State liability in tort for revenue attachment failed where payment was voluntary and claimed interest loss was too remote.

State liability in tort was examined in relation to allegedly unlawful attachment, execution and detention of money. Acts done by revenue officers under statutory authority did not, without malice, want of reasonable and probable cause, or State ratification of an actionable wrong, fasten damages liability on the Government. The court also treated the payment of the disputed sum as voluntary, made with notice and an opportunity to object, so it could not support a claim for wrongful detention or damages. Loss of interest was held too remote because it flowed from intervening judicial action and the plaintiffs' own payment choice, not from a direct and proximate tort.

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Issues: (i) Whether the State was liable in tort for damages claimed on account of the alleged unlawful attachment, execution, receipt and detention of money; (ii) whether the plaintiffs' payment of the sum of Rs. 1,60,000 was involuntary so as to found a claim for damages; and (iii) whether the claimed loss of interest was too remote to be recovered as damages.

Issue (i): Whether the State was liable in tort for damages claimed on account of the alleged unlawful attachment, execution, receipt and detention of money

Analysis: The claim was examined against the settled distinction between acts done in the exercise of sovereign functions and acts of a private or commercial character. Acts done under statutory authority by the Income-tax Officer, Collector and Certificate Officer did not render the State answerable merely because the underlying attachment or execution later turned out to be unlawful. In the absence of malice, want of reasonable and probable cause, or proof that the State ordered or ratified an actionable wrong, no liability in damages could be fastened on the Government for the officers' acts in the circumstances proved.

Conclusion: The State was not liable in tort on this footing.

Issue (ii): Whether the plaintiffs' payment of the sum of Rs. 1,60,000 was involuntary so as to found a claim for damages

Analysis: The payment was made before execution was actually ordered, after notice had been directed and while the plaintiffs had an opportunity to object. The payment was made to secure a compromise-like relief and was treated by the Court as voluntary. The plaintiffs never demanded return of the money and had throughout supported retention of the amount against the rival claimant. On those facts, the receipt and retention of the money could not be treated as a wrongful detention giving rise to damages.

Conclusion: The payment was voluntary and no damages were recoverable on that basis.

Issue (iii): Whether the claimed loss of interest was too remote to be recovered as damages

Analysis: Even assuming some initial illegality in the attachment or execution process, the loss claimed arose only after an intervening judicial order and from the plaintiffs' own choice to make payment in the circumstances. The damage claimed was therefore not the direct and proximate consequence of any tort attributable to the State. The chain of causation was too remote to sustain the claim for interest as damages.

Conclusion: The claimed loss was too remote and was not recoverable.

Final Conclusion: The appeal failed on the merits, as the plaintiffs established neither a legally actionable tort by the State nor a proximate and recoverable loss.

Ratio Decidendi: Where the impugned act is done under statutory authority and the asserted loss flows from a voluntary payment and an intervening judicial process, without malice or want of reasonable and probable cause, the State is not liable in tort and the damage is too remote to be recovered.

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