Part XII from Article 294 to 300 deals with the property, contracts, rights, liabilities, obligations and suits of the centre and the states.
Article 294 states that all the property and assets which immediately before the commencement of the constitution were vested with the Dominion of India or a province or a princely state of India became vested in the Union or its corresponding state.
Article 296 states that any property in the territory of India which, if this Constitution had not come into operation, would have accrued to the king of England or to the Ruler of an Indian State by escheat or lapse or as bona vacantia for want of a rightful owner would vest in the Union or the state, as the case may be.
According to Article 297, things of value within territorial waters or continental shelf and resources of the exclusive economic zone of India vest in the Union.
It also empowers the parliament to make law for the limits of the territorial waters, the continental shelf, the exclusive economic zone and other maritime zones of India. At present, India’s territorial zone and exclusive economic zone extends up to 12 nautical miles and 200 nautical miles from the baseline respectively.
Acquisition under executive power: The executive power of the Union and of each State extends to the,
(i) Carrying on of any trade or business
(ii) Acquisition, holding and disposal of property and the making of contracts for any purpose
Acquisition by law: The parliament and the state legislatures can enact laws related to compulsory acquisition and requisitioning private property by the government. The 44th Amendment Act, 1978 deleted the Right to Property as a fundamental right from the constitution. Though, it was added as a legal right under Article 300A. So, the government is under no constitutional obligation to pay compensation except in two cases:
(i) When the government acquires the property of a minority educational institution
(ii) When the government acquires the land held by a person under his personal cultivation and the land is within the statutory ceiling limits.
1. Liability for Contracts
Under Article 299, the central or a state government can enter into contracts for the acquisition, holding or disposal of property, or to carry out a business or trade or for any such purpose. All contracts made in the exercise of the executive power of the union or of a state are to be expressed to be made:
(i) By the president, or by the governor of the state, as the case may be
(ii) On behalf of the president or the governor
(iii) By such persons and in such manner as the president or the governor direct or authorize.
2. Liability for Torts
The government cannot be sued for torts in respect of its sovereign functions. However, it can be sued for torts committed by its officials while exercising non-sovereign functions. Same rule was applied during the company’s rule in India. It could not be sued as a sovereign but only as a trader.
After the Kasturilal case (1965), the Supreme Court has narrowed the scope of sovereign functions of the government. This has enabled the apex court to provide compensation to victims in number of cases.
Suits against public officials
1. President and Governor
The constitution provides certain immunities to the president and governors of the state. The immunities such provided may be divided into official acts and personal acts.
(a) Official Acts: The president and the governors cannot be sued for their official acts during their terms of office or thereafter. However, an aggrieved person can sue the government instead of president or governor of the concerned state.
(b) Personal Acts: Criminal proceedings cannot be initiated against the president and the governors in relation to their personal acts. They cannot be arrested or limited. The immunity is provided for the period of the terms of their office.
Ministers are not provided any immunity in personal as well as official acts. They can be sued for crimes as well as in civil cases like any other ordinary citizen. The courts are barred from enquiring into the advice of ministers on which the president and the governors have done official act.
3. Judicial Officers
The judicial officers cannot be sued for their official acts. They have immunity from any legal liability for an act done during the discharge of their official duty.
4. Civil Servants
The constitution provides personal immunity to civil servants from any legal liability. An aggrieved person can sue the government for any contract made by a civil servant in his official capacity. However, the contract made by the civil servant should abide by the constitution and comply with the conditions specified in the constitution. Otherwise, the civil servant who made the contact is personally liable. He is also immune from liability for torts while exercising sovereign functions of the government. Proceeding in civil cases related to official acts of civil servants can be started after two months advance notice. This immunity is not provided in their personal acts. Proceeding in criminal cases related to official acts of civil servants can be started only with the prior permission of the president or the governor.