Full Judgment Text
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PETITIONER:
THE STATE OF WEST BENGAL
Vs.
RESPONDENT:
SHAIKH SERAJUDDIN BATLEY.UNION OF INDIA: INTRVENER
DATE OF JUDGMENT:
24/11/1953
BENCH:
DAS, SUDHI RANJAN
BENCH:
DAS, SUDHI RANJAN
SASTRI, M. PATANJALI (CJ)
MAHAJAN, MEHR CHAND
HASAN, GHULAM
JAGANNADHADAS, B.
CITATION:
1954 AIR 193 1954 SCR 378
CITATOR INFO :
D 1973 SC 381 (12)
ACT:
Indian Independence (Rights, Property and Liabilities) Order
1947, Arts. 8(2), 9-Rent payable by Province of Bengalbefore
15th August, 1947-Purpose of lease exclusive purpose of West
Bengal Liability of West Bengal "Financial obligations,"
interpretation of- Object of Art. 9.
HEADNOTE:
The liability to pay rent under a lease does not come
with the expression "financial obligations" in article 9 of
the Indian Independence (Rights, Property and Liabilities)
Order, 1947.
The Province of Bengal took certain premises on lease on
the 6th February, 1947, agreeing to pay a monthly rent of
Rs. 1,800 and the purposes for which the lease was entered
into were, after 15th August, 1947, exclusivel purposes of
the Province of West Bengal: Held, that the liability to pay
rent was not a "financial obligagation" contemplated by
article. 9 and the Government of West Bengal was liable
underar article 8(2)(a) of the abovesaid order to pay the
rent which had accrued up to the 15th August, 1947.
Province of West Bengal v. Midnapur Zemindari Co., Ltd.
(54 C. W. N. 677), Sree Sree Iswar Madan Gopal Jim v.
Province of West Bengal (54 C. W. N. 807) and The State of
Punjab v. L Mohanial Bhayana (A. I. R. 1951 Punj. 382)
referred to.
JUDGMENT:
CIVIL APPELLATE. JURISDICTION : Civil Appeal No. 119
of 1951.
Appeal by special leave granted by the Supreme Court of,
India by its Order dated 14th December,
379
1950, from the Judgment and Decree dated the 9th March,
1950, of the High Court of judicature at Calcutta (Harries
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C. J. and Bannerjee J.) in Appeal from Original Decree No.
162 of 1949 arising out of the judgment and Decree dated the
4th August, 1949, of the said High Court (Sinha J.) in its
Ordinary Original Civil jurisdiction in Suit No. 1502 of
1948.
S.M. Bose, Advocate General of West Bengal, and N. C.
Chatterjee (B. Sen, with them) for the appellant
R. Choudhary and B. Choadhary for the respondent
C.K. Daphiary, Solicitor General for India. (G. N. Joshi
and Porus A. Mehta, with him) for the Union of India.
1953. November 24. The judgment of the Court was delivered
by
DAS J.-This is an appeal by special leave by the State of
West Bengal from the judgment and decree passed on the 9th
March, 1950, by a Division Bench of the Calcutta High Court
affirming the judgment and decree pronounced by Sinha J.on
the 4th August, 1949, in exercise of the ordinary original
civil jurisdiction of that court. The question for
consideration in this appeal is whether on a proper
interpretation of articles 8 and 9 of the Indian
Independence (Rights, Property and Liabilities) Order, 1947,
the appellant can be held liable for payment of rent and
taxes for a. period prior to the 15th August, 1947, in
respect of a premises which had been taken on lease by the
undivided Province of Bengal.
The relevant facts are shortly these. By an indenture of
lease dated the 22nd February, 1947, the respondent demised
to the Governor of the undivided Province of Bengal the
first, second and third floors of premises No. 73,
Dharmatolla Street, in the town of Calcutta for a term of
three years commencing from the 1st day of February, 1947,
Yielding and Paying unto the lessor therefor during the said
term a monthly rent of Rs. 1,800 only clear of all
deductions by equal monthly payments on the 5th day of each
and
380
every month for the month immediately preceding and also the
sum of Rs. 150 per quarter towards payment of occupicr’s
share of municipal taxes. By the lease the lessee
covenanted that he would, during the said term, use the
demised premises only for a hostel for the students of the
Campbell Medical School and shall not at any time during the
said term use the demised premises or any part thereof for
any other purpose whatsoever. The lessee further agreed to
pay the costs of and. incidental to the lease. On the 15th
August, 1947, the partition of India took place and, amongst
other things, two new provinces came into existence, namely,
West ’Bengal and East Bengal, in Place of the old Province
of Bengal. The Province of West Bengal formed part of the
Domininion of India and is now the State of West Bengal in
the Union of India while the Province of East Bengal became
and is still a part of the Dominion of Pakistan. the Indian
Independence Act, 1947, by section 9 empowered the Governor-
General, amongst other things, to make such provision as
appeared to him to be necessary or expedient for dividing
between the new provinces to be constituted under that Act
the powers, rights, properties, duties and liabilities of
the provinces which under that Act were to cease to exist.
In exercisc of that power the Governor General promulgated
an Order called the Indian Independence (Rights, Property
and Liabilities) Order, 1947, hereinafter referred to as the
said Order, to deal with the power.%, rights, property,
dudes and liabilities of the respective Governments of West
Bengal and East Bengal. Article 8(2) of that Order, which
is material for the purposes of this appeal, was in the
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following terms
"Any contracts made on behalf of the Province of
Bengal before the appointed day shall, as from that day
(a) if the contract is for purposes which as from that
day are exclusively purposes of the Province of West Bengal,
be deemed to have been made on behalf of that Province
instead of the Province of Bengal: And
381
(b) in any other case be deemed to have been made on behalf
of the Province of East Bengal instead of the Province of
Bengal ;
and all rights and liabilities which have accrued or may
accrue under any such contract shall., to the extent to
which they would have been rights or liabities of the
Province of Bengal, be rights or liabilities of the Province
of West Bengal or the Province of East Bengal, as the case
may be."
Clause (6) of article 8 provided that the provisions of
that article would have effect subject to the provisions of
article 9 of that Order. The relevant portion of article 9
was as follows :
"9. All liabilities in respect of such loans, guar-
ntee and other financial obligations of the Governor General
in Council or of a Province as are outstanding Immediately
before the. appointed day shall as from that day
(a)........................................
(b) in the case of liabilities of the Province of Bengal be
liabilities of the Province of East Bengal."
On the 8th May, 1948,the respondent filed a suit in the
Calcutta High Court against the appellant claiming Rs.
21,600 as arrears of rent at Rs. 1,800 per month from
February, 1947, to January, 1948, Rs. 600 as occupier’s
share of municipal tax for the same period and Rs. 523-9-3
being the costs of land incidental to the, lease,
aggregating to Rs. 22,723-9-3. During the pendency of this
suit the appellant paid Rs. 9,250 being the arrears of rent
and taxes from the 15th August, 1947, but denied liability
for the arrears of rent or taxes for any period prior to
that date or for the costs of the lease.
The case was heard by Sinha J., who by his judgment dated
the 10th August, 1947, held, amongst other things that the
lease was entered into for purposes which as from the 15th
August, 1947, were exclusively purposes of the, Province of
West Bengal and that under articlc 8(2)(a) of the said Order
the appellant was clearly liable for the rents which had
accrued previous to the appointed day, that is to say, the
15th
382
August, 1947, and decreed the suit for Rs. 13,473-9-3 with
costs and interest on judgment at. 6 percent. The Province
of West Bengal preferred an appeal from, that judgment but a
Division Bench of the said High Court (Harries C. J. and
Banerjee J.) affirmed the decree and dismissed the appeal
with costs The State of West Bengal which took the place of
the Province of West Bengal applied for leave to appeal but
that application was dismissed. The State of West Bengal
thereafter applied for and obtained special leave to appeal
from this court and the appeal has now come up before us for
final disposal.
The learned Advocate General of West Bengal appearing
in support of this appeal fairly and frankly conceded that
in the absence of anything else this case would be wholly
covered by article 8 (2) (a) but contended that by virtue of
article 8 (6) that article was to have effect subject to the
provisions of article 9. In the circumstances the question
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whether the contract was for purposes which as from the
appointed day were exclusively purposes of the Province of
West Bengal and whether article 8(2) made any distinction
between liabilities which had accrued or which might accrue
need not be considered.
The argument before us has been confined only to the
interpretation of article 9. Learned Advocate General
contends that the liability to pay rent under the lease
comes within the expression "other financial obligations" to
be found in that article. According to him all obligations
to pay money under a contract whether by reason of a
covenant to pay money or by way of damages for breach of
contract may be properly described as "financial
obligations. It is no doubt true an obligation to pay money
under a contract or for breach thereof is in a sense a
"financial obligation" but the question is not what may
popularly be described as "financial obligation" but. what
is the meaning of the expression "other financial obli-
gations in the context in which it has been used. To accept
the argument of the learned Advocated will be to rob article
8 of practically the whole of its
383
content except claims for injunction or specific performance
of a contract or the like. Such, we apprehend, could not
have been the intention of the framers of that article.
This difficulty does not arise if the expression be
construed ejusdem gener is, for so construed it implies an
obligation in the nature of an obligation in respect of
loans and guarantees incurred or undertaken by the State as
held by Harries C J. in Province of West Bengal v. Midnapur
Zemindary Co., Ltd.( 1), which has been followed by Chunder
J. in Sree Sree Isiwar Madan Gopal Jiu v. Province of West
Bengl(2), and by Kapur J. in The State of Punjab v. L. Mohan
Lal Bhayana (3 ). The phrase "loans, guarantees and other
financial obligations" occurred in section 178 in Part VII
of the Government of India Act, 1935, and there cannot be
any doubt that those expressions used in that section did
not refer to au and sundry pecuniary obligations of the
State arising out of contracts of every description. The
loans and guarantees there referred to meant, it would seem,
the special kinds of contracts relating to the State loans
and State guarantees. In that context "financial
obligations" would mean obligations \arising out of
arrangement or agreements relating to State finance such as
distribution of revenue, the obligation to grant financial
assistance by the Union to any State or the obligation of a
State to make contributions and the like. It is, however,
not necessary or desirable to attempt an exhaustive
definition of the expression "financial obligations." The
court will have to consider in each case whether a
particular obligation which may be the subject-matter of
discussion falls within the expression "financial
obligations’ within the meaning of article 9. Whatever
liabilities may or may not come within that expression we
are clearly of opinion, in agreement with the High Court,
that the liability to pay rent under a lease certainly does
not come within that expression.
(1) 54 C.W.N. 677, 85 C.L.J.202;A.I.R 1950 Cal.159.
(2) 54 C. W. N. 807.
(3) A.I.R. 1951 Punjab 382.
384
The result, therefore, is that we affirm the decision of the
High Court and dismiss this appeal with costs.
Appeal dismissed.
Agent for the appellant: P. K. Bose.
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Agent for the respondent: A. N. Mitter.
Agent for the intervener : G. H. Raiadhyaksha.