P. & O. Steam Navigation Co. Vs. Secretary of State: Summary

To determine governments liability in Torts, popularly known as 'principle of sovereign immunity' the judgment of the Supreme Court of Calcutta in the case. P. & O. Steam Navigation Co. Vs. Secretary of State is the authority. The case was actually reported as an Appendix to one of the Bombay High Court Reports – 5 B. H. C. R. App. P. 1.


The point as to how far the State was liable in tort first directly arose in this case. The facts of the case were that a servant of the plaintiff’s company was proceeding on a highway in Calcutta, driving a carriage which was drawn by a pair of horses belonging to the plaintiff. He met with an accident, caused by negligence of the servants of the Government. For the loss cased by the accident, the plaintiff claimed damages against the Secretary of State for India. Sir Barnes Peacock C. J. (of the Supreme Court) observed that the doctrine that the “King can done wrong”, had not application to the East India Company. The company would have been liable in such cases and the Secretary of State was thereafter also liable. The Court also drew the distinction between sovereign and non-sovereign functions, i.e. if a tort were committed by a public servant in the discharge of sovereign functions, no action would lie against the Government – e.g. if the tort was committed while carrying on hostilities or seizing enemy property as prize. The liability could arise only in case of “non-sovereign functions” i.e. acts done in the conduct of undertakings which might be carried on by private person-individuals without having such power.

The aforesaid judgment laid down that the East India Company had a two fold character:

(a) As a sovereign power and

(b) As a trading company.

The liability of the company could only extend to in respect of its commercial dealings and not to the acts done by it in exercise of delegated sovereign power. As the damage was done to the plaintiff in the exercise of non-sovereign function, i.e. the maintenance of Dockyard which could be done by any private party without any delegation of sovereign power and hence the government cannot escape liability and was held liable for the torts committed by its employees.

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