by Niharika Kumari


People often face seizure of their goods and property under suspicion when the police authorities are exercising their power. But what if someone’s goods get damaged or stolen during this procedure? Will the State be vicariously liable for the negligence of its officers while discharging their statutory duties? The present article intends to analyse all these aspects with the help of cases as precedent.


The case of Nagendra Rao v/s State of Andhra Pradesh[i] deals with the liability of the Government for a tortious and sovereign act of its officers. The present case was an appeal filed before the Supreme Court (hereinafter referred to as SC) and the question put in front of the bench, comprised of Sahai R.M. (J) and Hansaria B.L. (J), was whether the seizure of goods of a person comes under the purview of a sovereign act of the Government which does not attract any liability of the Government. The appellant, N. Nagendra Rao, was having a valid license to carry on a business of food grains and fertilizers in the state of Andhra Pradesh.

Relevant law- Essential Commodities Act, 1955

Facts: N. Nagendra Rao carried on a business of fertilizers and food grain under a proper license issued by the appropriate authority. On August 11,1975, a raid was made by the police inspector, vigilance cell upon the premises of appellant. During the raid, a huge amount of fertilisers, food grains and even non-essential goods were seized. Subsequently, on August 31,1975, a report was submitted by the Inspector of the District Revenue Officer (in brief the DRO)under Section 6-A of the Act[ii], directing fertilizers to be hand over to Assistant Agricultural Officer(in brief AAO)so that it could be distributed to ryots. Food grains and other non-essential goods were ordered to keep under the custody of Tehsildar for disposing of it off and sell out these goods and deposit the amount received from this as consideration to the treasury. No steps were taken by AAO to dispose of the fertilizers. Against the non-compliance of orders, the appellant submitted two applications on 17-9-1975 before the DRO and on 11-2-1976 before AAO, stating that since no steps were taken for disposition of seized Fertilizers which are being deteriorated, are causing heavy losses to plaintiff-appellant. Appellant requested that if goods are not being sold by the Government, then it can be handed over to him and he will deposit the amount received in the Government treasury but no action was taken by neither DRO nor AAO and meanwhile appellant’s license was cancelled. After a repeated request by the appellant, the appropriate authority (collector) ordered to release the stock but the AAO did not comply with the orders. At the end of March 1977, the AAO issued a notice to the appellant to take delivery of the stock but the appellant found that the stock was spoilt both in quantity and quality.

Previous Judgment passed by Trial Court and High Court:

The appellant suffered a huge loss due to the negligent act of DRO and AAO. The trial court issued a decree for payment of Rs 1,06,125.72 with interest at the rate of 6% to the appellant due to non-disposal of the stock under the Essential Commodities Act, 1955. Therefore, the High Court (hereinafter referred to as HC) struck down the decree passed by the trial court and granted a certificate under Article 133(1) of the Constitution of India[iii] as the case involved “substantial questions of law, of general importance”.

Issues before the Court: Mainly 2 issues were raised-

  1. Whether the seizure of the goods in the exercise of statutory powers under the Act immunizes the state, completely, from any loss or damage suffered by the owner.
  2. Whether the employees of the State were negligent in disposing of the goods which led to the damage to the owner of food grain.

The ratio of the Case:

For a better analysis of the case, the SC called for subsequent reading of the case of Vidyawati and Kasturilal’s.

In the case of The State of Rajasthan vs Mst. Vidhyawati And Another[iv], the respondent’s husband was knocked down by a jeep driven rashly and negligently by the employee of the State, ultimately causing the death of her husband. The trial court gave ordered a decree to the driver individually but dismissed the case against the status but the High Court struck down the judgment of the trial court and held the state liable for the tortious act committed by its employee during the course of employment. The State of Rajasthan appealed against the SC and SC upheld the view of HC and held that the concept of sovereign immunity based on the rule of ‘the king can do no wrong’ is no longer applicable.

In the case of Kasturi Lal Ralia Ram Jain v. State of U.P[v], the view taken by the SC in Vidyawati’s case was not upheld. In this case, goods were seized by the police authorities in the exercise of their statutory power and Kasturilal was also detained. Later it was found that the goods belonged to Kasturial and he had the appropriate title of those goods. However, in the meanwhile, due to negligent act of the police officers, a constable stole those goods. The SC held that the act of arresting a person and seizure of goods under suspicion comes under the sovereign act and the state will not be liable to compensate the appellant. This view can nevertheless be accepted as the State will be morally and legally liable for the actions of its employees.

With respect to the vicarious liability of the State, the rule lays down that State is not above the law and the state and individual should be treated equally. Keeping this in view, the State of Andhra Pradesh was ordered to compensate the appellant, N. Nagendra Rao.


The SC set aside the judgment and order given by the HC and stored the decree of the trial court for restoring the cost of the appellant. The SC did not consider the seizure of good as a sovereign act of State. Several principles were also laid by the Apex Court:

  • The act of seizure of goods does not come under the purview of the sovereign act of the state.
  • The state will be liable for the tortious act of its employee.
  • The tortious act does not come under the category of sovereign act.


In the case of N. Nagendra Rao, the Apex court upheld the view of Vidyawati’s decision and struck down the view given under the case of Kasturilal. Regarding the doctrine of vicarious liability, SC takes the view that the employee individually can be held liable for their negligent act but this does not give immunity to the state to not being sued. The act of seizing goods does not come under the sovereign act and the doctrine of the sovereign act is also required to enacted clearly. Thus, the State of Andhra Pradesh will be liable to pay the appellant decided by the trial court.

[i]Nagendra Rao v/s State of Andhra Pradesh, 1994 SCC (6) 205.

[ii]Essential Commodities Act, 1955, S. 6-A, No. 10, Acts of Parliament, 1955 (India).

[iii]INDIA CONST. art. 133, cl. 1.

[iv]The State of Rajasthan vs Mst. Vidhyawati And Another, 1962 AIR 933.

[v]Kasturi Lal Ralia Ram Jain v. State of U.P, 1965 AIR 1039.

Picture: Lex Spectre


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