Question

The landmark case of Peninsular & Oriental Steam Navigation Company v. Secretary of State (1861) primarily deals with which of the following?

• A. Constitutional functions of the State
• B. Sovereign and non-sovereign functions of the State
• C. Vicarious Liability of State
• D. Residuary functions of the Government

Hint:

The P and O case is the origin of the "sovereign vs. non-sovereign function" test for determining if the government can be sued for the wrongful acts of its employees in India.

Answer 1

The Correct Option is B

This is a foundational case in Indian administrative law regarding the tortious liability of the State.
In P & O Steam Navigation Co.
v.
Secretary of State, the Calcutta Supreme Court, led by Chief Justice Barnes Peacock, introduced the distinction between sovereign and non-sovereign functions of the State to determine its liability.

Sovereign Functions: Acts that can only be performed by the state by virtue of its sovereignty (e.
g.
, maintaining an army, making treaties).
The state was held to be immune from liability for torts committed during these functions.

Non-Sovereign Functions: Acts that are similar to those performed by private individuals or corporations (e.
g.
, running a commercial enterprise, maintaining a dockyard).
The state was held to be liable for torts committed during these functions.
While the case is about the vicarious liability of the state, its primary contribution was establishing this specific distinction.