Full Judgment Text
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 30
PETITIONER:
PROMOD CHANDRA DEB AND OTHERS
Vs.
RESPONDENT:
THE STATE OF ORISSA AND OTHERS
DATE OF JUDGMENT:
16/10/1961
BENCH:
SINHA, BHUVNESHWAR P.(CJ)
BENCH:
SINHA, BHUVNESHWAR P.(CJ)
DAS, S.K.
SARKAR, A.K.
AYYANGAR, N. RAJAGOPALA
MUDHOLKAR, J.R.
CITATION:
1962 AIR 1288 1962 SCR Supl. (1) 405
CITATOR INFO :
F 1962 SC1305 (12)
RF 1963 SC 222 (11)
D 1963 SC 953 (12)
R 1964 SC1043 (19,52,56,69,70,78,117,131,137
R 1964 SC1793 (12)
D 1966 SC 704 (13)
RF 1981 SC1946 (18)
ACT:
Khor Posh Grant-Maintenance allowance granted
by Ex-Ruler of State-Merger of State with the
Dominion of India-Abrogation of grant by executive
action-If an act of State-Consitutional Validity-
Constitution of India, Arts. 14, 19(1) (f), 31-
Extra Provincial Jurisdiction Act, 1947(47 of
1947), ss. 3, 4, 5-Administration of Orissa States
order, 1948, Para. 4(b)-States’ Merger (Governors’
Provinces) Order, 1949, ss. 3. 4,-Government of
India Act, 1935 (26 Geo. 5, ch. 2) s. 299 (1).
HEADNOTE:
The petitioners, who were holders of Khor
Posh grants from the Rulers of Talcher, Bamra and
Kalahandi before these states merged with the
Dominion of India, challenged the constitutional
validity of certain orders passed by the State
406
of Orissa and the Union of India annulling those
grants which the Petitioners claimed were based on
the law and custom prevailing in these states
relating to maintenance of the junior members of
the Ruling family. The grant in controversy in
Petition No. 79 of 1957, made by the Ruler of
Talcher under Order 31 of the Rules and
Regulations of the State of Talcher, 1937,
originally of land but converted in 1944 into
money grant, was regularly paid till April 1949.
The grant in Petition No. 167 of 1958, made by the
Ruler of Bamra prior to January 1, 1948, was
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 30
annulled on June 8, 1949, by the Government of
Orissa as the delegate of the Government of India
under s. 4 of the Extra Provincial Jurisdiction
Act 1947. The petitioner in Petition 168 of 1958
was the same as in the previous petition. He was
granted an increased allowance by the Ruler of
Bamra on December 8, 1947. The grant was
recognised on June 11, 1949, but paid at a reduced
rate from April 1, 1948, to July 1, 1957, and was
annulled by a statement made on June 29, 1957, by
the Chief Minister of Orissa in Legislature. The
allowance in favour of the first petitioner in
Petition No. 4 of 1959; the widow of the late
Maharaja of Kalahandi, fixed by the Political
Department of the Government of India in 1939, and
the allowance granted to the second petitioner by
the Ruler, were paid till they were annulled by
the aforesaid statement of the Chief Minister of
Orissa. By the Merger Agreements signed by the
Rulers on or after December 14, 1947, Sovereignty
over these States vested in the Dominion of India
before January 1, 1948, and in exercise of its
powers under s. 3(2) of the Extra Provincial
Jurisdiction Act, 1947, which came into effect on
December 24, 1949, the Central Government
delegated its powers to the Government of Orissa
to administer the States. On January 1, 1948, the
Government of Orissa in exercise of its powers
under s. 4 of that Act made an order called the
Administration of Orissa States Order, 1948, para.
4(b) of which provided, inter alia, that all prior
laws, which included Rules, Regulations, byelaws
and orders, whether based on custom or usage,
would continue in force until altered or amended
by an order under the Extra Provincial
Jurisdiction Act, 1947. By s. 3 of the States’
Merger (Governors’ Provinces) Order, 1949, which
came into effect on August 1, 1949, these States
became parts of the Province of Orissa. Section 4
of the Order provided that all laws in force in a
merged State before that day including orders made
under ss. 3 or 4 of the Extra Provincial
Jurisdiction Act, 1947, would continue in force
until repealed modified or amended by a competent
legislature or other competent authority. The case
of the petitioners was that by these provisions
the grants were recognised by the new sovereign
and their abrogation by executive action amounted
to infringement
407
of fundamental rights guaranteed by Arts. 14,
19(1)(f) and 31 of the Constitution A preliminary
objection was taken on behalf of the respondents
in the first two Petitions that the grants in
question having been annulled prior to the
Constitution, no writs could issue thereunder and
it was urged, that in any view of the matter, the
orders annulling the grant amounted to acts of
state and their legality could not be canvassed in
a Municipal Court.
^
Held, that the preliminary objection had no
substance and must fail. Since the grants at the
time they were annulled had ceased to be grants of
land and been converted to money allowances,
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 30
payable periodically at regular intervals, every
periodic deprivation gave the petitioners the
right to approach the court and it was not until
1957 that the protracted correspondence between
the parties for the revision of the impugned
orders came to an end.
The expression ’act of state’ means the
acquisition of sovereignty by a state over foreign
territory by conquest, treaty, cession or
otherwise. That act may take place on a particular
date or by a gradual process but sovereign power,
including the right to legislate for and
administer the acquired territory, may be acquired
before the merger. No Municipal Court has,
however, the power to judge the propriety or
legality of such an act relating either to public
or private rights nor can it enforce obedience to
ordinary principles of International law relating
to rights of private property which a new
sovereign is presumed to respect. Individual
citizens cannot enforce such rights even though
they may be protected by the treaty since they are
no parties to the stipulations. It is only when
the new sovereign recognises the Municipal Courts
that they can have the power and jurisdiction to
investigate and ascertain only such rights as it
chooses to recognise either by legislation or
agreement or otherwise. Recognition may be express
or implied from its dealing with those rights.
Such recognition, however, is a matter within thee
jurisdiction of the Municipal Courts, but the onus
of proving it must be on the claimant.
Secretary of State of India v. Mamachee Boye
Sahaba, (1859) M.I.A. 476, Cook v. Sir James
Gordon Sprigg, [1899] A.C. 572, Secretary of State
for India v. Bai Rajbai, (1915) L.R. 42 I.A. 229,
Vajesingji Joravarsingji v. Secretary of State for
dia in Council, (1924) L.R. 51 I.A. 357,
Dattatraya Krishna Rao Kane v. Secretary of State
for India, (1930) L.R. 57 I.A. 318, Secretary of
State v. Saudar Rustam Khan, (1911) L.R. 68 I.A.
109, State of Saurashtra v. Memon Haji Ismail
Hagi, [1960] 1 S.C.R. 537 and Jagannath Agarwala
v. State of Orissa, [1962] I S.C.R. 205, referred
to.
408
Judged in the light of these principles,
there could be no doubt that Order 31 of the Rules
and Regulations of the State of Talcher, 1937, had
the effect of law, having been continued in force
by sub-para. (b) of Para. 4 of the administration
of Orissa States order 1948, in the absence of any
legislation to the contrary under the Extra
Provincial Jurisdiction Act, 1947. The said Rules
and Regulations were existing law within the
meaning of Art. 327 of the constitution. It was
wholly immaterial whether the grant by the former
Ruler was a legislative or an executive act.
Madharao Phalke v. The State of Madhya
Bharat, [1961] 1 S.C.R. 957, Thakur Amar Singhji
v. State of Rajasthan, [1955] 2 S.C.R. 303 and
M/s. Dalmia Dadri Cement Co. v. The Commissioner
of Income-tax, [1959] S.C.R. 729, relied on.
The wide language of sub-par. (b) of para.
(4) of the Order of 1948, read with the
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 30
Explanation, left no manner of doubt that the new
sovereign by that Order had recognised the
Khorposh grant made to the petitioner.
It was not correct to say that the impugned
order annulling the grant could be sustained under
ss. 3(1) and (5) of the Extra Provincial
Jurisdiction Act, 1947. Section 3(1), properly
construed, could not override s. 4 of the Act and
an order made thereunder by a competent authority
could be superseded only by another under the
section itself. Section 5 of the Act could not be
so construed as to authorise the abrogation of a
law continued in force by s. 4 or an order passed
thereunder The entire Act must be read
harmoniously so as to give effect to each one of
its provisions. It must, therefore, be held that
the annulment by executive action was not
justified.
It was not, therefore, necessary for
disposing of this matter to consider whether the
petitioner was entitled to the protection of s.
299(1) of the Government of India Act, 1935.
Johnstone v. Pedlar, (1921) L.R. 2 A.C. 262,
considered.
Since the order impugned by Petition No. 167
of 1958 was made in terms of s. 4 of the Extra
Provincial Jurisdiction Act, 1947, it had the
effect of law, and was not open to investigation
by this Court.
The right of the petitioner in Petition No.
168 of 1958, having been recognised on June 11,
1949, in modification of the grant by the Ex-Ruler
and implemented, it could not be abrogated by a
mere executive fiat.
The orders of annulment in Petition 4 of 1959
must also for the same reasons be held to be
unjustified.
409
Per Sarkar and Mudholkar, JJ.-Section 299(1)
of the Government of India Act, 1935 could be of
no help to the grantee from an Ex-Ruler unless his
right had been recognised by the new sovereign so
as to enable him to establish the same in its
municipal courts. That section could only protect
such rights as the new citizen had at the moment
of his becoming a citizen of the Dominion of
India. It did neither enlarge his rights nor cure
any infirmity in them.
State of Gujarat v. Jamadar Mahomed Abdulla
[1962] 3 S.C.R. 970, referred to.
JUDGMENT:
ORIGINAL JURISDICTION : Petitions Nos. 79 of
1957, 167 and 168 of 1958 and 4 of 1959.
Petition under Art. 32 of the Constitution of
India for enforcement of Fundamental Rights.
A. V. Viswanatha Sastri and K. R. Choudhri,
for the petitioner (In Petn. No. 79 of 1957).
Purushottam Trikamdas and R. Patnaik, for the
Petitioners (In Petns. Nos. 167 of 58 and 4 of
59).
N. C. Chatterjee and R. Patnaik, for the
petitioner (In Petn. No. 168 of 1958).
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 5 of 30
C. K. Daphtary, Solicitor-General of India,
B. R. L. Iyengar and T. M. Sen, for the
respondents.
1961. October 16. The Judgment of Sinha, C.
J., Das and Ayyangar, JJ., was delivered by Sinha,
C.J., and the Judgment of Sarkar and Mudholkar,
JJ., was delivered by Mudholkar, J.
SINHA, C. J.-The Petitioners in these Writ
Petitions, under Art. 32 of the Constitution,
complain of interference with their rights under
the several Khor Posh grants, and pray for writs
of certiorari or mandamus and further orders or
directions to the respondents for the enforcement
of their alleged rights. In Writ Petition No. 79
of 1957, the first respondent is the State of
Orissa, and the Union of India is the second
respondent. In all the other Writ Petitions, the
State of Orissa is the sole respondent. As most of
the questions of law relating to the
interpretation of the Constitution, or other
410
laws hereinafter to be referred to, are common,
the cases have been heard together. But in order
to appreciate the points arising in these cases,
it is necessary to state the facts of each case
separately.
I. Writ Petition No. 79 of 1957.
In Writ Petition 79 of 1957, the petitioner
is the younger brother of the present Raja of
Talcher, which was an independent sovereign State
before its merger. It was later incorporated in
the State of Orissa. The Talcher State was a
sovereign State of the Rajabahadur of Talcher,
under the paramountcy of the British Government,
before India attained Independence. As such a
sovereign, the Rajah had absolute powers of
disposal of the properties comprised in the State.
The succession to the Rulership of the State is
governed by the Mitakshara law, according to the
rule of lineal primogeniture. The petitioner is a
citizen of India and is the only younger brother
of the present Raja of Talcher. The petitioner’s
father, the previous Ruler of Talcher, died in
1945 and was succeeded by the petitioner’s elder
brother, the present Raja of Talcher. According to
immemorial and long established custom of the
State, as also according to the Hindu Law of
lineal primogeniture, the junior members of the
family of the Rulers, for the time being, were
entitled to and were provided with suitable
maintenance, either land or in money, to enable
them to maintain themselves in accordance with
their status as members of the Ruler’s family. The
grants of land, or its equivalent in money, or
partly in land and partly in money, used to be
called Khanja or Khor posh grants, and the
grantees were known as Khanjadars or Khorposhdars.
The nature and conditions of such grants have been
laid down in Order 31 of the Rules, Regulations
and Privileges of Khanjadars and Khorposhdars.
Those "rules, regulations of Talcher etc. (1937)"
state the law of the State. In accordance with the
law aforesaid, the Khorposh
411
grants made by the Ruler, for the time being,
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 6 of 30
became the absolute private property of the
grantee, being a male or a female member of the
family of the grantor.
The petitioner was born in 1903, and in the
same year the petitioner’s father, who was then
Ruler of the State of Talcher, made a grant in
perpetuity to the petitioner of 5 villages
specified in the Schedule to the petition. The
said grant conveyed to the petitioner full
proprietary rights in the villages aforesaid. By
an order, dated March 31, 1912, the Ruler
aforesaid passed an order to the effect that the
income of the 5 villages granted to the
petitioner, as aforesaid, be collected by the
State Officials and deposited in the State
Treasury, and the petitioner should be paid in
cash the equivalent of the income from the
villages aforesaid, amounting to Rs. 5926 odd. By
a subsequent order, dated September 8, 1929, the
Ruler aforesaid directed the Settlement Officer,
who was in charge of making the records up to
date, to keep the aforesaid grant yielding a cash
income of Rs. 5926 odd intact, to be enjoyed by
the petitioner "in perpetuity under hereditary
rights". The Ruler of the State, after making the
necessary enquiries, directed, by his Order dated
March 16, 1944, that the petitioner should be paid
Rs. 6200 a year, as a cash allowance out of the
State Treasury in lieu of the income from the
villages granted to the petitioner, as aforesaid.
Since then the petitioner was being paid regularly
the allowance at the rate of Rs. 500 per month,
till April 1949.
Going a little backwards, it is necessary to
complete the narrative of events by stating that
in August 1947, the present Raja of Talcher, the
petitioner’s elder brother, entered into an
agreement with the Dominion of India after its
formation after the Independence Act of 1947, and
executed an Instrument of Accession,
412
which was in the form as it appears in Appendix
VIII at page 169 of the White Paper on Indian
States. Another agreement, in form appearing in
Appendix IX at page 173 of the White paper, was
also entered into between the Ruler of Talcher and
the Dominion of India. On December 14, 1947, an
agreement, called the ’Merger Agreement’, in the
same form as Appendix XI at page 178 of the White
Paper, was entered into between the Governor-
General of India and the Raja of Talcher. The
terms and effect of these transactions will have
to be examined in detail later. On January 1,
1948, the State of Talcher merged in the Dominion
of India in accordance with the Merger Agreement
aforesaid. The petitioner claims that the Khorposh
grant made to him, as aforesaid, was fully and
unequivocally recognized by the State and that
even without such recognition his rights before
the merger of the State of Talcher in Orissa
remained intact, and neither the Central
Government nor the State Government could question
or ignore those rights. As the petitioner did not
receive his Khorposh allowance due for the month
of April, 1949 he entered into correspondence with
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 7 of 30
the Government of Orissa. In answer he received a
latter, dated May 26, 1949, from the Sub-
Divisional Magistrate of Talcher informing him
that the payment of allowance in question could
not be made until further instructions were
received from the Government. As a result of
further correspondent between the petitioner and
the Government of Orissa, the petitioner received
a letter, on June 22, 1949, to the following
effect:
"With reference to your letter No. Nil
dated 7th June, 1949, on the subject
mentioned above, I am directed to say that as
you have extensive landed property and are
well off in life, Government of India have
not allowed any monthly cash allowance. The
decision of the Government of India is
413
final in this matter and cannot be
reconsidered."
It is this order of the Government which the
petitioner challenges as invalid and interfering
with his property rights. After entering into
further correspondence with the Government of
India, the petitioner received on September 7,
1956, a copy of the letter dated March 26, 1955,
to the following effect:
"The Government of India are advised
that the alleged grant of maintenance
allowance to you by the Ruler of Talcher was
never recognized by the Govt. of India or the
State Govt. of Orissa. After the merger
therefore no claim for payment of the said
allowance can be enforced against either the
State Govt. of Orissa or the Central Govt.
The Govt. of India are further advised that
even if, according to the law applicable to
the members of the ruling Family of Talcher
you had a right to be maintained, that was
rights against the Ruler of Talcher which is
not legally enforceable against either the
Govt. of Orissa or the Central Govt. who have
not inherited or undertaken any obligation in
the behalf.
As regards your contention based on the
provisions of Articles 2 and 4 of the Merger
Agreement signed by the Ruler of Talcher, I
am directed to say that the Govt. of India do
not consider that these have the effect of
placing an obligation on the Government to
continue your allowance."
The correctness and validity of the statements of
fact and law contained in the letter aforesaid of
the Government of India is challenged by this
petition on the grounds that Government’s order
aforesaid amount to an infringement of
414
the petitioner’s fundamental rights under Arts.
19(1)(f) and 31 of the Constitution and are also
discriminatory, thus violating Art. 14 of the
Constitution inasmuch as the other Khorposh
grantees have been allowed to continue enjoying
their similar rights. It was on these allegations
that the petitioner moved this Court and obtained
the Rule.
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 8 of 30
II. Writ Petition No. 167 of 1958.
The petitioner in this case is the younger
brother of the Raja of what was previously known
as the State of Bamra, one of the native States in
Orissa. The Ruler of Bamra possessed and exercised
absolute rights-legislative, executive and
judicial-in his territory, subject to the
paramountcy of the British Government. The Ruler
of Bamra also, like the other ruler similarly
situated, acceded to the Dominion of India by an
Instrument of Accession executed between him and
the Governor-General of India on or about the 15th
of August, 1947, in terms similar to the form
appearing in Appendix VII of the White Papers, at
page 165. There are similar allegations, as in the
previous case, about the law and custom governing
the grant of Khorposh to the members of the Ruling
Family. In accordance with the law aforesaid and
in exercise of his sovereign powers, the Ruler
made the following 4 grants in favour of the
petitioner.
"1. Land Revenue hereditary grant of Rs.
10,000 per annum out of the Revenue income of
the village Balanda and 24 others in Bamra
State granted by the Ruler on 24-3-47.
2. Land Revenue hereditary kharposh Mafi
grant of Rs. 2,400 per year out of the income
of village Nenei and 6 others granted by the
ruler on 15-9-45.
415
3. Forest grant of Panguli and
Prabhasuni reserve forests for reclaiming
1500 acres granted by Ruler on 27th December,
1947.
4. Tank at Deogarh granted by Ruler on
22-9-47. All these properties have been duly
recorded in Revenue registers."
After the grants aforesaid had been made in favour
of the petitioner, who is the only surviving
younger brother of the Ruler, the latter executed,
on the December 30,1947, the Agreement of Merger
by which he transferred to the Dominion Government
authority, jurisdiction and power for and in
relation to the governance of Bamra State and also
agreed to transfer the administration of the State
on January 1, 1948. On June 8, 1949, the
Government of Orissa, purporting to act in
exercise of its powers under s. 4 of the Extra
Provincial Jurisdiction Act (XLVII of 1947), read
with Notification dated March 23, 1948, issued
directions to the effect that the commitments,
specified in the Schedule to the Notification,
made by the Ruler of Bamra were not reasonable and
bonafide in the opinion of the Provincial
Government and were declared null and void and not
binding on them, and shall stand annulled as from
the date of the said commitments and that no Court
shall have jurisdiction to call into question the
validity of the Order. The Schedule to the
Notification aforesaid also made reference to the
grants made in favour of the petitioner. Then the
petition goes to make allegations as to why the
petitioner was discriminated against on grounds of
political bias. The petitioner also challenged the
authority of the Government of Orissa, or of
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 9 of 30
Central Government, to annul the said grants, and
characterised the annulment as wholly void. As the
petitioner’s memorial and petition requesting the
Orissa Government to annual their Order
416
of June 8, 1949, aforesaid had proved unavailing,
as would appear from the Government’s letter dated
June 26, 1957, the petitioner had no option left
but to move this Court. The Orders aforesaid of
the Government are challenged as null and void and
ultra vires the powers of the Government, as
violative of Arts. 19 and 31 of the Constitution.
III. Writ Petition 168 of 1958.
The petitioner in this case is the same as
the petitioner in the Writ Petition 167 of 1958.
After making allegations similar to those in the
previous petition, he goes on to state that the
Ruler of the Bamra State made the following Order
on December 8, 1947.
"Bamra Darbar
Order
As my brother Barakumar Pratap Ganga Deb
is going to marry soon and as the present
maintenance grant will be insufficient to
maintain himself and his family befitting his
status and position, the present maintenance
grant of Rs. 600 p. m. is increased to Rs.
1000 (one thousand) per month with effect
from the 1st of December 1947.
8th Dec., 1947. Sd-B.C.
Tribhuban Deb.
Raja & Ruler, Bamra State."
The petitioner goes on to state that, not
withstanding the protest of the petitioner, the
increased amount of maintenance at Rs. 1000 per
month, as granted by the Ruler, as aforesaid, was
reduced by Mr. D. V. Rege, the Adviser to the
Orissa State, by his letter dated June 11, 1949 to
the following effect:-
"Dear Bara Kumar Sahib,
With the approval of Government of India
your allowance has been increased
417
from Rs. 7200 to Rs. 9600 per annum from 1-4-
1948.
Your sincerely,
Sd. D. V. Rege"
This reduced amount of maintenance at the rate of
Rs. 800 per month continued be to paid to the
petitioner from April 1, 1948 till July 1, 1957.
But after the passing of the Budget for 1957-58,
during the discussion on the Orissa Appropriation
Bill (II of 1957) on June 29, 1957, the then Chief
Minister of Orissa, Dr. Hare Krishna Mahtab,
suddenly, for political reasons, made a statement
in the Assembly to the following effect:
"Government have decided that on
principles and on grounds of expediency all
allowances to relatives of the Rulers should
be annulled with effect from 1st July, 1957,
and the fact should be communicated to the
Government of India, subject to the following
conditions:-
(1) The existing allowances should be
continued in respect of widowed Rajmatas and
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 10 of 30
other widows subject to a maximum limit of
Rs. 500 per month.
(2) If, as a result of annulment of
these allowances, any hardship is caused to
anybody, he or she may represent to
Government for consideration of his or her
case and Government after proper enquiry
about the actual conditions and income of the
representationist and after being satisfied
about the genuineness of the grievance, may,
in suitable cases, grant allowances to
anybody upto a maximum limit of Rs. 500 p.m."
The result of this statement was that the
petitioner’s allowance was annulled. The
petitioner’s memorials and petitions to the State
Government and to the
418
Central Government authorities proved fruitless;
hence the writ petition in respect of the
annulment aforesaid.
IV. Writ Petition No. 4 of 1959.
The petitioners in this case are the mother
and younger brother of the present Maharaja of the
State of Kalahandi, previously known as the State
of Kalahandi, one of the native States in Orissa.
After the death of the late Maharaja Braja Mohan
Deo of Kalahandi in 1939 at the age of 43, the
maintenance allowance of Rs. 1200 per month was
fixed for the first petitioner by the Political
Department of the Government of India. She
continued to get the allowance even after the
merger of the State of Kalahandi with the Province
of Orissa. The petitioner No. 2, as the younger
brother of the Ruler of Kalahandi and in
accordance with the law and custom prevailing in
that area, was granted by the then Ruler, his
brother, H.H. Maharaja P. K. Deo a maintenance
allowance of Rs. 1200 per month. After the merger
of the State in the State of Orissa and on the
recommendation of Shri Rege I.C.S., a maintenance
allowance of Rs. 1000 per month was fixed for the
petitioner in consultation with the Government of
India. As a result of the statement made by the
then Chief Minister of Orissa, dated June 28,1957,
quoted above, the petitioners have been deprived
of their just claims to maintenance in accordance
with the law. The petitioners’ memorials to the
State Government and to the authorities of the
Central Government have produced no results; hence
the Writ Petition against the stopping of the
payment of allowances to the petitioners with
effect from July 1, 1957.
In support of these petitions, three separate
arguments have been addressed to us, and have
covered a very wide field. Shri Viswanatha Sastri
appeared in support of petition No. 79 of 1957;
Shri Purshottam Trikamdass appeared in support of
419
petition No. 167 of 1958 and No. 4 of 1959, and
Shri N. C. Chatterjee appeared in support of the
petition No. 168 of 1958. Though the arguments
have been overlapping and not always consistent,
the points urged on behalf of the petitioners in
each case may be summarised as follows. The grants
made by the Rulers in each case were in respect of
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 11 of 30
the khorposh rights of the members of their
family, which the Rulers, under the law both
statutory and customary, recongnised as the rights
of the junior members of the family which is
governed by the rule of Lineal Primogeniture.
Generally the grants took the shape of landed
property but very often the usufruct of the
property was taken over by the State in lieu of a
cash allowance. Whether the Khorposh grant took
the form of land or of money, it was made by a
sovereign Ruler. Every act of the Ruler, whether
executive, legislative or judicial in character,
with reference to modern democratic ideas of
separation of power, has the force of law. In the
hands of the Ruler for the time being, these
distinctions did not hold good. Whatever they said
or did in relation to the affairs of the State was
law for the time being, which the Ruler could
abrogate or modify according to his absolute
power. But after the disappearance of the Rulers’
sovereign powers, the succeeding power, whether it
was the Government of India or the Province, and
later the State of Orissa, was not competent to
abrogate the orders granting maintenance to the
junior members of the family, according to the law
of the land, without recourse to legislation by a
competent body. In this connection reliance was
placed on the decisions in the case of Director of
Endowments, Government of Hyderabad v. Akram Ali
and Madhaorao Phalke v. The State of Madhya
Bharat. Hence the Government of India had to get
the Parliament to make the necessary legislation,
if it intended to do away with the rights
420
to Khorposh created by the previous Rulers of the
States concerned. It was also contended that there
was no entry either in List I or in List III, of
the Constitution, which could authorise the
Central Legislature to make a law abrogating those
grants. It was further contended that in respect
of some of the grants at least, the Government of
India had recognised the rights of the grantees
and had been making payments through the State of
Orissa, in pursuance of those recognised rights.
In the case of the petitioners in Writ Petition
168 of 1958 and 4 of 1959, it was further argued
that the payments had been made to the grantees
until June 1957. It was only in July, 1957, that
the payments were stopped arbitrarily as a result
of the statement made by the Chief Minister of
Orissa, as stated above.
The learned Solicitor General, who appeared
on behalf of the respondents, first raised a
preliminary objection in respect of the first case
(Writ Petition 79 of 1957) relating to the grant
by the Ruler of Talcher. His contention was that
it was the admitted case of the parties that the
payment to the petitioner was stopped in April,
1949, and the petitioner was informed by the
Government’s order dated June 22, 1949 that the
Government’s decision to stop the payment was
final and could not be reconsidered. That being
so, the rights guaranteed by the Constitution
could not be founded upon, in respect of a cause
of action which arose before the Constitution
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 12 of 30
could not be founded upon, in respect of a cause
of action which arose before the Constitution. In
the second case, namely Writ Petition 167 of 1958,
the right, if any, has been abrogated by the
Government’s Notification dated June 8, 1949,
hence in this case also the preliminary objection,
if it has any force, applies. The other arguments,
of the Solicitor General, which apply to all the
cases, were to the effect that the grant, if any,
was not grant of land but of money, any,
therefore, was not grant of land but of money,
and, therefore, was not a grant properly so
called; that there may
421
have been a law relating to the making of Khorposh
grants to junior members of the family of the
Rulers governed by the Rule of Lineal
Primogeniture, but the act of making each
individual grant could not properly be
characterised, as enacting a law; it could, at
best, be an order in exercise of the powers of the
Ruler giving effect to the law in question.
Alternatively, it was argued that whether or not
the making of a grant was enacting a law, and
whatever its nature, it could be abrogated by the
succeeding sovereign power, without recourse to
legislation. It was further argued that the matter
in controversy would be governed by the provisions
of the Extra Provincial Jurisdiction Act (XLVII of
1947), which came into effect on December 24,1947.
Reliance was placed upon s. 3 of the Act which
lays down that it "shall be lawful for the Central
Government to exercise extra provincial
jurisdiction in such manner as it thinks fit". It
was pointed out that under sub. s.(2) of s. 3 of
the Act, the Central Government had been
authorised to delegate its jurisdiction, and this
power the Government exercised in favour of the
Provincial Government of Orissa, The terms of s.
4(1) to the effect that the Central Government may
make such order as may seem to it expedient for
the effective exercise of its jurisdiction under
the Act, were also relied upon as the source of
the authority for cancelling the Khorposh
allowance in favour of the petitioners made by the
ex-Rulers. It was further contended that s. 5 of
the Act validated the impugned orders of the
Government, and whether or not they were legal,
thay "shall be valid as if they had been done
according to the local law then in force in that
area". And lastly, it was urged that, in any view
of the matter, the orders impugned by the
petitioners in these cases were acts of State, the
legality of which could not be canvassed in a
Municipal Court.
422
Before dealing with the arguments on the
merits of the controversy, it is convenient first
to deal with the preliminary objection raised with
reference to the first two petitions, on behalf of
the respondents, to the effect that the orders
passed before the coming into effect of the
Constitution could not be challenged in a writ
petition because no writ could be issued in
respect of orders passed before the Constitution
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 13 of 30
came into force. If the grants were in the shape
of land, and if the Government had deprived the
petitioners of those lands, it could have been
argued with a good deal of force that the
dispossession from the lands took place at a time
when the Constitution was not in force. But it
appears that in these cases the grants ultimately
assumed the shape of money allowances payable at
regular intervals. They were to be paid
periodically. Hence, every periodic deprivation of
the money allowance would give the petitioners a
right to approach this Court for relief. It
appears from the pleadings of the parties that the
petitioners entered into prolonged correspondence
insisting upon their rights under the grants by
the former Rulers and trying to impress upon the
Government the justness of their demands. It was
only in 1957 that the petitioners realised that
they had no hopes of any revision by the
Government of the policy which they had adopted of
cancelling those grants. In our opinion,
therefore, the preliminary objection has to be
overruled.
In order to determine the controversy on its
merits, it is necessary to trace the history of
the relationship between the Rulers and the
Government of India before the territories
concerned became a part of the territory of India.
During the British regime, the Rulers of the
Indian States (then called native States) enjoyed
certain amount of sovereign powers, which were not
uniform. The extent of their sovereignty under the
suzerainty or the
423
paramount authority of the British Government
depended upon the several agreements between them.
The position is thus described in the White Paper
on Indian States (page 32, para 71):
"Till the lapse of Paramountcy, the
Crown as represented by and operating through
the Political authorities provided the nexus
between the Indian States and the Central and
Provincial Governments. The pivot of this
arrangement was the Viceroy, who as Crown
Representative represented to the Indian
States the suzerainty of the British Crown
while at the same time he was, in relation to
British India, the head of the Government as
Governor-General. The Indian Independence
Act, 1947, released the States from all their
obligations to the Crown".
After the coming into effect of the Indian
Independence Act and the establishment of the
Indian Dominion, as a result of negotiation
between the Dominion of India and the Indian
States, certain steps were taken towards the
integration of those States with India. The first
step was the accession of these States in
accordance with the Instruments of Accession,
which appear in Appendices VII and VIII at pages
165 to 173 of the White Paper. As a result of the
accession, the three States with which we are now
concerned-the States of Talcher, Bamra and
Kalahandi-acceded to the Dominion of India "with
the intent that the Governor-General of India the
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 14 of 30
Dominion, Legislature, the Federal Court and any
other Dominion authority established for the
purposes of the Dominion shall, by virtue of this
Instrument of Accession but subject always to the
terms thereof, and for the purposes only of the
Dominion, exercise in relation to the
States...such functions as may be vested in them
by or under the Government of India Act, 1935, as
in force in the Dominion of India on the 15th day
of August,
424
1947". This accession did not affect the
continuance of the sovereignty of the Rulers
entering into the agreement, save as provided by
or under the Instrument of Accession. It, however,
provided that in respect of such matters as are
specified in the Schedule annexed to the
Instrument, which may be compendiously described
as "Defence, External Affairs and Communications",
the Dominion Legislature may make laws which shall
apply to the acceding States also. It is not
necessary to notice the difference between the
Instrument of Accession as contained in Appendix
VII and that contained in Appendix VIII for the
purposes of these cases. The second step was the
signing of what has been termed "Standstill
Agreement", the form of which appears in Appendix
IX at pages 173-74 of the White Paper. The
acceding States signed this "Standstill Agreement"
which provided for the continuance for the time
being of all subsisting agreements and
administrative arrangements in matters of common
concern between the States and the Dominion of
India. The first phase of the process of
integration of the Indian States into the Indian
Dominion was the accession of the States as
aforesaid. The second phase followed on the merger
of these States into the Dominion of India as a
result of the ’Merger Agreement’, in terms
appearing in Appendix XI at pages 178-179 of the
White Paper. In December 1947, these States merged
with the Dominion of India by virtue of the
Agreements of Merger, whereby the States ceded "to
the Dominion Government full and exclusive
authority, jurisdiction and powers for and in
relation to the governance of the States and
agreed to transfer the administration of the State
to the Dominion Government on the 1st day of
January 1948". As a result of the Merger
Agreement’ signed by the Rulers of these States on
or after the 14th of December, 1947, but before
the 1st of January,
425
1948, the Dominion of India was vested with
sovereign authority and the ex-Rulers were left
only with their private property and their annual
Privy Purse. As these States which merged with
the domination of India, as aforesaid, did not
become part of the Province of Orissa until a much
later date, it became necessary to provide for the
administration of these States. Thus came into
existence the Act, called the Extra Provincial
Jurisdiction Act (XLVII of 1947). The Act
authorised the Central Government, by itself or
through its delegate, to exercise extra provincial
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 15 of 30
jurisdiction in respect of areas outside a
Province, which were acquired by the Central
Government by treaty, agreement, grant, usage,
etc., as recited in the Preamble to the Act. In
pursuance of the powers given to the Central
Government under s. 3(2) of this Act, the Central
Government delegated its power to the Government
of Orissa to administer the territories which had
acceded, as aforesaid, including the three States
with which we are now concerned. This state of
affairs continued until the coming into effect of
the States’ Merger (Governors’ Provinces) Order,
1949, which came into effect on the first of
August, 1949. Section 3 of the Order provides that
as from the appointed day, namely, August 1, 1949,
the States in question shall be administered in
all respects as if they formed part of the
Province of Orissa. Section 4 provides that all
laws in force in a merged State before that day,
including orders made under s. 3 or s. 4 of the
Extra Provincial Jurisdiction Act, 1947, shall
continue in force until repealed, modified or
amended by a competent legislature or other
competent authority. Hence, any orders passed by
the Central Government or its delegate, the
Government of Orissa, under Act XLVII of 1947,
shall have the effect of law, even though until
the 1st of August, 1949, these States did not form
part of the Province of Orissa. It
426
will, thus, appear that the sovereignty, whatever
it was, of the Rulers of the States in question
ceased on the execution of the Merger Agreement on
or after the 14th of December, 1947, and before
the 1st of January, 1948. Thereafter, on the 1st
of January, 1948, the sovereignty in those States
vested in the Central Government. The question,
therefore, arises: How far the Central Government
of its delegate, the Government of orissa, until
the merger of the territories in the Province of
Orissa, as aforesaid, were bound by the laws
prevailing in those States during the regime of
the Rulers, who had gone out.
It has been strenuously argued on behalf of
the respondents that the acts complained of by the
petitioners were acts of State, into the legality
of which the Municipal Courts had no jurisdiction
to examine. The question of the nature and effect
of what are characterised as acts of State has
been discussed in a number of cases, which went up
to the Privy Council, and later in cases which
came up to this Court. In the case of the
Secretary of State of India v. Kamachee Boye
Sahaba, their Lordships of the Privy Council
stated the law in these terms:
"The transactions of independent States
between each other are governed by other laws
than those which Municipal Courts administer;
such Courts have neither the means of
deciding what is right, nor the power of
enforcing any decision which they may make".
In that case, the Raja of Tanjore, an
independent sovereign Chief, who, by virtue of
Treaties, was under the protection of the East
India Company, died without leaving male issue.
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 16 of 30
Thereupon the East India Company, in exercise of
their sovereign
427
power, seized the Raj of Tanjore on the ground
that the dignity of the Raj was at Stake for want
of male heir. It was held by the Privy Council
that as the seizure was made by the British
Government, acting as a sovereign power, through
its delegate the East India Company, it was an act
of State, and that, therefore, a Municipal Court
had no jurisdiction to enquire into the property
or legality of the transaction. In the course of
the judgment, Lord Kingsdown further observed
"that acts done in the execution of these
sovereign powers were not subject to the control
of the Municipal Courts, either of India or Great
Britain, was sufficiently established by the cases
of the Nabob of Arcot v. The East India Company,
in the Court of Chancery, in the year 1793; and
The East India Company v. Syed Ally, before the
Privy Council in 1827". In that case, an argument
was advanced before the Privy Council, that the
seizure of the Raj might be justified as an act of
State, but the seizure of the private property of
the Raja was not so justifiable. In dealing with
that argument, their Lordships of the Privy
Council made the following very significant
observations:
"But then, it is contended, that there
is a distinction between the public and
private property of a Hindoo Sovereign, and
that although during his life, if he be an
absolute Monarch, he may dispose of all
alike, yet on his death some portions of his
property, termed his private property, will
go to one set of heirs, and the Raj with that
portion of the property which is called
public, will go to the succeeding Rajah.
It is very probable that this may be so;
the general rule of Hindoo inheritance is
partibility, the succession of one heir, as
in the case of a Raj, is the exception. But
assuming
428
this, if the Company, in the exercise of
their Sovereign power, have thought fit to
seize the whole property of the late Rajah,
private as well as public, does that
circumstance give any jurisdiction over their
acts to the Court at Madras? If the Court
cannot enquire into the acts at all because
it is in act of State, how can it inquire
into any part of it, or afford relief on the
ground that the Sovereign power had been
exercised to an extent which Municipal law
will not sanction?".
This decision of the Privy Council was followed in
the case of Cook v. Sir James Gordon Sprigg. That
was a case in which the appellant claimed right to
certain concessions relating to minerals, forests,
trading and other rights, etc., in Eastern
Pondoland, granted to them by the paramount chief
of Pondoland. The suit was successfully defended
on the ground that the grant did not bind the
Imperial or the Colonial British Government to
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 17 of 30
recognise the said concessions. The Lord
Chancellor, delivering the judgment of the
Judicial Committee, observed as follows, and
almost adopted the language of Lord Kingsdown:
"The taking possession by Her Majesty,
whether by cession or by any other means by
which sovereignty can be acquired, was an act
of State and treating Sigcau as an
independent Sovereign-which the appellants
are compelled to do in deriving title from
him. It is a well established principle of
law that the transactions of independent
States between each other are governed by
other laws than those which municipal courts
administer.
It is no answer to say that by the
ordinary principles of international law
private property is respected by the
sovereign which accepts the cession and
assumes the duties
429
and legal obligations of the former sovereign
with respect to such private property within
the ceded territory. All that can be properly
meant by such a proposition is that according
to the well understood rules of international
law a change of sovereignty by cession ought
not to affect private property, but no
municipal tribunal has authority to enforce
such an obligation."
A similar question arose before their
Lordships of the Privy Council in a case from
India, reported as Secretary of State for India v.
Bai Rajbai. In that case, the plaintiffs sued for
a declaration of their rights to certain property
and they questioned the orders of the Government
of Bombay to the effect that they had no
indefeasible rights in the property as claimed by
them. The property was situate in the District of
Ahmedabad, which was ceded by the Gaekwar to the
British Government in the year 1817. The
plaintiffs (respondents before the Privy Council)
claimed the title to the property in the right of
a grantee from the Mogul Emperors. While examining
the question as to what was the precise relations
in which the respondents stood to the Bombay
Government at the time of cession of the
territory, as aforesaid, and as to what were the
legal rights enforceable in the tribunals of the
new sovereign, their Lordships stated the legal
position as follows:
"The relation in which they stood to
their native sovereigns before this cession,
and the legal rights they enjoyed under them,
are, save in one respect, entirely irrelevant
matters. They could not carry in under the
new regime the legal rights, if any, which
they might have enjoyed under the old. The
only legal enforceable rights they could have
as against their new sovereign were those,
and only those, which that new sovereign, by
agreement
430
expressed or implied, or by legislation,
chose to confer upon them. Of course this
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 18 of 30
implied agreement might be proved by
circumstantial evidence, such as the mode of
dealing with them which the new sovereign
adopted, his recognition of their old rights,
and express or implied election to respect
them and be bound by them, and it is only for
the purpose of determining whether and to
what extent the new sovereign has recognised
those anti-cession rights of the kasbatis,
and has elected or agreed to be bound by
them, that the consideration of the
existence, nature, or extent of these rights
becomes a relevant subject for inquiry in
this case. This principle is well
established, though it scarcely seems to
have been kept steadily in view in the lower
Courts in the present case. It is only
necessary to refer to two authorities on the
point, namely, the case of Secretary of State
for India v. Kamachee Boye Sahaba, decided in
the year 1859, and Cook v. Sprigg, decided in
the year 1899."
Their Lordships also observed that in deciding the
question as to whether or not the new Government
had recognised the pre-existing rights and, if so,
to what extent, the burden of proof rested upon
those who made such claims.
In a later decision of the Judicial Committee
of the Privy Council in the case of Vajesingji
Joravarsingji v. Secretary of State for India in
Council, the questions as to the significance of
’act of State’ and as to the rights of the
inhabitants of the territory after it has been
acquired by a new sovereign, whether by conquest,
treaty or otherwise have been discussed by Lord
Dunedin. In the course of his judgment, after
referring to the previous
431
authorities bearing on the questions, he made the
following observations, which put, in a nutshell
the entire legal position.
"But a summary of the matter is this:
when a territory is acquired by a sovereign
state for the first time that is an act of
State. It matters not how the acquisition has
been brought about. It may be by conquest, it
may be by cession following on treaty, it may
be by occupation of territory hitherto
unoccupied by a recognised ruler. In all
cases the result is the same. Any inhabitant
of the territory can make good in the
municipal Courts established by the new
sovereign only such rights as that sovereign
has, through his officers, recognised. Such
rights as he had under the rules of
predecessors avail him nothing. Nay more,
even if in a treaty of cession it is
stipulated that certain inhabitiants should
enjoy certain rights, that does not give a
title to those inhabitants to enforce these
stipulations in the municipal Courts. The
right to enforce remains only with the high
contracting parties. This is made quite clear
by Lord Atkinson when, citing the Pongoland
case of Cook v. Sprigg he says: "It was held
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 19 of 30
that the annexation of territory made an act
of state and that any obligation assured
under the treaty with the ceding state either
to the sovereign or the individuals is not
one which municipal Courts are authorised to
enforce."
In that case the Privy Council was called upon to
determine the rights of the plaintiffs as
Taluqdars in respect of land in the Panch Mahals,
which were in the domain of the Scindia of Gwaloor
until December 12, 1860, when the Ruler ceded that
territory to the British Government by a treaty.
The paintiffs in that case claimed proprietary
rights in the Taluqs, whereas the Secretary of
State for India, who was
432
the contesting respondent, asserted that they were
ordinary lessees holding their lands at the
pleasure of the Government. In that case it had
been argued before the Judicial Committee that the
plea of act of State not having been specifically
taken in the Courts below, that plea should not
have been given effect to. This argument was met
by their Lord ships of the Privy Council by
observing that no such specific plea using the
words ’act of State’ was necessary inasmuch as the
plaintiffs themselves had admitted in the plaint
that the territory had been ceded by the previous
Ruler, the Scindia of Gwalior, to the British
Government. The plaintiff had the onus cast on
them of showing the acts of acknowledgment of
their rights, which they claimed, by the new
sovereign. Another argument raised on behalf of
the paintiffs was that rights as proprietors still
subsisted. On this part of the case, their
Lordships observed that such a general statement
in a proclamation only means this that the new
government will recognised such rights as upon
investigation by its officers it found those
rights substantiated. The new Government had not
thereby renounced its right to recognise only such
titles as it considered fit and proper to
recognise, and the Municipal Courts were not
thereby empowered to investigate the rights
claimed.
Where territory has been annexed to a new
sovereign by treaty, conquest, cession or
otherwise, the position in law is clear. But where
there is no complete cession of territory but only
the grant of prover and jurisdiction whereby
sovereign authority is vested and in another
State, the question has arisen whether the latter
State has the right to legislate on matters which
are already governed by law promulgated by the
State in which the territory still remains vested.
That question was raised in the case of
433
Dattatraya Krishna Rao Kane v. Secretary of State
for India. The case related to what is known as
the Berar, now forming part of the State of
Maharashtra. By the treaty of 1853, H. H. The
Nizam of Hydrabad had assigned to the British
Government the districts collectively called the
Berar, in lieu of certain expenses relating to the
army, etc. As a result of the arrangement, H. H.
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 20 of 30
the Nizam leased in perpetuity to the British
Government that territory. The territory formed
the subject matter of subsequent treaties in 1860
and 1920, whereby full sovereignty over the
assigned districts was reaffirmed in favour of the
British Government. The British Government was to
continue to have full and exclusive jurisdiction
and authority over the assigned districts and the
power to administer them as the British Government
thought fit and proper. In pursuance of the
Foreign Jurisdiction Act, 1890 (53 & 54 Vict. c.
57) an Order in Council was made in 1902
authorising the Governor-General of India in
Council to deal with those territories, on behalf
of His Majesty. In pursuance of that power, the
impugned law (The Berar Alienated Villages Tenancy
Law, 1921) was enacted in 1921 it was held by
their Lordships of the Judicial Committee
repelling the appellant’s contention that the
enactment of 1921 was ultra vires that the Law of
1921, aforesaid, promulgated by the Governor-
General in Council, was a valid piece of
legislation and was effective to interfere with
pre-existing rights.
The still later decision of their Lordships
of the Judicial Committee in the case of Secretary
of State v. Sardar Rustam Khan is also very
instructive in so far as it reviewed the older
decisions and reiterated the law as summarised by
Lord Dunedin in the decision just noticed in the
case of Vajesingji Joravarsingji v. Secretary of
State. In that case their Lordships had to
consider the effect of the Treaty of 1903 between
the Khan of Kalat and the
434
Government of India whereby the former ceded in
perpetuity to the latter, in consideration of the
payment of an annual rent, a certain territory. It
was held that the transaction was, in fact, a
perpetual lease of the territory at a quit rent
and that the territory itself did not become part
of the British Dominions, though the Khan of Kalat
had made over the whole of his sovereign rights.
In this case, their Lordships had also to consider
the effect of the provisions of the Foreign
Jurisdiction Act, 1890 (53 & 54 Vict. c. 37).
Their Lordships held that by virtue of the Treaty
and the provisions of the Foreign Jurisdiction
Act, the Government of India had acquired full
sovereign rights and had, therefore, the right to
recognise or not to recognise existing titles to
land, thus completely ousting the jurisdiction of
the Municipal Courts to investigate and to
pronounce upon claims to those rights.
The decisions referred to above have been
noticed with approval by this Court in the cases
of Thakur Amar Singhji v. State of Rajasthan, M/s.
Dalmia Dadri Cement Co. v. The Commissioner of
Income-tax, The State of Saurashtra v. Memon Haji
Ismail Haji and in Jagannath Agarwala v. State of
Orissa.
On an examination of the authorities
discussed or referred to above, the following
propositions emerge. (1) ’Act of State’ is the
taking over of sovereign powers by a State in
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 21 of 30
respect of territory which was not till then a
part of its territory, either by conquest, treaty
or cession, or otherwise, and may be said to have
taken place on a particular date, if there is a
proclamation or other public declaration of such
taking over. (2) But the taking over full
sovereign powers may be spread over a number of
years, as a result of a historical process. (3)
Sovereign power, including the right to legislate
435
for that territory and to administer it, may be
acquired without the territory itself merging in
the new State, as illustrated in the case of
Dattatraya Krishna Rao Kane v. Secretary of State
for India in Council. (4) Where the territory has
not become a part of the State the necessary
authority to legislate in respect of that
territory may be obtained by a legislation of the
nature of Foreign Jurisdiction Act.(5) As an act
of State derives its authority not from a
municipal law but from ultra-legal or supra-legal
means, Municipal Courts have no power to examine
the propriety or legality of an act which comes
within the ambit of ’act of State’. (6) Whether
the act of State has reference to public rights or
to private rights, the result is the same, namely,
that it is beyond the jurisdiction of Municipal
Courts to investigate the rights and wrongs of the
transaction and to pronounce upon them and, that,
therefore, such a Court cannot enforce its
decisions, if any. It may be that the presumption
is that the pre-existing laws of the newly
acquired territory continue, and that according to
ordinary principles of International Law private
property of the citizens is respected by the new
sovereign, but Municipal Courts have no
jurisdiction to enforce such international
obligations. (7) Similarly, by virtue of the
treaty by which the new territory has been
acquired it may have been stipulated that the pre-
cession rights of old inhabitants shall be
respected, but such stipulations cannot be
enforced by individual citizens because they are
no parties to those stipulations. (8) The
Municipal Courts recognised by the new sovereign
have the power and the jurisdiction to investigate
and ascertain only such rights as the new
sovereign has chosen to recognise or acknowledge
by legislation, agreement or otherwise. (9) Such
an agreement or recognition may be either express
or may be implied from circumstances and
436
evidence appearing from the mode of dealing with
those rights by the new sovereign. Hence, the
Municipal Courts have the jurisdiction to find out
whether the new sovereign has or has not
recognised or acknowledged the rights in question,
either expressly or by implication, as aforesaid.
(10) In any controversy as to the existence of the
right claimed against the new sovereign, the
burden of proof lies on the claimant to establish
that the new sovereign had recognised or
acknowledged the right in question.
Applying those principles to each of the
cases in hand, the position appears to be as
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 22 of 30
follows. In Writ Petition 79 of 1957, the Talcher
State merged in the territory of India with effect
from January, 1, 1948. Whatever rights the ex-
Ruler of Talcher may have conferred upon the
petitioner, those rights could be enforced against
the respondents only in so far as they have been
recognised or acknowledged by the new sovereign,
the Government of India, the question therefore
arises whether the rights claimed by the
petitioner in this case had been recognised by the
Government of India by legislation or otherwise.
It has already been observed that the State of
Talcher become part of the territory of India
certainly with effect from the first of January,
1948, as a result of the Merger Agreement, as
aforesaid. There is also no doubt that the grant
made by the ruler of Talcher in favour of the
petitioner continued to be effective until the
Merger. The nature and conditions of such grant of
Khorposh are governed by the provisions of the
laws of that State as embodied in order 31 of the
"Rules and Regulations of Talcher, 1937". Under
the laws of Talcher, the petitioner had been
enjoying his Khorposh rights until the cash grant,
as it became converted in 1943-44 as aforesaid,
was stopped by the State of Orissa, in April,
1949. On the first of January, 1948, the
petitioner became a subject of the
437
Dominion of India, on his territory merging in the
territory of India. It has been argued on behalf
of the petitioner by Shri Viswanatha Sastri that
as from the Ist of January, 1948, on the merger,
there was a complete change over of sovereignty
and the Dominion of India got full and exclusive
authority, jurisdiction and power in relation to
the erstwhile territory of Talcher State; and that
as soon as that happened, the Constitution Act of
India then in force (Government of India Act 1935
as amended by the Indian Independence Act) became
applicable to the inhabitants of Talcher also.
That being so, they also became entitled to the
benefit of s. 299(1) of the Constitution Act of
1935, which reads that "no person shall be
deprived of his property save by authority of
law". He relied upon the decision of the House of
Lords in the case of Johnstone v. Pedlar in which
the plaintiff’s claim for damages brought by a
friendly alien, resident in the United Kingdom
against an officer of the Crown in respect of
wrongful seizure and detention of his property was
decreed. It was further held that the defendant’s
plea that the property had been detained by
direction of the Crown as an act of State was not
a good defence to the action. In that case
Viscount Cave stated the proposition of law and
his opinion on that proposition in these words:-
"My Lords, counsel for the appellant
contended for the broad proposition that,
where the personal property of an alien
friend resident in this country is seized and
detained by an officer of the Crown, and his
act is adopted and ratified by the Crown as
an act of State, the alien is without legal
remedy. In my opinion this proposition cannot
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 23 of 30
be sustained.
When a wrong has been done by the King’s
officer to a British subject, the person
wronged has no legal remedy against the
438
Sovereign, for ’the King can do no wrong’;
but he may sue the King’s officers for the
tortious act, and the latter cannot plead the
authority of the Sovereign, for "from the
maxim that the King cannot do wrong it
follows, as a necessary consequence, that the
King cannot authorize wrong".
In the course of his Judgment in that case Lord
Atkinson made the following observations with
reference to the decision of Lord Halsbury in the
case of Cook v. Sprigg.
"The last words of Lord Halsbury’s
judgment clearly suggest that the Government
of this country cannot assert as a defence
against one of their own subjects that an act
done to the letter’s injury was an act of
State, since such a subject clearly could not
rely on his own sovereign bringing diplomatic
pressure against himself to right the
subject’s wrong. In conformity with this
principle it was held in Walker v. Baird
((1892)A.C.491) that where the plaintiffs are
British subject in an action for trespass
committed within British territory in time of
peace it is no answer that the trespass was
an act of State, and that thereby the
jurisidiction of the Municipal Courts was
ousted".
Lord Sumner, in the course of his opinion,
referred to the argument based upon the case of
Buron v. Denman that the executive has, as against
aliens, a general right to commit by its agents
what would be an actionable wrong in private
persons. With reference to that argument, Lord
Sumner made the following observations:
"My Lords, the speculation is
interesting but, as I think, fallacius. Buron
v. Denman (2 Ex. 167) is a case rather of the
inability of the Court than of the disability
of the suitor.
439
Municipal Courts do not take it upon
themselves to review the dealings of State
with state or of Sovereign with Sovereign.
They do not control the acts of a foreign
State done within its own territory, in the
execution of sovereign powers so as to
criticise their legality or to require their
jastification...".
Lord Phillimore, in the course of his opinion,
while dealing with the defence set up by the
official of the Crown, made the following
observations:
"The defence set up in the present case
is sometimes called the defence of an act of
State. As regards this way of looking at it,
I cannot put the matter better or more
tersely than as I found it put in one of the
reasons given by the successful plaintiffs in
their case as respondents before the Privy
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 24 of 30
Council in Walker v. Baird ((1892) A.C. 491,
494): "Because between Her Majesty and one of
her subjects there can be no such thing as an
act of State". And this proposition was
finally accepted in the case of Walker v.
Baird".
Lord Phillimore, after discussing a number of
authorities and the propositions laid down by
them, concluded his opinion in these words:-
"From these propositions it would seem
to follow that an alien ami complaining of a
tort is in the position of an ordinary
subject, and that no more against him than
against any other subject, can it be pleaded
that the wrong complained of was, if a wrong,
done by command of the King or was a so-
called act of State."
Relying upon those observations, the learned
counsel for the petitioner contended, in the first
instance, that when the Government of India, or
its delegate the Government of Orissa, deprived
440
the petitioner of his allowance in 1949, as
aforesaid, it infringed the constitutional
guarantee contained in s. 299 (1) of the
Constitution Act of 1935, and that the reliance
upon act of State by way of defence was not
tenable because, it was further argued, the
sovereign cannot exercise an act of State against
his own subject. The argument is very plausible
and attractive, but we need not pronounce upon it
in view of our conclusion, as will presently
appear, with reference to his alternative argument
based upon recognition. The argument is that the
inhabitants of a territory acquired by a new
sovereign by conquest, cession or otherwise can
make good in the municipal courts such rights as
have been recognised by the new sovereign. In this
connection, reliance was placed upon the
provisions of sub-para (b) of paragraph 4 of the
Administration of Orissa States Order, 1948 (which
we shall for the sake of brevity call the Order of
1948). It has to be recalled that on the Ist of
January 1948, the Government of Orissa made the
Order of 1948. This order was made by the
Government of Orissa in exercise of the powers
conferred by s. 4 of the Extra Provincial
Jurisdiction Act, 1947, as a delegate of the
Government of India. Paragraph 4 of the Order of
1948 reads as follows:-
"4. Laws to be applied-(a) The
enactments specified in the first column of
the Schedule hereto annexed shall, so far as
circumstances admit and subject to any
amendments to which the enactments are for
the time being generally subject, in the
territories to which they extend, apply to
all Orissa States and any provision of any
law in force, whether substantive or
procedural and whether based on custom and
usage or statues, in any of the Orissa
States, which is repugnant to any provision
of any of the said enactments shall, to the
extent of the
441
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 25 of 30
repugnancy, cease to effect from the date of
commencement of this Order:
Provided that the further modifications
and restrictions set forth in the said
Schedule shall be made in the enactments
applied:
Provided further that for the purpose of
facilitating the application of the said
enactments any court having jurisdiction in
the Orissa States may construe the provisions
thereof and notifications, orders, rules,
regulations, forms or bye-laws made or issued
thereunder, with such alteration not
affecting the substance as may be necessary
or proper to adopt them to the matter before
the Court:
Provided further that in the enactments
as to applied (except where the context or
modifications hereinbefore referred to
otherwise require), reference to "British
India" and "Central Government" shall be
construed as references to "all the provinces
of India and Orissa States" and "the
Provincial Government" respectively.
(b) As respects to those matters which
are not covered by the enactments applied to
the Orissa States under sub-paragraph (a),
all laws in force in any of the orissa States
prior to the commencement of this Order,
whether substantive or procedural and whether
based on custom and usage of statutes, shall,
subject to the provisions of this Order,
continue to remain in force until altered or
amended by an order under the Extra-
Provincial Jurisdiction Act, 1947 (XLVII of
1947).
Provided that the powers that were
exercised by the Ruler of each such State
under
442
any of those laws prior to the commencement
of this order shall be exercised by the
Provincial Government or any other officer
specially empowered in this behalf by that
Government.
Explanation-In this sub-paragraph the
expression "law" includes rules, regulations,
bye-laws and orders.
(c) As respects those matters regarding
which the enactments applied under sub-
paragraph (a) or the laws continued in force
under sub-paragraph (b) are inapplicable,
civil, criminal and revenue jurisdiction in
the Orissa States shall be exercised in
accordance with the principles of justice,
equity and good conscience".
Under sub-para (a) certain enactments
specified in the first column of the Schedule
annexed to the Order of 1948 were applied to the
Orissa States including Talcher, subject to
certain amendments not material in this
connection. The enactments so specified in the
Schedule did not in any way affect the custom or
the law under which the grant in favour of the
petitioner had been made, and under sub-para (b)
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 26 of 30
the law of the State of Talcher, a contained in
the Regulation aforesaid 1937 continued in
operation, subject, of course, to the provisions
of the order until altered or amended by an order
under the Extra Provincial Jurisdiction Act, 1947.
It is contended on behalf of the petitioner that
by virtue of the operation of sub-paragraph (b) of
paragraph 4 of the Order of 1948, the new
sovereign recognised the legal right of the
petitioner to receive his maintenance allowance
under the grant by the previous Ruler of Talcher.
In this connection we may notice the argument
advanced by the learned Solicitor-General on
hehalf of the respondents that there was no
changeover of de jure sovereignty on the 1st of
January, 1948, as contended on behalf of the
petitioner, and
443
that such a change-over could not be deemed to
have taken place until July 27, 1949, when, as a
result of the promulgations of the Order known as
the States’ Merger (Governors’ Provinces) Order,
1949 (Appendix XLIV, page 297 of the White Paper),
the Orissa States, including Talcher, were
integrated in the Province of Orissa. In our
opinion there is no substance in this contention
for the simple reason that the question is not
whether or when Talcher became a part of the
Province of Orissa, or subsequently of the State
of Orissa, on the advent of the Constitution. The
question in really is on what date can the State
of Talcher be said to have completely merged the
Dominion of India within the meaning of s. 5 of
the amended Government of India Act, 1935. Under
that section, the Dominion of India comprised not
only the Provinces, called "Governors’ Provinces",
or Chief Commissioners’ Provinces, but also "the
Indian States acceding to the Dominion of India in
the manner hereinafter provided" (s.5(c)). We have
already pointed out, while tracing the
relationship between the people of the Indian
states and the Dominion of India, and later the
Union of India, that as a result of the Merger
Agreements, referred to above, those States,
including the State of Talcher, completely merged
in the Dominion of India on the list of January
1948.
But then it was argued by the learned
Solicitor-General that, alternatively, assuming
that Talcher had become a part of the Dominion of
India in January, 1948, the grant made in favour
of the petitioner was not a law, and was neither
recognised nor continued in force by virtue of
subpara. (b) of paragraph 4 of the Order of 1948.
It is, therefore, necessary to consider whether
the grant in favour of the petitioner had itself
the force of law in the State of Talcher. In our
444
opinion, the decisions of this Court, particularly
(1) Thakur Amar Singhji v. State of Rajasthan (2)
M/s. Dalmia Dadri Cement Co., Ltd. v. The
Commissioner of Income-Tax and Madharao Phalke v.
The State of Madhya Bharat fully support the
conclusion that whether the act of the former
rulers in making the grant partook of the
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 27 of 30
character of legislative, or executive action, it
had the effect of law, and, secondly, that the
rules contained in order 31 of the Rules and
Regulations of the State of Talcher, 1937, had the
effect of law and had been continued in force, in
the absence of any legislation to the contrary.
The last mentioned case in particularly opposite
to the facts and circumstances of this case. The
Order 31 of the Rules and Regulations aforesaid of
the State of Talcher stand on the same footing as
the Kalambandis which were the subject matter of
the decision in that case. The Rules and
Regulations, even as the Kalambandis in that case,
have the force of law and would be existing law
within the meaning of Art. 327 of the
Constitution. The provisions of sub-para. (b) of
para. 4 of the Order of 1948, therefore, clearly
applied and the Regulations of 1937 continued in
force. The explanation to the sub paragraph (b)
says in express terms that the expression "law"
includes rules, regulations, bye-laws and orders.
In view of the width and amplitude of the
provisions of sub-para,(b) of paragraph 4, the
conclusions is irresistible that the new
sovereign, by the legislative order of 1948, had
recognised the customary grant in favour of the
Khorposhdhars of Talcher, including the
petitioner. Of course, the recognition is subject
to the reservations, namely, (1) to the provisions
of the Order of 1948, and (2) to any alternation
or amendment of the Order by any legislation under
the Extra Provincial Jurisdiction Act of 1947.
445
In this connection, we may here notice the
further argument advanced by the learned Solicitor
General that even if the petitioner were entitled
to take advantage of the provisions of sub-para.
(b) of paragraph 4 of the Order of 1918, the
impugned order stopping the grant could be
supported with reference to the provisions of ss.
3 (1) and (5) of the Extra Provincial Jurisdiction
Act of 1947. Section 3(1) is in general terms and
provides that "it shall be lawful for the Central
Government to exercise extra provincial
jurisdiction in such manner as it thinks fit".
This provision, which is in general terms,
authorises the Central Government to exercise
extra provincial jurisdiction in such manner as it
thinks fit, which means, in accordance with the
subsequent provisions of the Act. or orders passed
under the provisions of the Act. Those sections,
ss. 3(1) and 4, have to be read harmoniously so as
not to make the provisions of s. 4 nugatory.
Subsection (2) of s. 4 enables the Central
Government to make any "order" in respect of
matters specified in cls. (a), (b), (c) and (d)
therein, and where an "order" has already been
made by a competent authority under s. 4 of the
Act, that order can be superseded only by another
valid order under that very section. Section 3(1)
cannot, therefore, be construed so as to override
the provisions of s. 4.
With reference to the provisions of s. 5 of
the Act, which read,
"Every act and thing done whether before
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 28 of 30
or after the commencement of this Act, in
pursuance of any extra provincial
jurisdiction of the Central Government in an
area outside the Provinces shall be as valid
as if it had been done according to the local
law then in force in that area".
it has to be remembered that the Act was enacted
with a view to arming the Central
446
Government with powers to make provision for the
administration of such areas as came into the
Dominion of India as a result of the process of
integrations as discussed above, and which areas
were not within the ambit of any Governors’ or
Chief Commissioners’ Provinces. In order,
therefore, to fill the legal vacuum for the time
being, the Act was passed to regularise every act
and thing done even before the enactment, as if it
had been done according to the local law then in
force in that area. Anything could be done in such
a local area according to the laws of that area by
authorities empowered to do so, but the
functionaries of the Government of India or of its
delegate, would have no jurisdiction so to
function except by virtue of the provisions of s.
5. The section, thus, clothed such functionaries
with legal authority in respect of an act or thing
done, which otherwise would have been illegal. But
this section cannot be construed so as to mean
that those functionaries had been empowered to
abrogate the laws which had been continued in
force by virtue of s. 4 of the Act, or by virtue
of an order made in accordance with the provisions
of s. 4 of the Act. In other words, s. 5 cannot be
read so as to make the provisions of s. 4, or of
orders passed under that section, otiose. All the
sections of the Act have to be read, it must be
repeated, in a harmonious way so as to give full
effect to each one of the provisions of the Act.
It must, therefore, be held that s. 5 did not
authorise the functionaries of the Government of
India, or of its delegate, to infringe the laws
which had been continued in force by virtue of s.
4, using the word "laws" in their most
comprehensive sense, in accordance with the
provisions of the Act itself. As a result of these
considerations, it must be held that the
respondents have no justification for stopping the
grant. The application must, therefore, be
allowed, and a writ issued directing the
Government to continue the allowance
447
as from the date on which it was withheld. The
petitioner is entitled to his costs.
In the second case (Writ Petition 167 of
1958), it must be held, in accordance with the
decision in the case just decided, that the
petitioner had the right claimed by him. But this
case is met by the Order dated June 8, 1949, which
was in terms made under s. 4 of the Extra
Provincial Jurisdiction Act of 1947. Such an order
has the effect of law and was not a mere executive
flat, as contended on behalf of the petitioner. By
an order made under the provisions of the Act
aforesaid, the Central Government clearly
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 29 of 30
indicated its intention of annulling the grant.
The Order passed under the Act has in terms been
characterised as of a legislative character; hence
it has the effect of abrogating the grant so far
as the petitioner was concerned. Whether that
order of annulment was proper or improper, just or
unjust, is not a matter which this Court can
investigate and pronounce upon. It has not been
contended before us that the order annulling the
grant was ultra vires the provisions of the Act,
and, therefore, of no effect. It must, therefore,
be held that the rights claimed by the petitioner
in this case have been validly terminated by the
respondents. This application must, therefore, be
dismissed, but, in the circumstances, without
costs.
In the third case (Writ Petition No. 168 of
1958) in which the petitioner is the same as in
the second case, the position is different,
because by the order dated June 11, 1949, the
Government recognised the right to a maintenance
at Rs. 800 per month, in modification of the
previous grant. Not only was this grant
recognised, but the right thus recognised was
given effect to, because it is common ground that
payment continued to be made till July 1, 1957.
The payment was stopped
448
only as a result of the statement made by the
Chief Minister in the Legislative Assembly on June
29, 1957. As the right claimed in this case had
been recognised by the Government, and
implemented, it could not be stopped by a mere
flat of the Government. The petitioner, therefore,
is entitled to the declaration that his right is
intact and to a writ of mandamus to the respondent
to carry out its obligations.
In the fourth case (Writ Petition 4 of 1959),
the position is the same as in the third case,
just disposed of. In this case also, the
petitioners’ rights were recognised in respects of
maintenance allowance of Rs. 1200 per mensem for
the first petitioner and the reduced maintenance
allowance of Rs. 1000 per mensem for the second
petitioner. These allowances continued to be paid
until they were stopped as a result of the
statement aforesaid. The petitioners, therefore,
are entitled to the same relief as in the previous
case (Writ Petition 168 of 1958). The petitioners
in Writ Petition 168 of 1958 and Writ Petition 4
of 1959 are entitled to their costs.
MUDHOLKAR, J. - We agree. We could, however,
like to add a few words. In the course of his
argument Mr. Viswanatha Sastri stated that since
the Talcher State was merged in the Dominion of
India on January 1, 1948, there was complete
change over of sovereignty, that as from that date
the residents thereof became entitled to the
benefit of s. 299 (1) of the Constitution Act,
1935, that the Act of the Orissa Government in
depriving the petitioner in W.P. 79 of 1957 of his
maintenance grant in the year 1949 was in
violation of that provision and that consequently
the order made in that behalf was
unconstitutional. He also contended that the
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 30 of 30
action of the Orissa Government could not be
regarded as an act of State because there can be
449
no act of state by sovereign against his own
subject. Referring to this argument My Lord the
Chief Justice in his judgment has observed: "The
argument is very plausible and attractive, but we
need not pronounce upon it in view of our
conclusion, as will presently appear, with
reference to his alternative argument based upon
recognition." The learned Chief Justice went on to
deal with the alternative argument advanced by Mr.
Viswanatha Sastri and accepted it.
While we agree with the conclusions reached
by My Lord the Chief Justice on the alternative
argument of Mr. Viswanatha Sastri and also agree
with what My Lord has said with regard to the
other writ petitions, we would like to state our
view on the first point urged by Mr. Viswanatha
Sastri. In our opinion s. 299(1) of the
constitution Act of 1935 did not help grantees
from the former rules whose rights had not been
recognized by his new sovereign in the matter of
establishing their rights in the municipal courts
of the new sovereign because that provisions only
protected such rights as the new citizen had at
the moment of his becoming a citizen of the Indian
Dominion. It did not enlarge his rights nor did it
cure any infirmity in the rights of that citizen:
This is the view which we have taken in our
judgment in State of Gujarat v. Jamadar Mahomed
Abdulla. In that case the rights of the grantees
from the former ruler of Junagadh were not
recognised at any time by the Dominion of India
and so we held that even after becoming citizens
of the Indian Dominion they could not assert those
rights in the municipal courts of the Dominion of
India. We adhere to that view and reject the first
argument of Mr. Viswanatha Sastri. Since we agree
with the rest
450
of the judgment there is nothing more that we need
say.
Petitions 79 of 1957
168 of 1958 and
4 of 1959 allowed.
Petition 167 of 1958 dismissed.
___________