Court caseAIR 1962 SC 933

Lokumal, a temporary employee of the State of Rajasthan, was the driver of a government jeep kept for the use of the Collector of Udaipur. He was bringing the jeep back from a workshop where it had been repaired when he drove rashly and negligently and knocked down Jagdishlal, who was walking on the footpath. Jagdishlal died of his injuries a few days later. His widow Vidyawati and their daughter sued the driver and the State for damages. The trial court decreed the suit against the driver only; the Rajasthan High Court held the State also liable, and the State appealed to the Supreme Court.

Sinha CJ, for the Constitution Bench, dismissed the State's appeal. Article 300 makes the Government of India and of a State liable to be sued in the same way as the Dominion and the Provinces were before the Constitution, and that liability was traced back through s. 176 of the Government of India Act 1935 and s. 65 of the Act of 1858 to the East India Company, which, under P. and O. Steam Navigation Co. v. Secretary of State (1861), was liable for torts committed in the course of activities that a private person might also carry on. Driving a jeep from a repair shop to the Collector's bungalow was not an act in exercise of sovereign power. The Court observed that in a welfare State engaged in trade and industry there was no justification for the archaic maxim that "the King can do no wrong", and that the State should be as much liable as any other employer.