In *N. Nagendra Rao v. State of A.P., AIR 1994 SC 2663*, the Supreme Court significantly reformulated the sovereign / non-sovereign distinction in State tort liability. What was the key principle?

1. In ***N. Nagendra Rao v. State of A.P., AIR 1994 SC 2663 (1994 6 SCC 205)***, the Supreme Court reviewed earlier decisions and reformulated the rule: 2. **'In the modern sense, the distinction between sovereign or non-sovereign power thus does not exist. It all depends on the nature of the power and manner of its exercise.'** 3. The Court identified a small core of truly sovereign functions (defence, foreign affairs, making peace or war, political and policy matters) — for these, the State is immune. 4. **'But there the immunity ends.'** Barring strictly inalienable functions such as administration of justice, maintenance of law and order and repression of crime, the State **cannot claim immunity** in tort. The court emphasised the **welfare state** element — the demarcating line between sovereign and non-sovereign has largely disappeared. _Source: ICSI CS Executive — Lesson 6, 'Distinction between Sovereign and Non-Sovereign Functions', pp. 145-146._