State immunity for negligence in seizure custody bars damages where the act is referable to sovereign functions.

Police negligence in handling seized property was established because the articles were not properly listed, weighed, secured, or deposited as required by custody regulations. The loss was therefore traced to gross neglect after seizure. However, State liability was excluded because the seizure, search, and custodial handling were treated as acts done in the exercise of sovereign powers under Article 300(1) of the Constitution. The governing principle is that no tort action lies against the State for negligence referable to sovereign functions, even where the public servants' mishandling is proved.

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Issues: (i) Whether the police officers were negligent in dealing with property seized from the claimant and kept in police custody; (ii) Whether the State was liable to compensate for loss caused by such negligence where the impugned acts were connected with the exercise of sovereign powers.

Issue (i): Whether the police officers were negligent in dealing with property seized from the claimant and kept in police custody

Analysis: The property was seized under the powers of arrest, search and seizure conferred by the Code of Criminal Procedure, and the custody of seized property was also governed by the applicable police regulations. Those regulations required careful listing, weighing and safe custody, and in the case of valuables, deposit in a sealed packet and placement in the treasury. The evidence showed that no proper list was made, the articles were not duly weighed, and the valuables were not kept in the treasury as required. The loss was attributable to gross negligence in the manner in which the property was handled after seizure.

Conclusion: The police officers were negligent and the claimant succeeded on this issue.

Issue (ii): Whether the State was liable to compensate for loss caused by such negligence where the impugned acts were connected with the exercise of sovereign powers

Analysis: Liability depended on Article 300(1) of the Constitution of India and the pre-Constitution law relating to suits against the State. The governing principle drawn from the earlier authorities was that no action lies for torts committed in the exercise of sovereign powers, whereas liability may arise for acts connected with non-sovereign or private undertakings. The seizure, search and custodial handling of the property were held to be acts done in the course of statutory functions referable to sovereign power. The claim therefore fell within the protected sphere of State immunity, and the principle applied in the earlier authority concerning ordinary non-sovereign employment did not assist the claimant.

Conclusion: The State was not liable in damages and the issue was decided against the claimant.

Final Conclusion: Although negligence in custody was established, the claim failed because the loss arose from acts done in the exercise of sovereign powers, so State immunity barred recovery.

Ratio Decidendi: The State is not liable in tort for negligence committed by public servants when the negligent act is referable to the exercise of sovereign powers or delegated sovereign functions, even if the negligence is otherwise established.

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