JUDGMENT - FACTS- The plaintiff filed a suit for compensation for Rs.1,86,000/- for the physical damages suffered by him on account of anti-rabies injections given to him negligently from 15-12-1967 to 7-1-1968 at the O. P. D. of the General Hospital, Sholapur. Defendant No. 3, the State, owned and was runnig the said hospital while defendant No. 1 was at the material time Medical Officer in-charge of the O. P. D. and defendant No. 2 was the Civil Surgeon in-charge of the hospital. The hospital provided for arrangements for antirabies injections. The injections invariably were given actually by the nurses under the instructions and direct supervision of the Medical Officer in-charge of the O.P.D. The plaintiff claimed that he was employed as a mechanic operator by Shiwaji Works Ltd. on a salary of Rs. 225 per month for seven years before the incident. A dog bit him on foot on 25-12-1967 in the morning and he went to the O.P.D. of the General Hospital at Sholapur for treatment. Fourteen anti-rabies injections were prescribed for him and accordingly he took them from 25-12-1967 till 7th January, 1968. According to him, the defendant No. 1 was present on 25-12-1967 and dictated the prescription and he was also in-charge of the O. P. D. from I-I-I968 to 7-1-1968. The plaintiff felt pain in the body on 1-1-1968 and complained to the defendant No. I Doctor about the same. From 3-1-1968 he started feeling fever and loss of power in the limbs. This was brought to the notice of the Doctor from 3rd January, 1968 every day till 7-1-1968 when the plaintiff found it very difficult even to walk due to pain in the limbs and numbness therein. Defendant No. 1 told him that such re­actions were common and there was nothing to worry about it. During the last four days the plaintiff was required to be taken to the General Hospital in a tonga. The limbs got badly paralysed on 8-1-1968 when he was even unable to pass urine. He, therefore, got himself admitted in the N. M. Wadia Hospital as an indoor patient on 9-1-1968 where he took treatment and spent in all a sum of Rs. 3,000/- but he was not completely recovered. His limbs still suffered from paralysis and according to him all this was entirely due to negli­gence of the doctors. He, therefore, claimed Rs. He, therefore, got himself admitted in the N. M. Wadia Hospital as an indoor patient on 9-1-1968 where he took treatment and spent in all a sum of Rs. 3,000/- but he was not completely recovered. His limbs still suffered from paralysis and according to him all this was entirely due to negli­gence of the doctors. He, therefore, claimed Rs. 1,83,000/- as damages for loss of earnings and loss of enjoyment of life and a further sum of Rs. 3,000/- on on account of expenses incurred by him. The claim was made against all the 3 defendants. The defendant No. 3, the State was sought to be held liable vicariously for the tortious acts of its employees. The defendants denied their liability. The trial Court on evidence held that the defendant No. 1 was negligent. It however found the defendant No. 2 un-concerned with the plain­tiff's treatment and accordingly exonerated him of any liability. It was found that the plaintiff failed to prove medical expenses of Rs. 3,000. The damages were quantified at Rs. 15,000 and the State was also found vicariously liable for the negligent acts of its servant. Accordingly a decree was passed in favour of plaintiff against defendants 1 and 3 with proportionate costs the suit having been dismissed against defendant No. 2. Three separate appeals came to be filed. First appeal No, 123 of 1973 was filed by the plain­tiff claiming higher compensation. First Appeal No. 144 of 1973 was filed by the defendant No. 1 challenging his liability while 1st Appeal No. 217 of 1973 was filed by the defendant No. 3, the State. Deshpande V.S., C.J.-After stating the facts in paragraphs I to 5 the Judgment proceeds : ] 6. Shri M. R, Kotwal, the learned Government Pleader, appearing for the Appellant-State, apart from challenging the finding as to negligence of Defendant No. I, contended that running of hospitals is part of the regal functions of the State and the State can never be held liable for the tortious acts of its servants when the complained acts of negligence are claimed to have been committed by the servants in the discharge of such regal functions. Reliance is placed on a Division Bench judgment of this Court (Vaidya and Naik JJ.), in First Appeal No. 620 of 1968 With First Appeal No. 852 of 1968 dated 15-4-1977. The Judgment, no doubt, supports his contention. Reliance is placed on a Division Bench judgment of this Court (Vaidya and Naik JJ.), in First Appeal No. 620 of 1968 With First Appeal No. 852 of 1968 dated 15-4-1977. The Judgment, no doubt, supports his contention. One Chandrikabai in that case died in the Government-owned hospital after her delivery and sterilisation operation. The two doctors attending to her opera­tion were alleged to have sutured the wound without caring to remove the cotton swab inserted during the operation. Her death was attributed to this negligence of the doctors. Her husband and children claimed compensation for these tortious acts from the doctors and also from the Government for its vicarious liability for the negligence of its servants. The Trial Court held the doctors to be guilty of negligence and passed a decree against the doctors and the Government. The Division Bench, however, did not find evidence enough to sustain the finding of negligence. The question of any liability for compensation of either of the defendants for any such negligence, obviously could not arise on this finding. Further question whether running hospital was part of its regal functions and whether Government could not be vicariously liable for the negligence of its servants also could not arise for decision. Even so, the learned Judges discussed this point in paras 238 to 253 of this judgment and held that running the hospital was part of the regal functions of the Government and the Government can never be held liable for the tortious acts of its servants in the discharge of any such delegated regal functions. Amongst others, the learned Judges relied on the Judgment of the Madras High Court in the case of (Etti and another v. Secretary of State)1, and the Judgment of the Supreme Court in the case of (The Management of Safdar Jung Hospital, New Delhi v. Kuldip Singh Seth)2. Ratio of the earlier Supreme Court Judgment in (Hospital Mazdoor Sabha's case)3 was found to have been over-ruled. The Division Bench also seems to have thought the ratio in Safdar Jang Hospital case had the effect of making the Supreme Court Judgment in the case of (State of Rajasthan v. Mst. Vidhyawati)4 and (Kasturi Lal v. State of U. P.)5 and Division Bench Judgment in the case of (Union of India v. Sugrabai)6 irrelevant. The Division Bench also seems to have thought the ratio in Safdar Jang Hospital case had the effect of making the Supreme Court Judgment in the case of (State of Rajasthan v. Mst. Vidhyawati)4 and (Kasturi Lal v. State of U. P.)5 and Division Bench Judgment in the case of (Union of India v. Sugrabai)6 irrelevant. The Division Bench also thought that the Government has to run such hospitals to comply with (he directive principles of the Constitution ana functions required to be so discharged in compliance with the Constitution, cannot but be held to be regal. 8. Shri B. P. Apte, the learned Advocate appearing for the plaintiff, however, relied on a subsequent Judgment of the larger Bench of the Supreme Court (Seven Judges) in the case of (Bangalore Water Supply v. Rajappa)7 in which ratio of its Judgment in Mazdoor Sabha's case is affirmed and that of Safdar Jung Hospital's case is overruled, and contended that ratio of the Division Bench Judgment, based on Safdar Jung Hospital case, is no more a good and binding law. This contention appears to us to be well founded. 9. Immunity of the Government from any claim for damages against the “act of the State” is based on the English Common Law doctrine that the King could do no wrong. The extent of its application to India was consider­ ed by a Full Bench of the then Supreme Court of Calcutta in its classic Judg­ ment in the case of (Peninsular Oriental Steam Navigation Co. v. Secretary of State)6 hereinafter referred to as “the Calcutta Supreme Court Case”. The case pin-points the distinction between the acts of the State committed in dis­charge of its sovereign or regal functions and other acts falling beyond the limits of such functions and which can be performed by any private individual. 10. The law laid down in this case has been uniformly followed by the Privy Council and all the High Courts in India, The Supreme Court had an occasion to consider the impact of the Constitution thereon in the light of Article 300 of the Constitution in the case of State of Rajas than v. Vidhyawati and in the case of Kasturi Lal v. State of U. P. . The State was held liable in the former for tortious act of its employee-driver in driving the truck negligently, while it was held not so liable for seizure of the goods negligently in the course of its regal function of investigating an offence. In the latter case Gajendragadkar, C. J. approvingly summarised the ratio of the Calcutta Supreme Court Judgment as follows : - “Thus, it is clear that, this case recognises a material distinction between acts committed by the servants employed by the State where such acts are referable to the exercise of sovereign powers delegated to public servants, and acts committed by public servants which are not referable to the delegation of any sovereign powers. If a tortious act is cammitted by a public servant and gives rise to a claim for damages, the question to ask is: was the tortious act committed by the public servant in discharge of statutory functions which are referable to, and ultimately based on, the delegation of the sovereign powers of the State to such public servant? If the answer is in the affirmative, the action for damages for loss caused by such tortious act will not lie. On the other hand, if the tortious act has been committed by a public servant in discharge of duties assigned to him not by virtue of the delegation of any sovereign power, an action for damages would lie.” 11. The learned Judge then emphasised the importance of such distinc­tion in the post Constitution era in India in the following words : - “It is not difficult to realise the significance and importance of making such a distinction particularly at the present time when, in pursuit of their welfare ideal, the Government of the States as well as the Govern­ment of India naturally and legitimately enter into many commercial and other undertakings and activities and activities which have no relation with the traditional concept of governmental activities in which the exercise of sovereign power is involved. It is necessary to limit the area of these affairs of the State in relation to the exercise of sovereign power, so that if acts are committed by Government employees in relation to other activities which may be conveniently described as non-governmental or non-sovereign, citizens who have a cause of action for damages should not be precluded from making their claim against the State. That is the basis on which the area of the State immunity against such claims must be limited; and this is exactly what has been done by this Court in its decision in the case of State of Rajasthan.” 12. In Hind Mazdoor Sabha, the question that directly fell for con­sideration was if hospital run by the Government could be an industry within its definition under section 2(j) of the Industrial Disputes Act. It was argued that Government had to establish and run hospitals in compliance with the directive principles of the Constitution, and running of the hospital would be a part of its regal functions as a Welfare State. The Court observed that, “Negatively stated, the activities of Government which can properly be described as regal or sovereign activities are outside the scope of section 2(j).” The contention, that activities indulged in by the State to comply with the directive principles or in pursuit of its welfare policies could be such regal activities, was turned down on the ground that they cannot be said to be “primary and inalienable functions of a Constitutional Government” and are not such that “no private citizen can undertake the same”. Test laid down in the above Calcutta Supreme Court's case must have been in the mind of the learned Judges while making the above observations, though the case does not make any direct reference to the same. The Court further held that the words “industry” or “trade” or “business” must be interpreted in a broad manner to include the hospitals run by the Government or chartiable institu-tions. It was held that inclusive second part of the definition had this effect. Hidayatullah, C. J. did not agree with this view in the Safdar Jung Hospital case and held that hospital cannot be an “industry” unless it is run on commercial lines. This view is now over-ruled in Bangalore Water Works case virtually confirming the ratio of Mazdoor Sabha's case. 13. Thus, in the first place, the decision of the Division Bench is obiter in that the question had not cropped up for consideration. Secondly the basis of its judgment, namely the ratio of Safdar Jung Hospital case, is itself now knocked out. 13. Thus, in the first place, the decision of the Division Bench is obiter in that the question had not cropped up for consideration. Secondly the basis of its judgment, namely the ratio of Safdar Jung Hospital case, is itself now knocked out. Thirdly, view of the Supreme Court in Mazdoor Sabha's case that the activities undertaken by the Government in pursuit of welfare policies, and in compliance with the directive principles, were not part of the regal functions, of the State was not dissented in Safdar Jung Hospital's case. In fact, difference of view centred round now to interpret the second part of the definition in section 2(i) of the Act. With respect, Division Bench was not right in ignoring the ratio of Mazdoor Sabha's case and preferring to rely on the Madras High Court case whose reasoning is impliedly overruled in Mazdoor Sabha's case. Fourthly, and far more importantly, question of the extent of the State's vicarious liability for the tortious acts of its employees had not arisen at all in the case either of Hind Mazdoor Sabha, Safdar Jung Hospital or Bangalore Water Works. It had directly arisen in Vidyawati and Kasturi Lal's cases. The ratio of these cases was followed by a Division Bench of this Court earlier in the case of The Union of India v. Sugrabai ''Abdul Majid. The later Division Bench could not ignore the ratio of the cases directly deal­ ing with the point. The Division Bench judgment relied on by Shri Kotwal thus cannot be said to have laid down any good and binding law. 14. Coming to the Appeal of defendant No. I, Shri M. S. Nargolkar, the learned Advocate appearing for the appellant, contended that the evidence of the plaintiff and his father is thoroughly interested and unreliable and no case of negligence or any compensation can be said to have been made out. He secondly contended that even if the evidence of these two witnesses is found to be reliable, still the said evidence is discrepant and is inadequate to prove the defendant No. 1's negligence. Before we discuss the evidence on this point it will be convenient to notice that the allegation of negligence pre­supposes the duty on the part of the doctor to be vigilant and act prudently. Before we discuss the evidence on this point it will be convenient to notice that the allegation of negligence pre­supposes the duty on the part of the doctor to be vigilant and act prudently. The learned trial Judge relied on page 28 of the Hospital Administration Manual, Volume II, under the head Treatment of Neuroparalytic reactions” to determine what the duties of a Medical Officer in respect of the patients receiving anti-rabies injections are. The relevant passage is quoted in para­graph 13 of the judgment The clause indicates the degree of vigilance that is expected from a Medical Officer, Now, the learned trial Judge rejected the evidence of the plaintiff that defendant No. 1 was present on 25-12-1967 or that he prescribed the dose of injection or that the plaintiff had gone to the hospital on 8-1-1968 and showed his condition to defendant No. 1. Shri Apte could not seriously challenge these findings. Admittedly all injections were given by the nurses, though plaintiff initially attributed it to defendant No. 1. It is not disputed, however, that no injection can be given by the nurse unless an endorsement to that effect is made by the doctor after seeing the patient. In this case negligence of defendant No. 1 is claimed to be of continuing the injection after the patient reacted to the same unfavourably and the reaction was communicated to him by the patient. Three questions thus require consi­deration. Firstly, whether did the injections create any adverse reaction in the patient? and secondly whether the patient had communicated the same to defendant No. 1. Thirdly, was the Doctor under any obligation to himself ascertain if such adverse reaction had set in. [Rest of the judgment is not material for the report.] Appeals dismissed.