Finance, Property, Contracts And Suits

Question 1

Rights and liabilities of the government

Answer 1

Article 294 to 300 (Part 12)
Deals with property, contracts, rights, liabilities, an obligations and suits of the union and States
In this regard the constitution can make the union or States act as a juristic (legal) person

Question 2

Escheat, lapse and Bona vacantia

Answer 2

Any property in India that would have been accrued to king of England or to the ruler of an Indian state (princely) by:

Escheat or death of a person inter-state without any heir

Lapse or termination of rights via disuse or failure to follow appropriate procedures

Bona vacantia or the property found without any owner/in the want of a rightful owner/would now be vested in state if the property is situated in the union

In all these three cases the property is accrued to the government as there is no rightful owner

Question 3

Property of union and States

Answer 3

Compulsory acquisition by law:

The parliament as well as the state legislatures are empowered to make laws for compulsory acquisition and requisition of private property by the government

Further the 44th amendment Act of 1978 has also abolished the constitutional obligation to pay compensation in this regard except in two cases:
1) When the government acquires property of a minority educational institution
2) When the government acquires the land held by a person under his personal cultivation and the land is within the statutory ceiling limits

Acquisition under state or union includes acquiring, holding, disposing of property under the exercise of its executive powers
The executive power of the union or state extends to the carrying on of any trade or business within and in other states also

Question 4

Suits by or against the Government

Answer 4

Article 300:
The union of India and its states are legal entities (juristic personalities) for the purpose of suits and proceedings and not the Government of the union or the Government of the states.

For the pre-constitution period:
From the days of the East India Company up to the commencement of the constitution in 1950, the government was suitable for contracts but not for torts (wrong committed by its servants in respect of its sovereign functions.)

The liability for contracts under the article 299 states that the central or State Government can enter into contract for the acquisition, holding and disposal of property to carry out business or trade or for any such purpose.

All contracts expressed to be made by the president or governor of state on behalf of the president or governor by such person and in such manner as president or the government directs or authorises.

The liability for torts, the government cannot be sued for the torts in respect of its sovereign functions. However, it can be sued for the torts committed by its officials while exercising non-sovereign functions. Same rule was applied during the company’s rule in India, it could not be sued as sovereign but only as a trader.

The supreme court in the post-independence era in the Kasturi Lal case of 1955 and in the Nagendra Rao case of 1994 ruled that the government was suitable for contracts but not for torts (wrongs committed by its servants in respect of its sovereign functions).

Question 5

Suits against public officials

Answer 5

President and the governor of state:
The constitution provides immunities to the president and governors.
In regards to their official acts, the president and governors cannot be sued for their official acts during their terms of office or thereafter.
However an aggrieved person can sue the government instead of the president or governor of the concerned state
For personal acts, criminal proceedings cannot be inflated against the president or the governors and they cannot be arrested or limited.
Immunity is provided for a period of the terms in office.

Ministers:
As for the ministers, the constitution does not grant any immunity to the ministers for their official acts

Judicial officers:
Judicial officers enjoy immunity from any liability in respect of their official acts and hence cannot be sued.
The judicial officers protections act of 1850 lays down that no judge, magistrate, justice of peace, collector or any other person acting judicially shall be liable to be sued in any court for any act done by him in the discharge of his official duty

Civil servants:
Civil servants who made a contract in his official capacity is not personally liable in respect of that contract but it is the government (the centre or state) that is liable for the contract.