Articles 294 to 300 in Part XII of the Constitution deal with property, contracts, rights, liabilities, obligations, and suits of the Union and States, recognizing them as juristic (legal) persons. UPSC Polity Notes.

The Articles 294 to 300 in Part XII of the Indian Constitution outline the rules concerning property, contracts, legal rights, liabilities, and governmental obligations. These provisions establish the Union of India and the States as juristic legal entities, ensuring clarity in ownership, succession, and suits filed by or against the government—an important area for students of polity preparing for competitive exams.

Property, Contracts and Liabilities of the Union and States under Indian Constitution

• Property of the Union and States

  • Succession of Property and Liabilities

    • All properties and assets of the Dominion of India, provinces, or princely states before the Constitution’s commencement were transferred to the Union or respective state governments.
    • The rights, liabilities, and obligations of earlier governments automatically became those of the Government of India or the concerned state.

  • Escheat, Lapse, and Bona Vacantia

    • Property without rightful heirs (escheat), property lost due to disuse (lapse), or property without owners (bona vacantia) vests in the state if located there, and otherwise in the Union.
    • In all three cases, the property goes to the government due to absence of a legitimate claimant.

  • Sea-Wealth and Maritime Resources

    • All minerals, lands, and valuable resources under India’s territorial waters, continental shelf, and exclusive economic zone belong exclusively to the Union.
    • Territorial waters extend up to 12 nautical miles, while the exclusive economic zone stretches 200 nautical miles from the baseline.

  • Compulsory Acquisition of Property

    • Both Parliament and State Legislatures may pass laws for compulsory property acquisition.
    • The 44th Constitutional Amendment Act, 1978 removed the general obligation to compensate, except in two cases:
      • (a) Acquisition of property of minority educational institutions.
      • (b) Acquisition of agricultural land within statutory ceiling limits under personal cultivation.

  • Acquisition under Executive Power

    • The Union or States may acquire, hold, and dispose of property under executive power.
    • They may also engage in trade, commerce, or business across state boundaries.

• Suits by or Against the Government

  • Article 300 allows the Union of India and States to sue or be sued in their official names, establishing them as legal entities for judicial proceedings.
    • The Union can sue/be sued as Union of India, while states can do so as State of Andhra Pradesh, State of Uttar Pradesh, etc.
    • This continuity of liability extends from the pre-Constitution era (Dominion of India and Provinces).

  • Government Liability for Contracts

    • Governments may enter into contracts for property, business, or governance purposes, but three mandatory conditions apply:
      • (i) Contracts must be made in the name of the President or Governor.
      • (ii) They must be executed on behalf of these authorities.
      • (iii) Execution must be done by authorised persons.
    • Failure to meet these conditions renders the contract null and void.
    • The President, Governor, and officers executing contracts are personally immune, but the government remains contractually liable.

  • Government Liability for Torts (Civil Wrongs)

    • Initially, the East India Company was immune from liability for sovereign functions but liable for its trading activities.
    • The principle of sovereign immunity was upheld in the P & O Steam Navigation Company case (1861) and later in the Kasturilal case (1965).
    • The Supreme Court gradually diluted this doctrine in cases such as Nagendra Rao (1994), Common Cause (1999), and Prisoner’s Murder case (2000), stressing that the State cannot escape liability in a modern welfare state.

  • Supreme Court Observations on State Liability

    • (i) No civilised system can allow the State to act above the law; negligent acts of officers must invite compensation.
    • (ii) The distinction between sovereign and non-sovereign functions is outdated.
    • (iii) In a welfare state, government duties extend beyond defence or justice to social, economic, and political regulation.
    • (iv) Only core functions like justice, law and order, and crime repression retain immunity.

The Indian Constitution provides clear guidelines on suits and immunities of public officials including the President, Governors, Ministers, Judicial Officers, and Civil Servants. These provisions balance accountability with functional independence, ensuring smooth governance while safeguarding constitutional authorities. This framework is essential for students of polity preparing for competitive exams.

Suits Against Public Officials and Their Constitutional Immunities

• Immunities of the President and Governors

  • Immunity for Official Acts

    • The President and Governors cannot be sued during or after their tenure for any act performed in discharge of official duties.
    • The official conduct of the President may still be examined by Parliament during impeachment proceedings.
    • Aggrieved citizens may file proceedings against the Union of India or the State Government, but not personally against the President or Governor.

  • Immunity for Personal Acts

    • No criminal proceedings, arrest, or imprisonment can be initiated against them during their term of office.
    • However, civil proceedings may be filed for personal acts during their term, provided a two-month advance notice is given.
    • This protection ends once their official tenure concludes.

• Ministers and Their Liability

  • The Constitution does not grant special immunity to Union or State Ministers.
  • They are not legally accountable for official acts of the President or Governor, as courts cannot inquire into the nature of their advice.
  • For personal acts, ministers enjoy no immunity and can be sued like ordinary citizens for crimes or torts.

• Immunity of Judicial Officers

  • Judicial officers are protected from legal action for acts done in official capacity.
  • The Judicial Officers Protection Act, 1850 explicitly safeguards judges, magistrates, collectors, and others acting judicially from being sued in civil courts for duties performed officially.

• Civil Servants and Their Legal Liability

  • Contracts Made by Civil Servants

    • Civil servants are not personally liable for official contracts entered into on behalf of the government.
    • However, if the contract violates constitutional requirements, the officer concerned may become personally liable.

  • Torts and Wrongful Acts

    • For sovereign functions, civil servants enjoy immunity from tortious liability.
    • For non-sovereign functions, their liability is similar to that of ordinary citizens.
    • Civil proceedings against them for official actions require two months’ prior notice, except when acts fall outside official duty.
    • Criminal proceedings for official acts may proceed only with prior sanction of the President or Governor, as required.

• Articles Related to Government Rights and Liabilities at a Glance

  • (i) Article 294: Succession to property, assets, rights, and liabilities in certain cases.
  • (ii) Article 295: Succession to property, assets, rights, and liabilities in other cases.
  • (iii) Article 296: Property accruing by escheat, lapse, or bona vacantia.
  • (iv) Article 297: Ownership of resources in territorial waters and continental shelf to vest in the Union.
  • (v) Article 298: Power of Union and States to carry on trade or business.
  • (vi) Article 299: Rules relating to government contracts.
  • (vii) Article 300: Provisions on suits and legal proceedings against the government.
  • (viii) Article 361: Immunities of the President and Governors.