Full Judgment Text
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PETITIONER:
STATE OF BIHAR
Vs.
RESPONDENT:
UNION OF INDIA & ANR.
DATE OF JUDGMENT:
19/09/1969
BENCH:
MITTER, G.K.
BENCH:
MITTER, G.K.
HIDAYATULLAH, M. (CJ)
SHAH, J.C.
RAMASWAMI, V.
GROVER, A.N.
CITATION:
1970 AIR 1446 1970 SCR (2) 522
1970 SCC (1) 67
CITATOR INFO :
O 1977 SC1361 (153)
R 1984 SC1675 (6)
D 1986 SC1571 (48)
ACT:
Constitution of India, Art. 131--Private party whether
can be impleaded in a suit under Article--Article is meant
to settle only disputes between parties mentioned in cls.
(a) (b) and (c) Court can give declaratory decree
simpliciter.
HEADNOTE:
The State of Bihar filed a number of suits in this Court
under Art. 131 of the Constitution in connection with the
delayed delivery of iron and steel materials for its Gandak
project. In six of the suits the defendants were: The Union
of India (Defendant No. 1 ) and Hindustan Steel Ltd.
(Defendant No. 2). In six other suits the defendants were:
The Union of India (Defendant No. 1) and The Indian Iron &
Steel Co. Ltd. (Defendant No. 2). The prayers in all the
suits were that decrees for specific sums of money be passed
either against the Union of India or the second defendant.
Identical preliminary issues were set down for consideration
in all the suits, namely: (1) whether the cause or causes of
action in this suit are within the scope of Art. 131 of the
Constitution? (2) Whether the suit is within the scope of
Art. 131 of the Constitution in view of a non-State viz.
defendant No. 2, having been made a party to the suit ? (3)
Whether the suit is barred by the provisions of s. 80 C.P.C.
for want of notice to defendant No. 1.
HELD: (i) The specification of the parties in Art. 131
is not of the inclusive kind. The express words in cls.
(a), (b) and (c) of the Article exclude the idea of a
private citizen, a firm or a corporation figuring as a
disputant either alone or even along with a State or with
the Government of India in the category of a party to the
dispute. The contents of the corresponding section, of the
Government of India Act, 1935 namely s. 204, and the
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legislative history culminating in the adoption of Art. 131
of the Constitution support the conclusion that so far as
the parties to a dispute are concerned, the framers of the
Constitution did intend that they could only be the
constituent units of the Union of India and the Government
of India itself arrayed on one side or the other either
singly Or jointly with another unit or the Government of
India. For other types of controversies or disputes special
provision has been made in the sonstitution e.g. in Art. 143
257, 262 and 290 A dispute in which a private party, is
involved must be brought before a court other than this
Court having jurisdiction over the matter. [52.6 D--F; 530
B; 531 C, F, H; 532 C]
The United Provinces v. The Governor-General in
Council, [1939] F.C.R. 124 and State of Seraikella and
Others v. Union of India and another, [151] S.C.R. 474,
referred to.
The enlarged definition of ’State’ given in Parts III
and IV of the Constitution is not attracted to Art. 131 of
the Constitution and a body like the Hindustan Steel Ltd.
could not be considered to be "a State" for the purpose of
Art. 131 of the Constitution. [532 G]
Rajasthan State Electricity Board v. Mohan Lal, [1967] 3
S.C.R. 377, distinguished.
523
In view of the above finding on issue No. 2 the suits
did not lie in this Court under Art. 131 of the Constitution
and the plaints must be returned; it was accordingly
unnecessary to decide issues Nos. 1 and 3. [532 H]
Article 131 does not prescribe that a suit must be filed
in the Supreme Court for the complete adjudication of the
dispute envisaged therein or the passing of a decree capable
of execution in the ordinary way as decrees of other courts
are. Once this Court has given a declaration of its rights
to the aggrieved party the function of the Court under Art.
131 is over. [525 C--F]
JUDGMENT:
ORIGINAL JURISDICTION: Civil Misc. Petitions Nos. 512,
513, 574 & 575, 578 & 579, 581 & 582, 583 & 584, 587 & 588,
605 & 606, 609 & 610 and 1466 and 1467 of 1969.
Applications by defendant No. 1 for rejection of plaints
and for stay of the hearing of the suits.
Original suits Nos. 3 of 1967, 1 and 3 to 9 of 1968.
Petitions under Art. 131 of the Constitution of India.
Niren De, Attorney-General, V.A. Seyid Muhammad and B.D.
Sharma, for respondent No. 1 (in all the suits).
D.N. Gupta, for defendant No. 2 fin suits 968 ).Nos. 3
to 8 of
D.N. Mukherjee, for defendant No. 2 (in suits Nos. 3 of
1967, 1 and 9 of 1968).
D.P. Singh, for the plaintiff (in suits Nos. 3 of 1967,
1, 3, 5 and 6 of 1968).
D. Goburdhun, for the plaintiff (in suits Nos. 4 and 7
of 1968).
U.P. Singh, for the plaintiff (in suit No. 8 of 1968).
R.C. Prasad, for the plaintiff (in suit No. 9 of 1968).
The Judgment of the Court was delivered by
Mitter, J. This group of applications can be divided
into two parts. The object of one group is to get the
plaints in nine suits filed in this Court rejected while
that of the other group is to stay the hearing of the suits.
The suits are all of the same pattern in each of which the
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State of Bihar figures as the plaintiff. The Union of India
is the first defendant in all of them while the second
defendant in six is Hindustan Steel Ltd. and in three others
the Indian Iron and Steel Company Ltd. The cause of action
in all the suits is of the same nature. Briefly stated the
plaintiffs case in all the suits is that "due to the
negligence or deliberate action of the servants of both
defendants there was a short delivery of iron and steel
material ordered by the plaintiff to various sites in the
State of Bihar in connection with the
524
construction work of the Gandak Project". As the goods were
in all cases booked by rail for despatch to the project
site, both defendants are sought to be made liable for short
delivery, the first defendant as the owner of the railways
and the second defendant as the consignor of the goods under
contract with the State of Bihar for supply of the material.
In each case there is a prayer for a decree for a specific
sum of money to be passed either against the first defendant
"or alternatively against the second defendant". Normally
all suits of this kind are instituted all over India in
different courts beginning from the courts of the lowest
jurisdiction to the High Courts exercising original
jurisdiction. The only distinguishing feature of this
series of suits from others of everyday occurrence in
different courts is that a State is the plaintiff in each
case. In all suits of a similar nature which are filed in
courts other than this Court, a notice under s. 80 of the
Code of Civil Procedure is an essential prerequisite. No
such notice has been served in any of these cases. The
applications were set down for trial of three issues sought
to be raised by way of preliminary issues. They are as
follows :--
1. Whether the alleged cause or causes of
action in this suit are within the scope of
Art. 131 of the Constitution ?
2. Whether this suit is within the scope
of Art. 131 of the Constitution in view of a
non-State, viz, defendant No. 2, having been
made a party to the suit ?
3. Whether the suit is barred by the
provisions of s. 80 C.P.C. for want of notice
to defendant No. 1 ?
The question before this Court is, whether the dispute
in these cases is within the purview of that article (quoted
in the foot-note. It must be noted that the article confers
jurisdiction on this Court to the exclusion of all
other courts in any dispute between the parties
mentioned therein. There is however an over-riding
provision that such jurisdiction is subject to the
provisions of the Constitution and our attention was drawn
to a few of these provisions where the disputes specified
are to be adjudicated upon in entirely different
*Art. 131. Subject to the provisions of this
Constitution, the Supreme Court shall, to the exclusion of
any other court, have original jurisdiction in any dispute--
(a) between the Government and one or more States; or
(b) between the Government of India and any State or States
on one side and one or more other States on the other; or
(c) between two or more States,
525
manner. The most important feature of Art. 131 is that it
makes no mention of any party other than the Government of
India or any one or more of the States who can be arrayed as
a disputant. The other distinguishing feature is that the
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Court is not required to adjudicate upon the disputes in
exactly the same way as ordinary courts of law are normally
called upon to do for upholding the rights of the parties
and enforcement of its orders and decisions. The words in
the article "if and in sO far as the dispute involves any
question (whether of law or fact) on which the existence or
extent of a legal right depends" are words of limitation on
the exercise of that jurisdiction. These words indicate
that the disputes should be in respect of legal rights and
not disputes of a political character. Moreover this Court
is only concerned to give its decision on questions of law
or of fact on which the existence or extent of a legal right
claimed depends. Once the Court comes to its conclusion on
the cases presented by any disputants and gives its
adjudication on the facts or the points of law raised, the
function of this Court under Art. 131 is over. Art. 131
does not prescribe that a suit must be filed in the Supreme
Court for the complete adjudication of the dispute envisaged
therein or the passing of a decree capable of execution in
the ordinary way as decrees of other courts are. It is open
to an aggrieved party to present a petition to this Court
containing a full statement of the relevant facts and
praying for the declaration of its’ rights as against the
other disputants. Once that is done, the function of this
Court under Art. 131 is at an end. The framers of the
Constitution do not appear to have contemplated the
contingency of a party to an adjudication by this Court
under Art. 31 not complying with the declaration made.
Our law is not without instances where a court may be called
upon to make an adjudication of the rights of the parties to
an agreement or an award simpliciter on the basis of such
rights without passing a decree. A case in point is s. 33
of the Indian Arbitration Act. Further, all adjudications by
a court of law even under a decree in a suit need not
necessarily be capable of enforcement by way of execution.
Section 42 of the Specific Relief Act, 1877 now replaced by
s. 34 of the new Act enables a person entitled to any legal
character or to any right as to any property to institute a
suit against any person denying or interested to deny his
title to such character or right without asking for any
further relief subject to the limitations prescribed by the
section. We
If and in so far as the dispute involves any question
(whether of law or fact) on which the existence or extent of
a legal right depends:
Provided that the said jurisdiction shall not extend
to a dispute arising out of any treaty, agreement,
covenant, engagement, sanad or other similar instrument
which having been entered into or execucated before the
commencement of the construction, continues in operation
after such commencement, or which provides that the said
jurisdication shall not extend to such a dispute.
526
need not however lay much stress on this aspect of the case
as we are only concerned to find out whether the suits can
be entertained by this Court.
Clauses (a), (b) and (c) of the article specify the
parties who can appear as disputants before this Court.
Under cl. (a) it is the Government of India and one or more
States under cl. (b) it is the Government of India and one
or more States on one side and one or more other States on
the other, while under cl. (c) the parties can be two or
more States without the Government of India being involved
in the dispute. The specification of the parties is not of
an inclusive kind. The express words of cls. (a), (b) and
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(c) exclude the idea of a private citizen, a firm or a
corporation figuring as a disputant either alone or even
along with a State or with the Government of India in the
category of a party to the dispute. There is no scope for
suggesting that a private citizen, a firm or a corporation
can be arrayed as a party by itself on one side and one or
more States including the Government of India on the other.
Nor is there anything in the article which suggests a claim
being made by or preferred against a private party jointly
or in the alternative with a State or the Government of
India. The framers of the Constitution appear not to have
contemplated the case of a dispute in which a private
citizen a firm or a corporation is in any way involved as a
fit subject for adjudication by this Court under its
exclusive original jurisdiction conferred by Art. 131.
Like many of the provisions of our Constitution this
article had a fore-runner in the Government of India Act,
1935. Section 204 of that Act provided for conferment of
original jurisdiction on the Federal Court of India. That
section ran as follows :--
"(1) Subject to the provisions of this
Act, the Federal Court shall, to the exclusion
of any other court, have an original
jurisdiction in any dispute between any two or
more of the following parties, that is to say,
the Federation, any of the Provinces or any
of the Federal States, if and in so far as the
dispute involves any question (whether of law
or fact) on which the existence or extent of a
legal right depends:
Provided that the said jurisdiction shall not
extend to--
(a) a dispute to which a State is a party,
unless the dispute-
(i) concerns the interpretation of this
Act or of an Order in Council made thereunder,
or the extent of the
527
legislative or executive authority vested in
the Federation by virtue of the Instrument of
Accession of that State; or
(ii) arises under an agreement made under
Part VI of this Act in relation to the
administration in that State of a law of the
Federal Legislature, or otherwise concerns
some matter with respect to which the Federal
Legislature has power to make laws for that
State; or
(iii) arises under an agreement made after
the establishment of the Federation, with the
approval of His Majesty’s Representative for
the exercise of the functions of the Crown in
its relations with Indian States, between that
State and the Federation or a Province, being
an agreement which expressly provides that the
said jurisdiction shall extend to such a
dispute;
(b) a dispute arising under any agreement
which expressly provides that the said
jurisdiction shall not extend ’to such a
dispute.
(2) The Federal Court in the exercise of
its original jurisdiction shall not pronounce
any judgment other than a declaratory
judgment."
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Clause (a) of the proviso. to the section defined the
categories of disputes which might be raised before the
Federal Court while clause (b) permitted the parties to
provide for the exclusion of such jurisdiction in the
agreement in respect whereof the dispute arose. It will be
noted that the scope of the dispute under subcl. (i) of cl.
(a) was limited to the interpretation of the Government of
India Act or Order in Council or to the extent of
legislative or executive authority vested in the Federation
while under sub-cl. (ii) the dispute had to relate to the
administration in a State of a law of the Federal
Legislature or otherwise concerned with some matter
relating to the legislative competency of the said
legislature. Under sub-cl. (iii) the dispute could only
be one under an agreement made after the establishment of
the Federation between the State and the Federation or a
Province subject to the condition therein specified. A
dispute of the nature which is raised in this scries of a
case was outside the ken of s. 204 of the Government of
India Act.
It may not be out of place to trace the origin of s.
204. The proceedings of the Joint Committee on Indian
Constitutional Re-
528
form, Session 1933-34, Vol. 1, Part II, paragraph 309 read
as follows:
"A Federal Court is an essential element
in a Federal Constitution. It is at once the
interpreter and guardian of the Constitution
and a tribunal for the determination of
disputes between the constituent units of the
Federation. The establishment of a Federal
Court is part of the White Paper scheme, and
we approve generally the proposals with regard
to it. We have, however, certain comments to
make upon them, which we set out below."
The report of the Joint Committee on Indian Constitutional
Reform, Session 1933-34, Vol. 1, Part 1 contained two
paragraphs bearing on this matter. Paragraph 322 was a
reproduction of paragraph 309 quoted above. Paragraph 324
ran as follows:
"324. It is proposed that the Federal
Court shall have an original jurisdiction in--
(i) any matter involving the
interpretation of the Constitution Act or the
determination of any rights or obligations
arising thereunder, where the parties to the
dispute are (a) the Federation and either a
Province or a State, or (b) two Provinces or
two States, or a Province and a State;
(ii) any matter involving the
interpretation of, or arising under, any
agreement entered into after the commencement
of the Constitution Act between the Federation
and a Federal Unit or between Federal Units,
unless the agreement otherwise provides.
This jurisdiction is to be an exclusive
one, and in our opinion rightly so, since it
would be altogether inappropriate if
proceedings could be taken by one Unit of the
Federation against another in the Courts of
either of them. For that reason we think
that, where the parties are Units of the
Federation or the Federation itself, the
jurisdiction ought to include not only the
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interpretation of the Constitution Act, but
also the interpretation of Federal laws, by
which we meant any laws enacted by the Federal
Legislature."
It is clear from the above that the framers of the
Government of India Act, 1935 thought that the Federal Court
should
529
be the tribunal for the determination of disputes between
the constituent units of the Federation and it sought to lay
down the exact nature of the dispute which that Court could
be called upon to examine and decide.
The Constitutional Proposals of the Sapru Committee show
that they had the said report’and the said proceedings of
the Committee in their mind when they advocated the
strengthening of the position of the Federal Court in India
and widening its jurisdiction both on the original side and
the appellate side but maintaining at the same time that it
should "act as an interpreter and guardian of the
Constitution, and as a tribunal for the determination of
disputes between the constituent units of the Federation."
It is also to be noted that under s. 204 of the
Government of India Act, 1935 the Federal Court’s
jurisdiction was limited to the pronouncement of a
declaratory judgment.
Art. 109 of the Draft Constitution of India prepared by
the Constituent Assembly was in the same terms as Art. 131
of the Constitution as it came into force in 1950. The
proviso to the original article was substituted by the new
proviso in the year 1956. as a result of the Seventh
Amendment by reason of the abolition of the Part B States
and the changes necessitated thereby. Reference was made at
the Bar in this connection to the Debates in the
Constituent Assembly, Vol. IV, 13th July 1947 to 21st
July, 1947. They however do not throw any additional light.
So far as the proceedings of the Joint Committee on
Indian Constitutional Reform and the report of the Committee
on the same are concerned, they make it clear that the
object of conferring exclusive original jurisdiction on the
Federal Court was that the disputes of the kinds specified
between the Federation and the Provinces as the constituent
units of the Federation, should not be left to be decided by
courts of law of a particular unit but be adjudicated upon
only by the highest tribunal in the land which would be
beyond the influence of any one constituent
unit.
Although Art. 131 does not define the scope of the
disputes which this Court may be called upon to determine in
the same way as section 204 of the Government of India Act,
and we do not find it necessary to do so, this much is
certain that the legal right which is the subject of dispute
must arise in the context of the Constitution and the
Federalism it sets up. However, there can
530
be no doubt that so far as the parties to the dispute are
concerned, the framers of the Constitution did intend that
they could only be the constituent units of the Union of
India and the Government of India itself arrayed on one side
or the other either singly or jointly with another unit or
the Government of India.
There is no decision either of the Federal Court of India
or of this Court which throws much light on the question
before us. Reference was made at the Bar to the case of The
United Provinces v. The Governor-General in Council(1)
where the United Provinces filed a suit against the
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Governor-General in Council for a declaration that certain
provisions of the Cantonments Act. 1924, were ultra vires
the then Indian Legislature. A claim was also made that all
fines imposed and realised by criminal courts for offences
committed within the cantonment areas in the United
Provinces ought to be credited to the provincial revenues
and that the plaintiffs were entitled to recover and adjust
all such sums wrongly credited to Cantonment Funds since
1924. The Governor-General in Council contended inter alia
that the dispute was not one which was justifiable before
the Federal Court. On the question of jurisdiction. Gwyer,
C.J. was not inclined to think "that the plaintiffs would in
any event have been entitled to the declarations for which
they originally asked, in proceedings against the Governor-
General in Council". According to the learned Chief
Justice "their proper course would have been to take
proceedings against a name’ Contouring Board, though ....
such proceedings could not have been brought to this Court."
He was of the view that it was competent for the court to
entertain a suit for a declaration "that s. 106 of the Act
of 1924 was ultra vires," and said that as the dispute
between the parties depended upon the validity of the
assertion of the Province to have the fines under discussion
credited to provincial revenues and not to the Cantonment
funds the dispute involved a question of the existence of a
legal right. According to him the question might have been
raised in proceedings to which a Cantonment Board was a
party but "it was convenient to all concerned that it should
be disposed of in the proceedings before the court."
The only other Indian case cited at the Bar in this
connection was that of the State of Seraikella and others v.
Union of India and another(2) where Mahajan, J. expressed
the view that s. 80 of the Code of Civil Procedure would not
affect suits instituted in the Federal Court under s. 204 of
the Government of India Act.
(1) [1939] F.C.R, 124. (2) [1951] S.C.R. 474.
531
Our attention was drawn to some provisions of the
American Constitution and of the Constitution Act of
Australia and several decisions bearing on the
interpretation of provision which are somewhat similar to
Art. 131. But as the similarity is only limited, we do not
propose to examine either the provisions referred to or the
decisions to which our attention was drawn. In interpreting
our Constitution we must not be guided by decisions which do
not bear upon provisions identical with those in our
Constitution .
The Constitution makes special provisions for settlement
of certain disputes in a manner different from that laid
down in Art. 131. For instance, Art. 143 gives an over-
riding power to the President of India to consult the
Supreme Court when he is of the view that the question is of
such a nature and of such public importance that it is
expedient to do so. Under el. (1) of that Article the
President is empowered to obtain the opinion of the Supreme
Court upon any question of law or fact which has arisen or
is. likely to arise and is of such a nature and of such
public importance that the President considers it expedient
to obtain such opinion. In such a case the Court after
giving such hearing as it thinks fit has to report to the
President its opinion thereon. Clause (2) of the article
shows that this power of the President over-rides the
proviso to Art. 131.
Art. 257 provides for control of the Union over the
States in certain cases. Under clause (2) thereof the
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executive power of the Union also extends to the giving of
directions to a State as to the construction and maintenance
of means of communication declared in the direction to be of
national or military importance. Under cl (4) where such
directions are given and "costs have been incurred in excess
of those which would have been incurred in the discharge of
the normal duties of the State if such direction had not
been given," the Government of India must pay to the State
such sum as may be agreed, or, in default of agreement, as
may be determined by an arbitrator appointed by the Chief
Justice of India, in respect of the extra costs so
incurred by the State,
Again, when there is a dispute or complaint with regard
to the use, distribution or control of the waters of, or in,
any interState river or river valley cl. (2) of Art. 262
gives Parliament the power by law to provide that neither
the Supreme Court nor any other court shall exercise
jurisdiction in respect of such dispute or complaint as is
referred to in clause (1 ). Such a law ousts the
jurisdiction of the court which would normally be attracted
by
532
Art. 131. Art. 290 contains a provision somewhat similar to
Art. 257(4) with regard to certain expenses and pensions and
makes the same determinable by an arbitrator to be appointed
by the Chief Justice of India.
Apart from these special provisions a dispute which
falls within the ambit of Art. 131 can only be determined in
the forum mentioned therein, namely, the Supreme Court of
India, provided there has not been impleaded in any said
dispute any private party, be it a citizen or a firm or a
corporation along with a State either jointly or in the
alternative. A dispute in which such a private party is
involved must be brought before a court, other than this
Court, having jurisdiction over the matter.
It was argued by counsel on behalf of the State of Bihar
that so far as the Hindustan Steel Ltd., is concerned it is
’State’ and the suits in which the Government of India along
with Hindustan Steel Ltd. have been impleaded are properly
filed within Art. 131 of the Constitution triable by this
Court in its original jurisdiction. Reference was made to
the case of Rajasthan State Electricity Board v. Mohan
Lal(1). There the question arose between certain persons
who were permanent employees of the Government of the State
of Rajasthan and later placed at the disposal of the State
Electricity Board and one of the questions was whether the
appellant Board could be held to be ’State’ as defined in
Art. 12. This Court by a majority held that the Board was
"other authority" within the meaning of Art. 12 and
therefore was a ’State’ to which appropriate directions
could be given under Arts. 226 and 227 of the Constitution.
It will be noted that under Art. 12 all local or other
authorities within the territory of India or under the
control of the Government of India are ’States’ for purposes
of Part III which defines and deals with the Fundamental
Rights enshrined in the Constitution. The expression "the
State" has the same meaning in Part IV of the Constitution
under Art. 36. No reason was shown as to why the enlarged
definition of ’State’ given in Parts III and IV of the
Constitution would be attracted to Art. 131 of the
Constitution and in our opinion a body like the Hindustan
Steel Ltd. cannot be considered to be "a State" for the
purpose of Art. 131 of the Constitution.
In the result we hold that the suits do not lie in this
Court under Art. 131 of the Constitution and issue No. 2
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must be answered in the negative. It is not necessary to
give any answer to issue No. 1 nor to issue No. 3. On the
view we take the
[1967] 3 S.C.R. 377.
533
plaints must be returned for the purpose of presentation to
courts having jurisdiction over the disputes. Let the
plaints be returned for presentation to the proper court
after endorsing on them the date of presentation of the
plaints in this Court and the date on which they were
returned. We make no order as to costs of these
applications.
G.C.
534