Can A Statutory Authority Provide Immunity From Liability?

Introduction

Democracy is said to be not only about numbers and votes but also about institutions and their freedom. To achieve the goal of democracy government establishes multiple operating bodies with particular mandates. In India, there are many forms of government bodies, which we hear in the news on a daily basis. They are constitutional, legislative, quasi-judicial, administrative, and judicial bodies.

Statutory bodies are set up by-laws that the legislators of Parliament and of the state may pass. Such bodies are instituted to analyze the data and make decisions in some field of operation. Basically, a statutory body is a government organization which is not delineated in India’s Constitution, but even that gets its powers, service rules, authority through an act of parliament or state legislatures. They are usually formed to perform unique functions that a government considers to perform effectively outside of a conventional executive departmental structure.

They satisfy the criteria for some organizational separation from the government; funding mechanisms that are not based on the systems of annual appropriations; or setting up a separate legal entity. Statutory bodies are normally set up in countries that are governed by the form of political setup under parliamentary democracy.

Working of Statutory Authority

Under the statute, regulatory bodies are organizations with the power to control a company’s activities and to ensure that such entities are lawful and to obey official rules.

For Example The General Medical Council is a statutory body that is responsible for the supervision of doctors.

The statutory bodies may be set up to allow for a certain level of independence from the government, but the government is still accountable to ensure that the taxpayers’ money spent on the operations of statutory bodies is spent in the most efficient and economical way. Such bodies are susceptible to different degrees of ministerial control that are defined in the enabling legislation of the legislative body. Ministers are accountable to Parliament for all government boards and agencies operating within their portfolios and are obliged to disclose their annual reports to Parliament.

Depending on the legislation, the meaning of the statutory body’ may change. For example, a local council is not a statutory body for the purposes of the Financial Accountability Act, but for the purposes of the Financial Arrangements Act of the statutory bodies.

Purpose And Some Specific Powers Given To A Statutory Authority

All statutory bodies are put in a way that they function under the terms of their own enabling legislation, which sets out the agency’s intent and basic powers.

The enabling legislation will include clauses, on the level of fees to be levied for services/products provided by the statutory body, the power of the statutory body to recoup or invest funds, whether the board may delegate powers to officials of the statutory body and whether the body represents the State.

1. An example of a statutory body is the University Grants Commission, a statutory body which was established by the Parliament Act of 1956 for the coordination, determination and maintenance of university education standards. Apart from granting grants to qualified universities and colleges, the Commission also recommends to the central and state governments, the measures aimed at the development of higher education.
2. One other example of a statutory body is SEBI, (The Securities and Exchange Board of India). SEBI is a very major regulatory body for the Indian security market.

The connotation of a ‘statutory body’ may change depending upon the legislation. For example, a local council is not a statutory body for the purposes of the Financial Accountability Act, but it is for the purposes of the Statutory Bodies Financial Arrangements Act. All statutory bodies are established and operate under the provisions of their own enabling legislation, which sets out the purpose and specific powers of the agency.

The enabling legislation may also include provisions for the levels of fees to be charged for services/products provided by the statutory body, the power of the statutory body to borrow or invest funds, whether the board can delegate powers to officers of the statutory body and whether the body represents the State.

Existing Statutory Bodies

1. National Human Rights Commission
2. National Commission for Women
3. National Commission for Minorities
4. National Commission for Backward Classes
5. National Law Commission
6. National Green Tribunal
7. National Consumer Disputes Redressal Commission
8. Armed Forces Tribunal

Act of State

The act of State is the exercise of sovereign power as a matter of policy or political expediency which is not available to the citizen. Thus, if a person acting under an authority derived from a statute or legislation causes damage to a person, that person cannot bring an action to that effect.

It means that the legislative authority in the law of tort is the defense, which states that the defendant has been allowed by a statute to commit the act for which he has been convicted. The most basic theory underpinned by this concept is that a lesser private right may give rise to a greater public interest. This authority exists because fewer personal rights can be overlooked in favor of broader public good, and the protection also exists not only because of the actions permitted by the act but also because of all the possible implications of that act.

This includes the damage that is associated with the exercise of that authority. The powers conferred by the legislature should be exercised with judgment and caution in such a way that no unnecessary damage is done, the person must do so in good faith and must not exceed the powers conferred by the statute, otherwise, he will be liable.

For example, the state government wants to extend the highway and crosses through a person’s land; the highway authority cannot be held responsible for a wrongdoing because it is covered by a statute and has the authority. Acts authorized by statutes must be carried out carefully and without exceeding the powers conferred by the statute, so that no unnecessary damage is done, otherwise, the person may be held liable. Compensation for damages incurred by these actions can be sought in compliance with the provisions of the law.

In Hammer Smith Rail Co. v. Brand: The defendants were allowed to run trains on land. The plaintiffs landed near the railway line. The value of the plaintiff’s property was significantly depreciated due to the noise, vibrations and sparks caused by the running of the trains. The plaintiff sued the railway corporation for damages. The Court held that the harm done to the plaintiff was incidental to the operation of trains permitted by the law and, thus, was not liable to the defendant railway company.

Absolute and Conditional authority

The authority under the statute is of two kinds:

1. Absolute
2. Conditional

Any damage caused by an act carried out under an absolute statutory authority shall not be liable for action. In the case of a conditional authority, the law requires such actions to be carried out, but at the same time places a restriction on the manner in which they are performed so as not to cause harm to others. Such a constraint can be explicit or implied.

In Metropolitan Asylum District v. Hill the appellants– The local Municipal Corporation had the authority to establish a smallpox hospital. The construction of the hospital began in a residential area that created a risk of disease for the residents of the area. It was held that the establishment of a smallpox hospital in a residential area was a nuisance and that the appellants were prevented from constructing a hospital by issuing an injunction. In these situations, the constitutional authority shall be conditional.

The appellants should create a hospital if that could be achieved without creating a nuisance. This does not mean that a person should be stopped from acting on the ground that there is a risk of a nuisance. Therefore, whether or not there has been a nuisance must be decided on the basis of the facts and circumstances of each case.

In the case of Dunne v. North West Gas Board, what occurred was that the gas was spilled due to an eruption (by water) and the gas exploded in the pipe and passed along, a series of explosions were witnessed, several people were injured, including a cyclist, two children playing in the field, a woman, etc. For that case, the principle of strict liability was applied in determining the case and the protection of the regulatory authority appeared as an absolute defence, the defendant was not found to be liable.

Statutory Authority As Defence

The statutory authority is the defense through which the defendant is given protection from the charges brought against him. There are, however, certain requirements that need to be met by an act to fall within the scope of statutory protection, such as:

1. What does the statute mean?
2. How can an act fully satisfy the defence of statutory authority?
3. Does plaintiff entitle for the compensation?

This Article is Authored by Astitva Kumar, 4th Year BBA-LLLB Student at JEMTEC School of Law, (Affiliated to GGSIPU, New Delhi).

Also Read – Can A Person Be Liable For Theft of His Own Property?