Etti and Another vs The Secretary of State for India in Council

Burn, J.—This is an appeal from the decision of the learned Additional Judge of the City Civil Court hi O.S. No. 919 of 1935. This suit was

filed in forma pauperis by a man and his wife living in Madras for Rs. 3,000 as damages against the Secretary of State for India in Council. The

plaintiff''s case as set out in the plaint was that on 4th December, 1933, the first plaintiff and his brother took the infant son of the plaintiffs to the

Government Hospital for Women and Children, Egmore, Madras, for treatment. The child was two or three days old. About the 11th December,

the nurse in charge of the Children''s ward at the Hospital is said to have told the first plaintiff and his brother that the child was cured and might be

taken away, but before taking the child away, the first plaintiff was advised to buy a piece of rubber apparatus. The first plaintiff and his brother

went away and bought this appliance, went back to the hospital the same day to fetch the child away, and were then informed by the nurse that the

child had been taken away by some one else. The plaintiffs sought for the child in every possible place. The first plaintiff reported the matter to the

police, but the police were unable to find the child. On those facts, it was alleged that the loss of the child was due to the negligence of the ""hospital

authorities"". It was also alleged that ""the hospital authorities"" had committed a breach of contract in failing to return the child to its parents or their

nominees, and that they were also guilty of misfeasance, non-feasance and malfeasance in handing over the child to some unknown person. The

plaintiffs estimated the damages sustained at Rs. 3,000 and filed the suit, as already stated, against the Secretary of State for India in Council.

The learned Additional Judge of the City Civil Court discussed the following issues as preliminary matters with the consent of both parties:

Is there any valid and binding contract between the plaintiffs and the Secretary of State for India in Council?

If there is no such contract, is the defendant liable in damages u/s 65 or u/s 70 of the Indian Contract Act?

Is not the tort, if any, founded on contract: and if there is no contract between the plaintiffs and the defendant, is the defendant liable in tort?

Is the defendant liable in tort?

The learned Judge held that there was no valid and binding contract and that the defendant could not be said to be liable in damages u/s 65 or

Section 70 of the Indian Contract Act. The third issue was not pressed before him on behalf of the defendant. On the fourth issue, the learned

Judge held that the defendant was not liable in tort. The plaintiffs have filed this appeal.

The suit was filed against the Secretary of State for India in Council u/s 32 of the Government of India Act, 1915. The material portions of that

section are as follows:

The Secretary of State in Council may sue and be sued by the name of the Secretary of State in Council as a body corporate.

Every person shall have the same remedies against the Secretary of State in Council as he might have had against the East India Company if the

Government of India Act, 1858, and this Act had not been passed.

Put briefly, the case for the plaintiffs is that in such a case as this, the East India Company would have been liable for the torts of its servants,

and therefore the Secretary of State for India in Council is liable for the torts of the staff of the Government Hospital for Women and Children.

Earned Counsel for the appellants has relied in this Court, as he did in the lower Court, on the leading case of the Peninsular and Oriental Steam

Navigation Co. v. Secretary of State for India in Council (1868) 5 H.C.R. . That is, of course, a very well-known case. The substance of the ruling

is given in the headnote as follows:

The Secretary of State in Council for India is liable for the damages occasioned, by the negligence of servants in the service of Government if the

negligence is such as would render an ordinary employer liable.

The P. & O. Company sued the Government for damages occasioned by injuries caused to a horse belonging to them. Their carriage was being

driven along a public road passing between two portions of the Government dockyard at Kidderpore. Some coolies in the service of the

Government were carrying a piece of funnel casing from the works on one side of the road to the works on the other side of the road, and owing

to their negligence, a horse drawing the plaintiff''s carriage was Seriously injured. The learned First Judge of the Calcutta Court of Small Causes

stated a case for the opinion of the Supreme Court on the question of the liability of the Secretary of State for India for the damages occasioned to

the plaintiffs. The learned Judges, Sir Barnes Peacock, C.J. and Jackson and Wells, JJ., held that the Secretary of State for India in Council was

liable to the plaintiffs on the facts found by the learned Judge of the Court of Small Causes. The provision of law under which the Secretary of

State for India in Council was held responsible was Section 65 of the Act for the better Government of India, 21 & 22 Vict., Ch. 106. That was in

the same terms as Section 32 of the Government of India Act, 1915, already quoted. The learned Judges drew a distinction between acts done by

the Government in the exercise of sovereign powers and acts done by Government in the conduct of undertakings which might be carried on by

private individuals to whom sovereign powers had not been delegated. Sir Barnes Peacock said:

There is a great and clear distinction between acts done in the exercise of what are usually termed sovereign powers, and acts done in the conduct

of undertakings which might be carried on by private individuals without having such powers delegated to them.

In the former case, the learned Chief Justice and the other Judges held that the Secretary of State for India in Council would not be liable for the

torts of its servants, but in the latter case he would. Earned Counsel for the appellants relies entirely upon the words quoted above from the

judgment of Sir Barnes Peacock. He points out that any private individual may carry on a hospital for women and children in precisely the same

way that the Government Hospital for women and Children, Egmore, is carried on by the Government. He goes further than that. He points out

that the history of the institution is that it actually began as a private hospital. It was started by a number of private individuals acting jointly and was

later taken over by the Government. Earned Counsel argues that the case therefore falls within the dictum of Sir Barnes Peacock. This contention

however entirely fails to take into consideration the facts of the P. & O. case. The Kidderpore dockyard, as appears from the judgment in the

case, was being maintained by the East India Company, for the repair of their river steamers, which carried both passengers and goods for hire.

This dockyard was taken over by the Government from the East India Company. This is the principal fact in the case which must not be lost sight

of when considering the distinction drawn by Sir Barnes Peacock between acts done in the exercise of sovereign powers and acts done in the

conduct of undertakings which might be carried on by the private individuals. It is quite clear that Sir Barnes Peacock was considering

undertakings of a business or commercial nature. There is no analogy whatever between the carrying on of a dockyard for the purpose of repairing

steamers engaged in commercial traffic, and the carrying on of a hospital for the purpose of curing the diseases of women and children. Earned

Counsel for the appellants objects to the proposition that the Secretary of State''s immunity is taken away only in cases where the Government is

engaged in undertakings of a commercial or a business character. He wishes to rely on the letter of the dictum of Sir Barnes Peacock. This is, in

our opinion, clearly unsound. The judgment of Sir Barnes Peacock has been referred to in many cases subsequently, and it has, we think, always

been recognised that the learned Chief Justice was there dealing with undertakings of a business or commercial character; vide McInerny v.

Secretary of State for India ILR (1911) 38 Cal. 797, where Mr. Justice Fletcher held that the Government were not liable for damages sustained

by the plaintiff through coming in contact with a post set up by the Government on a public road on the Calcutta maidan. After referring to the P. &

O. case, the learned Judge enquires:

This case is a case to make the Government liable to pay compensation out of Government revenues. What for? For an act which happened to the

plaintiff on the public highway. What commercial undertaking or other trading operation were the Government of India carrying on in maintaining

the public path on the public highway?

Sir George Rankin, C.J., explains the P. & O. case in similar language in Secretary of State for India in Council v. Shreegobinda Chaudhuri

I.L.R.(1932) 59 Cal. 1289 , the learned Chief Justice observes with regard to the P. & O. case:

It was an action in tort and the matter, having come before this Court, on a reference from the Small Cause Court, and it being contended that the

Secretary of State for India in Council was not liable, this Court decided that there was a distinction between a busines or merchantile concern

carried on by the East India Company, whether for its own private or for public benefit, and acts done in connection with Governmental power or

powers which could not be lawfully exercised save by the sovereign or an individual delegated by the sovereign to exercise such powers.

It is impossible in our opinion to treat the dictum of Sir Barnes Peacock as though it had been intended to cover cases of an institution such as a

hospital, which may be maintained by private persons as well as by Government. The real question is, as the learned Judge of the Court below has

found, whether the Government in maintaining the Hospital for Women and Children, Egmore, is discharging a function of Government. There is no

allegation that that Hospital is maintained by the Government as a commercial or business undertaking. It is admittedly maintained out of public

revenues. Now, by Section 20(1) of the Government of India Act, the Revenues of India can only be applied for the purposes of the Government

of India. The maintenance of hospital is a proper object for the expenditure of the public revenues, vide item (2) in Part II of Schedule I appended

to the Devolution Rules framed u/s 45A of the Government of India Act. That section authorises the framing of rules:

For the classification of subjects, in relation to the functions of Government as central and provincial subjects, for the purpose of distinguishing the

functions of Local Governments and Local Legislatures from the functions of the Governor-General in Council and the Indian Legislature.

In maintaining a hospital such as this for the benefit of the public at the expense of the public revenues, we are quite clear that the Government

is discharging a proper function of Government, and that under the principle enunciated in the P. & O. case and in many subsequent cases, the

Secretary of State is not liable for the torts of his servants employed in the hospital.

We have been referred to a large number of cases by earned Counsel for the appellants, but there is nothing in them which supports his

contention, unless the dictum of Sir Barnes Peacock is taken literally, without any reference to the facts of the P. & O. case. The case which is

most nearly parallel to this is, we think, The Secretary of State v. Cockcraft ILR (1914) 39 Mad. 31. In that case, Sir John Wallis expresses the

view that in maintaining a road, and more particularly in maintaining a military road, the Government were exercising a function of Government and

that consequently the Secretary of State for India in Council was not liable for damages occasioned to the plaintiff by the careless stacking of

gravel on road by the persons engaged to carry out the work of repairs. It is not necessary, in our opinion, to refer to the other cases which have

been cited. The learned Additional Judge of the City Civil Court has dealt with all the important cases, and we have scarcely anything to add to his

able and accurate exposition of the law on this point.

Learned Counsel did not seriously press before us the claim of the plaintiffs based upon contract, and quite rightly, as it is clear that none of the

proper formalities necessary to bind the Secretary of State in a case of contract was observed in this case. This appeal must therefore be

dismissed.

The learned Judge of the Court below did not direct the'' plaintiffs to pay the Government''s costs, and the learned Government Pleader has

not pressed before us the question of the costs in the lower Court. If he had, we should have been disposed to say, as Sir George Rankin, C.J.,

said in Secretary of State for India v. Shreegobinda Chaudhuri ILR (1932) 59 Cal. 1289, that there is no justification for making the tax-payer

contribute a single penny towards the costs of the suit. The plaintiffs were very ill-advised in filing this suit against the Secretary of State for India in

Council, but since the learned Judge of the Court below did not award costs against them, we shall not interfere with his decree in that respect. We

shall however direct that the appellants must pay the costs of the respondent in this appeal, since whatever grounds there might have been for filing

a suit, there were certainly none for preferring this appeal.

It is necessary to note that the learned Judge of the Court below proceeded on the assumption that an actionable tort had been committed by

some person employed on the staff of the Hospital for Women and Children. The learned Government Pleader does not admit the soundness of

that assumption; he is prepared to contend that the plaintiffs, on the facts of this case, had no cause of action in tort against anybody. We express

no opinion on that question, as it was not discussed in the lower Court, and a decision of it is not necessary for the purposes of this appeal. The

plaintiffs must pay the court-fees.

R. Sundaralingam for N. Yegneswara Sastri, Advocate, for the appellants asks for a certificate u/s 205 of the Government of India Act, 1935.

This case does not involve a substantial question of law as to the interpretation of the Government of India Act, 1935, or any order in Council

made thereunder. We must therefore decline to give a certificate.