N. Nagendra Rao v/s Andhra Pradesh by Vanshika Tainwala at LEXCLIQ

Facts

The plaintiff-appellant of this case was N. Nagendra Rao and co. He had a business, he used to deal in fertilizers and food grains and he also had the license for the same. The authorities on 11th August, 1975 raided the premises where the plaintiff carried out his business. The police officer and the vigilance cell confiscated various things, which included huge stocks of food grains and fertilizers and also the non-essential items.

The police officer submitted the report on 31st August, 1975. The District Revenue officer subsequently in his power’s exercise under section 6(a) of the Essentials Commodities Act directed to handover the custody of the fertilizer to the Assistant Agricultural Officer, so that it could be distributed to the farmers and the food grains and non-essential items to the Tehsildar. Tehsildar was supposed to dispose the goods immediately and was asked to deposit the earnings for the same to the Government Treasury. But neither the Tehsildar comply with the order nor the Assistant Agricultural Officer.

Plaintiff-appellant against this submitted applications on 17th and 21st September before the District Revenue Officer claiming the deterioration of the fertilizers since no relevant steps were being taken. He requested to divert the fertilizers to him as no steps were being taken by the Government, so he will sell the goods and transfer the amount to the Government Treasury but the Government did not take any actions to his application.

When on 29th June 1976 the District Revenue Officer in the exercise of his power under section 6(a) of the Essential Commodities Act seized the goods of the plaintiff-appellant his license was cancelled as well. The District Revenue Officer Stated that though the plaintiff-appellant’s fertilizer account is irregular i.e., he isn’t always a defaulter of black-marketing, adulteration, or promoting the products for higher price than the usual price, so a few a part of the fertilizer be seized and the last can be again given back to plaintiff-appellant

 

The plaintiff-plaintiff-appellant against the above order appealed in the District & Session Court in which the court asked the goods to be returned to the plaintiff-appellant When the plaintiff-plaintiff-appellant lodged a complaint to the Chief Minister, Revenue Minister, Agriculture Minister and the other authorities then on March, 1977 the Assistant Agricultural Officer sent a notice with intention to return the confiscated goods.

 

After finally receiving the goods, the plaintiff observed that the goods were of less quantity and bad quality.

Then finally the plaintiff filed a suit before the District and Session Court claiming to get back the amount equivalent to the confiscated the goods. The court held that after the confiscation of the goods by the District Revenue Officer, the relationship of Bailer and Bailee between the Plaintiff and the Government was established.

 

The Government in this situation had a duty to look after the bailed goods and safeguard them from loss but the Government in this situation hadn’t performed its duty. It was also held that the seizing of the goods by the Government doesn’t fall under the purview of its sovereign act, hence the Government was held liable and was asked by the court to compensate the plaintiff-appellant.

The Government after this order filed an appeal before the High Court.

 

The High Court set aside the judgement of the District Court and held that the power that the Revenue Officer exercised falls under the statutory powers of the Government and hence it is not liable for damages.

 

Then the plaintiff against the above order filed a suit before the Supreme Court, he Stated that the act of seizing of the goods was not the sovereign power of the Government. The goods were in bad condition and it was the Governments duty to look after it.

 

Issues Raised

  1. Whether the goods seized in the exercise of the sovereign power gives the Government immunity from loss or damage suffered to the owner.
  2. Whether the seizure of a part of the goods immunizes the State from any claim of loss or injury suffered by the owner that were directed to be returned.

 

Arguments

The following arguments were made by both the parties before the Supreme Court:

Plaintiff:

 

  1. The plaintiff said that the confiscation of his goods by the Government doesn’t comes under the purview of sovereign act of the Government.
  2. The goods were deteriorating and it was Government’s duty to take care of it but they were negligent towards their part.
  3. The Government was liable for the damages suffered by him, thus he is entitled to receive damages for the loss from the Government.

Respondent:

 

  1. The Government argued that their act of seizing of goods comes under the purview of sovereign act of the Government.
  2. Hence, their no liability on the part of the Government arises.

Decision

At the first, when the plaintiff appealed in the trial court, it was found that the moment State took over the goods from the plaintiff, there a relationship of bailor and bailee was established. Going back to the basics we know the essentials of the contract of bailment and here all the essentials of it were fulfilled. There as a bailee it was the duty of the state to look after the goods bailed.

  1. Nagendra v. State of AP should be examined within the ambit of the Vidhyawati Case. In the case of State of Rajasthan v. Vidhyawati,[1] A pedestrian was knocked down by a Jeep of the Government, the pedestrian died in the accident. The State of Rajasthan appealed to the court that it was doing its sovereign act and should be granted immunity.

The Court held that the State would be liable for the tortious acts committed by its servant. The distinction of sovereign and non-sovereign acts was not considered. Court stated that the State would not be held liable for its act within the ambit of Article 300 of the Constitution.

The court awarded the petitioner a sum of Rs 15000. Court added that in these modern times the State has to act for the welfare of the people and defence of sovereign immunity on the basis of old notions of justice can’t be granted. In Nagendra Rao’s case also the State under the Essential Commodities Act seized the goods for public welfare, as the goods were deteriorating so it was the State’s duty to safeguard it. Hence the State was held liable for the losses suffered by the owner.

-Vanshika Tainwala

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