited. And this is exactly what has been case of State of Rajasthan : AIR1962SC933 .'
12. In Hind Mazdoor Sabha, the question that directly fell for consideration was if hospital run by the Government could be an industry within its definition under S. 2(j) of the Industrial Disputes Act. It was argued that Government had to establish and run hospitals in compliance with the directive principles of the Constitution, and running of the hospital would be a part of its regal functions as a Welfare State. The Court observed that, 'Negatively stated, the activities of Government which can property be described as regal or sovereign activities are outside the scope of Section 2(j).'
The contention, that activities indulged in by the State to comply with the directive principles or in pursuit of its welfare policies could be such regal activities, was turned down on the ground that they cannot be said to be 'primary and inalienable functions of a Constitutional Government' and are not such that 'no private citizen can undertake the same.' Test laid down in the above Calcutta Supreme Court's case must have been in the mind of the learned judges while making the above observations, though the case does not make any direct reference to the same. The Court further held that the words 'industry' of 'trade' or 'business' must be interpreted in a broad manner to inclusive second part of the definition had this effect. Hidayatullah, C. J. Did not agree with this view in the Safdar Jung Hospital case : (1970)IILLJ266SC and held that hospital cannot be an 'industry'. Unless it is run on commercial lines. This view is now overruled in Bangalore Water Works case : (1978)ILLJ349SC virtually confirming the ratio of Mazdoor Sabha's case.
13. Thus, in the first place, the decision of the Divisions Bench is obiter in that the question had no cropped up for consideration. Secondly the basis of its judgment, namely the ratio of Safdar Jung Hospital case, is itself not knocked out. Thirdly, view of the Supreme Court in Mazdoor Sabha's case that activities undertaken by the Government in pursuit of welfare policies, and in compliance with the directive principles, were not part of the regal functions of the State, was not dissented in Safdar Jung Hospital's case. In fact, difference of view centered round how to interpret the second part of the definition in S. 2(j) of the Act. With respect, Division Bench was not right in ignoring the ratio of Mazdoor Sabha's case and preferring to rely on the Madras High Court case whose reasoning is impliedly overruled in Mazdoor Sabha's case. Fourthly, and for more importantly, question of the extent of the State's vicarious liability for the tortuous acts of its employees had notaries at all in the case either of Hind Mazdoor Sabha, Sardar Jung Hospital or Bangalore Water Works. It had directly arisen in Vidyawati and Kasturi Lal's cases. The ratio of these cases was followed by a Division Bench of this Court earlier in the case of Union of India v. Sugrabai Abdul Majid reported in : AIR1969Bom13 The later Division Bench*judgment relied on by Shri Kotwal thus cannot be said to have laid down any good and binding law.
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