PETITIONER: STATE OF GUJARAT Vs. RESPONDENT: VORA FIDDALI BADRUDDIN MITHIBARWALA DATE OF JUDGMENT: 30/01/1964 BENCH: AYYANGAR, N. RAJAGOPALA BENCH: AYYANGAR, N. RAJAGOPALA DAYAL, RAGHUBAR MUDHOLKAR, J.R. SINHA, BHUVNESHWAR P.(CJ) SUBBARAO, K. HIDAYATULLAH, M. SHAH, J.C. CITATION: 1964 AIR 1043 1964 SCR (6) 461 CITATOR INFO : R 1964 SC1793 (15) RF 1964 SC1903 (17) R 1966 SC 442 (4) R 1966 SC 704 (10) R 1967 SC 40 (5) R 1971 SC 530 (129,322,364,365,370) F 1971 SC 744 (6) R 1971 SC 846 (7,8,9) D 1971 SC 910 (6) RF 1971 SC1594 (8) RF 1975 SC1518 (33) RF 1981 SC1946 (18) RF 1986 SC1272 (75,76) R 1987 SC 82 (7) ACT: Act of State-Ruler of a native state granted certain rights in forest to grantees-State merged with Dominion of India- Dominion of India did not recognise the grant-Effect of non- recognition before Constitution and after Constitution-If non-recognition of the grant amounts to an act of State- Government of India Act 1935-Constitution of India, Art. 32. HEADNOTE: The Ruler of the State of Sant had issued a Tharao dated 12th March 1948, granting full right and authority to the jagirdars over the forests in their respective villages. Pursuant to the agreement dated March 19, 1948, the State of Sant merged with the Dominion of India. On October 1, 1948, Shree V. P. Menon, Secretary to the Government of India, wrote a letter to the Maharana of Sant State expressly declaring that no order passed or action taken by the Maharana before the day of April 1st 1948, would be questioned. After merger there was obstruction by the forest officers when the respondents were cutting the forests, but after some correspondence they were permitted to cut the trees on furnishing an undertaking that they would abide by the decision of the government. The Government of Bombay, after considering the implications of the Tharao, decided that the order was mala fide and cancelled it on 8th July 1949 In the meantime these respondents were stopped from working the forests by the Government of Bombay. 462 Thereupon these respondents filed suits for declaration of rights in the forests and for a permanent injunction against interference with those rights by the State. The respondents claimed in these suits that the rights of the grantees to the forests were not liable to be cancelled by the Dominion of India after the merger of the State of Sant in June, 1948, by executive action, and that the Government of Bombay was not competent to obstruct them in the exercise of those rights. Their claims were opposed by the State of Bombay mainly on the ground that in the absence of recognition, express or implied, by the successor State of the rights conferred by the former ruler on the jagirdars the respondents could not enforce them in the Municipal Courts. These respondents filed five suits against the State of Gujarat. All suits except one were dismissed by the Trial Court. The District Judge on appeal ordered the dismissal of that suit also and dismissed the appeals of the plaintiffs in the other suits. The plaintiffs then appealed to the High Court and the High Court allowed all appeals and the suits were decreed.' The High Court held on the basis of the letter written by Shri V. P. Menon, Secretary that the succeeding sovereign had waived or relinquished its right to repudiate the Tharao. The High Court further held that the Tharao was not a legislative action of the Ruler of Sant State. The State Government appealed to this Court by special leave. Hence the appeal. Per majority: Hidayatullah J. (i) The Act of State comes to an end only when the new sovereign recognises either expressly or impliedly the rights of the aliens. It does not come to an end by an action of subordinate officers who have no authority to bind the new sovereign. Till recognition, either express or implied, is granted by the new sovereign, the Act of the State continues. In the present case, the Act of State could only come to an end if Government recognised the rights flowing from Tharao. That Government never did. There was thus no recognition of the Tharao or the rights flowing from it at any time. In the present case, the subordinate officers of the Forest Department allowed each respondent to cut the trees on furnishing an undertaking that he would abide by the decision of the Government and so the question of waiver or relinquishment does not arise. Secretary of State in Council for India v. Kamachee Boye Sahaba, (1859) 13 Moore P. C. 22, Secretary of State v. Sardar Rustom Khan and Others, (68) I. A. 109, MIS. Dalmia Dadri Cement Co. Ltd. v. Commissioner of Income-tax, [1959] S.C.R. 729, The State of Saurashtra v. Memon Haji Ismale Haji, [1960] 1 S.C.R. 537, Jagan Nath Agarwala v. State of Orissa, [1962] 1 S.C.R. 205, State of Saurashtra V. Jamadar Mohamed Abdulla and Ors., [1961] 3 S.C.R. 970 and Vaje Singhji Jorwar Singh v. Secretary of State for India, (1924) L.R. 51 I.A. 357, relied on. Virendra Singh and Ors. v. The State of Uttar Pradesh [1955] 1 S.C.R. 415, disapproved. Bhola Nath v. State of Saurashtra, A.I.R. 1954 S.C. 680, Bhojrajji v. The State of Saurashtra, 61 Bom. L.R. 20, referred to. 463 (ii) The Act of State did not come to an end by virtue of Article 299(1) of Government of India Act, 1935 and so the respondents could not claim the protection of that section. Section 299(1) did not come into play because it could only come into play after the rights were recognised. In the present case the rights were never recognised by the Government. (iii) The original Act of State continued even after January 26, 1950, because there was no state succession on January 26, 1950 in so far as the people of Sant State were concerned. For them state succession was over some time in 1948. The Act of State which began in' 1948 could continue uninterrupted even beyond 1950 and it did not lapse or get replaced by another Act of State. These rights in question cannot be protected under the Constitution because these rights were not recognised even before 1950. (iv) That the impugned Tharao was not a law as it did not lay down any rule of conduct. It was a grant made to the Jagirdars mentioned in the Tharao.. The fact that Maharana's Tharao was passed to benefit a larger number of persons en bloc does not make it any the more a law if it did not possess any of the indicia of a law. The Tharao did give rights to the grantees but did not lay down any rule of conduct. It is a grant and as a grant it was open to the new sovereign not to recognise it. Madhorao Phalke v. The State of Madhya Bharat, [1961] 1 S.C.R. 957, distinguished. Ameer-unnissa Begum and Ors. v. Mahboob Begum and Ors. A.I.R. 1955 S.C. 352. distinguished. Maharaja Shri Umaid Mills Ltd. v. Union of India and Others. A.I.R. 1963 S.C. 953 and The Bengal Nagpur Cotton Mill Ltd. v. The Board of Revenue, Madhya Pradesh and Others, A.I.R. 1964 S.C. 888 relied on. (v) The right claimed here is not even a concessionary right such as has received the support of the International writers. It is more of the nature of a gift by the Ruler at the expense of the State. It lacks bona fides which is one of the things to look for. There is no treaty involved and whatever guarantee there is, Art. 363 of the Constitution precludes the Municipal Courts from considering. This distinguishes the jurisdiction and power of the Supreme Court of the United States in which consideration of treaties is included. In the United States the Constitution declares a treaty to be the law of the land. In India the position is different. Article 253 enables legislation to be made to implement international treaties. This Court has accepted the principles laid down by the Courts in England in regard to the limits of the jurisdiction of Municipal Courts. The view of the Supreme Court of United States or the view taken in international law has not been accepted by this Court. Politically and 464 ethically there might have been some reason to accept and respect such concessions but neither is a reason for the Municipal Courts to intervene. The Rule that the Act of the State can be questioned in a Municipal Court has never been adopted and it has been considered that it is a matter for the political departments of the State. However desirable it may be that solemn guarantees should be respected, this Court should not impose its will upon the State, because this is outside its jurisdiction. In this case, the present respondents who were not parties to the merger agreement or to the letter written by Mr. Menon which was made expressly a part of the Agreement cannot take advantage of cl. 7. If they were parties, Article 363 would bar such plea. Maharaj Umeg Singh and Others v. The State of Bombay and Others. [1955] 2 S.C.R. 164, relied on. U.S. v. Percheman, 32 U.S. 51 at 86, disapproved: Shapleigh v. Miar, 299 U.S. 468, referred to. Salaman v. Secretary of State for India, [1906] 1 K. B. 613, referred to. Cook v. Sprigg. [1899] A.C. 572, referred to. Foster v. Nielson. (1829) 2 Pet. 253, referred to. Birma v. The State, A.I.R. 1951 Rajasthan 1 to 7, referred to. Amodutijani v. Secretary Southern Nigeria, [1921] 2 A.C. 399, referred to. Clark V. Allen, 331 U.S. 503. referred to. West Rand Central Gold Minning Co. v. Regem, [1905] 2 K.B. 391, referred to. Secretary of State v. Bai Raj Bai, (1915) L.R. 42 I.A. 229, relied on. Per Shah J. (1) The rule that cession of territory by one State to another is an act of State and the subjects of the former State may enforce only those rights in Municipal Courts which the new sovereign recognises has been accepted by this Court. M/s. Dalmia Dadri Cement Co., Ltd. V. Commissioner of incomeTax, [1959] S.C.R. 729, jagannath Agarwala v. State of Orissa, [1962] 1 S.C.R. 205, Promod Chandra Dev v. State of Orissa, [1962] Suppl. 1 S.C.R. 405 and the State of Saurashtra v. Jamadar mohd. Abdullah, [1962] 3 S.C.R. 970, relied on. The Secretary of State In Council of India v. Kamachee Boye Sahaba, 7 Moore's I.A. 476, Vajesinghji Joravarsinghji v. Secretary of State for India in Council, L.R. 51 I.A. 357 and Secretary of State v. Sardar Rustam Khan and Others, L.R. 68 I.A. 109, relied on. 465 (ii) The Constitutional provisions in the United States are somewhat different. Under the Constitution of the United States each treaty becomes a part of the law of the land; the provisions thereof are justiciable and the covenants enforceable by the Courts. In India the treaties have not the force of law and do not give rise to rights or obligations enforceable by the Municipal Courts. In the present case by virtue of Art. 363 of the Constitution, it is not open to the respondents to enforce the covenants of the agreement as stated in the letter of guarantee written by Mr. V. P. Menon in the Municipal Courts. United States v. Parcheman, [1833] 32 U.S. 51 at 86, 87, not relied on. Cook v. Sprigg. [1899] A.C. 572, referred to. Maharaj Umeg Singh and Others v. The State of Bombay and Others, [1955] 2 S.C.R. 164, relied on. (iii) An act of State may be spread over a period and does not arise merely an the point of acquisition of sovereign right. Nor is the new sovereign required to announce his decision when he assumes or accepts sovereignty over foreign territory, about the rights created by the quondam sovereign, on pain of being held bound by the right so created. There. fore till the right to property of the subjects of the former Indian State was recognized by the new sovereign there was no title capable of being enforced in the courts of the Dominion or the Union. (iv) The functions of a State whether it contains a democratic set up or is administered by an autocratic sovereign fall into three broad categories--executive, legislative and judicial. The line of demarcation of these functions in an absolute or autocratic form of government may be thin and may in certain cases not easily discernible. But on that account it is not possible to infer that every act of an autocratic sovereign has a legislative content or that every direction made by him must be regarded as law. The legislative power is the power to make, alter, amend or repeal laws and within certain definite limits to delegate that power. Therefore It is power to lay down a binding rule of conduct. Executive power is the power to execute and enforce the laws, and judicial power is the power to ascertain, construe. and determine the rights and obligations of the parties before a tribunal. In the present case the order dated March 12, 1948, is expressly in the form of a grant of the rights which were not previously granted and does not either expressly or by implication seek to lay down any binding rule of conduct. The impugned order was not a law or an order made under any law within the meaning of cl. 4 of the Administration of the Indian States Order of 1948. Promod Chandra Deb and Others v. The State of Orisa and Others, (1962] Suppl. 1 S.C.R. 405, Ameer-un-Nissa Begum and Others v. Mahboob Begwn and Others, A.I.R. (1955) S.C. 352, Director of Endow- 134-159 S.C.-30. 466 ments, Government of Hyderabad v. Akram Ali, A.I.R. (1956) S.C. 60, Tilkayat Shri Govindlalji Maharaj etc. v. State of Rajasthan and Others, A.I.R. (1963) S.C. 1638, distinguished, discussed. Madhorao Phalke v. The State of Madhya Bharat, [1961] 1 S.C R 957 discussed. Maharaja Shree Umaid Mills Ltd. v. Union of India, A.I.R. 1963 S.C. 953, relied on. The Bengal Nagpur Cotton Mills Ltd. v. The Board of Revenue, Madhya Pradesh and Others, C.A. No. 416 of 1961 decided on July 30, 1963, relied on. (v) To attract s. 299(1) of the Government of India Act, 1935, there must, exist a right to property which is sought to be protected. The subjects of the acceding State are entitled only to such rights as the new sovereign chooses to recognize, in the absence of the any recognition of the rights of the respondents or their predecessor Jagirdars, there was no right to property of which protection could be claimed. On the Sam* reasoning, grantees of the Ruler could not claim protection under Art 31(1) of the Constitution. Per Mudholkar J. (i) The rule of international law on which the several Privy Council decisions as to the effect of conquest or cession on the private rights of the inhabitants of the conquered or coded territory are founded has become a part of the common law of this country. This being a "law in force" and at the commencement of the Constitution is saved by Art. 372 of the Constitution. The Courts in India are, therefore, bound to en. force that rule and not what according to Marshall C.J. is the rule at. International Law governing the same matter, though the latter has also, received the approval of several text book writers. The rule which has. been applied in this country is not inequitor nor can it be regarded to be an anachronism. Virendra Singh v. The State of Uttar Pradesh, [1955] S.C.R. 415 United State v. Percheman, (1833) 32 U.S. 51. disapproved. Secretary of State for India v. Kamachee Boye Sahiba, (1859) is Moore P. C. 22, Asrar Ahmed v. Durgah Committee, Ajmer, A.I.R. 1947 P.C. 1, Dalmia Dadri Cement Co. Ltd. v. The Commissioner of Incometax, [1959] S.C.R. 729, State of Saurashtra v. Memon Haji Ismail [1960] 1 S.C.R. 537, State of Saurashtra v. Jamadar Mohamed Abdullah and Ors., (1962] 3 S.C.R. 970, Vajesinghji v. Secretary of State for India,, 51 I.A. 357 and Secretary of State for India v. Bai Rajbai, 42 I.A. 229 Promod Chandra Dev v. State of Orissa and Ors. [1962] Supp. 1 S.C.R. 405, relied on (ii) Two concepts underlie our law. One is that the inhabitants of acquired territories bring with them no rights enforceable against the new sovereign. The other is that the Municipal Courts have no jurisdiction to enforce any rights claimed by them, against the sovereign despite the provisions of a treaty unless their rights have been recognised by the 467 new sovereign after cession or conquest. In other words a right which cannot on its own strength be enforced against a sovereign in the Courts of that sovereign must be deemed to have ceased to exist. It follows therefore that a right which has ceased to exist does not, require repudiation. Municipal courts derive their jurisdiction from the Municipal law and not from the laws of nations and a change in the laws of nations brought about by the consent of the nations of the world cannot confer upon a Municipal Court a jurisdiction which it does not enjoy under the Municipal law. (iii) The grantees of the Ruler could not claim the protection of s 299 of Government of India Act, 1935 or of Art. 31 of the Constitution of India as they possessed no right to property enforceable against the new sovereign. (iv) The impugned Tharao was not law. Madhorao Phalke v. The State of Madhya Pradesh [1961] 1 S.C.R. 957, referred to. Per minority Sinha C.J. and Ayyangar J. (i) The juristic basis of the theory underlying the Privy Council decisions is that with the extinction of the previous sovereign the rights theretofore exerciseable by the subjects of that sovereign by virtue of grants for that sovereign were likewise extinguished and that without recognition which is really tantamount to a fresh grant by the new sovereign, no title enforceable in the municipal courts of the succeeding sovereign came into being. The doctrine of Act of State evolved by English courts is one purely of municipal law. It denies to such a court jurisdiction to enquire into the consequences of acts which are inseparable from an extension of its sovereignty. That doctrine was, however. not intended to deny any rule of International Law. The British practice that has prevailed in this country has not proved in actual practice to lead to injustice, but has proceeded on a just balance between the acquired rights of the Private individual and the economic interests of the community, and therefore there is nothing in it so out of tune with notions of propriety or justice to call for its rejection. Even in the case of Virendra Singh this Court did not express any decisive opinion in favour of accepting the observations in Percheman's case as proper to be applied by the municipal courts in India. This Court has in subsequent decisions followed the Privy Council decisions. The view of the Supreme Court of the United States has not been accepted by this Court for the reason that the Constitutional position in regard to the recognition of treaties in both countries are different. In the United States a treaty has the force of law, which is not the position here. Besides, in India by virtue of Article 363 of the Constitution, Municipal Courts are deprived of jurisdiction to enforce any rights arising from treaties. 468 Vinrendra Singh v. The State of Uttar Pradesh, [1955] 1 S.C.R. 415, disapproved. Vajesinghji v. Secretary of State for India, 51 I.A. 357, Cook v. Sprigg, [1899] A.C. 572, relied on. walker v. Baird, [1892] A.C. 491, Johnstone v. Pedlar, [1921] 2 A.C. 262, referred to. United States v. Percheman, 32 U.S. 51, disapproved. M/s, Dalmia Dadri Cement Co. Ltd. v. The Commissioner of Incometax, [1959] S.C.R. 729, Jagan Nath Agarwala v. The State of Orissa, [1962] 1 S.C.R. 205, Promodh Chandra Dev v. The State of Orissa, [1962] 1 Supp. S.C.R. 405, The State of Saurarhtra v. Jamadar Mohamad Abdulla, [1962] 3 S.C.R. 970, Secretary of State for India v. Kanzachee Boye Sahiba [1859] 7 Moore, I.A. 476, Secretary of State for India in Council v. Bai Rai Bat, 42 I.A. 229 and Secretary of State v. Rustom Khan, 68 IA. 109. relied on. Amodu Tijani v. Secretary Southern Nigeria, [1921] 2 A.C. 399, referred to. West Rand Central Gold Mining Co., v. Rex, [1905] 2 K.B. 391. referred to. Asrar Ahmed v. Durgha Committee, Ajmer, A.I.R. 1947 P.C. 1, relied on Attorney-General of Canada v. Attorney-General of Ontario, [1937] A.C. 326, referred to. (ii) Where the new sovereign assumes jurisdiction and it does some act and there is ambiguity as to whether the same amounts to a recognition of a pre-existing right or not, the covenant and the treaty right be looked at in order to ascertain the intention and purpose of that equivocal act, but beyond This the covenant and the treaty cannot by them- selves be used either as a recognition pure and simple or, as waiver of a right to repudiate the pre-excisting rights. It is needless to point out that since the enforceability of the rights against the succeeding sovereign springs into existence only on recognition by the sovereign, there La no, question of a waiver or the right to repudiate. In the present case the High Court erred in holding on the basis of cl. 7 of the letter of Shri V. P. Menon that the Government waived their right to repudiate the grant made by the previous ruler. Bhola Nath v. The State of Saurashtra, A.I.R. (1954) S.C. 680. distinguished 469 (iii) Just previous to the Constitution the grantee had no right of property enforceable against the State. The coming into force of the Constitution could not, therefore, make any difference, for the Constitution, did,not create rights in property but only protected rights which otherwise existed. (iv) In the present case the "Tharao" was not a grant to any individual but to the holders of 5 specified tenures in the State. The 'Tharao' is more consistent with its being a law effecting an alteration in the tenures of the 5 classes of Jagirdars by expanding the range of the beneficial enjoyment to the forests lying within the boundaries of the villages which had already been granted to them. In this light, the 'Tharao' would not 'be administrative order in any sense but would partake of the character of legislation by which an alteration was effected in the scope and content of tenures referred to. The "Tharao" dated March 12, 1918 satisfies the requirement of "a law" within Art. 366(10) of the Constitution and in consequence, the executive orders of the Government of Bombay by which the forests right% of the plaintiffs were sought to be denied were illegal and void. The "Tharao" was in truth and substance a law which was continued by Art. 372 of !he Constitution and therefore it could be revoked by the appellant by legislative authority and not by an executive act. Madhorao Phalke v. The State Madhya Bharat [1961] 1 S.C.R 957, Ameer-un-nissa Begum v. Mahboob Begum, A.I.R. 1955 Sup 4 Court, 352 and Director of Endowments, Government of Hyderabad Akram Ali, A.I.R. 1956 S.C. 60, relied on. Per Subha Rao J. (i) The decision in Virendra Singh's case is not only correct, but. is also in accord with the progressive trend of modern international law. It may, therefore, be stated without contradiction that in none of the decisions of this Court that were given subsequent to Vires. dra Singh's ease the correctness of that decision was doubted. After all, an act of State is an arbitrary act not based on law, but on the modern version of 'Might is right'. It is an act outside the law. There were two different lines of approach. One adopted by the imperialistic nations and the other by others who were not. That divergence was reflected in English and American Courts. All the jurists of International law recognise the continuity of title to immovable property of the erstwhile citizens of the ceding state after the sovereignty changed over to the absorbing state. It may, therefore, be held that so far as title to immovable property is concerned the doctrine of International law has become crystallized and thereunder the change of sovereignty does not affect the title of the erstwhile citizens of the ceding state to their property. In America the said principle of International Law has been accepted without any qualification. M/S. Dalmia Dadri Cement Co. Ltd. V. The Commissioner of Income-tax, [1959] S.C.R. 729, Jagannath Agarwala v. The State of Orissa, [1962] 1 S.C.R. 205, Promodh Chandra Dev. v. The State of Orrissa 470 [1962] Supp. 1 S.C.R. 405, State of Saurashtra v. Jamadar Mohmed Abdulla, [1962] 3 S.C.R. 970, discussed and distinguished. United States v. Percheman, (1833) 32 U.S. 51, relied on. Foster v. Neilson, (1829) 2 P.E.T., 253, The American Insurance Co. and the Ocean Insurance Co. v. Bales of Cotton (1828) 7 L.Ed. 511, Charles Dehault v. United States, (1835) 9 Ed. 117, Vajeenngli Joravarsingji v. Secretary of State for India in Council, (1951) I.A. 357, referred to. (ii) The law in England is that the municipal courts cannot enforce the acquired rights of the erstwhile citizens of the ceding state against the absorbing state unless the said state has recognized or acknowledged their title. This Court accepted the English doctrine of Act of State in a series of decisions. The word "recognize" means "to admit, to acknowledge, something existing before". By recognition the absorbing state does not create or confer a new title, but only confirms a pre-existing one. Non-recognition by the absorbing does not divest the title, but only makes it unenforceable against the state in municipal courts. Pramod Chandra Dev. v. The State of Orissa, [1962] Supp. 1 S.C.R. 503, relied on. (iii) The doctrine of acquired rights, at any rate in regard to immovable property has become crystallized in International Law. Under the said law the title of a citizen of a ceding state is preserved and not lost by cession. The change of sovereignty does not affect his title. The municipal laws of different countries vary in the matter of its enforceability against the state. As the title exists, it must be held that even in those countries, which accepted the doctrine of act of State and the right of a sovereign to repudiate the title, the title is good against all except the State. Before the Constitution came into force the State did Dot repudiate the title. When the Constitution of India came into force the respondent and persons similarly situated who had title to immovable pro- perty in the Sant State had a title to the said property and were in actual possession thereof. They had title to the property except against the State and they had, at any rate, possessory title therein. The Constitution in Article 31(1) declares that no person shall be deprived of his property save by authority of law. That is, the Constitution recognised the title of the citizens of erstwhile State of Sant, and issued an injunction against the sovereign created by it not to interfere with that right except in accordance with law. A recognition by the Supreme Law of the land must be in a higher position than that of an executive authority of a conquering State. It was held that the title to immovable property of the respondent was recognised by the Constitution itself and, therefore, necessarily by the sovereign which Is bound by it. 471 In the present case the letter written by the Government of India dated 'October 1, 1948, clearly recognized the title of the respondents to their properties. The letter clearly contains a statement in paragraphs 5 and 7 thereof that enjoyment of Jagirs, grants etc., existing on April 1, 1948, were guaranteed and that any order passed or action taken by the Ruler before the said date would not be questioned. This is a clear recognition of the property rights of the respondent and similar others. Virendra Singh v. The State of Uttar Pradesh, [1955] 1 S.C.R. 415, relied on. M/S. Dalmia Dadri Cement Co. Ltd. v. The Commissioner of Incometax [1959], S.C.R. 729, Jagan Nath Agarwala v. The State of Orissa [1962], 1 S.C.R. 205, Promodh Chandra Dev v. The State of Orissa' [1962], Supp. 1 S.C.R. 405 and State of Saurashtra v. Jamadar Mohamed Abdullah [1962], 3 S.C.R. 970, discussed and distinguished. JUDGMENT:
CIVIL APPELLATE JURISDICTION: Civil Appeals Nos. 182-186 of
1963.
Appeals by special leave from the judgment and order dated
January 1961 of the Gujarat High Court in Second Appeals
Nos. 105, 106, 107, 112 and 193 of 1960.
C. K. Daphtary, Attorney-General, R. Ganapathy Iyer, R. K.
P. Shankardass and R. H. Dhebar, for the appellant (in all
the appeals).
Purshottam Trikamdas, B. Parthasarathy, J. B. Dadachanji O.
C. Mathur and Ravinder Narain, for the resdondents (in all
the appeals).
January 30, 1964. Hidayatullah J., Shah J., and Mudholkar
J. delivered separate Judgments allowing the appeal.
Raghubar Dayal J. agreed with the order proposed by
Hidayatullah J. The dissenting opinion of Sinha C.J. and
Rajagopala Ayyangar J. was delivered by Ayyangar J. Subba
Rao J. delivered a separate dissenting opinion.
AYYANGAR J.-In this batch of five analogous appeals, by
special leave, the main question for determination is
whether the rights which were in controversy between the
472
parties in the courts below could be enforced by the Munici
pal courts; or in other words, whether or not “Act of State”
pleaded by the State of Gujarat is an effective answer to
the claims made by the respective respondents to the rights
over forests claimed by them in the suits giving rise to
these appeals.
Vora Fiddali Badruddin Mithibarwala is the respondent in
Civil Appeals Nos. 182 and 184 of 1963. Vora Hakimuddin
Tayabali Amthaniwala is the respondent in Civil Appeal No.
183 of 1963. Mehta Kantilal Chandulal is the respondent in
Civil Appeal No. 185 of 1963, and Pathan Abbaskhan Ahmedkhan
is the respondent in Civil Appeal No. 186 of 1963. In all
these Appeals the State of Gujarat is the appellant.
The course these litigations have taken in the courts below
may briefly be stated as follows: The respondent in Civil
Appeal No. 182 of 1963, is the assignee of the rights of one
Vora Hatimbhai Badruddin and was brought on a record as
plaintiff during the pendency of the suit in the trial
court, namely, the court of the Civil Judge (Senior
Division) at Godhra, being Civil Suit No. 115 of 1950, for
an injunction and ancillary reliefs to restrain the
appellant and its officers from interfering with the
plaintiff’s alleged rights to cut and carry away timber
etc., from the Gotimada jungle, rasing his rights under a
contract dated August 21, 1948, for a period of three years
on payment of a consideration of Rs. 9,501 to the Jagirdar
of the village, Thakore Sardar Singh Gajesingh. Civil Suit
No. 134 of 1950, giving rise to Civil Appeal No. 184 of
1963, was also instituted by the same plaintiff who claimed
by virtue of an assignment of the rights under a similar
contract in respect of another forest in village Nanirath
for a period of four years, the consideration being the cash
payment of Rs. 9,501. Civil Suit No. 106 of 1951, giving
rise to Civil Appeal No. 183 of 1963. was instituted by Vora
Hakimuddin Tayyabali Amthaniwalla. His claim was based on an
agreement with the Jagirdar. dated December 7, 1948, for a
period of four years for a consideration of Rs. 6,501 in
respect of the forest in village Rathda. All these three
suits, in which the reliefs claimed
473
were similar, were tried together and disposed of by a com-
mon judgment, delivered by the trial court on January 3,
1956. All the suits were dismissed. The Court took the
view that the rights of the plaintiffs, such as they were,
could not be enforced by the courts. Civil Appeal No. 185
of 1963 arises out of Suit No. 80 of 1953, filed by Mehta
Kantilal Chandulal. He owned the Inami villages Lalekapur
and Narsingpur and alleged that he had given a contract for
cutting the trees in his villages for a consideration of Rs.
11,000 on May 29, 1948, for a period of four years, and that
his transferee had been prevented by the State from
exercising those rights. He also prayed for a similar
injunction, as in the other suits. This suit was also
dismissed by the trial court by its judgment, dated March
23, 1956. The last of the suits is Suit No. 90 of 1955,
giving rise to Civil Appeal 186 of 1963. The plaintiff had
claimed to have obtained similar right of felling trees in
the forest belonging to the Jagirdar of Mayalapad on August
16, 1948 for Rs. 1,191 for a period of three years. This
suit was decreed by a judgment dated August 6, 1956. The
unsuccessful plaintiffs filed four appeals to the District
Judge, Panch Mahals, at Godra, being appeals Nos. 17, 18, 19
and 48 of 1956. All the appeals were heard together and, by
a common judgment, were dismissed on February 28, 1957, the
judgment of the trial court being confirmed. The 5th
appeal, being appeal No. 74 of 1956, was filed by the State.
Ile appeal was allowed by a separate judgement, dated
September 30, 1957, dismissing the suit. The plaintiffs-
respondents filed five second appeals, being Second Appeals
Nos. 105, 106, 107, 112 and 193 of 1960 in the High Court of
Gujarat. The appeals were heard together and were allowed
on January 24, 1961 with the result that the suits were
decreed and the appellant was restrained by an injunction
from interfering with the plaintiffs’ enjoyment of the
rights in the forests, as claimed by them. As the State
failed to obtain the necessary certificate of fitness from
the High Court, it moved this Court and obtained special
leave to appeal. And that is how these appeals have come up
to this Court. These appeals were first heard by a Bench of
five Judges, and it was directed that the matter be placed
for hearing by a larger Bench, as the Bench was of the
opinion that the decision of this Court in Virendra Singh v.
The
474
State of Uttar Pradesh(1) required reconsideration. That is
how these appeals have been placed before this special
Bench.
Before dealing with the questions that arise for deter-
mination in these appeals, it is necessary and convenient at
this stage to set out the course of events leading up to the
institution of the suits aforesaid, giving rise to these
appeals. The several villages, the forest rights in which
are in dispute in these cases, formed part of the State of
Sant. The steps in the transition of this State under its
ruler who was designated the Maharana into an integral part
of the territory of the Union of India conformed to the
usual pattern. With the lapse of the paramountcy of the
British Government on the enactment of the Indian
Independence Act, the ruler achieved complete sovereignty.
Soon thereafter by an instrument of accession executed by
the ruler, the State acceded to the Dominion of India so as
to vest in the latter power in relation to 3 subjects-
Defence, External Affairs and Communications. On March 19,
1948 the ruler entered into a merger agreement with the
Governor-General of India by which “with a view to integrate
the territory with the Province of Bombay at as early a date
as possible”, the full and exclusive authority and powers in
relation to the administration of the State were ceded to
the, Dominion Government. The agreement was to take effect
from June 10, 1948. It is necessary to set out two of the
Articles of this Agreement. Article 1 ran thus:
“1. The Maharana of Sant hereby cedes to the
Dominion Government full exclusive authority,
jurisdiction and powers for and in relation to
the governance of the State and agrees to
transfer the administration of the State to
the Dominion Government on the 10th day of
June, 1948 (hereinafter referred to as “the
said day”).
And from the said day the Dominion Government
will be competent to exercise the said powers,
(1) [1955] 1 S.C.R. 415.
475
authority and jurisdiction in such manner and
through such agency as it may think fit.”
Under Article 3 of the agreement, the ruler agreed to
furnish to the Dominion Government before October 1, 1948 a
list of all his private properties over which he was, under
the terms of the agreement, to retain full ownership and
enjoyment.
After this agreement came in force on June 10, 1948, the
Central Government delegated its functions to the Bombay
Government by virtue of the powers vested in it by the
Extra-Provincial Jurisdiction Act, 1947. Subsequently, Shri
V. P. Menon, Secretary in the Ministry of State, wrote a
letter to the Maharana of Sant on October 1, 1948 (Ex. 194).
This letter was entitled a “Letter of Guarantee” and was to
be treated as supplementary to the Agreement of Merger dated
March 19, 1948. Amongst other matters. it provided by cl.
7:
“No order passed or action taken by you before
the date of making over the administration to
the Dominion Government will be questioned un-
less the order was passed or action taken
after the 1st day of April, 1948, and it is
considered by the Government of India to be
palpably unjust or unreasonable. The decision
of the Government of India in their respect
will be final.”
In view of the forthcoming integration of (,lie territory of
Indian States into the Dominion of India, the Government of
India Act, 1935, was amended and s. 290-A was inserted. In
exercise of the powers conferred by that section, the
Governor-General of India promulgated the States Merger
(Governor Provinces) Order, 1949, on July 27 1949 which came
into force on August 1, 1949. As a result of that order the
integration of Indian States, including the Sant State with
that of the province of Bombay, was completed with effect
from that date, namely August 1, 1949.
In the meantime, the ruler of the Sant State passed or
issued “a resolution” or Tharao on March 12, 1948, which has
given rise to the present series of litigations. Under this
“‘instrument” marked as Ex. 192, to use a neutral expres-
476
sion in view of the controversy as to its nature, called
Tharao, an order was passed by the Maharana of Sant State
whose terms will be referred to later and discussed in
greater detail, granting forest rights to holders of certain
specified tenures. The holders of such tenures in the Sant
State entered into a number of agreements with the, parties,
parting with their rights in the forest timber, e.tc., for a
specified period, in consideration of cash payments made by
those third parties to the holders of the tenures. It is
not necessary to set out in detail all those agreements it
is enough to mention, by way of a sample the agreement dated
August 21, 1948 (Ex. 175) whereby the tenure-holder granted
as briefly adverted to earlier to Vohra Hatimbhai Badruddin
Mithiborwala the right to cut and remove timber and firewood
from the forest of Mouja Gothimada for a consideration of
Rs. 9,501 for a period of three years. The written
agreement contains quite a number of clauses which it is not
necessary to set out for the purposes of this case. After
the aforesaid grants, correspondence started between the
grantors and the grantees on the one hand, and the State
Forest Department on the other. When the District Forest
Officer was informed about the transactions aforesaid. and
the grantees applied for authorisation to remove timber
etc.. the Forest Authorities ordered that no export outside
would be permitted, pending receipt of orders from
Government. They also required an undertaking from the
purchaser that he would abide by the decision and orders
passed by the Government. Thereupon the grantor, Thakur
Sardar Singh Gaje Singh gave an undertaking to abide by the
decision and orders of the Government of Bombay in respect
of the Gothimada forests “rights over which were conferred
on me. by Santrampur State Government on March 12, 1948 in
their resolution No. G. 371, dated March 12, 1948.” The
Divisional Forest Officer, by his order dated January 10,
1949, passed an order under the provisions of r. 4 of the
Rules under s. 41 of the Indian Forest Act authorising the
grantee to remove forest produce like timber firewood and
charcoal from Gothimada forest.
This was followed by a memorandum by the Conservator of
Forests North Western Circle of the Bombay State by which
the Divisional Forest Officers were directed to conti-
477
nue to issue authorisations to contractors of Jagirdars who
had obtained rights over the forests in the Sant State under
the Tharao of the ruler, dated March 12, 1948. He, however,
pointed out that until the question of the rights of the
grantees over private forests was finally settled by the
Government an undertaking should be taken from the, persons
concerned that they would abide by the orders passed by the
Government in respect of their rights. This, as stated al-
ready had been obtained by the District Officers even
earlier. On July 8, 1949, the Government of Bombay passed
an order in which they stated “Government considers that the
order passed by the ruler of the Sant State under his No.
371, dated March 12, 1948, transferring forest rights to all
the Jagirdars of the Jagir villages, are mala fide and that
they should be cancelled…….. This decision or order was,
however, not communicated to the jagirdars or their
contractors though effect was given to it by the Forest
Authorities by stopping all further fellings. Some time
thereafter the respondents issued notices under s. 80 of the
Civil Procedure Code to the Government of Bombay seeking
respect for their rights under the Tharao of March, 1948 and
after waiting for two months filed the suits out of which
these appeals arise. By the written statements which they
filed, the Government of Bombay raised principally the def-
ence that the act of the ruler in passing the Tharao was not
binding on them as the successor State and that they in
exercise of their sovereign authority, had cancelled the
concession as unreasonable and mala fide by their order,
dated July 8, 1949, already referred. It might be mentioned
that after the suit was instituted and while it was pending
before the trial judge a formal resolution of the Government
of Bombay was passed and published on the 6th of February,
1953, in which they set out the legal position that the
rights acquired under the Tharao were not enforceable as
against the Bombay Government as the successor State unless
those rights were recognised and that as on the other hand
the same had been specifically repudiated, the Jagirdars and
their contractors had no title which they could enforce
against the Government.
We have already narrated the course of the litigations and
this would be the convenient stage at which to indicate
478
the grounds on which the learned Judges of the High Court
have upheld the claims of the plaintiffs who are the
respondents in the several appeals before us. There were
two, principle points that were urged on their behalf before
the learned Judges. The first was that the Tharao of March
12, 1948, was in truth and substance a ‘law’, a legislative
act of the ruler of Sant, which was continued under Art. 372
of the Constitution and that in consequence the rights
obtained by the grantees thereunder could not be abrogated
or set at naught by a mere executive order which the
Government resolution of February, 1953, undoubtedly was.
This submission was rejected by the Court holding that the
Tharao was merely a grant originating in an administrative
or executive order of the ruler. The other contention was
that through the agreement of merger by which the integra-
tion of the Sant State with the Dominion of India brought
about an “act of state” and that accordingly, no rights
based on the agreement of merger, dated March 19, 1948, or
in the supplementary letter, dated October 1, 1948, could
be, asserted or enforced in the Municipal Courts of the
successor State unless the same were recognised by
Government still cl. 7 of the letter of Shri V. P. Menon,
dated October 1, 1948, to the ruler could be referred to and
relied on for the purpose of drawing an inference that the
right of the Government to repudiate the grant by the ruler
had been waived. This submission was accepted and it was on
this reasoning that the learned Judges have decreed the
suits of the several plaintiffs.
It is the correctness of these two conclusions that are
being challenged before us, the first by the respondente and
the other by the appellant State. Arising from the
submissions of the learned Attorney-General the points that
require examination are as to the legal effect of the acces-
sion, integration and merger of the Sant State in the Indian
Union, on the rights that the plaintiffs acquired under the
Tharao, dated March 12, 1948 and secondly whether the
provisions in s. 299 of the Government of India Act, 1935,
or those contained in Part III of the Constitution affect
the nature or enforceability of those rights. ‘Me questions
to be considered under the first head in particular are:-
(a) Whether the rights acquired under the
previous
479
ruler are enforceable against the Governments
of the Union and the States without those
rights being recognised by the appropriate
Government.
(b) What is the effect of the letter of the
Government of India, dated October 1, 1948, on
the right of the Government to refuse to
recognise a grant under the Tharao.
(c) What is the effect of the Government’s
communication to the Chief Conservator of
Forests dated July 8, 1949 and of the
resolution of Government of February, 1953.
Under the second head, besides the constitutional guarantees
protecting rights to property contained in the Government of
India Act and the Constitution, the effect in the first
instance of s. 5 of the Government of India Act, 1935, of
the acceding States becoming part of the Dominion of India
and later of the manner in which the Constitution of India
was framed.
The other question that requires consideration is whether
the Tharao dated March 12, 1948 is merely a grant originat-
ing in an executive order or is it a law which is continued
in operation by Art. 372 of the Constitution.
In Virendra Singh’s case(1) this Court held that even on the
basis that the merger of the Indian States in the Indian
Union and the treaties by which that was accomplished were
acts of State, still by reason of the manner in which the
Constitution of India was brought into being and because of
the provisions which it contained, in particular those
guaranteeing property rights of its citizens, the acquired
rights of the inhabitants of the Indian States quoad their
rulers could not, after the Constitution, be annulled or
abrogated by arbitrary executive action on the part of the,
Union or State Governments. The learned Judges thus assumed
as correct the rule of Public International Law relevant to
that context expounded by the Privy Council in a number of
decisions rendered on appeals from the Indian
(1) [1955] 1 S.C R. 41
480
High Courts. For this reason we consider that it would be
convenient for a proper appreciation of the points now in
controversy to premise the discussion by briefly setting out
the principles underlying these decisions of the Privy Coun-
cil, reserving their detailed examination to a later stage.
These principles have been tersely summarised and the ratio
of the rule explained by Lord Dunedin in Vajesinghji v.
Secretary of State for India etc.(1) in a passage which has
been often quoted in later cases on the subject and we
consider that it would be sufficient if we extract it. The
learned Lord said:
“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, recognized. Such
rights as he had under the rule of prede-
cessors avail him nothing. Nay more, even if
in a treaty of cession it is stipulated that
certain inhabitants could 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.” (italics ours).
This has been accepted as expressing the constitutional law
of the United Kingdom and the same has been.applied tot
merely to claims or titles which were sought to be enforced
against the Indian Government but also in other parts of the
British Empire-See Cook v. Spring(2). This was the law laid
down and given effect to by the Privy Council until India
attained independence.
151 IA 357. (2) [1899] A.C. 572.
481
Virendra Singh v. State of Uttar Pradesh (1), however,
struck a different note particularly as regards the matters
covered by the sentences we have given in italics in Lord
Dunedin’s exposition of the law, and to this decision we
shall immediately turn. The facts of the case were briefly
these: On January 5, 1948, the ruler of Sarila granted the
village Rigwara to the petitioners who moved this Court
while on the 28th of January, 1948, the ruler of Charkari
granted certain other villages to the same petitioners. As
the rights of the petitioners were sought to be nullified by
an order of the Government of Uttar Pradesh they filed a
petition under Art. 32 of the Constitution praying that the
order of the Government of Uttar Pradesh revoking the grants
in their favour be declared void and for consequential
reliefs.
A few more facts in regard to the constitutional history of
these two States is necessary to be stated to appreciate
some of the matters which figured in the decision in
Virendra Singh’s case(2). After the date of the grant in
favour of the petitioners 35 States in Bundelkhand and
Bhagalkhand, including Charkari and Sarila agreed to unite
themselves into a State to be called the United State of
Vindhya Pradesh. While this Union was in existence, certain
officials of this Government interfered with the rights of
the petitioners but the Government of the United State of
Vindhya Pradesh issued orders directing the officers to
abstain from such interference. Subsequently the rulers of
the 35 States dissolved their Union and ceded to the Gov-
ernment of Indian Dominion all their powers and jurisdiction
and the Dominion constituted the area into a Chief
Commissioner’s province for the purpose of administration,
but the four villages granted to the petitioners were, how-
ever, detached from the centrally administered State and
absorbed into Uttar Pradesh. On August 29, 1952, the
Governor of Uttar Pradesh revoked the grants made in favour
of the petitioners. The question before the Court was
whether this order of revocation of the grants made by the
former rulers was justiciable in courts and if justiciable,
valid.
(1) [1955] 1 S. C. R. 415.
S.C.-31
482
The judgment of the Court was delivered by Bose J. The
learned Judge after stating the question arising for
decision as being “whether the Union Government had the
right and the power to revoke these grants as an act of
State?”, pointed out that jurists had held divergent views
on this matter. At one extreme, he said, was the view
expressed by the Privy Council in a series of cases to which
reference was made and as summarising their effect the
passage from the judgment of Lord Dunedin we have extracted
already was cited. At the other extreme was the view of
Marshall C.J., in United States v. Percheman(1) from which
he quoted the following:
“It may not be, unworthy of remark that it is
very unusual, even in case of conquest, for
the conqueror to do more than to displace the
sovereign and assume dominion over the
country. The modern usage of nations, which
has become law, would be violated; that sense
of justice and of right which is acknowledged
and felt by the whole civilised world would be
outraged, if private property should be
generally confiscated, and private rights
annulled. The people change their allegiance;
their relation to their ancient sovereign is
dissolved; by their relations to each other,
and their rights of property, remain
undisturbed. If this be the modem rule even
in cases of conquest, who can doubt its
application to the case of an amicable cession
of territory?…… A cession of territory is
never understood to be a cession of the
property belonging to the inhabitants. The
King cedes that only which belonged to him.
Lands he had previously granted were not his
to cede. Neither party could consider itself
as attempting a wrong to individuals,
condemned by the practice of the whole
civilised world. The cession of a territory
by its name from one sovereign to another,
conveying the compound idea of surrendering at
the same time the lands and the people who
inhabit them, would be
(1) 32 U.S. 51 at pp. 86-87.
483
necessarily understood to pass the sovereignty
only, and not to interfere with private
property
After referring to a few other decisions of the English
Courts the learned Judge proceeded:
“We do not intend to discuss any of this
because, in our opinion, none of these
decisions has any bearing on the problem which
confronts us, namely, the impact of the
Constitution on the peoples and territories
which joined the Indian Union and brought the
Constitution into being……..
Now it is undoubted that the accessions and
the acceptance of them by the Dominion of
India were acts of State into whose competency
no municipal court could enquire; nor any
Court in India, after the Constitution, accept
jurisdiction to settle any dispute arising out
of them because of Article 363 and the proviso
to Article 131; all they can do is to register
the fact of accession………… But what
then; Whether the Privy Council view is
correct or that put forward by Chief Justice
Marshall in its broadest outlines is more
proper, all authorities are agreed that it is
within the competence of the new sovereign to
accord recognition to existing rights in the
conquered or ceded territories and, by
legislation or otherwise, to apply its own
laws to them and these laws can, and indeed
when the occasion arises must, be examined and
interpreted by the municipal courts of the
absorbing State.”
The learned Judge then went on to point out that the title
of the petitioners to the disputed villages had not been
repudiated upto January 26, 1950. Because of the non-
exercise of the right to repudiate till that date, the
petitioners were admittedly in de facto possession of the
villages and the learned Judge adverted to the circumstance
that those possessory rights could have been asserted and
enforced against all persons except the rulers who granted
the lands, and
484
except possibly the succeeding State. Considering it
unnecessary to pronounce whether these rights could be
enforced against the rulers as well as the Dominion of India
as the succeeding sovereign, he observed that as these
rights were factually in existence at the date of the
Constitution and as by that date the subjects of the rulers
of Charkari and Sarila had become the subjects of the Union,
there could be no question of the Union Government claiming
to exercise an ” act of State” operating to deprive the
petitioners of their property following in this respect the
well-known decisions of Walker v. Baird(1) and Johnstone v.
Pedlar(2). He further explained that “the Constitution by
reason of the authority derived from and conferred by the
peoples of this land blotted out in one magnificent sweep
all vestiges of arbitrary and despotic power in the
territories of India and over its citizens and lands and
prohibited just such acts of arbitrary power as the State
now seeks to uphold.”
The passage extracted and indeed the entire judgment is
replete with a description of the poetry of India’s
constitutional evolution as an unified State during the most
momentous period of her history from the Declaration of
Independence on August 15, 1947, to the coming into force of
the Constitution on January 26, 1950 and of the saga of the
march of the subjects of the former Indian princes from
being subjects of an autocratic ruler to a modern democatic
set up in which they are full-fledged citizens of India, in
language at once picturesque and of authentic eloquence. We
should not be understood to minimise in any manner the
political significance of the events described or underrate
their importance, content or meaning if we differ somewhat
from certain of the conclusions drawn on matters which are
relevant for the purposes of the points arising for decision
in these appeals.
Pausing here we ought to point out that several decisions of
this Court subsequent to Virendra Singh’s case(4) of which
it is sufficient to refer to Mls. Dalmia Dadri Cement Co.
Ltd. v. The Commissioner of Income Tax(4), Jagan-
(1) (1892) A.C. 491. (2) (1921) 2 A.C. 262.
(3) [1955] 1 S.C.R. 415. (4) [1959] S.C.R. 729.
485
nath Agrawala v. State of Orissa(1), Promod Chandra Deb v.
The State of orissa(2) and State of Saurashtra v. Jamadar
Mohamad Abdulla(3) have proceeded on the acceptance of the
constitutional doctrine enunciated by the Privy Council. We
shall be referring to them later, but before doing so it is
necessary to set out certain matters which are not in
controversy.
The native Indian rulers were undoubtedly sovereign in the
territories under their jurisdiction and they parted with
their sovereignty in stages, firstly on accession, then on
integration and finally by what has been felicitously termed
in the White Paper on Indian States as ‘unionization’ i.e.,
by State territory becoming part and parcel of the territory
of the Union of India which meant the complete extinction of
their separate existence and individual sovereignty and of
their States as separate political units. Proceeding next
to deal with Virendra Singh’s case(4) a close analysis of
the reasoning underlying the decision discloses the
following as its ratio:
(1) There were two schools of thought as
regards the effect of a change in sovereignty
in respect of the enforceability of the rights
of private individuals against the succeeding
sovereign. At one end of the scale were the
decisions of the Privy Council which proceeded
on the acceptance of the principle, that
rights enforceable against the previous ruler
or sovereign ceased to be enforceable by the
Municipal Courts of the succeeding sovereign
unless and until a competent authority or
organ of the succeeding sovereign recognised
those rights. The passage in the judgment of
Lord Dunedin in Vajesingjis case(5) was
typical of this view. On the other hand,
there was another and, if one might say so, an
opposite view expressed in the decisions of
the Supreme Court of the United States of
which the classic exposition by
(1) [1962] 1 S.C.R. 205. (2) [1962] 1 Supp.
S.C.R. 405.
(3) [1962] 3 S.C.R. 570. (4) (1955] 1 S.C.R.
415.
(5) 51 I. A. 357.
486
Chief Justice Marshall in Percheman’s case(1)
was typical, that the proper and just rule of
Public International Law which should be given
effect to by municipal courts was that the
changes in sovereignty over a territory did
not or should not have any effect on the
rights of the private individuals even as
regards the enforceability of their claims as
against the State and that it was the
obligation certainly moral, if not also legal,
of the succeeding sovereign to give effect to
such rights previously acquired by gants from
the previous sovereign. After pointing out
these divergent views the learned Judges, in
Virendra Singh’s case(2), considered it
unnecessary to express their opinion as
regards the correctness or acceptability of
either view, but proceeded, however, on the
assumption that the constitutional doctrine as
enunciated by the Privy Council appealed to
the facts of the case before them.
(2) Starting from the position that the
petitioners obtained a good title to the
villages granted to them by the rulers of
Sarila and Charkari, they proceeded to analyse
the nature of the title which they had under
the grants. As a result of this examination
they arrived at the conclusion that even on
the basis of the decisions of the Privy
Council, their title was only voidable at the
option of the succeeding sovereign. They
recognised that the changes that took place in
the constitutional position of the State of
Charkari and Sarila undoubtedly brought in a
change in the sovereignty of that territory
and hold that the changes thus brought about
including the treaties which marked the
transition were “Acts of State” and that the
interpretation or enforcement of rights under
the treaties was outside the jurisdiction of
municipal courts. The petitioners, they held,
could not, therefore obtain any advantage by
reliance on any provision in the
(1) 32 U.S. 51 at pp. 86-87.
(2) [1955] 1 S.C.R. 415.
487
treaty safeguarding their rights, for apart
from the treaties being “Acts of State” they
were engagements between two sovereign States
and enforceable between them at the instance
of the high contracting parties through
diplomatic channels and not by recourse to
municipal courts, and the petitioners not even
being parties to the treaties could not
obviously claim any right to enforce them. In
this connection the terms of Art. 363 of the
Constitution which contained an express
embargo on the enforcement by the municipal
courts of the, provisions of these treaties
were adverted to as reinforcing this position.
(3) If guarantees contained in the treaties
be put aside, the next question to be
considered was whether the Governments which
emerged as a result of the Constitution, were
competent to avoid or repudiate the titles
obtained by the petitioners under the previous
ruler by an “Act of State”. They answered
this question in the negative for four
reasons:
(i) The constitution emerged as a result of
the conjoint action of the subjects of the
former Indian rulers and the people of former
British India. When as a result of this joint
effort the Constitution was brought into
existence there was no question of conquest or
cession so as to attract those doctrines of
Public International Law relating to the
effects of rights arising out of changes in
sovereignty brought about by conquest,
cession, treaty etc.
(ii) The subjects of the former Indian rulers
became, when the Constitution emerged, Indian
citizens, and as against its own subjects or
citizens there was no question of any “Act of
State” by any Indian Government.
(iii) Even if the previous rulers had vested
in them autocratic powers to revoke grants
488
made by them in favour of their subjects, the
Government of the Union and the States which
were functioning under a Constitution which
contained fundamental rights guaranteeing
protection of property rights against
arbitrary executive action could’not claim to
exercise those arbitrary powers which they
might have inherited from the previous rulers,
and
(iv) The petitioners had at the commencement
of the Constitution a possessory title to the
property granted to them and had also a right
at that date, to continue in possession unless
and until their title which was voidable was
extinguished by repudiation by the Governments
which were established by the Constitution.
These proprietary rights were, however,
protected by Arts. 19 (1) (g) and 31 (1) of
the Constitution and so the petitioners could
not be deprived of their proprietary rights
except by competent legislation enacted after
the commencement of the Constitution.
We shall now proceed to examine the above reasoning of the
learned Judges. Reserving for later consideration the
arguments addressed to us regarding the divergent views of
judges, jurists and writers on Public International Law on
the topic of the enforceability of the rights derived from
previous sovereigns against a succeeding sovereign on a
change of sovereignty, we shall proceed on the same lines as
in Virendra Singh’s case(1) viz., on the acceptance of the
rule as enunciated in the decisions of the Privy Council.
It is necessary, first to understand the precise scope and
implications of these decisions and of the law explained in
them. The earliest of these usually referred to in this
connection is Secretary of State for India v. Kamachee Boye
Sahiba(2) which was concerned with the justiciability in
municipal courts of a seizure by the East India Company of
not merely the Raj but even of the private properties of the
(1) [1955] 1 S.C.R. 415. (2) (1859) 7 MOO. I.A. 476-13
MOO. P.C. 22.
489
Raja of Tanjore. The Privy Council held in a judgment
delivered by Lord Kingston that as the seizure had been made
by the Company as a sovereign power the municipal courts
“had no means of forming or the right of expressing if they
had formed any opinion of the propriety or the justice of
that act.” That is, however, a different aspect of what is
termed ‘Act of State’ from what is strictly relevant to the
facts before us. That decision was referred to with
approval by the Privy Council in a case from India-Secretary
of State for India in Council v. Bai Rajbai(1) where the
point in controversy was somewhat akin to those in the
present appeals. The question at issue before the Privy
Council was whether the respondent was entitled to the
continued ownership and possession of a village called
Charodi in the province of Gujarat. The respondent’s title
to the village was ultimately based on rights claimed to
have been granted by the Gaekwar of Baroda. The territory
in which the village was situated was ceded by the Gaekwar
to the British Government in 1817. The claim of the
respondent to full ownership of the property was not
recognised by the Indian Government after the cession and
Government held that the respondent had no more than a
leasehold interest. The question before the Privy Council
was whether the respondent was entitled to assert in
municipal courts rights more extensive, than what had been
recognised by the authorities. Dealing with this Lord
Atkinson delivering the judgment of the Board stated:
“….It is essential to consider what was the
precise relation in which the kasbatis
(respondents) stood to the Bombay Government
the moment the cession of their territory took
effect, and what were the legal rights
enforceable in the tribunals of their new
sovereign, of which they were thereafter
possessed. 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,
(1) 42 I.A. 229.
490
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 expressed or implied,
or by legislation, chose to confer upon them.
Of course, this 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 these antecession 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 enquiry in this
case. This principle is wellestablished,
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 Sahiba [(1859) 7Moo. I.A. (476)
decided in the year 1859, and Cook v. Sprigg
(1899) A.C. 572] decided in the year 1899.”
This passage would appear to indicate that the effect of the
change of sovereignty is not to treat rights previously
enforceable against the former ruler as only voidable at the
instance of the succeeding sovereign, but to effect a com-
plete destruction of those rights until by recognition or by
legislation of the succeeding sovereign the same is obtained
by the previous grantee. A question very similar to Bai
Rajbais case(1) arose in Vajesingji’s case(2) where the
statement of the law as explained by Lord Atkinson was
approved and Lord Dunedin, as already stated, conveyed the
same idea when he said:
“Any inhabitant of the territory can make good
in the municipal Courts established by the new
(1) 42 1.A. 229. (2) 51 I.A. .357.
491
sovereign only such rights as that sovereign
has, through his officers recognised. Such
rights as he had under the rule of
predecessors avail him nothing.”
It need hardly be stated that this passage, just like that
extracted from Lord Atkinson, is wholly inconsistent with
the theory that an inhabitant of a territory in which there
has been a change of sovereignty carries with him a voidable
title to property which inheres in him until by some
positive act of the new sovereign he is divested of that
right.
Coming nearer to the present times we have the decision in
Secretary of State v. Rustam Khan(1) which related to the
enforceability of the right to certain land claimed to have
been acquired under the Khan of Kalat against the British
Government after the cession by the Khan of the territory
which included the villages in which the lands of the
respondent were situate. For the appellant the plea raised
was ‘Act of State’ and the decisions of the Board in Bai
Rajbai’s case(2) and Vijayesingji’s case (3) were relied on.
Among the submissions made to the Board on behalf of the
respondent we would refer to two as of some relevance to the
points under consideration in these appeals. The two
contentions were: (1) that a mere change in sovereignty was
not to be presumed to disturb the rights of private owners,
and the terms of the cession by which full sovereignty was
transferred were to be construed as passing only public
property-relying for this proposition on Amodu Tijani v.
Secretary Southern Nigeria(4), (2) that the effect of a
change in sovereignty in regard to title to land which had
been perfected under a previous sovereign was different from
that in regard to personal obligations. For the latter
proposition support was sought on the observations of Lord
Alverstone C.J. in West Rand Central Gold Mining Co. v.
Rex(5) reading:
“It must not be forgotten that the obligation
of conquering States with regard to private
pro-
(1) 68 I.A. 109. (2) 42 I.A. 229.
(3) 51 LA. 357. (4) [1921] 2 A. C. 399.
(5). [1905] 2 K.B. 391
492
perty and private individuals, particularly
land to which title had already been perfected
before the conqueror annexation are altogether
different from the obligations which arise in
respect of personal rights by contract.”
We have referred to these arguments and particularly to the
citation of these two decisions, because they are usually
referred to in connection with a suggestion that even
according to the British view rights of private individuals
to land and interests in relation to land continue to be
enforceable unaffected by changes in sovereignty.
Lord Atkinson who delivered the judgment of the Board
pointed out that the cession of the territory by the Khan
constituted a complete transfer of all sovereignty to the
British Government, stated:
“On the legal position that arises in such
circumstances there is a wealth of weighty
authority.”
After referring in detail to the earlier decisions of the
Board in Kamachee Boye(1), Cook v. Sprigg,(2) Bai Rai Bai(2)
and Vijayesingji, (4) applied them to the facts and held
that as the title which was asserted had not been recognised
by the British Government; allowed the appeal and directed
the dismissal of the suit of the respondents. If the Privy
Council decisions lay down the law correctly and we are
applying that law, the fact that it is land or immovable
property which is claimed or as regards which the right is
asserted makes no difference for the application of the
principle.
The last decision to be referred to in this context is that
reported. as Asrar Ahmed v. Durgah Committee, Ajmer(5) where
Lord Simonds said:
“From this it follows that the rights, which
the inhabitants of that State enjoyed against
its former rulers, availed them nothing
against the British Government and could not
be asserted in the Courts established by that
Government
(1) (1859) 7 Moo. I. A. 476.13 Moo. P.C.
22.
(2) [1899] A.C 572. (3) 42 I.A. 229.
(4) 51 I.A. 357. (5) A.I.R. 1947 P. C. I.
493
except so far as they had been recognised by
the new sovereign power. Recognition may be
by legislation or by agreement express or im-
plied. This well-established rule of law for
which reference may be made to 42 I.A. 229 at
p. 237 and 51 I.A. 357 at p. 360, appears to
their Lordships to be peculiarly applicable to
an office, to which material benefits apper-
tain and which, so far the records show, had
consistently been regarded as within the dis-
position of the sovereign power.”
As we have already pointed out, these decisions of the Privy
Council have been referred to and followed by this Court in
Dalmia Dadri Cement Co.(1) and the other decisions already
referred. The statement of the law therefore in Virendra’s
case(2) that if the doctrine of Public International Law
enunciated by the Privy Council were applied, the
petitioners in that case had a voidable title, which inhered
in them even after the change of sovereignty, is not seen to
be correct. If the view expressed by the Privy Council was
to be adopted there is no escape from the conclusion, that
the grantees under the previous rulers did not carry with
them, on- a change of sovereignty, as subjects of the
succeeding sovereign any inchoate rights as against the new
sovereign, but their rights in so far as enforceability
against the new sovereign was concerned sprang into exist-
ence only on recognition express or implied by the duly
constituted competent authorities of the succeeding sove-
reign, apart from legislation.
Pausing here we might observe that this error on the part of
the learned Judges in appreciating the ratio of the
judgments of the Privy Council necessarily led them ‘to
assume that the petitioners before them had certain rights
which they continued to enjoy even after the change of
sovereignty and which were protected by the guarantees con-
tained in Arts. 19 and 31 of the Constitution.
The next step in the reasoning of the learned Judgeswas
based on the fact that the Constitution was framed not
merely by the people inhabiting the Provin-
(1) [1959] S.C.R. 729. (2) [1955] 1 S.C.R. 415.
494
ces of India but as a result of their conjoint action along
with the subjects of the former Indian rulers. From this
the inference was drawn that those rules of Public Interna-
tional Law which recognised the rights of a successor State
to refuse to be bound by obligations incurred by or enforce-
able against the predecessor State had no application to the
change in sovereignty -brought about when the Union of India
was brought into existence. This was on the theory that for
that doctrine to operate there must be a cession or transfer
of territory by one ruler to another and that where the
people of the entire subcontinent by their united action
brought into existence a new sovereign State there was no
question of transfer of territory from one sovereign to an-
other to afford scope for the application of the rule of
Public International Law.
With the greatest respect to the learned Judges, we feel
constrained to differ. that a new sovereign emerged on the
unification of India by the merger or absorption of the
Indian States with the Provinces of British India cannot be
questioned and that this was by the process of the sove-
reignty of the rulers of the former Indian States being
extinguished cannot be disputed either.
We are here not concerned with whether India as an
International person has undergone any change, vis-a-vis in
its relationship with other States or in the International
Organisations but in a more limited and, so to speak, domes-
tic sphere. The territories under the rulers of the former
Indian Princes undoubtedly passed from one sovereign to
another when as a result of the ‘unionisation’ by the
Government of India, they became integral parts first of the
Dominion of India and later of the Union of India. A
transfer of territory from under one sovereign to another
may be effected in a variety of ways-conquest, annexation,
by cession under a treaty after a war or without a war, by
revolution by emancipation of subject peoples and by
territorial resettlements. These changes possess one common
feature viz., that one sovereign ceases to rule a territory
and another takes its place. For the application of the
rules which have been evolved in connection with the
problems arising from such succession, little turns for the
purpose of British Constitutional Law on either the manner
in which the change of
495
sovereignty was brought about or whether the absorption was
partial or complete in the sense of a total extinction of
the previous sovereignty of the absorbed State, leaving no
trace of survival after the merger. In passing we might
mention that, in fact. it was in most cases the rulers of
the Indian States who ejected the merger and who on behalf
of their State and their subjects participated by themselves
or through their representatives in the deliberations which
brought into existence the Constitution, and the legal and
political unity of India. If, then, as a result of the
absorption there was a State succession, its consequences
have to be judged by tests or principles similar to those by
which State succession is brought about by other means. We
cannot, therefore, agree that the manner in which the Indian
States ceased to exist or in which the Constitution and with
it the complete political unification of the territory of
India was brought about negatives the applicability of rules
which govern the enforceability of rights against a
succeeding sovereign on State succession.
The point next to be considered is whether the fact that the
subjects of the former Indian rulers became, after the
Constitution, citizens and subjects of the Indian Union pre-
cludes the Indian Government from refusing recognition to
titles which such persons could have enforced against their
previous rulers on the well-accepted principle that “there
can be no act of State against its own subjects.” The appli-
cation of this principle last mentioned of which Walker v.
Baird(1) and Johnstone v. Pedlar(2) are classic examples, is
intimately bound up with the question as to the precise
nature of the action taken by a succeeding State, when it
refuses to accord recognition to the right of a former in-
habitant of the territory of an earlier sovereign and
enforce.able against the predecessor.
If the true position in law were that a positive action is
necessary to be taken by the succeeding sovereign before it
interferes with the pre-existing rights of the subjects of
the former ruler and that the action thus taken is really a
continuance of the act of the State by which the territory
of the former ruler became transferred to the new sovereign,
it is possible that the rule that there can be no act of
State by
(1) [1892] A.C. 491. (2) [1921] 2 A.C. 262.
496
the Government against its own subjects might have some
application. But if, on the other hand, the true theory
were, that on the extinction of the sovereignty of the
previous ruler over the territory ceded or surrendered,
there is an extinction ipso jure of the rights enforceable
against the State and that it is really a new right that
springs into existence on recognition by the succeeding
sovereign, it would be manifest that the refusal of the
succeeding sovereign to recognise preexisting rights could
in no sense be an act of State. No doubt, that refusal is
in the exercise of sovereign power but by such exercise it
neither annihilates nor affects any enforceable right which
its subjects had against it. We consider, therefore, that
if the doctrine of Public International Law expounded by the
Privy Council were held applicable to the termination of the
rights arising on the change of sovereignty in India, as the
learned Judges in Virendra Singh’s case(1) did, the power of
the Government of India as at present constituted to refuse
to recognise titles originating in executive grants by
former Indian rulers cannot be negatived by resort to the
rule of law laid down in Walker v. Baird(2) and Johnstone v.
Pedlar(3).
The next proposition of law which underlies the decision in
Virendra Singh’s case(1) is that the arbitrary and absolute
powers which the former Indian rulers possessed to revoke
grants made by them did not survive the change in sove-
reignty brought about by the Constitution, when as a result
of the setting up of a democratic polity informed by justice
and the rule of law, the right to exercise any arbitrary
power was abandoned and was no longer available for revoking
the grants made by the former rulers. If the theory of Pub-
lic International Law which was explained and given effect
to by the decisions of the Privy Council rested on the doc-
trine that the powers of the succeeding sovereign to recog-
nise or not to recognise grants by the preceding sovereign
or to repudiate them was based on the rights of the previous
ruler so to revoke or repudiate, the argument would have
considerable force. The juristic basis – of the theory
underlying the Privy Council decisions is that with the
extinction of the previous sovereign the rights theretofore
exercisable
(1) [1955] 1 S.C.R. 415. (2) (1892] A.C. 491.
(3) [1921] 2 A. C. 262.
497
by the subjects of that sovereign were likewise extinguished
and that without recognition which is really tantamount to a
fresh grant by the new sovereign, no title enforceable in
the municipal courts of the succeeding sovereign came into
being. If this latter be the correct juristic approach, and
that is what the decisions of the Privy Council lay down as
we have shown by the extracts we have made of the relevant
passages in Bai Rajbai’s(1) and in Vajeysinghji’s(2) case,
then it matters not whether the earlier grant was by an
absolute ruler who could revoke his grant or by a ruler of a
different type who could not or even if he could, had re-
nounced his rights to revoke by unilateral executive action.
In either case, where the question at issue is whether the
right could be enforced against the succeeding sovereign in
its courts, nothing turns on the power of the preceding
ruler to derogate from his grant; for it is not by virtue of
any power derived from the previous sovereign that the
succeeding sovereign claims the right not to recognise the
earlier rights or grants but as an incident of its own
sovereignty and sovereign power. In the circumstances, the
existence of the arbitrary powers of the native Indian
rulers and its absence in the Governments under the
Constitution is not relevant, nor the fact that these were
not inherited by and did not devolve on the Governments of
the Union and the States functioning under the Constitution.
The last of the steps in the reasoning underlying Virendra
Singh’s case(1) proceeds on the basis that the petitioners
had brought with them from their previous rulers into the
Indian Union certain rights in the property granted to them,
enforceable against the Government in regard to which they
were entitled to the protection of Arts. 19 and 31. This
question has to be approached from two points of view
arising from the two stages through which the territory of
the former Indian rulers became part of the territory of
India under the Constitution. The first stage is concerned
with the effect of the changes which took place from the
accession of the States to the Dominion of India followed by
the merger agreement executed by the rulers all of which
were governed by the provisions of the Government of India
(1) 42 I.A. 229. (2) 51 I.A. 357-
(3) [1955] 1 S.C.R. 415.
134-159 S.C-32
498
Act, 1935 as it stood from time to time and the second stage
with the complete ‘unionization’ of these territories so as
to form part of an unified polity, the Union of India.
So far as the first stage is concerned, there was certainly
a transfer of sovereignty over the territory of the former
Indian rulers to the Government of India for the purposes of
the exercise by the latter of sovereignty with plenary
powers of administration. Sections 290A and 290.B were
introduced into the Government of India Act for enabling the
administration by the Dominion Government of the territories
of the acceding States which under s. 5 of that Act became
part of the Dominion of India. At this stage the powers of
the Government of India for the administration of the
acceding territories were exercised under the Extra
Provincial Jurisdiction Act (Act XLVII of 1947) which used
the phraseology ‘areas outside Provinces which were acquired
by the Central Government by treaty, agreement, grant,
usage, sufferance or other lawful means’. It may be
mentioned that under orders made by virtue of powers
conferred by the Extra Provincial Jurisdiction Act all laws
theretofore in force prevailing in the territories which
were being administered under that Act were continued in
force. Later by an order issued under s. 290A of the
Government of India Act, known as the States Merger Order
1949, laws in operation in the merged States, were continued
until repealed or modified. If in that situation the law as
to acquired rights enforceable against the successor State
as enunciated by the Privy Council applied, all grants which
rested solely on executive action could acquire vitality for
being enforced against the administration by the Government
of India or its delegates only if those rights were
recognised; for there was here a true case of State suc-
cession-transfer of territory by one sovereign to another
and without the complication arising from the fact that the
rulers or the people of the various Indian States
participating in the making of the Constitution which the
people of India gave to themselves. We have already ex-
plained that if the view of the Privy Council as to the
effect of a change in sovereignty were accepted, it un-
mistakably points to their being no survival of any vestige
of rights on the extinction of the sovereignty of the
previous
499
ruler and to the emergence of any right only by the action
express or implied of the new sovereign. If this principle
were applied, there would have been no rights of property
vesting in the grantee which he could assert against the new
ruler. No doubt, if the grantees were in possession they
would have a right to retain their possession against
private trespassers but that is not the question with which
we are here concerned, for what is now under consideration
is the capacity of these grantees to assert rights as
against the Government which is totally different from their
right to possession as to the rest of the world. Digressing
a little it may be pointed out that s. 299 of the Government
of India Act, 1935 as well as Arts. 19 and 31 which are
referred to in this connection deal exclusively with the
inference with proprietary rights by the State and have
nothing to do with rights inter se between the grantee and
his fellow subjects or citizens.
If, therefore, we are correct in our understanding of the
decisions of the Privy Council that on a change of sover-
reignty no scintilla of right inhered in the grantee quoad
his right to assert or enforce his rights under the grants
against the rulers survived the change of sovereignty, the
guarantee against deprivation of property contained in s.
299 of the Government of India Act, 1935, availed him
nothing, for when the succeeding sovereign refused to
recognise the rights obtained by him under the previous
sovereign its action deprived him of no right to property;
because he brought with him no rights from the previous
ruler which he could assert against the new sovereign.
The position, therefore, reduces itself to this: Just previ-
ous to the Constitution the grantee had no right of property
enforceable against the State and in regard to which, there-
fore, he could invoke the protection of Arts. 19 and 31 of
the Constitution. The coming into force of the Constitution
could not, therefore, make any difference; for the Con-
stitution does not create rights in property but only
protected rights which otherwise existed. It is necessary
to add that if the learned fudges in Virendra Singh’s
case(1) were right in their understanding of the Privy
Council decision to
(1) [1955] 1 S.C.R. 415.
500
mean that a grantee under the previous ruler had a voidable
title which he continued to possess and enjoy until by
action of the succeeding ruler the same was revoked or
repudiated, they might also be right in their conclusion
that such title as the grantees had could not be
extinguished by the executive action of the Union or of the
State Governments because of the guarantee of the right to
property contained in Arts. 19 and 31. But, if as we have
shown, the decisions of the Privy Council do not lend
support to such a view, the conclusion in Virendra Singh’s
case(1) as regards this last proposition also cannot be
correct.
This takes us to the consideration of the question which was
raised by Mr. Purshottam Tricumdass submitting to us that we
should discard the theory of Public International Law which
underlies the decisions of the Privy Council. but that we
should accept and give effect to what might be termed the
American view as formulated by Chief Justice Marshall in
U.S. v. Percheman(2) which was approved and applied in the
later decisions of the American Supreme Court to which also
he drew our attention. Learned Counsel submitted that this
Court was not bound by the decisions of the Privy Council
and was free to adopt the more rational, just and human
doctrine which found expression in these American decisions.
In this connection his thesis was that the doctrines evolved
by the Privy Council were conditioned by Britain being an
Imperialist and expansionist power at the date when they
originated and were applied and that while these might have
been suited to the regime of a colonial power, they were
wholly out of place in the set up of this country and with
the type of Constitution under which it functions.
Having considered this matter carefully we are clearly of
the opinion that there is no justification or reason to dis-
card the British view as regards the jurisdiction of
municipal courts to enforce rights against succeeding
sovereigns on a change of sovereignty. In the first place,
Percheman’s case(2) itself came before the courts for
ascertaining the proper construction of the treaty under
which Florida was surrendered to the United States by Spain
under the Florida treaty dated February 22, 1819, on the
terms of which the
(1) [1955] 1 S.C.R. 415.
(2) 32 U.S. 51 at pp. 86-87.
501
respondent contended that his title to the property claimed
by him had been recognised and confirmed. The place of a
treaty entered into by the United States and the provisions
contained in it, in the Constitutional Law of the United
States, we shall be referring to later, but that apart the
Florida treaty was followed by an Act of Congress of 1828
,entitled “an Act supplementary to the several Acts provid-
ing for the settlement of confirmation of private land
claims in Florida.” Under the terms of this Act of the
Congress, ,Commissioners were set up to investigate claims
by private individuals to lands and in cases where the
validity of a claim set up was not upheld by the
Commissioner, provision was made for resort to courts for
resolving the dispute. There was, therefore, no scope for
invoking the British rule of the lack of jurisdiction of
municipal courts to adjudicate on unrecognised titles to
property, even if such a doctrine was applicable and the
only point in controversy was as to the interpretation of
the clauses of the treaty relative to the titles which were
recognised because on any view of the law if the treaty and
the Act of Congress confirmed the respondent’s title, the
same was enforceable in the municipal courts of the United
States.
Before passing on from this decision it is necessary to bear
in mind the difference in constitutional law prevailing in
the United States and in India as regards the effect of
treaties and the provisions contained therein. Art. 6 cl.
(2) of the United States Constitution reads:
“6…………………..
(2) All treaties made, or which shall be
made, under the authority of the United
States, shall be the supreme law of the land;
and the Judges in every State shall be bound
thereby, anything in the Constitution or laws
of any State to the contrary notwithstanding.”
Willoughby explains* the object. and effect of this
provision thus:
“…. the primary purpose of this provision,
(Art. VI cl. (2) was to make indubitable the
supremacy of treaties over State Statutory or
*Constitution of the United States Vol. 1,
548.
502
constitutional provisions…… it has, from
the beginning been held that treaties, so far
as they are self-executory, operate in the
United States, by virtue of this
constitutional provision, to create municipal
law which the courts are called upon to
recognise and apply.”
In the United Kingdom and in India the position is entirely
different. A treaty is, in British jurisprudence, treated
merely as a contract between two States and does not become
a part of the law of the land unless by an express Act of
the Legislature. A treaty does not confer rights or
obligations between the State and its subjects or as between
Subjects, such rights can be conferred only by an enactment
of the Legislature. As explained by Lord Atkin in Attorney-
General of Canada v. Attorney General of Ontraio(1):
“Unlike some other countries the stipulations
of treaty duly ratified do not within the
Empire, by virtue of the treaty alone have the
force of law”
It was in recognition of this constitutional position that
s. 106 of the Government of India Act, 1935 was enacted. Its
terms are in substance re-enacted in Art. 253 of the
Constitution which reads:
“253. Notwithstanding anything in the
foregoing provisions of this Chapter,
Parliament has power to make any law for the
whole or any part of the territory of India
for implementing any treaty’ agreement or
convention with any other country or countries
or any decision made at any international
conference, association or other body.”
and to reinforce this position we have Art. 363 by which
municipal courts are deprived of jurisdiction to enforce any
rights arising from certain treaties. It would be apparent
that in the context of the different constitutional position
regarding treaties in the two countries, the rule of law
which was enunciated by the American Supreme Court, cannot
automatically be applied here. For in ultimate analysis the
court in Percheman’s case (2) was giving effect to
provisions
(1) 1937 A. C. 326 at P. 347. (2) 32 U.S. 51 at pp. 86-87.
503
of the treaty with Spain which was the law of the land, and
if the treaty provisions were different, these again would
have been enforced by the courts. We are making this
observation not to minimise the importance of the doctrine
of Public International Law explained by Chief Justice
Marshall, but to point out that the decision must be under-
stood in the setting of the provisions of the treaty with
Spain and the articles of the American Constitution.
As indicated earlier, we are not insensible to the position
that apart from the place of treaties in American Con-
stitutional Law what Marshall C.J., expounded was a doctrine
of Public International Law which lie considered it was
necessary; just and proper for succeeding States to observe
in their dealings with the rights acquired by private
individuals under predecessor sovereigns. We shall now
proceed to deal with the question whether we should discard
the rule as enunciated in the decisions of the Privy Council
and adopt that which was formulated in Percheman’s case(1).
There are several reasons why we are unable to accept C. J.
Marshall’s exposition in Percheman’s case(1) as laying down
a law which has to be given effect to by municipal courts in
this country. In the first place, it could not be said that
the broad terms in which Marshall C.J., stated the doctrine
that every private rights derived from a predecessor
sovereign ought to continue to be enforceable against a
successor sovereign and that a change in sovereignty makes
no difference to the enforceability of private rights, be it
against other individuals or the succeeding State, has been
in that absolute form accepted as valid by jurists and
writers on Public International Law. Even in treaties in
Public International Law in which the most extended scope
has been afforded to the enforceability of acquired-rights
against a successor State two limitations have always been
recognised: (1) that the origin of the right should be bona
fide and not one designed to injure the economic interests
of the successor State, and (2) that the right should not be
a political concessions
Next, jurists and even the Permanent Court of International
Justice have drawn a marked distinction between
(1) 32 U.S. 1 at pp. 86-87.
504
that might be termed the theory of the law and the enforce-
bility of these rights and in municipal courts. C.C. Hyde
in is treatise on Public International Law(*) after
referring of the decision in Percheman’s case(1) and those
which allowed it adds:
“Acknowledgement of the principle that a
change of sovereignty does not in itself serve
to impair rights of private property validly
acquired in areas subjected to a change, does
not, of course, touch the question whether the
new sovereign is obliged to respect those
rights when vested in the nationals of foreign
States, such as those of its predecessor.”
Similarly George Schwarzenberger in his International
Law(**) after referring to a passage in the decision of the
Permanent Court of International Justice in the case of
German Settlers in Poland reading:
“Private rights acquired under existing law do
not cease on a change of sovereignty. No one
denies that the German Civil Law, both sub-
stantive and adjective, has continued without
interruption to operate in the territory in
question. It can hardly be maintained that,
although the law survives, private rights
acquired under it have perished. Such a
contention is based on no principle and would
be contrary to an almost universal opinion and
practice”
adds that though the Permanent Court of International Jus-
tice negatively stated that private rights acquired under
existing law do not cease on a change of sovereignty, the
Court did not expressly pronounce on the question whether in
the absence of legislation to the contrary on the part of
Poland, she was bound by International Law to consider
German Civil Law as valid in the ceded territories. The
doctrine of act of State evolved by English Courts is one
purely of municipal law. It denies to such a Court
jurisdiction to enquire into the consequences of acts which
are inseparable from an extension of its sovereignty. That
doc-
(*) Vol. IP. 433.
(**)Vol. 1 p. 83.
(1) 32 U. S. 51 at Pp. 86-87.
505
trine was, however, not intended to deny any rule of inter-
national law.
Next we might examine the juristic concept underlying the
American view, putting aside for the moment what one might
call authority. There has been at one time a school of
thought among writers on Public International Law which has
described the process of State succession as if it were a
transmission of sovereignty bringing in for this purpose the
analogy of an heir in private law clothing the successor
with the totality of the rights and obligations qua all
inhabitants without exception or modification. This theory
has now been discarded because of the realisation that there
could be no analogy between individuals and States, nor
could the theory be sustained in the face of the
circumstance that it does not accord with practice, which
after all is one of the basic foundations of the rules of
Public International Law. It is hardly necessary to add
that ‘there is -here no inconsistency with the comity of
nations. Nor could it be maintained that the theory is
just, because it would force upon the successor State
obligations which might have owed their birth to political
considerations which would not survive the predecessor
State. Besides, it must not be forgotten that when a
successor State exercises its sovereignty even over
territory which has passed to it from a preceding ruler, it
does not do so as a representative of or by delegation from
the latter-as in the case of the heir in Private Law, but as
a sovereign of the -territory deriving authority from its
own constitution and set up. It is true that Public
International Law might lay on the successor State duties
with respect to the acquired territory and to the rights of
the inhabitants thereof but those must be compatible with
its undoubted sovereignty. It is in recognition of such a
position that successor States give effect to laws which
regulate rights inter se between the subjects which
theretofore applied, save in so far as either its
constitution or its legislation has made other provision.
We are, however, here concerned with rights possessed by
individuals in the predecessor’s territory enforceable
against the previous rulers and even as regards these we are
concerned with a very limited range of rights-rights arising
out of grants of immovable property or concessions of rights
in relation thereto and
506
enforceable against the predecessor State. We made this
Reservation because in the Dalmia Dadri Cement case(1) which
dealt with the continued enforceability of a concession
regarding the levy of income -tax, even Bose J. agreed that
such rights did not survive and in a separate judgment
confined the operation of the principle that he enunciated
in Virendra Singh’s case(2) to rights of immovable property.
If the theory that rights and duties or rather the bundle of
them pass ipso jure from the predecessor to the successor
State is discarded and at the same time it is recognised
that International Law and justice which underlies that body
of law might impose some obligations which the successor
State should respect, two questions arise: First what are
the obligations which International Law might impose? and
secondly, whether these obligations which are not the crea-
tures of municipal law, might give rise to claims
enforceable in municipal courts.
It is impossible to lay down exact rules as to the inter
ests which are protected by a consensus of opinion as
acquired rights. So much, at least, is clear that to
receive the protection of International Law the interest
must have been properly vested in the sense that it must not
have been voidable at the instance of the predecessor State
and bona fide and legally acquired. Neither the comity of
nations, nor any rule of International Law can be invoked to
prevent a sovereign State from safeguarding its national
economy and taking steps to protect it from abuse. On the
one side the principles of acquired rights demands that the
interest of the private individual be not abrogated and on
the other side the public interest of the successor State
has to be considered. It is this conflict between the
public and private aspects that hinders the laying down of
hard and fast rules.
As has been pointed out by O’Connell in his Treatise on the
Law of State Succession, the problems posed by State
succession in International Law are notably different in
character from those of municipal law though they arise at a
different plane, but there is no necessary reason why the
one system should not draw on the doctrine or concepts
formulated and found to be adequate within the other
(1) [1959] 729.
(2) [1955] 1 S.C.R. 415.
507
system. The principle of universal succession based on ana-
logy from the civil law was essentially juristic in
character, but the analogy was wrong and the practice of
States was not consonant with the theory. The rejection of
this doctrine led to the assumption that solutions are to be
found on experience alone. The choice of the appropriate
theory by writers was’ coloured by their standpoint and
their legal (Experience. In theory, therefore, we must have
regard both to past experience and the necessities of the
present and while on the one hand not being unduly
restrictive, ought not on the other become so doctrinaire as
to deprive the State of the option not to recognise even
mala fide transactions.
Looked at from this point of view the British practice that
has prevailed in this country has not proved in actual
practice to lead to injustice, but has proceeded on a just
balance between the acquired rights of the private indivi-
dual and the economic interests of the community, and
therefore there is nothing in it so out of tune with notions
of propriety or justice to call for its rejection.
It is undoubted that the British doctrine was part of the
jurisprudence and the constitutional practice that prevailed
in pre-Constitution India. Most certainly it does not need
to be stated that the British Parliament when it enacted the
Government of India Act as the constitutional framework by
which this country should be governed, could not have had in
contemplation any other rule by which the rights of the
inhabitants newly brought into the political set up by other
territories becoming part of India. With this historical
background it would not be a violent presumption if we
assume that the framers of the Constitution should also be
taken to have proceeded on the basis of the acceptance of
this doctrine and this state of the law, unless one found
some provision or indication in the Constitution repugnant
to its continuance. As already pointed out, the position of
treaties vis-a-vis municipal law was not changed. On the
other hand, by Art. 363 an embargo was laid in express terms
on municipal courts giving effect to the provisions of
treaties with rulers of Indian States. This, in our opinion
is a clear indication that the Constitution-makers intended
no
508
departure from the Constitutional doctrine that was thereto-
fore accepted as law. It would, of course, be different if
the provisions of any treaty became embodied in subsequent
legislation; then they would be enforced as part of the law
of the land.
It is also not to be assumed that the Constitution-makers
were oblivious of the need for continuity of the law when
the Indian States were absorbed and a change in sovereignty
took place. By Art. 372 of the Constitution all the laws
which were in force in these States just as in British India
without any distinction were continued until they were
altered or repealed by competent legislation. It is only
necessary to point out that in the interval between the
merger of these States and the coming into force of the
Constitution, there were other provisions to which we have
already adverted which continued the laws which obtained in
these territories till Art. 372 could be availed of. There
was thus no legal vacuum or hiatus created so far as laws
were concerned and it is only where the right sought to be
enforced was created not by the laws of the previous
sovereign but merely as a result of an administrative order
that we have the problem to be solved in these appeals. If
the definition of law in Art. 366(10) were as that in Art.
12 so as to include even executive orders every right,
however, created would have been continued. But the
Constitution-makers decided otherwise and preferred to
continue only laws as distinguished from administrative
orders.
Next we have the circumstance that the doctrine enunciated
in the decisions of the Privy Council have been accepted as
correct and thus applicable equally in postConstitution
India in a series of decisions of this Court commencing from
Dalmia Dadri Cement Co.(1) and unless compelling reasons are
found for holding that all these were wrongly decided, it
would be neither proper or even open for us to depart from
these precedents, and as explained earlier, there are none.
Lastly, as we have already noticed, even in the case of
Virendra Singh(2), though the divergent views of the jurists
on this question of Public International Law were set
(1)(1959] S.C.R. 729.
(2) [1955] 1 S C.R. 415.
509
out the court did not express any decisive opinion in favour
of accepting the observations in Percheman’s case(1) as
proper to be applied by the municipal courts in India. In
the face of these circumstances we would not be justified in
departing from the decisions of the Privy Council which have
been accepted and applied by this Court. These decisions
both of the Privy Council as well as the earlier ones of
this Court were reviewed and the propositions laid down in
them were examined and summarised by this Court in Promod
Chandra Deb and Ors. v. The State of Orissa and Ors.(2) as
laying down the following propositions:
“(1) ‘Act of State’ is the taking over of
sovereign power by a State in 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 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 [(1930) L.R. 57 I.A. 318].
(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.’
(1) 32 U.S. at pp. 86-87. (2) [1962] 1
Supp. S.C.R. 405.
510
(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 circum-
stances and 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 acknow-
ledged 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.”
511
We consider this summary succinctly expressed the rule to be
applied in this country as regards the, enforceability
against the Governments in India of private rights originat-
ing in executive or administrative orders of the former
Indian rulers.
The next matter to be considered is the correctness of the
view expressed by the High Court, that even though the
treaty be an Act of State, and the merger agreement executed
by the ruler a document on which no rights enforceable in
municipal courts could be based, still cl. (7) of the letter
of Shri V. P. Menon dated October 1, 1948 could be referred
to and relied upon for founding an argument that the
Government waived their right to repudiate the grant made by
the previous ruler. We consider that the submission of the
learned Attorney-General that the learned Judges were in
error in this respect is well-founded. If the treaty or its
provisions cannot be looked at to spell out any right. as
the learned Judges themselves conceded. the use to which
they have put the provisions of cl. (7)-that the Government
would not re-examine grants made earlier than April 1, 1948,
is virtually the same though called by another name. We can
see no sensible distinction between reliance on the
provisions of the treaty as pointing to a recognition by the
Government of rights claimed and reliance on it for the pur-
pose of establishing that Government had waived their right
not to recognise such rights. In substance, they are the
same though the nomenclature employed is different.
In support of the reasoning on which this distinction was
accepted the learned Judges have placed reliance on the
approach to this question in Virendra Singh’s case(1). We
have discussed this matter fully in the earlier part of this
judgment and there is no need to repeat it. The learned
Judges have further referred to and relied on a decision of
this Court in Bholanath v. The State of Saurashtra(2) and
certain observations contained in it. We do not agree that
the observations in the decision, though couched somewhat
widely could properly be understood in the manner in which
the learned Judges have done. The question that arose in
the case was whether the condition of service of a person
(1) [1955] 1 S.C.R. 415 (2) A. I. R. 1954 S. C. 680.
512
originally employed as an officer of one State continued to
govern his services after that State became merged in the
Government of Saurashtra. The condition of service in
controversy was as to the age at which an officer had to
retire on superannuation. By an enactment of the ruler of
Wadhwan State this was, in the case of officers like the
appellant before this Court, fixed at 60. An order by the
Government of Saurashtra retiring him after he reached the
age of 55 against his will, gave rise to the suit from which
the proceedings before this Court arose. There was contro-
versy in the Courts below as to whether the law embodying
the service conditions was competently enacted by the
Wadhwan State. But this contention was not persisted in
this court, and the court recorded a finding that the terms
of service of the appellant were regulated by a law which
was competently enacted and that the law was continued by
Art. 372 in the Saurashtra State. On that finding there
could really be no defence to the appellant’s claim. The
decision in favour of the appellant was rested on the ground
that the law of the Wadhwan State was continued by express
provisions contained, first, in statutes of the Saurashtra
State and, again, by Art. 372 of the Constitution when the
latter merged in the Dominion of India. On this it followed
that without a valid change in the law the rights of the
appellant could not be restricted. In stating this
position, however, the following words were used:
“The Covenant (between the ruler of the
Wadhwan State and the State of Saurashtra)
could be looked at to see whether the new
sovereign had waived his rights to ignore
rights given under the laws of the former
sovereign.”
We do not understand this passage to mean that the covenant
which under Art. 363 could itself not be looked at for
founding any right, could be used indirectly for inferring
that rights were recognised, without anything more. The
true position appears to us to be that where the new sove-
reign assumes jurisdiction and it does some Act and there is
ambiguity as to whether the same amounts to a recognition of
a pre-existing right or not, the covenant and the treaty
might be looked at in order to ascertain the intention and
purpose of that equivocal act, but beyond this the cove-
513
nant and the treaty cannot by themselves be used either as a
recognition pure and simple or, as the learned Judges of the
High Court have held, as waiver of a right to repudiate the
pre-existing rights. It is needless to point out that since
the enforceability of the rights against the succeeding
sovereign springs into existence only on recognition by the
sovereign, there is no question of a waiver of the right to
repudiate. The expression ‘right to repudiate’ in this con-
text is a misnomer and there could be no question of a
waiver of such right.
This, however, does not conclude the matter, for we have
still to deal with the question whether the grant by the
ruler of the Sant State which was embodied in a ‘resolution’
of his was a “law” or was merely an executive or administra-
tive order. Learned Counsel for the respondent submitted to
us that the grant under the Tharav No. 371 dated March 12,
1948 was not a grant by executive power but was in truth and
substance a law which was continued by Art. 372 of the
Constitution and which, therefore, could be undone only by
legislation and not by any executive fiat as has been done
in the present case and in this connection relied strongly
on the decisions of this Court in Madhaorao Phalke v. The
State of Madhya Bharat(1) and in Promod Chandra Deb and Ors.
v. The State of Orissa and Ors. (2). Both in the trial
Court as well as before the High Court the cases had
proceeded on the footing that the ruler of the Sant State
was an absolute monarch with no constitutional limitations
upon his authority, and it was not suggested that this was
incorrect. He was the supreme legislature as well as the
supreme head of the executive so that his orders however
issued would be effective and would govern and regulate the
affairs of the State including the rights of the citizens;
(vide Ameer-un-nissa Begum v. Mahboob Begum(3) and Director
of Endowments, Government of Hyderabad v. A kram Ali(4) We
should, however, hasten to point out that though in the case
of such absolute monarchs the distinction between the
administrative action under their executive power and laws
passed by them as the supreme legislature
(1) [1961] 1 S.C.R. 957. (2) [1962] 1 Supp. S.C.R. 405.
(3) A.I.R. 1955 S.C. 352. (4) A.I.R. 1956 S.C. 60.
134–159 S. C.—33.
514
of the State, possess no deference as regards their
effectiveness, still the distinction between the two is of
vital importance for the purpose of determining their
continued efficacy after the coming into force of the
Constitution. Under Art. 372 of the Constitution-“all the
law in force in the territory of India immediately before
the commencement of this Constitution shall continue in
force therein until altered or repealed or amended by a
competent Legislature or other competent authority”. The
expression “existing law” is defined in Art. 366(10):
“Existing law means any law, Ordinance, Order
bye-law, rule or regulation passed or made
before the commencement of this Constitution
by any legislature, authority or person having
power to make such a law, Ordinance, Order,
bye-law, rule or regulation.”
This definition would include only laws passed by a
competent authority as well as rules, bye-laws and
regulations made by virtue of statutory power. It would
therefore not include administrative orders which are
traceable not to any law made by the Legislature but derive
their force from executive authority and made either for the
convenience of the administration or for the benefit of
individuals, though the power to make laws as well as these
orders was vested in the same authority-the absolute ruler.
What survives the Constitution and is continued by Art. 372
are those laws which could trace their origin to the
exercise of legislative power.
The problem next is to discover that which is “law” from
that which is merely an executive order and this is by no
means an easy one to solve. In the case of some States
where there are rules which prescribe particular forms which
the laws have to or generally take or where laws as
distinguished from executive orders are issued bearing a
defined nomenclature, there is not much difficulty. But the
cases which have come up before this Court have shown that
this is by no means the universal rule. In the case of the
Sant State with which we are concerned it was not suggested
that there was any particular formality or process
515
which had to be observed in the promulgation of laws or any
particular form which laws had to take or took or that they
went by any particular nomenclature to distinguish them from
executive or administrative orders. We have, therefore, to
consider whether from the nature of ‘the instrument its
contents and its general effect-whether the Tharav dated
March 12, 1948 constitutes a law within Art. 366(10) and is
therefore continued by Art. 372 or whether it is merely an
executive grant or administrative order which might confer
rights but which without recognition by the Union or State
Government cannot be enforced in the municipal courts of
this country.
We shall therefore proceed to consider the terms of the
Tharav and for this purpose it would be convenient to set it
out in full.
It is headed ‘Tharav Order’ by Maharana, Santrampur State,
dated March 12, 1948. It was explained to us that the
expression of ‘Tharav’ meant a resolution. The text of this
resolution or order by the Maharana is as follows
“The Jivak, Patavat Inami, Chakariyat,
Dharmada villages in Sant State are being
given (granted) to Jagirdars and the holders
of the said villages are not given rights over
forests. Hence after considering the
complaints of certain Jagirs, they are being
given full rights and authority over the
forests in the villages under their vahivat.
So, they should manage the vahivat of the
forest according to the policy and
administration of the State. Orders in this
regard to be issued.
Sd/- in English
Maharana, Santrampur State.”
There are a few matters to which it is necessary to advert
in this document : The first of them is that it is not a
grant to any individual, that is, treating him as an
individual or as one of a number of individuals or to a
group
516
treating them merely as separate individuals, but to the
holders of five specified tenures in the State-Jivak,
Patavat, Inami, Chakariyat and Dharmada villages. Next, it
states that the rights in the forests of the villages of the
several kinds of tenure-holders are-being given to them in
response to the representations made in regard to the
villages in the possession and enjoyment of the Jagirdars as
regards this matter. Lastly, the tenure-holders were
directed to manage and administer the forest according to
the policy and administration of the State. The learned
Judges of the High Court have treated the ‘Tharav’ as merely
an administrative order treating it as if consisted of as
many grants of forest rights to the tenure-holders as there
were such holders and this was the view that was stressed
upon us strongly by the, learned Attorney-General. We are,
however, not impressed by this argument. We have no
evidence as regards the creation of the several tenures
referred (to in the Tharav to base any conclusion as flowing
from the original grant. No doubt, there is on record the
translation of the -rant of the village of Gothimada dated
1867, but from this it does not follow that everyone of the
grants comprised in the’ five tenures specified was of this
pattern, We consider that the ‘Tharav’ is more consistent
with its being a law effecting an alteration in the tenures
of the five classes of Jagirdars by expanding the range of
the beneficial enjoyment to the forests lying within the
boundaries of the villages which had already been -ranted to
them. In this light, the ‘Tharav’ would not be an
administrative order in any sense but would partake of the
character of legislation by which an alteration was effected
in the scope and content of the tenures referred to. This
aspect is reinforced by the reference to the complaints of
the tenure-holders whose grievance apparently was that
though villages had been granted to them for their enjoyment
under the several tenures, they were not permitted any
rights in the forests within their villages. It was not
thus a case of an individual grant but the yielding by the
ruler to the claims of these large group of Jagirdars who
requested that their rights should be extended. Lastly, the
manner of the enjoyment was specified as having to be in
accordance with the policy and administration in the
517
State. It is obvious that there must have been some rules
which have the force of law as regards the administration of
these forests and the enjoyment by the Jagirdars was made
subject to the observance of these laws.
We, therefore, consider that the ‘Tharav’ dated March 12,
1948 satisfies the requirement of a “law” within Art.
366(10), and in consequence, the executive orders of the
Government of Bombay by which the forest rights of the
plaintiffs were sought to be denied were illegal and void.
The result is that we agree with the learned Judges that the
plaintiffs were entitled to succeed, though for different
reasons, and we direct that the appeals should be dismissed.
The appellant will pay the costs of the respondents-one set
of hearing fees.
SUBBA RAO J.-I have had the advantage of going through the
judgment of my learned brother, Rajagopala Ayyangar J. I
agree with him that Ex. 192 is law and that it continued in
force after the making of the Constitution. This conclusion
would be enough to dispose of the appeals. But, Rajagopala
Ayyangar J., further expressed his disagreement with the
unanimous view propounded by this Court in Virendra Singh v.
The State of Uttar Pradesh(1). As I regret my inability to
share his view, I shall state the reasons for my agreement
with the decision in Virendra Singh’s case.
As the question raised is common to all the appeals, it is
enough if I take up Civil Appeal No. 182 of 1963 for
consideration. The facts necessary to appreciate the
alternative contention may now be briefly stated. In the
year 1947, the then ruler of the Sant State made a grant of
the village Gotimada to the predecessor-in-interest of
Thakor Sardarsingh Gajesing. On August 15, 1947, India
obtained independence. Under s. 7 of the Indian Indepen-
dence Act, 1947, the suzerainty of the British Crown over
the Indian States lapsed, with the result the Sant State
became a full sovereign State. On March 12, 1948, the
Maharana
(1) [1955] 1 S.C.R. 415.
518
of Sant State issued an order conferring full rights over
forests to the holders of villages in the State, which
included the said Gotimada village. On March 19, 1948,
there was an agreement, described as the Merger Agreement
entered into between the Maharana of Sant State and the
Dominion Government of India where under the Maharana ceded
to the Dominion Government full exclusive authority,
jurisdiction and power for and in relation to the governance
of the Sant State and agreed to transfer the administration
of the Sant State to the Dominion Government on June 10,
1948. It was also agreed that as from June 10, 1948, the
Dominion Government would be competent to exercise full and
exclusive authority, jurisdiction and powers for and in
relation to the Governance of the Sant State in such manner
and through such agency as it might think fit. Under the
other articles of the said agreement certain personal rights
and privileges of the Maharana were preserved. After the
merger, under s. 3 of the Extra Provincial Jurisdiction Act,
1947, the Government of India delegated the administration
of the Sant State to the State of Bombay. From October 1,
1949, under the States’ Merger (Governor’s Provinces) Order
1949, the said State became part of the State of Bombay;
that is to say, from June 10, 1948 to October 1, 1949 the
Bombay State administered the Sant State as a delegates of
the Dominion of India, and thereafter the State became
merged with the State of Bombay. The Sant State, therefore,
became part of the Dominion of India on June 10, 1948 and
thereafter the citizens of that State became, the citizens
of the Dominion of India. On August 21, 1948 the respondent
entered into a contract with Thakor Sardarsing Gajesing for
cutting of the trees in the forest of village Gotimada. On
October 1, 1948 i.e., 4 months after the merger and more
than a month after the said contract, Shri V. P. Menon,
Secretary to the Government of India, Ministry of States,
wrote a letter to the Maharana of Sant State expressly
declaring that no order passed or action taken by the
Maharana before the date of making over the administration
to the Dominion Government would be questioned unless the
order was passed or action taken after the 1st day of April
1948, and if considered by the Government of India to be
palpably unjust or unreasonable. By that letter it was also
guaranteed that,
519
among others, “the enjoyment of ownership” of jagirs, grants
etc., existing on April 1, 1948 would be respected. A
combined reading of the paragraphs of this letter makes it
clear that the Dominion of India declared in clear and
unambiguous terms that no grants made or orders issued by
the Maharana before April 1, 1948 would be questioned by it.
It may be mentioned that in the last paragraph of this
letter it was stated that the contents of the letter would
be regarded as part of the Merger Agreement entered into by
the Maharana with the Governor-General of India. It may be
recalled that this letter was written months after the
merger and after the citizens of the extinct State became
the citizens of the absorbing State. The effect of the last
paragraph of the said letter will be considered in due
course.
On July 8, 1949 the Government of Bombay sent a
communication to the Commissioner, Northern Division,
stating that the Government considered that the order passed
by the ruler of Sant State on March 12, 1948 transferring
forest rights to all the Jagirdars of the Jagir villages was
mala fide and that it should be cancelled. It was suggested
that the Commissioner should do some other preliminary acts
before taking further action in the matter. It would be
seen from this communication that the order was not actually
cancelled, but there was some correspondence in respect of
that matter and that it was not even communicated to the
jagirdars. There was obstruction by the forest officers
when the contractor was cutting the trees, but after some
correspondence he was permitted to cut the trees, on an
undertaking that he would abide by the decision of the
Government. On February 6, 1963 the Government of Bombay
passed a resolution after receiving a report from the Forest
Settlement Officer specially appointed by it to investigate
the rights of jagirdars. It was stated in the resolution
)that the Tharav issued by the ruler of Sant State in 1948
was mala fide and, therefore, not binding on the Government.
Thereafter, it scrutinized the claims of jagirdars to
forests in 74 villages in the erstwhile Sant State and
recognized their rights in some of the villages. So far as
Gotimada village. is concerned, it was stated that the
question of forest rights in the said village was still
under the
520
consideration of the Government and necessary orders in that
behalf would be issued in due course. It is clear that till
1953 the Government did not refuse to recognize the title of
the Jagirdars to forests; indeed, in the case of Gotimada
village no final order was made even on that date. On these
facts, the question that arises is whether the respondent
would be entitled to a permanent injunction issued by the
High Court restraining the appellant from interfering with
his right to cut trees in Gotimada village.
The argument of the learned Attorney-General, so far as it
is relevant to the question which I propose to deal with,
runs as follows : After the merger of the Sant State with
the Dominion of India the jagirdar had nO title to the
forests against the Dominion of India unless it recognized
such a right, and that, as in the instant case the said
Government did not recognize such a right, he or his
assignees could not maintain any action against the State on
the basis of his title to the said forests. He conceded
that on the basis of the finding of the High Court that the
Dominion of India did not repudiate the title of the
jagirdar to the forests till after the Constitution came
into force, the decision of this Court in Virendra Singh v.
The State of Uttar Pradesh(1) is against him. But he,
contended that it was not correctly decided and indeed its
binding force was weakened by later decisions of this Court.
As the correctness of the decision in Virendra Singh’s
case(1) is questioned, it is necessary to consider the scope
of that decision in some detail and also to ascertain
whether later decisions of this Court had in any way
weakened its authority. The facts in that case were as
follows. The petitioners in that case were granted in
January, 1948,Jagirs and Muafis by the Ruler of Sarila State
in one village and by the Ruler of Charkhari State in three
villages. In March, 1948, a Union of 35 States, including
the States of Sarila and Charkhari. was formed into the
United States of Vindhya Pradesh. The Vindhya Pradesh
Government confirmed these grants in December, 1948, when
its Revenue Officers interfered with them questioning their
validity. The integration of the States however did not
work well and the same 35 Rulers entered into an
(1) [1955] 1 S.C.R. 415.
521
agreement in December 1949, and dissolve the newly created
State as from January 1, 1950, each Ruler acceding to the
Government of India all authority and jurisdiction in
relation to the Government of that State. After the
Constitution came into force, the Government of Uttar
Pradesh in consultation with the Government of India revoked
the grant of Jagirs and Muafis in four of the villages. On
an application filed by the petitioners under Art. 32(2) of
the Constitution, this Court issued a writ against the
State. From the said facts it would be seen that the grants
were made to the petitioners before the merger, and it was
held that the Government had no right to revoke the said
grants after the Constitution came into force. Bose J.,
speaking for the Court, elaborately considered the doctrine
of “Act of State” in the light of English and American
decisions and the opinions of jurists of International Law
and came to the following conclusion :
“We think it is clear on a review of these
authorities that whichever view be taken, that
of the Privy Council and the House of Lords,
or that of Chief Justice Marshall, these
petitioners, who were in de facto possession
of the disputed lands, had rights in them
which they could have enforced up to 26th
January, 1950, in the Dominion Courts against
Fill persons except possibly the Rulers who
granted the land and except possibly the
State. We do not by any means intend to
suggest that they would not have enforced them
against the Rulers and the Dominion of India
as well, but for reasons which we shall
presently disclose it is not necessary to
enter into that particular controversy. It is
enough for the purpose of this case to hold
that the petitioners had., at any rate, the
rights defined above.”
Pausing here it will be noticed that this Court did not
express a final opinion on the question whether the
petitioners could have enforced their title to the property
against the Rulers before the Constitution came into force.
but it had definitely held that the petitioners had title to
the property against all
522
persons except the Rulers. On the basis of that finding,
Bose J., proceeded to consider the impact of the
Constitution on the said finding. The learned Judge
observed:
“But however that may be, there is no question
of conquest or cession here. The new Republic
was. born on 26th January, 1950, and all
derived their rights of citizenship from the
same source, and from the same moment of time;
so also, at. the same instant and for the same
reason, all territory within its boundaries
became the territory of India. There is, as
it were from the point of view of the new
State, Unity of Possession, Unity of Interest,
Unity of Title and Unity of Time.”
Then the learned Judge proceeded to state:
“All the citizens of India, whether residing
in States or Provinces, will enjoy the same
fundamental rights and the same legal remedies
to enforce them.”
This decision struck a new and refreshing note. It pleaded
for a departure from imperialistic traditions and to adopt
the American traditions, which are in consonance with the
realities of the situation created by our Constitution. It
gave new orientation to the doctrine of the act of State to
reflect the modern liberal thought embodied in our Consti-
tution. It held that citizens of a ceding State have a
title to their property against all except possibly the
ruler. Though it inclined to go further and hold that the
change of sovereignty does not affect the title of the
citizens of the ceding State even against the new sovereign,
it did not think fit to decide that question finally, as it
found ample justification to sustain the title of the
petitioners therein against the sovereign under our
Constitution. It pointed out that the concept of ceding and
absorbing States is foreign to our Constitution and that all
the people of India, to whichever part of the country they
might have belonged, through their representatives, framed
the Constitution recognizing the fundamental rights of a
citizen to hold property and not to be deprived of it save
by authority of law. In that view it
523
held that the title of the petitioners in -,hat case to
their Property was protected by the Constitution. This is a
unanimous and considered decision of five learned Judges of
this Court. I shall not obviously differ from this view
unless there are compelling reasons to do so. I find none.
I shall now proceed to consider whether the subsequent
decisions of this Court threw any doubt on the correctness
of the decision in regard to the following two aspects on
which it had given a firm decision: (1) The citizen of a
ceding State does not lose his title to immovable property
but continues to have a right thereto against all except
possibly the absorbing State; and (2) on the making of the
Constitution, his title thereto became indefeasible even
against the absorbing State.
Where a company entered into an agreement, with the
erstwhile State of Jind whereunder it had to pay income-tax
only at concessional rates, it was held in Mills. Dalmia
Dadri Cement Co. Ltd. v. The Commissioner of Income-tax(1)
that, after the said State merged with the Union of India,
the latter was not bound by the contractual obligations of
the ceding State on the basis of the principle that the
treaty between the two sovereigns was an act of State and
the clauses of that treaty were not enforceable. In
Jagannath Agarwala v. State of Orissa (2) it was held that
after Mayurbhanj State had merged with the Province of
Orissa the two money claims of the appellant against the
Maharaja of Mayurbhanj State were not enforceable against
the Orissa State on the ground that the Act of State did not
come to an end till the claims made by the appellant were
rejected and, therefore, municipal courts had no
jurisdiction in the matter. Where the petitioners held Khor
Posh grants from the Rulers of Talcher, Bamra and Kalahandi
under the respective State laws it was held in Promod
Chandra Deb v. The State of Orissa(3) that the laws
continued to have legal force after the merger of the said
States with the Union of India. Where the Nawab of Junagadh
State made grants of property before he fled the State, it
was held in
(1) [1959] S.C.R. 720. (2) [1962] 1, S.C.R. 205.
(3) [1962] Supp. (1) S.C.R. 405.
524
State of Saurashtra v. Jamadar Mohamad Abdullah(1) that
the cancellation of the said grants by the Regional
Commissioner, who assumed charge of the administration of
the State before the said State was integrated with the
United States of Saurashtra, was an act of State.
The question now raised did not arise for consideration in
those cases. This Court accepted the English doctrine of
Act of State and acted on the principle that till the right
of an erstwhile citizen of a ceding State was recognized by
the absorbing State, he has no enforceable right against the
State. The scope and extent of the title to immovable
property of a citizen of a ceding State was not examined in
those decisions. Nor the impact of the Constitution on such
rights was considered therein. In M/s. Dalimia Dadri
Cement Co. Ltd. v. The Commissioner of Income-tax(1) the
following observations are found at D. 741, which may have
some bearing on the first aspect of the question:
“It is also well-established that in the new
set-up these residents do not carry with them
the rights which they possessed as subjects of
the ex-sovereign, and that as subjects of the
new sovereign, they have only such rights as
are granted or recognized by him.”
This observation is couched in wide terms. But this Court
was not concerned in that case with the distinction between
pre-existing title of a citizen of a ceding State to his
property against all and that against the State. Indeed,
Bose J., in his dissenting judgment, made it clear that they
were only concerned in that case with the contractual
obligation of the erstwhile sovereign and that they were not
dealing with the question of the title of the citizens to
immovable property. That the judgment had also nothing to
do with the second aspect was made clear by the following
observations of Venkatarama Aiyar J., who expressed the
majority view, at p. 749:
“This argument assumes that there were in
existence at the date when the Constitution
came into
(1) [1962] 3 S.C.R. 970.
(2) [1959] S.C.R. 720.
525
force, some rights in the petitioner which are
capable of being protected by Art. 19(1)(f).
But in the view which we have taken that the
concessions under cl. (23) of Ex. A came to
an end when Ordinance No. 1 of S. 2005 was
promulgated, the petitioner had no rights sub-
sisting on the date of the Constitution and
therefore there was nothing on which the
guarantees enacted in Art. 19(1) (f) could
operate.”
These observations indicate that this Court did not go back
on the decision in Virendra Singh’s case(1) indeed, it re-
jected the argument based on that decision on the ground
that the appellant lost his rights if any, under a pre-
Constitutional valid Ordinance. In State of Saurashtra v.
Jamadar Mohamad Abdulla(2), Mudholkar J., speaking for
himself and for Sarkar J., expressed the view on the
question of impact of s. 299(1) of the Constitution Act of
1935 on the title to immovable property of a citizen of a
ceding State thus, at p. 1001:
“…… before the respondents could claim the
benefit of s. 299(1) of the Constitution Act,
1935, they had to establish that on November
9, 1947, or thereafter they possessed legally
enforceable rights with respect to the
properties in question as against the Dominion
of India. They could establish this only by
showing that their pre-existing rights, such
as they were recognized by the Dominion of
India. If they could not establish this fact,
then it must be held that they did not possess
any legally enforceable rights against the
Dominion of India, and, therefore, s. 299(1)
of the Constitution Act, 1935, avails them
nothing. As already stated s. 299(1) did not
enlarge anyone’s right to property but only
protected the one which a person already had.
Any right to property which in its very nature
is not legally enforceable was clearly
incapable of being protected by that section.”
(1) [1955] 1 S.C.R. 415, 433, 4. 37.
(2) (1962] 3 S.C.R. 970.
526
The same view was restated by the learned Judge in Promod
Chandra Deb v. The State of Orissa(1). It may be stated
that the said question did not arise for consideration in
either of those two decisions, for in the former the cancel-
lation of the order issued by the Ruler of the ceding State
was made before the merger and in the latter, the Court held
that the laws whereunder the grants were made continued to
have legal force after the merger of the concerned States
with the Dominion of India. It may be pointed out that Das
J., in the earlier decision and Sinha C.J., in the later
decision, who delivered the leading judgments in those
cases, had specifically left open that question. It may,
therefore, be stated without contradiction that in none of
the decisions of this Court that were given subsequent to
Virendra Singh’s case(2) the correctness of that decision
was doubted. Indeed, in the latest two decisions, the
principle was sought to be extended to a situation arising
under the Government of India Act. but the majority of the
learned Judges left open the question, though two of the
learned Judges constituting the Bench expressed their view
against such an extension. On the findings, I have accept-
ed, the said question does not arise for consideration in
this case and I do not propose to express my opinion
thereon.
If that be the position. is there any justification for this
Court to refuse to follow the decision in Virendra Singh’s
case(1). In my -View, the said decision is not only
correct, but is also in accord with the progressive trend of
modern international law. After all, an act of State is an
arbitrary act not based on law, but on the modern version of
“might is right”. It is an act outside the law. In the
primitive society when a tribe conquered another tribe, the
properties of the vanquished were at the mercy of the
conqueror. The successful army used to pillage, plunder and
commit acts of arson and rape. When society progressed, the
doctrine of Act of State was evolved. which really was a
civilized version of the primitive acts of pillage and
plunder of the properties of the conquered tribe. But the
further progress of civilization brought about by custom and
agreement factual recognition of pre-existing rights of the
people of the conquered State. There were two different
lines of
(1) [1962] Supp. 1 S.C.R. 405.
(2) [1955] 1 S.C.R. 415.
527
approach-one adopted by imperialistic nations and the other
by others who were not. That divergence was reflected in
English and American Courts. All the jurists of internatio-
nal law recognise the continuity of title to immovable
property of the erstwhile citizens of ceding State after the
sovereignty changed over to the absorbing State. In A
Manual of International Law by Georg Schwargenberger, 4th
Edn., Vol. 1, at p. 81 the learned author says:
“Private rights acquired under the law of the
ceding State are not automatically affected by
the cession. They must be respected by the
cessionary State.”
A more emphatic statement is found in The Law of State
Succession by O’Connell. Under the heading “The Doctrine of
Acquired Rights” the learned author points out, at pp. 78-
79:
“…….. only sovereignty and its incidents
expired with the personality of a State. The
relationships of the inhabitants one to
another, and their rights of property were
recognized to remain undisturbed.”
He observes at p. 104:
The doctrine of acquired rights is perhaps one
of the few principles firmly established in
the law of State succession, and the one which
admits of least dispute.”
In Hyde’s International Law, second revised edition, Vol. 1,
at p. 433, the following extract from the Sixth Advisory
Opinion of September 10, 1923 of the Court of International
Justice is quoted:
“Private rights acquired under existing law do
not cease on a change of sovereignty. No one
denies that the German Civil Law, both subs-
tantive and adjective, has continued without
interruption to operate in the territory in
question. It can hardly be maintained that,
although the law survives, private rights
acquired under it have perished. Such a
contention is based on no principle and would
be contrary to an almost universal opinion and
practice……”
528
In Oppenheim’s International Law, 8th edition, Vol. 1 the
same legal position is re-stated at p. 571
thus:
“It must be specially mentioned that, as far
as the law of Nations is concerned, the
subjugating State does not acquire the private
property of the inhabitants of the annexed
territory. Being now their sovereign, it may
indeed impose any burdens it pleases on its
new subjects-it may even confiscate their
private property, since a sovereign State can
do what it likes with its subjects; but
subjugation itself does not by International
Law affect private property.”
Starke in his book, An Introduction to International Law,
5th edn., observes, at p. 274:
“Such of these rights as have crystallised
into vested or acquired rights must be
respected by the successor State, more
especially where the former municipal law of
the predecessor State has continued to
operate, as though to guarantee the sanctity
of the rights.”
Much to the same effect the relevant statement of inter-
national law is found in Briggs’ The Law of Nations, 2nd
edn. It may, therefore, be held that so far as title to im-
movable property is concerned the doctrine of international
law has become crystallised and thereunder the change of
sovereignty does not affect the title of the erstwhile
citizens of the ceding State to their property.
In America the said principle of International Law has been
accepted without any qualification. Chief Justice John
Marshall of the United States Supreme Court has succinctly
stated the American legal position in United States v.
Percheman (1) thus:
“The people change their allegiance; their
relation to their ancient sovereign is
dissolved; but their relations to each other,
and their rights of property, remain
undisturbed. If this be
(1) (1833) 32 U.S. 51. at 86, 87.
529
the modern rule even in cases of conquest, who
can doubt its application to the case of an
amicable cession of territory?……. A
cession of territory is never understood to be
a cession of the property belonging to its
inhabitants. The King cedes that only which
belonged to him. Lands he had previously
granted were not his to cede. Neither party
could so understand the cession. Neither
party could consider itself as attempting a
wrong to individuals, condemned by the
practice of the whole civilised world. The
cession of a territory by its name from one
sovereign to another. conveying the compound
idea of surrendering, at the same time the
lands and the people who inhabit them, would
be necessarily understood to pass the sove-
reignty only, and not to interfere with
private property.”
This principle has been accepted and followed by the
American Courts in -other decisions. But it is said that
the view of the American Courts is really based upon the
circumstance that international treaties are part of the
supreme law of the land.
Article VI of the Constitution of the United States declares
that all treaties made, or which shall be made, under the
authority of the United States, shall be the supreme law of
the land; and the Judges in every State shall be bound
thereby, anything in the Constitution or laws of any State
to the contrary notwithstanding. Chief Justice Marshall in
Foster v. Neilson(1) said:
“Our Constitution declares a treaty to be the
law of the land. It is, consequently, to be
regarded in courts of justice as equivalent to
an act of the legislature, whenever it
operates of itself without the aid of any
legislative provision.”
A treaty in America may be deemed to be a law of the land;
but the American view is not solely based on treaties.
(1) (1829) 2 Pet. 253.
134-159 S.C.-34.
530
In The American Insurance Co. and the Ocean Insurance Co. v.
Bales of Cotton(1), Chief Justice Marshall clearly recorded
the view of the American Courts thus:
“On such transfer of territory, it has never
been held that the relations of the
inhabitants with each other undergo any
change.”
Again the learned Chief Justice in Charles
Dehault v. The United States(2) expressly
pointed out the existence of the said rights
apart from any treaty. He observed:
“Independent of treaty stipulations, this
right would be held sacred. The sovereign who
acquires an inhabited territory acquires full
dominion over it; but this dominion is never
supposed to divest the vested rights of
individuals to property.”
Therefore, the distinction sought to be made may perhaps
have some relevance, if in a particular treaty there. is a
specific term that the United States shall recognize the
acquired rights of a citizen of a ceding State, but none if
the treaty does not contain such a covenant. The American
decisions, therefore, cannot be distinguished on this narrow
ground; they have recognized the doctrine of International
Law and inter-woven it in the texture of the American
municipal law.
The Courts in England have developed the doctrine of act of
State which, in the words of Stephen, means “An act
injurious to the person or property of some person who is
not at the time of that act a subject of Her Majesty; which
act is done by a representative of Her Majesty’s authority,
and is either sanctioned or subsequently ratified by Her
Majesty.” A treaty whereunder a sovereign territory is ceded
is held to be an act of State, for it is not done under
colour of any title but in exercise of a sovereign power.
Has the law of England denied the doctrine of acquired
rights so well-settled in International Law?
(1) (1828) 7 L.Ed. 511. (2) (1835) 9 L.Ed. 117, 131.
531
In Vajesingji Joravarsingji v. Secretary of State for India
in Council(1), the Judicial Committee summarized the law on
the subject thus:
“When a territory is acquired by a sovereign
State for the first time that is an act of
State. 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,
recognized. Such rights as he had under the
rule of predecessors avail him nothing. Nay
more, even if in a treaty of cession it is
stipulated that certain inhabitants 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…………”.
The sentence in the said passage, namely, “such rights as he
had under the rule of predecessors avail him nothing”,
cannot be, in the context in which it appears, interpreted
as a denial of the doctrine of acquired rights evolved by
International ]Law, but it only refers to the question of
enforceability of such an acquired right in a municipal
court. The same view has been expressed in a number of
English decision. Therefore, the law in England is that the
municipal courts cannot enforce the acquired rights of the
erstwhile citizens of the ceding State against the absorbing
State unless the said State has recognized or acknowledged
their title. This Court accepted the English. doctrine of
act of State in a series of decisions noticed by me earlier.
What does the word “recognize” signify? It means “to admit,
to acknowledge, something existing before.” By recognition
the absorbing State does not create or confer a new title,
but only confirms a pre-existing one. It follows that till
the title Is recognized by the absorbing State, it is not
binding on that State. An exhaustive exposition of this
branch of law is found in Promad Chandra Dab’s case(2). I
am bound by that decision. O’Connell in The Law of State
Succession
(1) 51 I.A. 357. 360. (2) [1962] Supp. (1) S.C.R.
405.
532
brings out the impact of the doctrine of act of State on
that of acquired rights under International Law, at p. 88,
thus:
“The doctrine of act of State is one of
English municipal law. It merely denies an
English Court jurisdiction to inquire into
the consequences of Acts of the British
Government which are inseparable from the
extension of its sovereignty. The court is
not entitled to ask if such acts are ‘just or
unjust, politic or impolitic’ or what legal
rights and duties have been carried over in
the change of sovereignty. The doctrine is
not intended, however, to deny a rule of
International Law.”
In the words of the same author, the fact that a right can-
not be enforced does not mean that it does not exist. Non-
recognition by the absorbing State does not divest title,
but only makes it unenforceable against the State in
municipal courts.
The result of the discussion may be summarized thus: the
doctrine of acquired rights, at any rate in regard to
immovable property, has become crystallized in International
Law. Under the said law the title of a citizen of a ceding
State is preserved and not lost by cession. The change of
sovereignty does not affect his title. The municipal law of
different countries vary in the matter of its enforceability
against the State. As the title exists. it must be held
that even in those countries, which accepted the doctrine of
act of State and the right of a sovereign to repudiate the
title, the title is good against all except the State.
Before the Constitution came into force the State did not
repudiate the title. When the Constitution of India came
into force the respondent and persons similarly situated who
had title to immovable property in the Sant State had a
title to the said property and were in actual possession
thereof. They had title to the property except against the
State and they had, at any rate, possessory title therein.
The Constitution in Art. 31(1) declares that no person shall
be deprived of his property save by authority of law. That
is, the Constitution recognized the title of the citizens of
the erstwhile State of Sant, and issued an injunction
against the
533
soveriegn created by it not to interfere with that right
except in accordance with law. A recognition by the supreme
law of the land must be in a higher position than that of an
executive authority of a conquering State. I would,
therefore, hold that the title to immovable property of the
respondent was recognized by the Constitution itself and
therefore, necessarily by the sovereign which is bound by
it. 1, therefore, respectfully hold that Virendra Singh’s
case(1) has been correctly decided.
Apart from the recognition of the title of the respondent by
the Constitution, in this case the letter written by the
Government of India, dated October 1, 1948, clearly
recognized the title of persons situated in the position of
the respondent to their properties. But the learned
AttorneyGeneral contends that the letter shall be regarded
as part of the merger agreement and therefore its terms
cannot be relied upon for the purpose of recognition of the
respondent’s title or of evidence of the Govemment’s waiver
of its right to repudiate the respondent’s title. It is
true that in the concluding portion of the letter it is
stated that the contents of the letter will be regarded as
part of the merger agreement. But the merger had already
taken place on June 10. 1948 and this letter was written on
October 1, 1948. It does not appear from that letter that
the Maharana of Sant State, who-ceased to be the Ruler
except in name for certain privileges, was a party to it.
This letter, therefore, can at best be treated as one of the
acts of the Government of India implementing the terms of
the merger agreement. It cannot, therefore, be said to be a
part of the merger agreement. If it was not, by calling it
so it did not become one. At the time the letter was sent
all the citizens of the erstwhile Sant State had become the
citizens of India. The letter contains a clear statement in
paragraphs 5 and 7 thereof that enjoyment of ownership of
jagirs, grant etc. existing on April 1, 1948 were guaranteed
and that any order passed or action taken by the Ruler
before the said date would not be questioned. This is a
clear recognition of the property rights of the respondent
and similar others. It is necessary, therefore, to express
my opinion on the ques-
(1) [1955] 1 S.C.R. 415.
534
tion whether, even if the said letter formed part of the
merger agreement, any recital therein can be relied upon as
evidence of recognition of pre-existing titles by the
absorbing State or waiver of its sovereign right to
repudiate the said titles.
For the aforesaid reasons I agree that the appeal should be
dismissed with costs.
For the same reasons Civil Appeals No. 183 to 186 of 1963
are also dismissed with costs.
HIDAYATULLAH J.-These appeals by the State of Gujarat impugn
a common judgment of the High Court of Gujarat dated January
24, 1961. The respondents were plaintiffs in five suits for
declaration of rights in forests and for permanent
injunction against interference with those rights by the
State. All suits except one were dismissed by the Court of
first instance. The District Judge on appeal ordered the
dismissal of that suit also and dismissed the appeals of the
plaintiffs in the other suits. The plaintiffs then appealed
to the High Court and by the judgment under appeal, all
appeals were allowed and the suits were decreed. The State
Government has now appealed to this court by special leave.
The forests in respect of which the declaration and
injunction were sought are situated in the former State of
Santrampur (also called Sant State). Santrampur Was an
Indian State and the Ruler attained independence and
sovereignty on August 15, 1947 on the ceasing of the para-
mountcy of the British Crown. The Ruler at first ceded his
sovereignty on three subjects to the Government. of India
but on March 19, 1948, ceded the territory of the State to
the Government of India by an agreement which came into
force from June 10, 1948. The Central Government, by virtue
of powers vested in it by the Extra-Provincial Jurisdiction
Act, 1947, delegated its functions to the Provincial
Government of Bombay and on June 2, 1948, the Administration
of the Indian States Order was passed and it was applied to
Sant State from June 10, 1948. On July 28, 1948, the Indian
States (Application of Laws) Order, 1948
535
was passed. Certain enactments in force in the Province of
Bombay were extended to Sant State and then under the
States’ Merger (Governor’s Provinces) Order, 1949, Sant
State became a part of the Province of Bombay from August 1,
1949. On October 1, 1948, a letter of guarantee was written
to the Ruler by Mr. V. P. Menon in which it was stated. as
follows:
“…….
7. No order passed or action taken by you
before the date of making over the
administration to the Dominion Government will
be questioned unless the order was passed or
action taken after the 1st day of April, 1948,
and it is considered by the Government of
India to be palpably unjust or unreasonable.
The decision of the Government of India in
this respect will be final.”
It was Added that the letter would be read as
part of the original Merger agreement.
A week before ceding the territories of his
State, the Ruler of Sant made a Tharao or
Thavan order as follows:
“Order
3. Ta. Mu. Outward Register No. 371. The
Jivak, Patayat, Inami, Chakariyat, Dharmada
villages in Sant State are being given
(granted) to Jagirdars and the holders of the
said villages are not given rights over
forests. Hence after considering the
complaints of certain Jagirs, they are being
given full rights and authority over the
forests in the villages under their vahivat.
So. they should manage the vahivat of the
forest according to the policy and ad-
ministration of the State. Orders in this
regard to be issued.
Sd. In English.
Maharana, Sant State.”
536
The former grants which were made in favour of the jagirdars
and holders of the villages have not been produced, but they
were probably like the grant of village Gothimada dated
December 1, 1857, which was to the following effect:
“……..
You have to do the vahivat (management) of the
land situate within the permanent boundaries
of the outskirts of the villages in four
directions. This village has been granted for
the appropriation and enjoyment of the income
thereto except in respect of civil and
criminal matters. So you must behave in the
State in accordance with the custom and usage
and practice of other Thakarati villages of
the State.
If any person of the village is ordered in
regard to any work or matter then you should-
not in any way interfere therein but produce
the said person as per order.
You have to act and behave according to the
said clauses and should remain with integrity
and honesty and loyal to the State. Dated: 1-
12.1867 A.D.S.Y. 1929 Magsar. Sudu 5.”
After the Tharao was issued on March 12, 1948, some of the
Thakores executed contracts in favour of the plaintiffs
between May 1948 and 1950. The agreements which were made
with the contractors are on the file of the appeals. The
Thakores and the contractors then began to take forest
produce but they were stopped in April 1949. The present
five suits were then filed. Four of the suits were
instituted by the contractors and the fifth by one of the
Thakores in the capacity as inamdar.
After merger, a question arose whether these contracts
should be approved or not. On January 1949, on the
application of one of the Thakores, an order was passed by
the Divisional Forests Officer. It was as follows:
537
.lm15
“Gothimada village of santrampur State. Application of the
owner requesting to grant authorization to the Contractor
and states that he has no objection if the authorization is
issued. Is the authorization up to Lunawada and Signally
only, time-limit up to 31-3-1949. No export outside to be
permitted, pending receipt of orders from Government.
Written undertaking to be taken from the purchaser that he
will abide by the decision and orders passed by Government
and then the authorization handed over. Send copy to F.O.
Lunawada.”
Similar orders were passed in respect of other villages and
undertakings were taken from the Thakores and the con-
tractors. A sample is quoted here-
“UNDERTAKING:
I, Thakore Sardarsingh Gajesingh hereby give an undertaking
to abide by the decision and or ers passed by the Government
of Bombay in respect of Gothimada forests, rights over which
were conferred on me by Santrampur State Government on 12-3-
48 in their resolution No. G. 371 dated 12-3-48.
Authorization Nos. 111, 112 of 1948-49, in
respect of village in Santrampur State issued
by the Divisional Forest Officer, Integrated
States Division, Devgad Baria in favour of Mr.
Hatimbhai Badruddin is subject to the above
undertaking.
Dated 1-2-49.
Sd. in Gujarathi.”
The Conservator of Forests, North Western Circle also issued
a memorandum on January 18, 1949 stating:
“……..
However, to safeguard the Government interest
written undertaking should be taken from the
jahagirdars, Inamdars of person or persons.
538.
concerned that he or they would abide by the
decision or orders passed by the Bombay Gov-
ernment in respect of such private forests,
when the question of rights over such private
forests is finally settled.”
When the undertakings were furnished, passes were issued to
the contractors. In April 1949, however, the work of all
the contractors was stopped and on July 8, 1949, Government
sent a communique to the Collector of Panch Mahals
repudiating the Tharao of March 12, 1948. In this letter it
was stated as follows:
“Reference your memorandum No. ADM(P) 50-A11,
dated 24th May, 1949, Government considers
that the order passed by the Ruler of the Sant
State under his No. 371, dated 12th March,
1948 transferring forest rights to all the
jagirdars of the jagir village, are mala fide
and that they should be cancelled. Before,
however, taking further action in the matter,
please ascertain whether the possession of the
forests in question is with Government or has
gone to the Jagirdars. If the possession is
still with Government please ask the Officer
of the Forest Department to retain the same
and to refuse to issue passes, etc. to private
contractors and purchasers.
By order of the Governor of Bombay.
Sd/- “.
It appears that this was not communicated to the contractors
of the Thakores. On June 29, 1951, the Government of Bombay
passed a resolution that the Maharana’s order would not be
given effect to. Another resolution was passed on February
6, 1953 as follows:
“On the eve of the merger of the Sant State in
the State of Bombay, the Ruler of that State
issued Tharav No. 371 on 12th March, 1948,
under which Jiwai, Patawat, Inami, Chakriat
and Dhannada Jagirdars and inamdars were given
full forest rights over the villages in their
charge. The Government
539
of Bombay, after considering the implication
of the Tharav, decided that the order was mala
fide and cancelled it on 8th July, 1949 vide
Government Letter, Revenue Department No.
2103-M 49 dated the 8th July, 1949. By the
time these orders were issued, the tree growth
in the Jagiri forests concerned was already
sold by some of the Jagirdars and the trees
cut. Further cutting of trees and export of
trees cut was however stopped by the Forest
Department after receipt of the orders of 8th
July, 1949. On representation being made to
Government, however, agreed to allow to
release the material felled from the forest
under dispute, pending decision on the
settlement of forest rights, subject to the
condition that the contractor furnished two
sureties solvent for the material removed or
deposited with the Divisional Forest Officer
certain amount per wagon load of material.
The owner of the material was also asked to
give a written undertaking that he would abide
by the ultimate decision of Government.
………….
5. Government is, however, pleased to
examine individual cases of Jagirdars and
inamdars irrespective of the Tharav of 1948,
on the basis of the Forest Settlement
Officer’s Report and other considerations.
7. The question of forest rights in the
following villages is still under
consideration of Government and necessary
orders in that behalf will be issued in due
course:-
(1) Nanirath. (2) Gothimada. (3) Rathada.
…………..”
Before this the suits we are dealing with were filed. The
contention of the plaintiffs was that the Merger agreement
of March 1948 was not an Act of State, because it was
preceded by surrender by the Ruler of sovereignty in respect
of three subjects. This contention was not accepted in the
High Court and has not been raised here. The next conten-
tion was that the Tharao or order of March 12, 1948 was a
540
legislative act and as all the old laws of the State were to
continue to be in force except as modified by the Indian
States (Application of Laws) Order, 1948, the Tharao could
be revoked by the appellant by Legislative authority only
and not by an executive act. The High Court did not accept
this contention, because according to the High Court, the
Tharao was not a piece of legislation, but was a -rant by
the Ruler. The third contention was that the Central
Government through Mr. V. P. Menon has undertaken not to
question any order or action taken before 1st April, 1948,
and that this created a bar to the repudiation of the order
of the Maharana dated March 12, 1948. This contention was
not accepted by the High Court. The High Court held that
the letter formed a part of an Agreement which could only be
enforced by the High Contracting Parties, if at all, but not
by any other person, and in any event, municipal courts had
no authority to enforce the agreement. The High Court
relied upon Art. 363 of the Constitution and the decisions
of this Court.
The High Court, however, accepted the contention of the
plaintiffs, that it was open to the succeeding sovereign to
waive or relinquish its right to repudiate the actions of
the previous Ruler and to acknowledge either expressly or
impliedly the rights conferred on the subjects of the
previous Ruler and that this had been done in this case.
They referred to the permission which had been given by the
officers of the Forest Department to the plaintiffs in this
suit to cut and carry away the timber and regarded the
letter of Mr. V. P. Menon as evidence of waiver and
relinquishment. They held on the authority of Virendra
Singh and Others v. The State of Uttar Pradesh(1) and
Bholanath J. Thakar v. State of Saurashtra (2) and the
judgment of the Bombay High Court in Bhoirajji v. Saurashtra
State(3) that the Government must, in these circumstances,
be held to have waived or relinquished its rights to enforce
the Act of State against the plaintiffs.
On behalf of the appellant, it is urged (a) that the Act of
State continued till the resolutions were passed and there
(1) [1955] 1 S.C.R. 415. (2) A.I.R. (1954) S.C. 680
(3) 61 Bom. L.R. 20.
541
was no waiver or relinquishment in favour of the appellants,
and (b) that the action of the subordinate officers of the
Forest Department did not bind Government and the res-
pondents cannot take advantage of the letter of Mr. V. P.
Menon. On behalf of the respondents, in addition to meeting
the above arguments, it is contended that the Tharao was a
law and could only be revoked by another law. It is further
argued that after the Merger, s. 299(1) of the Government of
India Act, 1935 which read “No person shall be deprived of
his property in British India save by authority of law”
protected the respondents and this protection became
absolute on January 26, 1950, by reason of Art. 31 of the
Constitution. As the resolutions in question were passed
after the commencement of the Constitution, it is urged that
they cannot affect the rights of the respondents who came
under the protection of Art. 31 of the Constitution. It is
contended that in any case, the Act of State could not
operate against the citizens of the State which the res-
pondents became on the Merger or on the inauguration of the
Constitution. It is also argued on behalf of the res-
pondents on the authority of a case of the Permanent Court
of International Justice and certain cases of the Supreme
Court of the United States that the Act of State should not
interfere with rights in property held from a former Ruler.
The appellant contends in reply that the Act of State
continued, because the contractors, and jagirdars were
permitted to work the forests on their furnishing under-
takings, and it was only completed against them in April,
1949, when they were asked to stop their work even though
the actual order of Government deciding whether to accept
the Tharao or not was communicated to them in 1953. It is
argued that what was of real consequence was not the
decision of the Government but the stoppage of the work. It
is also argued that s. 299(1) did not protect the respon-
dents against the Act of State and that as there was no
State succession on January 26, 1950, the original Act of
State did not come to an end. It is also pointed out that
this Court has not accepted the rule of International Law
referred to in Virendra Singh’s case(1) and has instead
acted on
(1) [1955] 1 S.C.R. 415.
542
the doctrine of Act of State as interpreted by the Courts in
England. I shall deal with these points in brief, because
most of them have been decided against the respondents in
the High Court on the basis of earlier rulings of this
Court.
To begin with, this Court has interpreted the integration of
Indian States with the Dominion of India as an Act of State
and has applied the law relating to an Act of State as laid
down by the Privy Council in a long series of cases
beginning with Secretary of State in Council for India v.
Kamachee Boye Saheba(1) and ending with Secretary of State
v. Sardar Rustam Khan and Other(2). The cases on this point
need not be cited. Reference may be made to M/s. Dalmia
Dadri Cement Co. Ltd. v. Commissioner of Income-tax(3), The
State of Saurashtra v. Menon Haji Ismali Haji(4), jaganath
Agarwala v. State of Orissa(4) and State of Saurashtra v.
Jamadar Mohamed Abdulla and Others(5). In these cases of
this Court, it has been laid down that the essence of an Act
of State is an arbitrary exercise of sovereign power on
principles which are paramount to the Municipal Law, against
an alien and the exercise of the power is neither intended
nor purports to be legally founded. A defence that the
injury is by an Act of State does not seek justification for
the Act by reference to any law, but questions the
jurisdiction of the court to decide upon the legality or
justice of the action. The Act of State comes to an end
only when the new sovereign recognises either expressly or
impliedly the rights of the aliens. It does not come to an
end by any action of subordinate officers who have no
authority to bind the new sovereign. Till recognition,
either express or implied, is granted by the new sovereign,
the Act of State continues.
If we apply these tests (rightly applied in the High Court),
we reach the result that the Government of Bombay and the
Central Government could refuse to recognise the rights
created on the eve of the Merger by the Tharao of the
Maharana and to say that it was not acceptable to them and
therefore not binding on them. Such action may be
(1) (1859) 13 Moore P.C. 22. (3) [1959] S.C.R. 729
(5) [1962] 1 S.C.R. 205. (2) (1941) 68 I.A. 109.
(4) (1960] 1 S.C.R. 537. (6) [1962] 3 S.C.R. 970.
543
harsh or unfair; but the Municipal Courts cannot declare it
to be so, because unless the rights are irrevocably recog-
nised earlier the Municipal Courts have no jurisdiction to
pronounce upon the legality or the justness of the action.
It is for this reason that the respondents pleaded in the
High Court that there was a waiver or relinquishment of the
Act of State in their favour. Relinquishment and waiver
were again relied upon by the respondents before us and they
refer to two circumstances from which an inference about
waiver or relinquishment can be raised. The first is cl. 7
of the letter of Mr. V. P. Menon quoted above and the second
is the conduct of the officers of the Forest Department in
allowing the contractors and the jagirdars to work the
forests in accordance with the Tharao of the Maharana. Cl.
7 of a similar letter of guarantee was considered by this
Court in Maharaj Umeg Singh and Others v. The State of
Bombay and Others(1). In that case also arguments were the
same as here. It was then contended that the Ruler’s
agreement with the Government ensured for the benefit of the
subjects even if they were not parties to the agreement. It
was then pointed out on behalf of the Government that the
agreement, if any, could not be sought to be enforced by
persons who were not parties to it. This Court observed:
“We do not feel called upon to pronounce upon
the validity or otherwise of these contentions
also for the simple reason that the
petitioners would be out of Court either way.
If they were deemed to be parties to the
agreements of merger and letters of guarantee
they would be faced with the bar to the
maintainability of the petitions under Article
363 of the Constitution which lays down that
neither the Supreme Court nor any other Court
shall have jurisdiction in any dispute arising
out of any provision of a treaty, agreement,
covenant, engagement, sanad or other similar
instrument which was entered into or executed
before the commencement of the Constitution by
any Ruler of an Indian State and to which the
Government of
(1) [1955] 2 S..C.R. 164.
544
the Dominion of India…… was a party. If
on the other hand they were deemed not to have
been parties to the same they would not be the
contracting parties and would certainly not be
able to enforce these obligations.”
It would, therefore, appear that the present respondents who
were not parties to the Merger agreement or to the letter
written by Mr. Menon which was made expressly a part of the
Agreement cannot take advantage of cl. 7. If they were
parties, Art. 363 would bar such a plea.
It is next contended that the Act of State had come to an
end after the Government of India Act, 1935 was applied to
the State and the State became a part of the territories of
the Government of India. This argument was raised to claim
the benefit of s. 299 (1) of the Government of India Act
1935. The interference with the rights in forests
conferred by the Tharao and the agreements with the
contractors based on the Tharao took, place in April,
1949. It was contended that on June 10, 1948, the subjects
of Sant State became Indian citizens and they were protected
by s. 299(1). The Officers of the Forest Department did not
unconditionally allow the forests to be worked. They made
it clear to the contractors and the jagirdars that what they
were doing was not final and that Government was going to
decide about the Tharao and the contracts later. No doubt,
the forests were allowed to be worked, but an undertaking
was obtained from each contractor and jagirdar. This showed
that the officers of the Forest Department did not attempt
to bind the Government, even if they could. It is true that
the -order of Government to stop work was not communicated
to the contractors and the jagirdars but the working of the
forests was as a matter of fact stooped much earlier and the
learned Attorney-General is right in pointing out that it
was all that mattered. This action of the officers was
later approved by Government when it decided that it would
not allow any rights to flow from the Tharao and the
contracts. In other words, while Government was considering
the matter, the officers of the Forest Department
tentatively allowed the forests to be worked but in no
manner to bring the Act of State to art end. The Act
545
of State could only come to an end if Government recognised
the rights flowing from the Tharao. That, Government never
did. There was thus no recognition of the Tharao or the
rights flowing from it at any time. It was pointed out by
this Court in Aggarwala’s case(1) that Government may take
time to consider and delay does not militate against the Act
of State. In that case also the decision of Government was
taken after the coming into force of the Constitution. This
Court pointed out, agreeing with Vaje Singhji jorawar Singh
v. Secretary of State for India(2) that enquiries may
continue for some time without any inference of waiver or
relinquishment. No doubt, in Bholanath Thaker’s case(3) and
in Virendra Singh’s case(4) waiver or relinquishment was
inferred from the conduct of Government. Such an inference
may legitimately be raised where Government, after having
accepted the rights, attempts to go back upon such
acceptance. There must, however, be a clear indication,
either expressly or by implication, that Government has, in
fact, accepted the rights. In the present case, the
subordinate officers of the Forest Department allowed the
forests to be worked, making it quite clear that Government
was considering the matter and took undertakings from the
respondents that they would abide by the decision of
Government. Government passed an order declining to accept
the Tharao. The order so passed was not communicated to the
respondents but later it was reiterated as a resolution
which was communicated.
To avoid this result, there are two arguments upon which the
respondents rely and they are the main contentions in these
appeals. The respondents seek support for the judgment by
challenging the decision on some of the points decided
against them. The first is that the Tharao was a law which
could only be rescinded by another law. In this connection,
the respondents rely upon the observations made by this
Court in Madhaorao Phalke v. The State of Madhya Bharat(5).
These observations were based upon
(1) [1962] 1 S.C.R. 205. (2) (1924) L. R. 51 I. A. 357.
(3) A I.R. (1954) S.C. 680. (4) [1955] 1 S.C.R. 415.
(5) [1961] 1 S.C.R. 957. 964.
134-159 SC-35.
546
the earlier case in Ameer-un-nissa Begum and Others v.
Mehboob Begum and Others(1). In these cases, it was pointed
out that the distinction between legislative, executive and
judicial acts of an absolute Ruler (such as the Indian
Rulers were) was apt to disappear when the source of
authority was the sovereign. These observations are sought
to be applied here. In the past also these observations
were invoked on occasion. In so far as the subjects of the
Ruler were concerned, they were bound to obey not only laws
but any orders of the Ruler, whether executive or judicial.
For them they did not exist any difference because each
emanation of the will of the sovereign required equal
obedience from them. But it does not mean that the Ruler
acted legislatively all the time and never judicially or
executively. If this was the meaning of the observations of
this Court, then in Phalke’s case(2) it would not have been
necessary to insist that in determining whether there was a
law which bound the succeeding sovereign, the character.
content and purpose of the declared will must be
independently considered. In Ameer-un-nissa’s case,(3) this
Court was concerned. With a Firman of the Nizam and that
was one of the accepted modes of making laws in Hyderabad
State. In Phake’s case(2), this Court was concerned with
Kalambandis which were held by this Court to be laws binding
upon the subsequent Government unless repealed or replaced
by other law. The Kalambandis were so regarded partly
because the Maharana had himself laid down that Kalambandis
issued by him were to be regarded as law, and partly because
the Kalambandis created a tenure which carried with it
pensions. The pensions were grants but the manner of
enjoyment of the pensions was determined by the rules of
tenure provided in the Kalambandis also bearing upon
succession and devolution. These cases were distinguished
in more recent cases when the observations were sought to be
extended to others which were clearly not legislative and
reference may be made to Maharaj shree Umaid Mills Ltd. v.
Union of India and Others(3) and The Bengal Nagpur Cotton
Ltd. v. The Board of Revenue, Madhya Pradesh and Others(4).
It was pointed
(1) A.T.R. 1955 S.C. 352. (2) [1961] 1 S.C.R. 957, 964.
(3) A.T.R. 1963 S.C. 953. (4) A.I.R. 1964 S.C. 888.
547
out in these two cases that the observations in Ameer-un-
nissa’s case(1) Phalke’s case(2) could not be read as
indicating that everything that the Maharaja said or ordered
was a law. In the latter case, this Court pointed out that
a proper law would be one which was made in accordance with
the traditional mode of making laws in the territory or in
accordance with some procedure which was expressly devised
for tile occasion. It was pointed out that law is the
result of a legislative process and the result must be
intended to bind as a rule of conduct; it must not for
example be a contract or a grant or a gift etc.
Viewed from this angle, it is quite obvious that the Tharao
was not a law. It was a grant made to the jagirdars
mentioned in the Tharao. It is contended that it is made
applicable to persons belonging to five different tenures
and that the ‘management’ of the forests was to be done
according to the policy and administration of the State. No
doubt, the Tharao is applicable to a large number of persons
enjoying different tenures but it is stated therein that
orders were to be issued individually to all of them. The
Tharao was issued only 8 days before the Merger. It is
surprising that the Maharaja thought of the complaints of
the grantees on the eve of the Merger. The fact that the
Maharana’s Tharao was passed to benefit a large number of
persons en bloc does not make it any the more a law if it
did not possess any of the indicate of a law. The
respondents would not admit that if it had been addressed to
individuals, it would have changed its character from a law
to a grant. This fact makes no difference to its character.
content and purpose. Further, the original grant of which
the Tharao became a part was also a grant. One such grant
has been quoted above. The word “Vahivat” does show that
the grant was for management but in this context, it means
more than management. It was customary to use this word in
conferring rights which were liable to be resumed. These
grants did give rights to the grantees but did not lay down
any rule of conduct. It may be pointed out that in Umeg
Singh’s case(3) it was contended that cl. 5 of the letter of
(1) A.I.R. 1955 S.C. 352. (2) [1961] 1 S.C.R. 957,
(3) [1955] 2 S.C.R.164.
548
Mr. Menon prevented legislation and it was then held that
the grants were not legislative measures of the Maharaja and
did not bar the making of laws to set the grant at naught.
In that case also there was a Tharao in dispute. The Tharao
cannot, therefore, be treated as a law at all. It is a
grant and as a grant it was open to the new sovereign not to
recognise it.
It was contended that in any event, after the commencement
of the Government of India Act, 1935, the respondents had
the protection of s. 299(1). This point was raised but was
left open by the majority in Jamadar’s case(1) to which we
have already referred. On that occasion, Sarkar and
Mudholkar JJ. in a separate judgment held that s. 299(1) did
not afford any protection. The learned Judges pointed out
that s. 299(1) did not add to the rights of persons but
protected such rights as existed. If on the Merger of the
territories of the Indian Rulers with those of the
Government of India. there was Act of State and if as held
by this Court in the cases to which reference has alreadY
been made it was open to the Government of India to decide
whether or not to recognise certain rights, the Government
of India could do so. In that event, s. 299(1) did not come
into play because it could only come into play after the
rights were recognised. The Act of State continued because
Government was taking time to consider whether to accept the
Tharao or not and while the decision was being reached,
there was a second change inasmuch as the present
Constitution was passed. It is contended that there was a
lapse of the original Act of State because of a State
succession on January 26, 1950, and as this was before the
Resolutions of 1951 and 1953, the respondents were
protected.
The first question to consider is whether there took place
in 1950 a State succession. State succession takes place
either in law or in fact. It takes place in law when there
is a juridical substitution of one State for another. It
take place in-fact when there is (a) annexation (2) or (b)
cession(2)
(1) [1962] 3 S.C.R. 970.
(2) e.g. Algiers by France (1831) or South African Republic
by Great Britain (1901).
(3) e.g. the Ionian Islands by Britain to Greece (1864) or
territory to Poland by Germany.
549
or (c) fusion of one State with another into a federal Union
(2) or (e) partition ration of secession(3). It will be
seen that on the 26th January, 1950, there was no succession
in fact because none of these events took place. As
Oppenheim defined “succession”—
“A succession of International Persons occurs
when one or more International Persons take
the place of another International Person in
consequence of certain changes in the latter’s
position International Law, 5th edn. p. 151.”
In this sense, though the people of India gave themselves a
Constitution, there was no State succession in so far as the
people of Sant State were concerned. For them the State
succession was over sometime before. No doubt, when the
Dominion of India became a sovereign Democratic Republic,
there was a breaking away from the British Crown, but that
was a State succession in a different field. We are not
concerned with the secession of India from the British
Crown, but with State succession between Sant State and
India, and there was no second succession in 1950. Whatever
had happened had already happened in 1948 when Sant State
merged with the Dominion of India. The Act of State which
began in 1948 could continue uninterrupted even beyond 1950
and it did not lapse or get replaced by another Act of
State. The Constitution no doubt guaranteed the rights of
citizens after 1950 but these rights granted by the Ruler
were fort recognised even before 1950 and the Constitution
gave its support to those rights which were extant on
January 26, 1950.
It only remains to consider the argument of Mr. Purushotham
based on the view of Chief Justice John Marshall, of the
Supreme Court of the United States expressed in U.S. v.
Percheman(3) followed by Cardozo J. in 1937
(1) e.g. Fusion of Serbia with croat etc. to form
Yugoslavia.
(2) e.g. Hawaii in U.S.A. (3) e.g. India and Pakistan.
(4) e.g. U.S.A. from Britain. (5) 32 U.S. 51 at 86, 87.
550
in Shapleigh v. Mier(1). It was there laid down that
private ownership is not disturbed by changes in sovereignty
and that according to the modern usage of nations a cession
of territory is not understood to be cession of the property
of the inhabitants. These two cases were referred to in the
judgment of Bose J. in Virendra Singh’s case (2) who pointed
out that these principles were also reflected in the Sixth
Advisory Opinion of September 10, 1923 of the Permanent
Court of International Justice. Mr. Purushotham cited other
cases where the Supreme Court of the United States had
considered obligations which old Spanish and Maxican
treaties had created. It was argued that this represents
the modern and progressive view and we were asked to revise
the entire law of Act of State as understood in India during
the past 100 years and particularly the last dozen years.
The principle on which this Court has acted in the past few
years has been amply indicated earlier in this judgment. It
may be summarized in the words of Fletcher Moulton, L. J. in
Salaman v. Secretary of State for India(3):
“An Act of State is essentially an exercise of
sovereign power, and hence cannot be
challenged, controlled or interfered with by
municipal courts. Its sanction is not that of
law, but that of sovereign power, and,
whatever it be, municipal courts must accept
it, as it is without question. But it may,
and often must, be part of their duty to take
cognizance of it. For instance, if an act is
relied on as being an act of State, and as
thus affording an answer to claims made by a
subject, the courts must decide whether it was
in truth an act of State, and what was its
nature and extent”.
The Courts in England have also acted on the further
principle which may be shortly stated in the words of Lord
McNair(4):
(1) 299 U.S. 468 at 470. (2) [1955] 1 S.C.R. 415.
(3) (1906] 1 K. B. 613.
(4) International Law Opinions (1956) Vol 1. P. 1129; See
also O’Connel Y. B. (1950) P. 93.
551
“The term ‘Act of State’ is used, not only
narrowly to describe the defence explained
above, but also, perhaps somewhat loosely, to
denote a rule which is wider and more
fundamental namely, that ‘those acts of the
Crown which are done under the prerogative in
the sphere of foreign affairs’ (sometimes
called ‘Acts of State’ or ‘Matters of State’);
for instance, the making of peace and war, the
annexation or abandonment of territory, the
recognition of a new State or the new
Government of an old State, etc., cannot form
the basis of an action brought against the
Crown, or its agents or servants, by any
person British or alien, or by any foreign
State, in British Municipal Tribunals. Such
acts are not justiciable in British Courts, at
the suit either of British subjects or of
aliens; they may form the subject of political
action in Parliament or, when -the interests
of foreign States or their nationals are
involved, of diplomatic protest or of any
international judicial process that may be
available”.
We are not concerned with the obligations created by treaty
which according to the opinions of some writers ‘run with
the land’ and bind the territory. Other writers, as pointed
out by Lord McNair in his Law of Treaties by Keith in his
Theory of State Succession and Crandall in Treaties, Their
Making and Enforcement. hold that on cession, the treaties
are abrogated automatically. Such a view was taken by the
United Kingdom and United States when Algiers was annexed by
France and by the former when South Africa was annexed by
Great Britain and by the United States when Korea was
annexed by Japan in 1910. (See Mervyn jones B. Y. B. (1947)
P. 360; Dr. C. W. Jenks B. Y. B. (1952 P. 105). On the
other hand, the treaties of the annexing or cessionary State
are held to apply to the new territories. These are
treaties with other States which is not the case here.
Where is the treaty here? The rights conferred by the Ruler
were not the result of a treaty. Nor
552
can the Merger agreement be exalted to the position of a
treaty. There is no treaty involved here. Even if it were
possible to hold that there was a treaty between the Ruler
and the Central Government, there is no power in the
Municipal Courts in India to pronounce upon the Agreement as
the subject is outside their jurisdiction by reason of Art.
363. This distinguishes the jurisdiction and power of the
Supreme Court of the United States in which consideration of
treaties is included. The bar of our Constitution also
precludes the consideration whether these agreements can be
to be of the nature of treaties.
As regards the principles of International Law, it may be
pointed out that after the Report of the Transvaal
Concessions Commission and Professor Keith’s theories in his
book, the attention of the world communities has indeed been
drawn to the preservation of economic concessions and
acquired rights by the annexing or cessionary State. When
the Indian Islands were ceded to Greece the Law Officers
(Sir Robert Phillimore was one of them) advised:
“Both according to the principles of
International Law and the practice of all
civilised States, ceded territories pass, cum
onere to the new sovereign.’
(Opinion of 15th August, 1863, F. 0. 83/2287.)
McNair International Opinions, Vol. 1 p. 156.
Similar advice was given on the occasion of annexation of
Peruvian territory by Chile (1884), of Madagascar by France
(1896), cession of Cuba and the Philipines by Spain (1898).
McNair ibid pp. 157 et seq. Again at the annexation of the
Boer Republics between 1900 and 1909 what should be the
attitude of Britain led to domestic controversy. The legal
advisor to the High Commissioner advised that responsibility
arising from obligations incurred by the South African
Republic and Orange Free State could be repudiated but the
Law Officers in England reported that a Government annexing
territory annexes it subject, speaking generally, to such
legal obligations as have been incurred by the previously
existing Government. The obligations included concessionary
contracts but the Law Officers added a
553
rider that “the duty to observe such contracts cannot be
enforced in a municipal court; it rests merely on the
recognition of International Law of what is equitable upon
the acquisition of property of the conquered State” (see
opinion of 30th November, 1900, F.O. quoted by B. Y. B. 1950
at p. 105).
The Transvaal Concessions Commission made its report in
April 1901. The report said inter alia:
“After annexation, it has been said, the
people change their allegiance, but their
relations to each other and their rights of
property remain undisturbed; and property
includes rights which lie in contract.
Concessions of the nature of those which are
the subject of enquiry present examples of
mixed public and private rights : they
probably continue to exist after annexation
until abrogated by the annexing State, and as
a matter of practice in modern times, where
treaties have been made on cession of
territory, have often been maintained by
agreement.”
The Commission, however said that no rule of International
Law compelled this but added that the best modern opinion
favoured that such rights should be respected. The
distinction between what is a rule of law and what is a rule
of ethics was criticised : see Westlake in (1901) 17 Law
Quarterly Review p. 395. However, Prof. Keith gave support
to the view. The report of the Commission was considerably
influenced by the opinion in Cook v. Sprigg(1) International
experts, however, in drafting the terms of settlement of the
first Balkan War accepted a new formula in 1920 by which the
cessionary State was treated: as subrogated in all rights
and changes. These opinions were put to test in some cases
before the Permanent Court of International Justice in
connection with the Jaffa Concessions and the case of the
German Settlers Case. In the former, the Court decided, for
technical reasons, that it had no jurisdiction but added
that “if Protocol XII left intact the general principles of
subrogation,” the administration of Palestine was bound to
recognise the Jaffa,
(1) [1899] A.C. 572.
554
Concessions “in consequence of the general principles of
International Law.” In the case of Settlers of German origin
in territory ceded by Germany to Poland and German interest
in Upper Silesia case (P.C.I.J. series B No. 6 and series A
No. 7) the doctrine of acquired rights was accepted, in
respect of private rights. The term “acquired rights” has
not received a consistent meaning in this connection. It is
not the notion of ius quaesitum which was the result of
juristic activity following upon the social contract theory.
In International Law, it has different meanings. At one
extreme is the view that it must be “a grant to an
individual of rights under municipal law which touch public
interest” and at the other end “every economic concession”
is held included. Of course even International Law does not
recognise,a universal succession. The term economic
concessions” must involve a contract between the State or a
public authority on the one hand and a concessionaire on the
other and must also involve an investment of capital by the
latter for erection of public works or exploitation in the
public sector. Such cases are the Mavromma is case,
Lighthouses case, Lighthouses in Crete and Samos case
(P.C.I.J. Series A No. 5 and Series A B No. 62 and 71 ).
Cases of mere private rights without any corresponding
benefit to the public are not regarded as concessions but
there are two cases in which it has been ruled that private
rights must be respected. They are the case of Poland
mentioned above. Most of the cases deal with Concessions in
which there are reciprocal advantages.
All this recognition is still in the diplomatic field. It
has never gone beyond political consideration except in the
United States. The cases of the United States are mostly to
be found in 2-12 Peters and the leading case is U. S. v.
Percheman (1). Occasionally the question of concessionary
rights has been considered in the Courts in England : but
-of that latter. In U. S. v. Percheman(1), Chief Justice
John Marshall observed:
“It may not be unworthy of remark that it is
very unusual, even in cases of conquest for
the
(1) 7. Pet. 61.
555
conqueror to do more than to displace the
sovereign and assume dominion over the
country. The modem usage of nations, which
has become law, would be violated; that sense
of justice and of right which is acknowledged
and felt by the whole civilised world would be
outraged, if private property should be
generally confiscated, and private rights
annulled. The people change their allegiance;
their relation to (their ancient sovereign is
dissolved; but their relations to each other,
and their rights of property remain
undisturbed. If this be the modern rule even
in cases of conquest, who can doubt its
application to the case of an amicable cession
of territory?….. A cession of territory is
never understood to be a cession of the
property belonging to its inhabitants. The
King cedes that only which belonged to him.
Lands he had previously granted were not his
to cede. Neither party could so understand
the cession. Neither party could consider
itself as attempting a wrong to individuals,
condemned by the practice of the whole
civilised world. The cession of a territory
by its name from one sovereign to another,
conveying the compound idea of surrendering at
the same time the lands and the people who
inhabit them would be necessarily understood
to pass the sovereignty only, and not to
interfere with private property.”
These words of Chief Justice Marshall have been quoted in
legal opinions and have influenced international opinion.
The question has been raised that we must accent this as the
exposition of the law to be applied by municipal courts
here.
The doctrine in the United States is not unlimited.
Limitations were pointed out by Chief Justice John Marshall
himself in the case of Foster v. Nielson(1). That case
(1) [1829] 2 Pet. 253.
556
involved the effect upon private land titles of a phrase in
an Article of a treaty with Spain. That phrase was “shall
be ratified and confirmed to those in possession”. It was,
as the Chief Justice said, in the “language of contract”
and. it required legislative implementation before titles
could be claimed. This has led to a differentiation between
self executing treaties and non-self-executing treaties.
Says Chief Justice John Marshall:-
“A treaty is in its nature a contract between
two nations, not a Legislative Act. It does
not generally effect, of itself, the object to
be accomplished, especially so far as its
operation is infra-territorial; but is carried
into execution by the sovereign powers of the
respective parties to the instrument.
In the United States a different principle is
established. Our Constitution declares ‘a
treaty to be the law of the land. It is,
consequently, to be regarded in courts of
justice as equivalent to an Act of
Legislature, whenever it operates of itself
without the aid of any legislative provision.
But when the terms of the stipulation import a
contractwhen either of the parties engages to
perform a particular act-the treaty addresses
itself to the political, not the Judicial
Department; and the Legislature must execute
the contract before it can become a rule for
the Court.”
In India, the position is different. Article 253 enables
legislation to be made to implement international treaties.
This means that the law would bring the treaty in the field
of municipal law. The matter was considered in one cam
Birma v. The State(1), where the High Court declared:
“Treaties which are a part of international
law do not form part of the law of the land
unless expressly made so by the legislative
authority”.
This accords with what has been said by me but the judgment
seems to suggest that treaties which do not affect private
(1) A.I.R. [1951] Rai. 127.
557
rights also require legislative implementation. This is not
quite accurate, because it is not necessary that all
treaties must be made a part of municipal law. I agree with
Alexander in “International Law in India” in International
and Comparative Law Quarterly (1952) p. 289 at p. 295.
Preuss [Michigan Law Review (1953) p. 1123 n. 151 calls it a
rare example of a treaty which was not enforced without
legislative sanction. The only other example he gives is Re
Arrow River and Tributaries Slide and Boom Co. Ltd. (1932) 2
B.L.R. 250. see B.Y.B. (1953) 30, pp. 202, 203.
The precedent of the United States cannot be useful because
it has been held by the Supreme Court of the United States
that, although the Courts have no power to question the
validity of the Act of State, they can consider its effect.
See U. S. v. Percheman(1) at P. 86 and that the enunciation
of treaties must be accepted by Courts, Clark v. Allen (2).
Our practice and Constitution shows that there are
limitations upon the powers of Courts in matters of treaties
and Courts cannot step in where only political departments
can act. The power of the Courts is further limited when
the right is claimed against the political exercise of the
power of the State.
Again, the right claimed here is not even a concessionary
right such as he has received the support of international
writers. It is more of the nature of a gift by the ruler at
the expense of the State. It lacks bona fides which is one
of the things to look for. There is no treaty involved and
whatever guarantee there is, the Constitution precludes the
municipal courts from considering. Politically and
ethically there might have been some reason to accept and
respect such concessions but neither is a reason for the
municipal courts to intervene. The position of the
municipal courts according to English Jurisriudence has been
noticed in earlier cases. To them may be added the
following considerations. In Amodu Tijani v. Secretary,
Southern Nigeria (3) it was said:
“a mere change in sovereignty is not to be
presumed as meant to disturb rights of
private owners, and
(1) 7. Pet. 61 (2) 331 U.S. 503.
(3) [1921] 2, A.C. 399.
558
the general terms of a cession are prima facie
to be construed accordingly.” (p. 407).
Again, in West Rand Central Gold Mining Co. v.
Regem(1), it was said:
“It must not be forgotten that the obligations
of conquering states with regard to private
property of private individuals, particularly
land as to which the title had already been
perfected before the conquest or annexation
are altogether different from the obligations
which arise in respect of personal rights by
contracts.”
The observations in Amodu Tijani’s case(2) were cited before
the Privy Council in Sardar Rustam Khan’s case(3). But Lord
Atkin after referring to all cases from Kamachee Boye
Saheba(4), referred to the observations of Lord Halsbury in
Cook v. Sprigg(5).
“It is 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 assume the duties and
legal obligations of the former sovereign with
respect of 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”.
Lord Atkin referred in his judgment to Secretary of State
v. Bai Raibai(6) and Vajje Singh’s case(7 ) as laying the
(1) (1905) 2 K.B. 391.(2) (1921) 2. A.C. 399.
(3) (1941) 68 I. A. 109.(4) (1859.) 13 Moore P.C. 22
(5) 1899 A.C. 572. (6) (1915) L. R. 42 I.A. 229.
(7) (1924) L. R. 51 I.A. 357.
559
limits of the jurisdiction of municipal courts. These cases
have been applied in several decisions by this Court and the
view of the Supreme Court of the United States or the view
taken in International Law has not been accepted. It is not
that the Courts in England have not been pressed by the
rules of International Law as a science. As Westlake
pointed out in the Nature and ]Extension of Title by
Conquest (op. cit.):
“The authorities on the law of England appear
to be prepared to pay that homage ;to
international law. We may refer to what was
said by Vice-Chancellor Lord Cranworth in King
of the Two Sicilies v. Willcox, I Sim. N.S.
327-9, and by Vice-Chancellor Wood in United
States of America v. Prioleau, 2 Ham. 563; and
to the generality of the proposition laid down
by Vice Chancellor James in United States of
America v. Mcrae, L.R.8. Eq. 75. ‘I apprehend
it,’ he said, ‘to be the clear public
universal law that any government which de
facto succeeds to any other government,
whether by revolution or restoration, conquest
or reconquest, succeeds to all the public
property, to everything in the nature of
public (property, and to all rights in respect
of the public property, of the displaced
power, whatever may be the nature or origin of
the title of such displaced powers”.
But the rule that the Act of State can be questioned in a
Municipal Court has been adopted and it has been considered
that it is a matter for the political departments of the
State. To quote from Cook v. Sprigg(1).
“…. if there is either an express or a well-
understood bargain, between the ceding
potentate and the Government to which the
cession is made, that private property shall
be respected, that is only a bargain which can
be enforced by sovereign
(1) [1899] A.C. 572.
560
against sovereign in the ordinary course of
diplomatic pressure.”
I do not, therefore, accept the contention that a change of
opinion is necessary. Even Bose J., did not decide in
Virendra Singh’s case(1), on the basis of international law
or the opinion of the Supreme Court of the United States.
In my opinion, these are matters for the political
department of the State. However, desirable it may be that
solemn guarantees should be respected, we cannot impose our
will upon the State, because it is outside our jurisdiction.
For these reasons, I-would accept the appeals and would set
aside the judgment under appeal and restore the decrees
dismissing the suits with costs throughout.
SHAH J.-The Ruler of Sant State had made grants of villages
to jagirdars but without right to trees. On March 12, 1948,
the Ruler issued an order reciting that the holders of the
villages were not given “rights of the forests” and after
considering the complaints of certain jagirdars they were
given full rights and authority over the forests in the
villages under their vahivat. The jagirdars were directed
to manage “the forests according to the policy and
administration of the State”. The respondents claim in
these appeals that the rights of the grantees to the forests
were not liable to be cancelled by the Dominion of India
after the merger of the State of Sant in June 1948, and by
executive action the Government of Bombay was not competent
to obstruct the exercise of those rights.
Pursuant to the agreement dated March 19, 1948 as from June
1, 1948, the State of Sant merged with the Dominion of
India. The sovereignty of the Ruler was thereby
,extinguished and the subjects of the Sant State became
citizens of the Dominion of India. Accession of one State
to another is an act of State and the subjects of the former
State may, as held in a large number of decisions of the
Judicial Committee and of this Court, claim protection of
only such rights as the new sovereign recognises as
enforceable ‘by the subjects of the former State in his
municipal courts.
(1) [1955] 1 S.C.R. 415.
561
In The Secretary of State in Council of India v. Kamachee
Boye Saheba(1) the jurisdiction of the courts in India to
-adjudicate upon the validity of the seizure by the East
India Company of the territory of Rajah of Tanjore as an
escheat, on the ground that the dignity of the Raj was
extinct for want of a male heir, and that the property of
the late Rajah lapsed to the British Government, fell to be
determined. The Judicial Committee held 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, to, inquire into the propriety of which a
Municipal Court had no Jurisdiction. Lord Kingsdown
observed at p. 529:
“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 Vajesingji joravarsingji v. Secretary of
State for India Council(1) the Board observed
(at p. 360):
“…… 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 recognized 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 rule of
predecessors avail him nothing. Nay more,
even if in a treaty of cession it is
stipulated that certain inhabitants should
enjoy certain rights, that does not give a
title to those
(1) 7 Moode’s I.A. 476. (2) L.R. 51 I.A. 357.
184-159 s.c.- 476.
562
inhabitants to enforce these stipulations in
the municipal courts. The right to enforce
remains only with the high contracting
parties.”
In Secretary of State v. Sardar Rustam Khan and Others(1) in
considering whether the rights of a grantee of certain
proprietary rights in lands from the then Khan of Kalat,
ceased to be enforceable since the agreement between the
Khan and the Agent to the Governor-General in Baluchistan
under which the Khan had granted to the British Government a
perpetual lease of a part of the Kalat territory, at a quit
rent, and had ceded in perpetuity with full and exclusive
revenue, civil and criminal jurisdiction and all other forms
of administration, it was observed by Lord Atkin delivering
the judgment of the Board that :
“… in this case the Government of India bad
the right to recognise or not recognise the
existing titles to land. In the case of the
lands in suit they decided not to recognize
them, and it follows that the plaintiffs have
no recourse against the Government in the
Municipal Courts.”
The rule that cession of territory by one State to another
is an act of State and the subjects of the former State may
enforce only those rights which the new sovereign recognises
has been accepted by this Court in M/s. Dalmia Dadri Cement
Co. Ltd. v. The Commissioner of Income-tax(2); jagannath
Agarwala v. State of Orissa (3); Promod Chandra Deb and
Others v. The State of Orissa and Others(4) and The State of
Saurashtra v. Jamadar Mohamad Abdulla and others(5), and may
be regarded as well settled.
Mr. Purshottam on behalf of the respondents however
contended that this rule was a relic of the imperialistic
and expansionist philosophy of the British Jurisprudence,
which
(1) L. R. 68 I.A. 109. (2) [1959] S.C.R. 729.
(3) [1962] 1 S.C.R. 205. (4) [1962] Suppl. 1 S.C.R.405.
(5) [1962] 3 S.C.R. 970.
563
is inconsistent with our Constitutional set-up. Counsel
submits that in jurisdictions where truly democratic
institutions exist the rule laid down by the Judicial
Committee has not been accepted. The rule is, counsel
submits, inconsistent with the true spirit of our
Constitution, which seeks to eschew all arbitrary authority,
and establishes the rule of law by subjecting every
executive action to the scrutiny of the courts and to test
it in the light of fundamental rights. Counsel says that
the true rule should be the one which has been recognized by
the Supreme Court of the United States that of the accession
of a State to another, private rights of the citizens
enforceable against their sovereign are not affected, and
may be enforced in the Courts of the new sovereign. In
support of this argument Mr. Purshottam relied upon the
observations made by Marshall, C. J., in United States v.
Percheman(1):
“The people change their allegiance; their
relation to their ancient sovereign is
dissolved; but their relations to each other,
and their rights of property, remain
undisturbed. If this be the modern rule even
in cases of conquest, who can doubt its
application to the case of an amicable cession
of territory ? A cession of territory is never
understood to be a cession of the property
belonging to its inhabitants. The king cedes
that only which belonged to him. Lands he had
previously granted were not his to cede.
Neither party could consider itself as
attending a wrong to individuals, condemned by
the practice of the whole civilised world.
The cession of a territory by its name from
one sovereign to another, conveying the
compound idea of surrendering, at the same
time the lands and the people who inhabit
them, would be necessarily understood to pass
the sovereignty only, and to interfere with
private property. ”
But the rights and their enforceability in the Municipal
Courts of a State must depend upon the will of the
sovereign. The sovereign is the fountain head of all
rights, all laws and
(1) (1833] 32 U.S. 51, at 86, 87.
564
all justice within the State and only those rights which are
recognised by the sovereign are enforceable in his Courts,
The Municipal Courts which derive their authority from their
sovereign and administer his laws cannot enforce the rights
Which the former sovereign whose territory has merged or
been seized by the new sovereign recognised but the new
sovereign has not, for the right to property of the citizen
is only that right which the sovereign recognises.
It may also be observed that the constitutional provisions
in the United States are somewhat different. Under the Con-
stitution of the United States each treaty becomes a part of
the law of the land, the provisions thereof are justiciable
and the covenants enforceable by the Courts. Recognition of
the rights of the citizens of the acceding State being the
prerogative of the sovereign, if rights be recognized by
treaty which by the special rules prevailing in the United
States become part of the law of the land, they would be
enforceable by the Municipal Courts, Under the rule adopted
by this Court, a treaty is a contract between two nations,
it creates rights and obligations between the contracting
States. but there is no judicial tribunal which is competent
to enforce those rights and obligations. The treaties have
not the force of law and do not give rise to rights or
obligations enforceable by the Municipal Courts as observed
by Hyde in his ‘International Law” vol. 1 p. 433:
“Acknowledgement of the principle that a
change of sovereignty – does not in itself
serve to impair rights of private property
validly acquired in areas subjected to a
change, does not, of course. touch the
question whether the new sovereign is obliged
to respect those rights when vested in the
nationals of foreign States, such as those of
its predecessor. Obviously, the basis of any
restraint in that regard which the law of
nations may be deemed to impose must be sought
in another quarter.”
The observations made by Marshall C. J., have received
repeated recognition in treaties of cession concluded by the
565
United States. But as observed by Lord Halsbury in cook v.
Sprigg(1)
“It is a well-established principle of law
that the transactions of independent States
between each other are governed by the others,
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 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 autho-
rity to enforce such an obligation.”
It was then urged that by cl. 7 of the letter of guarantee
written by Mr. V. P. Menon on behalf of the Government of
India on October 1, 1948, which was to be regarded as
expressly stated in that letter, as part of the merger
agreement dated March 19, 1948, the Government of India had
undertaken to accept all orders passed and actions taken by
the Ruler prior to the date of handing over of the adminis-
tration to the Dominion Government. Clause 7 of the letter
is in the following terms:
“No order passed or action taken by you before
the date of making over the administration to
the Dominion Government will be questioned un-
less the order was passed or action taken
after the 1st day of April 1948, and it is
considered by the Government of India to be
palpably unjust or unreasonable. The decision
of the Government of India in their respect
will be final.”
But by virtue of Art. 363 of the Constitution, it is not
open to the respondents to enforce the covenants of this
agree-
(1) [1899] A.C. 572.
566
ment in the Municipal Courts: Maharaj Umeg Singh and Others
v. The State of Bombay and ohers(1).
It was then urged that the Government of Bombay as delegate
of the Dominion of India had recognised the right of the
respondents when they were permitted to cut the forests.
But the plea of recognition has no force. It is true that
some of the forests were permitted to be cut by the
contractors under special conditions pending decision of the
Government of Bombay. The Conservator of Forests North
Western Circle had ordered that the question as to the
approval to be given to the agreement dated March 12, 1948,
was under the consideration of the Government and that
written undertakings should be taken from the jagirdars,
inamdars or persons concerned that they would abide by the
decision or orders passed by the Bombay Government in
respect of such private forests when the question of rights
over such private forests will be finally settled. On
January 9, 1949, on the application of the jagirdar the
Divisional Forest Officer agreed to issue authorisation to
the contractor valid upto March 31, 1949, subject to the
condition that export outside was not to be permitted
pending receipt of the orders by the Government and that a
written undertaking was given by the purchaser that he would
abide by the decision and orders passed by Government. In
pursuance of this arrangement undertakings were given by the
contractors and the jagirdars agreeing to abide by the
decision and the orders to be passed by the Government of
Bombay in respect of the forest rights and admitting that
the authorization issued by the Divisional Forest Officer
was subject to those undertaking. The Forest Officers
therefore did not allow the forests to be worked
unconditionally. Cutting of trees in the forests by the
contractors was permitted subject to certain terms and
conditions and on the clear undertaking that the question as
to the right and the terms under which they could cut the
forests would be decided by the Government.
The Government of Bombay on July 8, 1949, resolved that the
order passed by the Ruler of the Sant State dated March 12,
1948, transferring forest rights to holders of the
(1) [1955] 2 S.C.R. 164.
567
jagirs villages were mala fide and that they should be can-
celled, but before taking further action in the matter, the
Commissioner should ascertain whether the possession of the
forests in question was with the Government or was with the
jagirdars. The order proceeded to state: “It the possession
is still with Government please ask the Officer of the
Forest Department to retain the same and to refuse to issue
passes, etc., to private contractors and purchasers’. A
copy of this order was forwarded to the Forest Officers,
Santrampur for information and guidance and it is found
endorsed on that order that no transit passes be issued-to
the jagirdars to whom rights over forests were conceded in
March 1948 and all further felling in such jagir forests
should be stopped at once and compliance reported. It is
true that the order of the Governor was not directly
communicated to the jagirdars or the contractors. But if
the conduct of the Forest Officers in permitting cutting of
the forests is sought to be relied upon, it would be
necessary to take into consideration the orders passed by
the Conservator of Forests, North-Western Circle, the
undertakings given by the contractors and the jagirdars and
the order passed by the Governor of Bombay and the execution
of that order by stoppage of the cutting of the forests. It
appears that cutting of trees in forests was permitted only
upto some time in 1949 and was thereafter stopped altogether
by order of the Revenue Department.
The final resolution cancelling the agreement was passed on
February 6, 1953. It was recited in the resolution that the
Tharav issued by the Ruler in 1948 had been considered by
the Government to be mala fide and the same had already been
repudiated and it was not binding on the Government of
Bombay both by law and under the agreement of integration,
in spite of the assurance contained in the collateral
letter. It was also recited.
“Since the Tharav has not been recognised by
Government but has been specifically
repudiated, everything done in pursuance
thereof including the contracts entered into
after passing of the Tharav. is not valid and,
therefore, binding on this Government. ”
568
Having regard to the conduct of the Officers of the Govern-
ment of Bombay and the resolution of the Government, the
plea that the Government of Bombay as delegate of the Do-
minion had renounced its right not to regard itself as bound
by the order made by the Ruler of Sant State cannot be
sustained.
The next question which falls to be determined is whether
the order can be regarded as “law” within the meaning of
cl.4 of the Administration of the Indian States Order, 1948.
Clause 4 (1) provided:
“Such provisions, or such parts of provisions
(a) of any law, or (b) of any notification,
order, scheme, rule, form or bye-law issued,
made or prescribed under any law, as were in
force immediately before the appointed day in
any Indian State shall continue in force until
altered, repealed 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 an Indian State in respect of
or in relation to such Indian State under any
such provisions of law immediately before the
appointed day, shall be exercised by the Pro-
vincial Government or any officer specially
empowered in this behalf by the Provincial
Government.”
It was urged that the order issued by the Ruler of Sant
State was either “law” or an “order made or prescribed under
any law” in force immediately before the appointed day and
by virtue of cl. 4 of the Administration of the Indian
States Order, it must be deemed to have remained in
operation and any action taken in contravention thereof by
executive action was unjustified. Our attention has not
been invited to any statutory provisions relating to forests
in the State of Sant, nor does the order dated March 12,
1948, purport to be issued in exercise of any statutory
power. On the face of it the order grants certain rights in
forests which had not been previously granted to the
jagirdars by the
569
Ruler. It is urged that the Ruler of Sant was an absolute
Ruler in whom were vested all authority legislative, execu-
tive and judicial, and whatever he did or directed had to be
complied with and therefore his actions and directions must
be deemed to be “law” within the meaning of cl. 4 of the
Administration of the Indian States Order. But the fact
that ;the Ruler of Sant State was an absolute Ruler not
bound by any constitutional limitations upon the exercise of
his powers does not, in my judgment, invest every exercise
of his powers with legislative authority. The functions of
a State whether it contains a democratic set-up or is
administered by an autocratic sovereign fall into three
broad categories–executive, legislative and judicial. The
line of demarcation of these functions in an absolute or
autocratic form of Government may be thin and may in certain
cases not be easily discernible. But on that account it is
not possible to infer that every act of an autocratic
sovereign has a legislative content or that every direction
made by him must be regarded as law. That an act or an
order of a sovereign with absolute authority may be enforced
and the subjects have no opportunity of getting redress
against infringement of their rights in the Municipal Courts
of -the State will not be decisive of the true character of
the functions of the sovereign in the exercise of which the
act was done or the order was made. The distinction between
functions executive, legislative and judicial vested in one
person may not be obliterated, merely because they are in
fact exercised or are capable of being exercised indiscrimi-
nately.
In the ultimate analysis, the legislative power is the power
to make, alter. amend or repeal laws and within,; certain
definite limits to delegate that power. Therefore it is
power to lay down a binding rule of conduct. Executive
power “is the power to execute and enforce the laws, and
judicial power is power to ascertain, construe and determine
the rights and obligations of the parties before a Tribunal
in respect of a transaction on the application of the laws
and even in an absolute regime this distinction of the
functions prevails. If an order is made during the regime
of a sovereign who exercises absolute powers, and it is
enforced or executed leaving nothing more to be done there-
570
under to effectuate it, any discussion of its true character
would be an idle exercise. Where however in a set-up in
which the rule of law prevails, to support action taken
pursuant to an order you have to reach the source of autho-
rity in the power of the previous autocratic sovereign, the
true nature of the function exercised may become important,
when the laws of the former State are by express enactment
continued by the new sovereign.
The order dated March 12, 1948, conveys to the jagirdars
rights which had been previously excluded from the grants.
The form of the order is of course not decisive. An
important, test for determining the character of the
sovereign function is whether the order expressly or by
clear implication prescribes a rule of conduct governing the
subject which may be complied with a sanction demanding
compliance therewith. The order dated March 12, 1948, is
expressly in the form of a grant of the rights which were
not previously granted and does not either expressly or
by implication seek to lay down any binding rule of conduct.
I am therefore unable to hold that the order issued on March
12, 1948, by the Ruler of Sant State was “law” or an order
made under any law within the meaning of cl. 4 of the
Administration of the Indian States Order. 1948.
Cases which have come before this Court in which the
question as to the binding effect of orders issued by the
Rulers of the former Indian States fell to be determined
clearly illustrate that principle. In Ameer-un-Nissa Begum
and others v. Mahboob Begum and others(1) the question as to
the binding character of two ‘Firmans’ dated February 24,
1949, and September 7, 1949, issued by H. E. H. the Nizam of
Hyderabad fell to be determined. The Court in that case
observed (at p. 359);-
“The ‘Firmans’ were expressions of the
sovereign will of the Nizam and they were
binding in the same way as any other law-,-
nay, they would override all other laws which
were in conflict with them. So long as a
particular ‘Firman’ held the field, that alone
would gov-
(1) A I.R. (1955) S.C. 352.
571
ern or regulate the rights of the parties con-
cerned, though it could be annulled or modi-
fied by a later ‘Firman’ at any time that the
Nizam willed.”
The Court declined to consider whether the
‘Firmans’were in the nature of “legislative
enactment” or “judicial orders” and observed:
“The Nizam was not only the supreme
legislature, he was the fountain of justice as
well. When he constituted a new Court, he
could, according to ordinary notions, be
deemed to have exercised his legislative
authority. When again he affirmed or reversed
a judicial decision, that may appropriately be
described as a judicial act. A rigid line of
demarcation, however, between the one and the
other would from the very nature of things be
not justified or even possible.”
In that case the primary question which the Court had to
consider was whether certain ‘Firmans’ issued by the Nizam
could be enforced. It was held that the order may be
legislative or judicial in character, but it could not be
regarded as executive. It may be noticed that no action was
required to be taken after the cessor of the sovereignty of
the Nizam, in pursuance of the ‘Firmans’. The ‘Firmans’ had
become effective, and titles of the parties stood adjusted
in the light of those ‘Firmans’ during the regime of the
Nizam.
In Director of Endowments. Government of Hyderabad v. Akram
Ali(1) the effect of a ‘Firman’ issued by the Nizam on
December 30. 1920, directing that the Ecclesiastical
Department to supervise a Dargah within the jurisdiction of
the Nizam until the rights of the parties were enquired into
and adjudicated upon by a civil court fell to be determined.
The Court in that case held that the right of Akram Ali who
claimed to be hereditary Sajjad Nashin and Mutwalli was
subject to the order of the Nizam which had been passed
before the Hyderabad State merged with the Union of India
and the applicant having no rights it could
(1) A.I.R. 1956 S.C. 60.
572
be enforced at the date of the Constitution and the Courts
were incompetent to grant him relief till the rights were
determined by the Constitution. The effect of the ‘Firman’
was to deprive the respondent Akram Ali and all ‘other
claimants of all rights to possession pending enquiry into
the case. It is clear from the observations made in that
judgment that the only decision of the Court was that by the
‘Firman’ the rights of the Sajjad Nashin and Mutwalli was
suspended till determination by the civil court of his right
to possession. The ‘Firman’ was given effect not because it
was regarded as the expression of the legislative will but
because it had become effective before the Constitution came
into effect suspending the rights of the applicant.
In Madhorao Phalke v. The State of Madhya Bharat(1) the true
character of certain ‘Kalambandis’ issued by the Rulers of
Gwalior fell to be determined. The appellant was the
recipient of a hereditary military pension granted by the
Ruler of Gwalior to his ancestors in recognition of their
military services. The right to receive pension was
recognised by the ‘Kalambandis’ of 1912 and 1935 issued by
the Ruler. After the formation of the State of Madhya
Bharat under the Constitution, the Government of that State
by an executive order terminated the right of the appellant.
The ‘Kalam-bandis’ though not issued in the form of
legislative enactments were issued for the administration of
the department relating to the Shiledari units. and the
nature of the provisions unambiguously impressed upon them
the character of statutes or regulations having the force of
law. The ‘Kalambandis’ recognised and conferred hereditary
rights: they provided for the adoption of a son by the widow
of a deceased Silledar subject to the approval of the State
and also for the maintenance of widows out of funds
specially set apart for that purpose, and contemplated the
offering of a substitute when a silledar became old or
otherwise unfit to render service: they made detailed provi-
sion as to mutation of names after the death of a silledar.
They further enacted that the Asami being for the shiledari
service it could not be mortgaged for a debt of any banker,
and if a decree holder sought to proceed against the amount
(1) [1961] S.C.R. 957.
573
payable to him, execution had to be carried out in accord-
ance with and in the manner and subject to the limitations
prescribed in that behalf. The ‘Kalambandis’ were not
treated as administrative orders issued merely for the pur-
pose of regulating the working of the administration of the
department of irregular forces, and were therefore to be re-
garded as regulations having all the characteristics of
legislative enactments.
In Promod Chandra Deb’s case(1) the true character of
,certain ‘Khor Posh’ grants granted by the Rulers of
Talcher, Bamara and Kalahandi fell to be determined, in a
group of petitions for enforcement of fundamental rights.
Out of the four petitions, petition No. 167 of 1958 was
dismissed ,on the ground that under an order passed by the
Extra Provincial Jurisdiction Act, 1947, a grant made by the
Ruler ,of Bamra in favour of the petitioner was annulled
before Bamra became part of the Union of India and the right
created by the grant had on that account ceased to exist.
In two other petitions Nos. 168 of 1958 and 4 of 1959 it was
found by the Court that the maintenance grants in favour of
certain members of the family of the Ruler were recognised
by the Government of India ‘and the right thus recognised
was given effect to and payments pursuant thereto were
continued for nearly eight years after the merger of the
State. This Court held that the State having recognized its
obligation to pay the maintenance grants which were -agreed
to be granted under the statutory law and the custom of the
State, the grants could not be annulled by executive action.
In the principal writ petition No. 79 of 1957 the grants by
the Ruler of Talcher was made subject to the -terms and
conditions laid down under Order 31 of the Rules and
Regulations of the State of Talcher of 1937. These Rules
and Regulations of Talcher of 1937 were regarded as the law
of the State and it was in accordance with the law that the
‘Khor Posh’ grants were made by the Ruler. If was held that
these grants had the effect of law. Sinha C.J., delivering
the majority judgment of the Court observed (at p. 436):
“There is also no doubt that the grant made by
the ruler of Talcher in favour of the
petitioner
(1) [1962] Suppl. 1 S.C.R. 405.
574
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.”
In the view of this Court the terms and conditions, subject
to which the grant was made, were on the facts of the cast
in the nature of legislative acts and not exercise of
executive functions. The Court in that case did not purport
to lay down that any act done by the Ruler whether it be
executive, legislative or judicial must be regarded since
the merger of the State as in the exercise of the
legislative will of the Ruler and therefore continuing as
law.
In a recent judgment of this Court in Tilkayat Shri
Govindlalji Maharaj etc. v. State of Rajasthan and others(‘)
the ‘Firman’ issued by the Udaipur Darbar in 1934 relating
to the administration of the temple of Sharnathji at Nath-
dwara, which was expressly declared to be a public temple,
and governing the devolution of the right to the management
of the temple, and certain incidental matters, fell to be
determined. The ‘Firman’ consisted of four clauses. By the
first clause it was declared that according to the law of
Udaipur the shrine of Shrinathji had always been and was a
religious institution for the followers of the Vaishnava
Sampradaya and that all the property immovable and movable
dedicated, offered or presented to or otherwise coming to
the deity Shrinathji had always been and was the property of
the shrine and that the Tilkayat Maharaj for the time being
was merely the custodian manager and trustee. of the said
property for the shrine. The second clause prescribed the
rule of succession and declared that it was regulated by the
law of primogeniture, and provided that the Udaipur Darbar
had absolute right to depose any Tilkayat Maharai on the
ground that such Tilkayat Maharaj was unfit. The
(1) A.I.R. (1963) S.C. 1638.
575
third clause provided for measures to be taken by the Ruler
for management of the shrine during the minority of the
Tilkayat Maharaj and by the last clause it was provided that
in accordance with the law of Udaipur the Maharana had
declared Shri Damodarlalji-the then Tilkayat Maharajunfit to
occupy the Gaddi and had approved of the succession of
Goswami Govindlalji to the Gaddi of Tilkayat Maharaj. This
‘Firman’ declared the character of the trust relating to the
Shrinathji temple, laid down rules as to the succession and
provided for the management during the minority of the
Tilkayat, and declared the right of the State to remove the
Tilkayat and for enforcement of that right by declaring that
the then Tilkayat was unfit to occupy the Gaddi. This was
in substance though not in form exercise of the legislative
will of the sovereign. Its operation was not exhausted by
its enforcement during the regime of the Maharana of
Udaipur. Devolution of the Gaddi, and declaration about the
power of the Ruler over the shrine were intended to govern
the administration of the shrine for all times. It is true
that in that case in paragraph-32 it was observed after
referring to Madhorao Phalke’s ease(1), Ameer-un-Nissa
Begum’s case (2 ) and the Director of Endowments, Government
of Hyderabad’s case(3):
“In the case of an absolute Ruler like the
Maharana of Udaipur it is difficult to make
any distinction between an executive order
issued by him or a legislative command issued
by him. Any order issued by such a Ruler has
the force of law and did govern the rights of
the parties affected thereby.”
It was not and could not be laid down that all orders issued
by an absolute Ruler were legislative in character: it was
merely sought to be emphasized that so long as the territory
of Udaipur and the shrine were under the sovereignty of the
Maharana the distinction between commands legislative and
executive was academic, for all orders and commands of the
Ruler had to be obeyed alike. But since the merger of the
State with the Union of India, the question
(1) [1961] S.C.R. 957, (2) A.I.R. (1955) S.C. 352.
(3) A.I.R. 1956 S.C. 60,
576
whether the ‘Firman’ was a mere executive order or a legis-
lative enactment assumed vital importance. If the command
was merely executive unless the rights created thereby were
recognized by the Dominion of India they had no validity and
no reliance could be placed upon them in the Municipal
Courts. If the command was legislative, the laws of the
former State having been continued upon merger, the
legislative command retained vitality and remained
enforceable. In the context in which it occurs the
statement set out did not and was not intended to lay down,
that there is no distinction between legislative commands
and executive orders which have to be enforced after the
merger of the State with the Indian Union.
I may refer to decisions which illustrate the distinction
between legislative commands and executive orders of the
Rulers of the former Indian States. In Maharaja Shree Umaid
Mills Ltd. v. Union of India and Others(1) the question
whether an agreement between the Ruler of Jodhpur and a
limited Company whereby the Ruler agreed to exempt or remit
certain duties or royalties and to hold the Company not
liable to pay taxes and further gave an assurance to the
Company to amend the laws so as to make them consistent with
the agreement was not regarded as “law” within the meaning
of Art. 372 of the Constitution. In the view of the Court
the agreement rested solely on the consent of the parties:
it was entirely contractual in nature an a none of the
characteristics of law. The Court in that case observed
that every order of an absolute Ruler who combines in
himself all functions cannot be treated as “law”
irrespective of the nature or character of the order passed.
There is, it was observed, a valid distinction between an
agreement between two or more parties even if one of the
parties is the sovereign Ruler, and the law relating
generally to agreements; the former rests on consensus of
mind, the latter expresses the will of the sovereign. This
case supports the proposition that every act done or order
passed by an absolute Ruler of an Indian State cannot have
the force of law or be regarded as “law” since the merger of
his territory with the ‘Union of India’. To have the
vitality of law after
(1) A.I.R. (1963) S.C. 953.
577
merger, it must be the expression of the legislative will of
the Ruler,
There is yet another judgment of this Court in The Bengal
Nagpur Cotton Mills Ltd. v. The Board of Revenue, Madhya
Pradesh and Others(1) in which also the question whether an
agreement between the Ruler of Rajnandgaon and M/s. Shaw
Wallace and Company in connection with the setting up of a
textile factory on certain concessional terms in the matter
of imposition of octroi duties on imported goods fell to be
determined. It was observed in that case:
“It is plain that an agreement of the Ruler
expressed in the shape of a contract; cannot
be regarded as a law. A law must follow the
customary forms of law-making and must be
expressed as a binding rule of conduct. There
is generally an established method for the
enactment of laws, and the laws, when enacted,
have also a distinct form. It is not every
indication of the will of the Ruler, however
expressed, which amounts to a law. An
indication of the will meant to bind as a rule
of conduct and enacted with some formality
either traditional or specially devised for
the occasion, results in a law but not an
agreement to which there are two parties, one
of which is the Ruler.”
The order of the Ruler of Sant dated March 12, 1948, was not
in the form of a legislative enactment. It also did not
seek to lay down a course of conduct: it merely purported to
transmit certain rights which were till the date of the
order vested in the Ruler to the jagirdars who were grantees
of the villages. It is difficult to hold that an order
merely granting forest rights not in pursuance of any legis-
lative authority, but in exercise of the power of the sove-
reign in whom the rights were vested, to the jagirdars to
whom the villages were granted without forest rights, can be
regarded as “law” within the meaning of cl. 4 of the
Administration of the Indian States Order, 1948, when the
order was not intended to lay down any binding rule of
(1) A.I.R. 1964 S.C. 888.
(2) 134-154 S.C. 37.
578
conduct of the grantees and merely purported to convey the
rights which till then were vested in the Ruler.
The other question which remains to be determined is whether
the respondents are entitled to the protection of s. 299(1)
of the Government of India Act, 1935, or Art. 31 (1) of the
Constitution. Undoubtedly the order which deprives them of
the right to cut forest trees which they claimed from the
jagirdar who derived them under the grant dated March 12,
1948, from the Ruler of Sant is an executive order. Section
299(1) of the Government of India Act, 1935, protection of
which was claimed on the merger of the State of Sant with
the Dominion of India provided:
“No person shall be deprived of his property
in British India save by authority of law.”
The clause conferred protection upon the property rights of
persons against any executive action not supported by law.
To attract the clause, there must, however, exist a right to
property which is sought to be protected. If for reasons
which we have already stated in considering the first
question, the subjects of the acceding State are entitled
only to such rights as the new sovereign chooses to
recognize, in the absence of any recognition of the rights
of the respondents or their predecessor jagirdars, there was
no right to property of which protection could be claimed.
As held by this Court in State of Saurashtra v. Jamadar
Mohamad Abdulla and others(1) orders passed by the
Administrator of the State of Junagadh appointed on behalf
of the Government of India (which had assumed charge of the
administration of the State after the Nawab of Junagadh fled
the country) on various dates between November 9, 1947 and
January 20, 1949, cancelling grants in favour of certain
persons in whose favour the grants had previously been made
by the Nawab of Junagadh were not liable to be challenged in
suits filed by the grantees in the Civil Courts of the
Dominion, on the plea that the properties had been taken
away without the authority of law. This Court held that the
impugned orders cancelling the grants in favour of the
respondents and taking of the properties arose out of and
during an act of State and they could not be questioned
before Municipal Tribunals, for the
(1) (1962] 3 S.C.R. 970.
579
orders of cancellation were passed before the change over of
de jure sovereignty.
There is no support for the assumption made by the res-
pondents that an act of State arises merely at a fixed point
of time when sovereignty is assumed. An act of State may be
spread over a period, and does not arise merely on the point
of acquisition of sovereign right: see Promod Chandra Deb’s
case(1). Nor is the new sovereign required to announce his
decision when he assumes or accepts sovereignty over foreign
territory, about the rights created by the quondam
sovereign, on pain of being held bound by the rights so
created. The decision of this Court in jagannath
Agarwalla’s case(2) pointedly illustrates this principle.
The State of Mayurbhanj merged with the Province of Orissa
on January 1, 1949, but an order dated June 28, 1952 made by
the Board of Revenue acting on behalf of the State of Orissa
rejecting the claim made by a person who had entered into an
agreement or arrangement with the Maharaja of Mayurbhanj in
1943 was held to be in the course of an act of State, the
rejection of the claim being in pursuance of an order issued
under s. 4 of the Extra Provincial Jurisdiction Act, 47 of
1947. Therefore till the right to property of the subjects
of the former Indian State was recognized by the new
sovereign there was no title capable of being enforced in
the Courts of the Dominion or the Union.
It was then urged that in any event since the enactment of
the Constitution, by executive action a person may not be
deprived of his right to property, and this protection
applies as much to rights granted by the former Rulers to
persons who on merger became citizens of the Dominion of
India as to rights of property of other citizens. In
substance it is urged that even if there was no recognition
of the right to property which was granted by the former
sovereign by the Dominion Government, after the enactment of
the constitution the right granted by the former Rulers may
only be taken away by legislative command and not by
executive action. This argument proceeds upon a
misconception of the nature of the fundamental right
conferred by Art. 31(1) of the Constitution. In terms, the
Article confers a right to claim protection against
deprivation of property otherwise than by
(1) [1962] Suppl. 1 S.C.R. 405.
(2) [1962] 1 S.C.R. 205.
580
authority of law. A right to property is undoubtedly pro-
tected against all actions otherwise than under the
authority of law. But the clause postulates a right to
property which is protected. It does not purport to invest
a person with a right to property which has not been
recognized by the Dominion of India or the Union. Even if
the right to property was recognized by the Indian State of
which the claimant was subject, so long as it is not
recognized by the Dominion or the Union it is not
enforceable by the Courts in India. On the merger of the
State of Sant with the Dominion of India, undoubtedly the
respondents became citizens of the Dominion and they were
entitled like any other citizen to the protection of the
rights which the Dominion recognized.
It has also to be remembered that promulgation of the
Constitution did not result in transfer of sovereignty from
the Dominion of India to the Union. It was merely change in
the form of Government. By the Constitution, the authority
of the British Crown over the Dominion was extinguished, and
the sovereignty which was till then rooted in -the Crown was
since the Constitution came into force derived from the
people of India. It is true that whatever vestige of
authority which the British Crown had over the Dominion of
India, since the Indian Independence Act was thereby
extinguished, but there was no cession, conquest occupation
or transfer of territory. The new governmental set up was
the final step in the process of evolution towards self-
government. The fact that it did not owe its authority to
an outside agency but was taken by the representatives of
the people made no difference in its true character. The
continuance of the governmental machinery and of the laws of
the Dominion, give a lie to any theory of transmission of
sovereignty or of the extinction of the sovereignty of the
Dominion, and from its ashes, the springing up of another
sovereign as suggested in Virendra Singh and Others v. The
State of Uttar Pradesh(1) which will presently examine.
If therefore the respondents had under the Government of
India Act, 1935, after the merger not acquired any right to
the forests by virtue of any recognition of the Tharav dated
March 12, 1948, the promulgation of the Constitution
(1) [1955] 1 S.C.R. 415.
581
did not invest them with any additional rights which would
convert either their claims to the forest rights into
property or to enable them to enforce in the Indian Courts
such claims not recognized by the State as fundamental right
to property. By Art. 31 right to property is protected
against all actions save by authority of law. But if there
was no right to property, an executive action refusing
recognition of a claim to property could not infringe Art.
31 of the Constitution.
In Virendra Singh’s case(1) this Court held that since the
promulgation of the Constitution grants which had been made
by the previous Rulers, even if they were not recognized by
the Dominion of India or the Union, could not be interfered
with except by authority of law. In that case the
petitioners were grantees from the Rulers of the States of
Sarila and Charkhari of certain villages before those States
merged with the Dominion of India. The States originally
merged with the Union of Vindhya Pradesh, and the Vindhya
Pradesh Government confirmed the grants in December 1948.
But the Union of the States of Vindhya Pradesh was
dissolved, and the covenanting States separately acceded to
the Dominion of India, and surrendered all authority and
jurisdiction in relation to the governance of the States and
executed instrument called ‘The Vindhya Pradesh Merger
Agreement’. The States which formed the Vindhya Pradesh
were transformed into a Chief Commissioner’s Province on
January 23, 1950. The grants of the four villages made in
favour of the petitioners Were revoked in August 1952 by the
Government of the State of Uttar Pradesh to which State
those villages being enclaves within its territory were
transferred. The grantees of the villages then petitioned
this Court under Art. 32 of the Constitution challenging the
validity of the orders revoking the grant of jagirs and
maufis in the four villages as violative of Arts. 31 (1) and
19 (1 ) (f ) of the Constitution. This Court observed that
the properties in question were the properties over which
the Rulers had right of disposition at the date of the
grants, and the grants were absolute in character and would
under any civilised system of law pass an absolute and
indefeasible title to the grantees and that assuming that
the titles were defensible at the mere will of
(1) [1955] 1 S.C.R. 415.
582
the sovereign the fact remained that they were neither
resumed by the former Rulers nor confiscated by the Dominion
of India as an act of State and upto the 25th of January,
1950, the right and title of the grantees to continue in
possession was good and was not interfered with. The Court
accordingly held that the Constitution by the authority
derived from and conferred by the people of India; destroyed
all vestige of arbitrary and despotic power in the
territories of India and over its citizens and lands and
prohibited just such acts of arbitrary power as the State of
Uttar Pradesh in that case was seeking to uphold. It was
further observed that the Dominion of India and the States
had abandoned their sovereignty and surrendered it to the
people of the land who framed the new Constitution of India
and as no sovereign can exercise an act of State against its
own subjects, the orders of revocation of the grants were
invalid. In my view the conclusion of the Court proceeded
upon two assumptions, neither of which was true:
(i) that the sovereignty of the Dominion of
India and of the States was surrendered to the
people of India, and in the exercise of the
sovereign power the people gave themselves the
new Constitution as from January 26, 1950; and
(ii) the petitioners who were in de facto
possession of the disputed lands had rights in
them which they could have enforced upto 26th
January, 1950, in the Dominion Courts against
all persons except possibly the State.
These assumptions are not supported by history or by consti-
tutional theory. There is no warrant for holding at the
stroke of mid-night of the 25th January, 1950, all our pre-
existing political institutions ceased to exist, and in the
next moment arose a new set of institutions completely
unrelated to the past. The Constituent Assembly which gave
form to the Constitution functioned for several years under
the old regime, and set up the constitutional machinery on
the foundations of the earlier political set up. It did not
seek to destroy the past institutions: it raised an edifice
on what existed before. The Constituent Assembly molded no
new
583
sovereignty:it merely gave shape to the aspirations of the
people, by destroying foreign control and evolving a com-
pletely democratic form of government as a republic. The
process was not one of destruction, but of evolution.
For reasons already stated it is impossible to hold that
what were mere claims to property till the 25th of January,
1950, could be regarded as enforceable against any one.
Till the Dominion of India recognised the right, expressly
or by implication there was no right to property which the
Courts in India could enforce. There is nothing in the
Constitution which transformed the claims which till January
25, 1950, had not been recognized into property rights so as
to prevent all further exercise of the act of State, and
extinguish the powers of the Union to refuse to recognize
the claims.
The order passed in August 1952 revoking the grants by the
Rulers of Sarila and Charkhari was in my view in substance
an act of State. It is true that there can be no act of
State by a sovereign against his own subjects. But the
State was seeking to refuse to recognize the claims made by
the grantees from the former Rulers, and the fact that the
act of State operated to the prejudice of persons who were
at the date of refusal of recognition citizens, did not
deprive the act of State of either its character or
efficacy.
These appeals must therefore be allowed and the suit filed
by the respondents dismissed with costs throughout.
RAGHUBAR DAYAL J.-I agree with the views expressed R, by my
learned brother Ayyangar J., on all the points except in
regard to the Tharao dated March 12. 1948, being law.
I agree with brother Hidayatullah J., that this Tharao is
not law, and further agree with him in the order proposed.
MUDHOLKAR J.-This Bench has been constituted for considering
whether the reasoning underlying the decision of this Court
in Virendra Singh v. The State of Uttar Pradesh(1) that the
inhabitants of the Indian States brought with them, after
the merger of those States in the Dominion of India pursuant
to agreements entered into by the Rulers of those
(1) [1955] 1 S.C.R. 415.
584
States, rights to property granted to them by the Rulers of
those States, is correct or not. The decision and the
various grounds upon which it rests have been carefully
examined by my brother Ayyangar J., in his judgment and I am
generally in agreement with what he has said. As, however,
I take a somewhat different view on some of the matters
which arise for consideration in this case this judgment has
become necessary.
The facts have been set out fully in the judgment of my
learned brother and, therefore, it will be sufficient to
mention only such of them as are necessary to elucidate the
questions which I propose to deal with. In consequence of
two agreements entered into by the former Ruler of Sant
State, the territory of that State merged in the Dominion of
India as from June 10, 1948. Prior to that date it had
acceded to the Dominion of India on three subjects only.
This State, along with other ruling States in India, became
an independent sovereign State in the year 1947 when the
Dominions of India and Pakistan were constituted. By virtue
of the powers vested in the Central Government by the Extra
Provincial Jurisdiction Act, 1947 it delegated its functions
to the Government of Bombay which passed the Indian States
(Application of Laws) Order, 1948 on July 28, 1948. In,
consequence of that Order certain laws in force in the Pro-
vince of Bombay were extended to the merged territories. By
the operation of the Indian States (Merger of Governors
Provinces) Order, 1949, the Sant State became part of the
Province of Bombay.
The agreement relating to the merger of the State in the
Dominion of India was entered into by the Ruler of Sant some
time before the date on which the merger became effective.
The Ruler of the State passed a Tharao (which is translated
as ‘Order) on March 12, 1948 in the following terms:-
“S. Ta. Mu Outward Register No. 371.
The Jivak, Patavat, Inami, Chakariyat,
Dharmada villages in Sant State are being
given (granted) to Jagirdars and the holders
of the said villages are not given rights over
forests. Hence after considering the
complaints of certain Jagirs, they,
585
are being given full rights and authority over
the forests in the villages under their
vahivat. So, they should manage the vahivat
of the forest according to the policy and
administration of the State. Orders in this
regard to be issued.”
Taking advantage of the Tharao several Jagirdars entered
into contracts pertaining to the exploitation of the forests
in their Jagirs. The respondents in these appeals are some
of the forest contractors. The Government of the Province
of Bombay through the officers of its Forest Department did
not allow the respondents to exercise their rights under the
contracts entered into with them by the Jagirdars on the
ground that the grant of forest rights by the former Ruler
to the Jagirdars was not binding upon the successor
Government. Thus being deprived of their right to work the
forests the various respondents instituted suits after the
coming into force of the Constitution of India. Their
claims were opposed by the State of Bombay mainly on the
ground that in the absence of recognition, express or
implied, by the successor State of rights conferred by the
former- Ruler on the Jagirdars the respondents could not
enforce them in the municipal courts. The suits of the
respondents were dismissed by the court of first instance
and appeals preferred therefrom by them were dismissed by
the District Court. In second appeal, however, the appeals
were allowed by the High Court by a common judgment in which
reliance is placed largely upon what has been held and said
by this Court in Virendra Singh’s case(1) though a reference
has also been made to two other decisions of this Court and
some decisions of the Privy Council.
In the arguments before us it has never been in question
that the acquisition of the territory of Sant State by the
Dominion of India in pursuance of the Instrument of
Accession and Merger Agreement was an act of State. The
respondents’ contentions were, however, that (1) in point of
fact the Government of Bombay, acting through the officers
of the forest department had recognised the Jagirdar’s
rights by permitting the contractors to carry on the work of
cutting timber; (2) that though the Government of”
(1) [1955] 1 S.C.R. 415.
586
Bombay subsequently repudiated the Jagirdars’ rights that
repudiation was of no avail; (3) that the letter sent to the
Ruler of Sant State by the Secretary to the States Depart-
ment, Mr. V. P. Menon, in October, 1948 amounted to a waiver
by the Dominion of India of the right of repudiation of the
rights of Jagirdars; (4) that after the Jagirdars became the
citizens of the Dominion of India there could be no act of
State against them; (5) that the doctrine evolved by the
Privy Council in its decisions starting from Secretary of
State for India v. Kamachee Boye Sahiba(1) and going upto
Asrar Ahmed v. Durgah Committee, Ajmer(2) was opposed to the
present view on the effect of conquest and cession upon
private rights as exemplified in the decisions in United
States v. Percheman(3) and that this Court should,
therefore, discard the Privy Council’s view and adopt the
modem view inasmuch as the latter is considered by common
consent to be just and fair and finally (6) that the
Jagirdars could not be deprived of the forest rights
deprived by them from the Ruler of Sant State before the
Constitution, without ,complying with the provisions of s.
299 of the Government of India Act, 1935, and after the
coming into force of the Constitution without complying with
the provisions of Art. 31 of the Constitution.
I agree with my brother Ayyangar J., that the fact that some
officers of the forest department had permitted the
respondents to carry on operations in the forests leased out
to them by the Jagirdars does not amount to recognition of
the right conferred upon the latter by the Tharao of March
12, 1948. In the first place, it was not open to the
officers of the forest department to grant recognition to
the Jagirdars’ rights for the simple reason that the right
of granting recognition could be exercised only by the
Government acting through its appropriate agency. Moreover
the permission which was accorded to the respondents was
only tentative and expressly subject to the final decision
of the Government on the question of their right under the
leases granted by the Jagirdars.
(1) (1859) 13 Moore P.C. 22. (2) A-1 R 1947 P. C I.
(3) (1883) 32 U. S. 51.
587
The second contention of the respondents is based upon -a
misapprehension of the legal position flowing from the long
series of decisions of the Privy Council which have been
accepted by this Court in several of its decisions and in
particular Dalmia Dadri, Cement Co. Ltd. v. The Commissioner
of Income-tax(1); State of Saurashtra v. Memon Haji Ismail
(2) ; Promod Chandra Deb and Ors. v. The State of Orissa and
Ors.(3); State of Saurashtra v. Jamadar Mahamad Abdulla and
Ors.(4). The one decision in which the Privy Council’s view
is criticised is that of Virendra Singh’s case(5). The view
of the Privy Council has been expressed by Lord Dunedin in
Vajesinghji v. Secretary of State for India(6) in the
following passage which has been ,quoted with approval in
several judgments.
“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 rule of predecessors avail him
nothing. Nay more, even if in a treaty of
cession it is stipulated that certain
inhabitants should enjoy certain rights, that
does not give a title to, those inhabitants to
enforce those stipulations in the municipal
courts. The right to enforce, remains only
with the high contracting parties.”
Thus what is clear beyond doubt is that the rights derived
by the inhabitants of the conquered and ceded territory from
its former rulers cannot be enforced by them against the new
(1) [1959] S.C.R. 729.(2) [19601 1 S.C.R. 537.
(3) [1962] Supp. 1. S.C.R. 405.(4) [19621 3 S.C.R. 970.
(5) [1955] 1 S C.R. 415.(6) 51 T.A. 357.
588
sovereign in the courts of that sovereign unless they have
been recognized by the sovereign. The only basis upon which
rights of this kind can be enforced in a municipal court
would be the fact of its recognition by the new sovereign.
A right which cannot -on its own strength be enforced
against a sovereign in the courts of that sovereign must be
deemed to have ceased to exist. It follows therefore that a
right which has, ceased to exist does not require
repudiation.
As regards the argument that the Government has waived its
right to withold recognition, I agree with all that has been
said by my brother Ayyangar J. Indeed, if the inhabitants of
a ceded territory have ceased to have a right against the
new sovereign there is nothing for the sovereign to waive.
I also agree with my learned brother that if the letter of
the Secretary to the States Department wpon which reliance
is placed by the respondents is regarded as part of the
agreement of merger the municipal courts are precluded by
Art. 363 of the Constitution from enforcing any rights
arising thereunder.
The argument that there can be no Act of State against its
citizens is based upon the supposition that the rights
claimed by the Jagirdars from their former Ruler would be
available to them against the new sovereign unless they were
repudiated and that here, as the resolution of the
Government of Bombay dated February 6, 1953 stating that
Jagirdars’ rights have already been repudiated amounts to an
Act of State against persons who had long before this date
become the citizens of the Republic of India it was
incompetent. As already pointed out, the municipal courts
cannot take notice of a right such as this unless it had
been recognized expressly or by implication by the new
sovereign. doubt, the Government resolution speaks of
repudiation. That in my opinion is only a loose way of
conveying that the rights of the Jagirdars have not been
recognized. That resolution does no more than set out the
final decision of Government not to give recognition to the
Tharao of March 12, 1948 by which the former Ruler of Sant
State ad conferred certain forest rights on the Jagirdars.
Indeed, it is clear from paragraph 3 of that resolution that
the Government had expressly borne in mind the legal
position
589
that rights claimed under the Tharao gave no title to the
inhabitants of Sant State to enforce them in a municipal
,court and that the right to enforce them remained only with
the high contracting parties.
Now as to the argument that this Court should discard the view
taken by the Privy Council in Secretary of State for India
v. Kamchee Boye Sahiba(1); Secretary of State for India v.
Bai Rajbai(2); Vajesinghji v. Secretary of State for
India(3); Secretary of State v. Sardar Rustom Khan(4) and
Asrar Ahmed’s case(5) and adopt the view taken by ,Chief
Justice Marshall in Percheman’s case(6). I agree with much
which my learned brother has said but would,add one thing.
It is this. The courts in England have applied the
principles of international law upon the view that what is
by the common consent of all civilized nations held to be an
,appropriate rule governing international relations must
also be deemed to be a part of the common law of England.
Thus English courts have given effect to rules of
international law by resorting to a process of
incorporation(7). The English courts also recognise the
principle that since the British Parliament is paramount the
rules of international law are subject to the right of
Parliament to modify or abrogate any of its rules. A
municipal court can only enforce the law in force in the
State. Therefore, if a rule of international law is
abrogated by Parliament it cannot be enforced by the
municipal courts of the State and where it is modified by
Parliament it can be enforced by the municipal courts
subject to the modification. Would the position be
different where a particular rule of international law has
been incorporated into the common law by decisions ,of
courts? So far as the municipal courts are concerned that
would be the law of the land which alone it has the power
and the duty to enforce. Where Parliament does not modify
or abrogate a rule of international law which has become
part of the common law, is it open to a municipal
(1) (1859) 13 Moore P.C. 22(2) 42 I.A. 229.
(3) 51 I.A. 357. (4) 68 I.A. 109.
(5) A.I.R. 1947 P.C. I.(6) (1833) 32 U. S. 51.
(7) See International Law-a Text 1962 by Jacobini, p. 32 et
seq
590
court to abrogate it or to enforce it in a modified form on
the ground that the opinion of civilized States has
undergone a change and instead of the old rule a more just
and fair rule has been accepted ? Surely the law of a State
can only be modified or repealed by a competent legislature
of theState and not by international opinion however weighty
that Opinion may be. Now, a rule of international law on
which the several Privy Council decisions as to the effect
of conquest or cession on the private rights of the
inhabitants. of the conquered or ceded territory is founded
has become a part of the common law of this country. This
is ‘law in force and is saved by Art. 372 of the
Constitution. The courts in India are, therefore, bound to
enforce that rule and not a rule of international law
governing the same matter based upon the principle of state
succession which had received the approval of Marshall C.J.
and which has also received the approval of several text-
book writers, including Hyde(1). It is true that the
International Court of Justice has also stated the law on
the point to be the same but that does not alter the
position so far as the municipal courts are concerned. If
in the light of this our law is regarded as inequitous or a
survival of an imperialistic system the remedy lies not with
us but with the legislature or with the appropriate
Government by granting recognition to the private rights of
the inhabitants of a newly acquired territory.
Thus while according to one view there is a State succession
in so far as private rights are concerned according to the
other which we might say is reflected in our laws, it is not
so. Two concepts underlie our law : One is that the
inhabitants of acquired territories bring with them no
rights enforceable against the new sovereign. The other is
that the municipal courts have no jurisdiction to enforce
any rights claimed by them, even by virtue of the provisions
of a treaty or other transaction internationally binding on
the new sovereign unless their rights have been recognized
(1) See Hyde international Law Vol. 1, 2nd ed. p. 431, and
Wesley L. Gould-An introduction to International Law pp.
422-427.
591
by the new sovereign. Municipal courts derive, their
jurisdiction from the municipal law and not from the laws of
nations and a change in the laws of nations brought about by
the consent of the nations of the world cannot confer upon a
municipal court a jurisdiction which it does -.lot enjoy
under the municipal law.
Apart from that the rule cannot be regarded merely as a
device of colonial powers for enriching themselves at the
expense of the inhabitants of conquered territories and,
therefore, an anachronism. It would neither be just nor
reasonable to bind the new sovereign, by duties and
obligations in favour of private parties created by the ex-
sovereign from political motives or for the purpose of
robbing the new sovereign of the full fruits of his
acquisition. No doubt, International Law does not prevent
legislation by the new sovereign for the purpose of freeing
itself from Such duties and obligations but that would be a
long and laborious process and may be rendered onerous or by
reason of constitutional provisions such as those contained
in Part III of our Constitution, even impossible. It would
also not be reasonable to regard the new sovereign as being
bound by duties and obligations created by the ex-sovereign
till such time as the new sovereign was able to show that
they were incurred by the ex-sovereign mala fide. It is
apparently for such reasons that the law as found by the
Privy Council deprives the grantees under the former ruler
completely of their rights as against a new sovereign by
making those rights unenforceable in a municipal court. It,
however, also envisages the recognition of those rights by
the new sovereign. This means that the new sovereign is
expected to examine all the grants and find out for himself
whether any of the grants are vitiated by mala fides or were
against his legitimate interests so that he can give
recognition to those grants only which were not vitiated by
mala fides or which were not against his interests. That
this is how the rule was applied would be clear from what
happened in this country when time and again territories
were ceded by former Indian Rulers to the British
Government. As an instance of this there was the Inam
Enquiry in the middle of the last century as a result of
which a very large number of Inams were ultimately
592
recognised by the British Government. That while dealing
with the claims of the former grantees in ceded territories
used to be examined meticulously would be clear from the
facts in Bai Rajbai’s case(1). Such being the actual posi-
tion I do not think that the rule which has been applied in
this country can be regarded to be anachronism or to be
iniquitous
In so far as the argument is based on the provisions of
s.299 of the Government of India Act, 1935 and Art. 31 of
the Constitution is concerned I would reiterate the view
which my brother Sarkar J. and myself have taken in Jamadar
Mahamad Abdulla’s case(3) and Promod Chandra Deb’s case(4)
which is the same as that expressed by my brother Ayyangar
J., and with which my brother Hidayatullah J., has agreed. ,
Adverting to a similar argument advanced by Mr. Pathak ‘in
the former case we quoted the following passage from the
judgment of Venkatarama Aiyar J., in Dalmia Dadri Cement
Co’s case(4):-
“,It is also well established that in the new
set up these residents do not carry with them
the rights which they possessed as subjects of
the ex-sovereign and that as subjects of the
new sovereign, they have only such rights as
are granted or recognised by him.”
and a passage from the judgment in Bai
Rajbai’s case(5), and then observed :
“Any right to property which in its very
nature is not legally enforceable was clearly
incapable of being protected by that section.”
(pp. 1001-2).
That was a reference to s. 299(1) of the
Government of India Act, 1935. In the other
case we have observed at p. 499:-
“In our opinion s. 299(1) of the Constitution
Act of 1935 did not help grantees from the
former
(1) 42 I.A. 229. (2) (1962] 3 S.C.R. 970.
(3) [1962] Supp. 1 S.C.R. 405. (4) [1959]
S.C.R. 729. (5) 42 I. A. 229.
593
rulers 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
provision 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
thecitizen:…………..”
The other point raised in these appeals was as to whether
the Tharao relied upon by the respondents was a law and,
therefore, could be said to have been kept in force by the
provisions of the Application of Laws Order, 1949 made by
the Province of Bombay. My brother Ayyangar J., has largely
on the basis of the decision of this Court in Madhorao
Phalke v. The State of Madhya Pradesh (1) held that it is
law. On the other hand my brother Hidayatullah J., has come
to the opposite conclusion. My brother Shah J., has also
held that the Tharao is not a law. I agreed with the view
taken by my brother Hidayatullah J., and brother Shah J.,
that it is not a law and that the decision in Madhorao
Phalke’s case(1) does not justify the conclusion that it is
‘law’. I do not think it necessary for the purpose of this
case to examine further the question as to what are the
indicia of a law.
For these reasons I would allow the appeals with costs
throughout.
ORDER
SINHA C.J.–In accordance with the opinion of the majority
the appeals are allowed with costs throughout–one set of
hearing fees.
(1) [1961] 1 S.C.R. 957.
134-154 S.C.-38.
594