{"id":233528,"date":"1969-10-30T00:00:00","date_gmt":"1969-10-29T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/choudhry-jawaharlal-ors-vs-state-of-madhya-pradesh-on-30-october-1969"},"modified":"2017-11-25T03:26:28","modified_gmt":"2017-11-24T21:56:28","slug":"choudhry-jawaharlal-ors-vs-state-of-madhya-pradesh-on-30-october-1969","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/choudhry-jawaharlal-ors-vs-state-of-madhya-pradesh-on-30-october-1969","title":{"rendered":"Choudhry Jawaharlal &amp; Ors vs State Of Madhya Pradesh on 30 October, 1969"},"content":{"rendered":"<div class=\"docsource_main\">Supreme Court of India<\/div>\n<div class=\"doc_title\">Choudhry Jawaharlal &amp; Ors vs State Of Madhya Pradesh on 30 October, 1969<\/div>\n<div class=\"doc_citations\">Equivalent citations: 1970 AIR 1430, \t\t  1970 SCR  (3) 208<\/div>\n<div class=\"doc_author\">Author: P J Reddy<\/div>\n<div class=\"doc_bench\">Bench: Reddy, P. Jaganmohan<\/div>\n<pre>           PETITIONER:\nCHOUDHRY JAWAHARLAL &amp; ORS.\n\n\tVs.\n\nRESPONDENT:\nSTATE OF MADHYA PRADESH\n\nDATE OF JUDGMENT:\n30\/10\/1969\n\nBENCH:\nREDDY, P. JAGANMOHAN\nBENCH:\nREDDY, P. JAGANMOHAN\nSIKRI, S.M.\nMITTER, G.K.\n\nCITATION:\n 1970 AIR 1430\t\t  1970 SCR  (3) 208\n 1969 SCC  (3) 682\n\n\nACT:\nPrincely State-Construction of public buildings-Merger\twith\nIndian\tState-Liability of successor State to  honour  claim\nfor for payment-Act of State: what is.\n\n\n\nHEADNOTE:\nThe  appellants\t constructed certain public buildings  in  a\nprincely  state and the Maharaja admitted the claim  of\t the\nappellants  and\t executed a promissory note for\t the  amount\nclaimed.  The princely State was merged with State of Madhya\nPradesh and the State Government (respondent) took over\t the\npossession of the public buildings.\nOn  the question of the liability of the respondent  to\t pay\nthe amount of the promissory note,\nHELD:\t  (1) The fact that the appellants were asked by the\nrespondent  to supply details of their claim did not  amount\nto  an\tacceptance  of the liability.  It was  open  to\t the\nrespondent  to examine and satisfy itself whether it  should\nhonour\tthe liability or not and it could not be  said\tthat\nthe State had waived its defence. of Act of State.\n(2)  An Act of State is an exercise of sovereign power\tover\na territory which was not earlier subject to its sway.\tWhen\nsuch an event takes place and territory is merged,  although\nthe  sovereign might allow the inhabitants to  retain  their\nold laws and customs or undertake to honour the liabilities,\nit  could not be itself bound by them until it purported  to\nact within the laws by bringing to an end the defence of Act\nof  State.   'he  rule\tapplies even in\t case  of  a  public\nproperty  of the erstwhile State which the  successor  State\ntakes over and retains as part of its public property.\t[212\nA]\n<a href=\"\/doc\/1251107\/\">Raja  Rajender\tChand v. Sukhi &amp; Ors.<\/a> [1956] 2\tS.C.R.\t889.\n<a href=\"\/doc\/1838105\/\">State  of  Saurashtra  v. Memon Haji Ismali,  A.  I.R.<\/a>\t1959\nS.C.R.\t1383   and  Vaje Singh ji Joravar Singh\t &amp;  Ors.  v.\nSecretary of State for India, 51 I.A. 357, referred to.\n\n\n\nJUDGMENT:\n<\/pre>\n<p>CIVIL APPELLATE JURISDICTION: Civil Appeal No. 97 of 1966.<br \/>\nAppeal\tfrom the judgment and decree dated January 11,\t1962<br \/>\nof  the Madhya Pradesh High Court in First Appeal No. I 1  5<br \/>\nof 1958.\n<\/p>\n<p>M.   S. Gupta, for the appellants..\n<\/p>\n<p>I. N. Shroff for respondent No.1      .\n<\/p>\n<p>The Judgment of the Court was delivered by<br \/>\nP.   Jaganmohan\t Reddy,\t J.-This appeal\t is  by\t certificate<br \/>\ngranted\t by the High Court of Madhya Pradesh  under  Article<br \/>\n133  (i)  (a)  of  the Constitution  of\t India\tagainst\t its<br \/>\njudgment  and decree by which it reversed the  judgment\t and<br \/>\ndecree of the Addl.\n<\/p>\n<p><span class=\"hidden_text\">209<\/span><\/p>\n<p>District  Judge,  Ambikapur.  The High Court held  that\t the<br \/>\nclaim of the appellant on the promisory note executed by the<br \/>\nMaharaja  of  Surguja-an  erstwhile Ruler  whose  state\t was<br \/>\nmerged in Madhya Pradesh, could not be enforced against\t the<br \/>\nIst Respondent the State of Madhya Pradesh because after the<br \/>\ncession\t of  the  erstwhile State, the\tnew  State  had\t not<br \/>\nexpressly  or impliedly undertaken to meet  that  liability.<br \/>\nIn other words, the plea of &#8216;an act of &#8216;State&#8217; raised by the<br \/>\n1st respondent was accepted.\n<\/p>\n<p>The  circumstances  in\twhich  the suit\t was  filed  by\t the<br \/>\nappellants  and\t the  array of parties may  now\t be  stated.<br \/>\nAppellants  1, 2, 3 and deceased Hira Lal were brothers\t and<br \/>\nmembers of a Joint Hindu family.  Appellant 4 is the wife of<br \/>\nHira Lal, appellants 5 to 7 are his sons and appellant 8  is<br \/>\nthe grand-son.\tAll these appellants along with appellants I<br \/>\nto  3 constitute a Joint Hindu family which was carrying  on<br \/>\nbusiness  of  construction of buildings under the  name\t and<br \/>\nstyle  of  Hira Lal &amp; Bros. at Ambikapur  in  the  erstwhile<br \/>\nState of Surguja.  The allegations in the suit filed by\t the<br \/>\nappellant  against  the respondent State was that  they\t had<br \/>\nconstructed   buildings\t of  the  District  Court  and\t the<br \/>\nSecretariat  at Ambikapur in 1936.  The work  was  completed<br \/>\nbut  in\t so  far  as payment  was  concerned,  there  was  a<br \/>\ndifference  of\topinion\t about\tthe  measurements  etc.\t but<br \/>\nultimately  it\twas  decided to pay to\tthe  appellants\t Rs.<br \/>\n80,000\ton account of the said construction and\t accordingly<br \/>\nthe Maharaja of Surguja-2nd respondent executed a  promisory<br \/>\nnote in favour of the appellants on 27-9-1947 for Rs. 80,000<br \/>\nwith  interest\t@ Rs. 3 per annum.   Thereafter\t the  Madhya<br \/>\nPradesh Government took over the administration of the State<br \/>\nof  Surguja  on 1-1-48 after the merger of  the\t Chattisgarh<br \/>\nState  and  consequently  the Court  building  -as  well  as<br \/>\nSecretariat   building.were  taken  possession\tof  by\t the<br \/>\nGovernment.  When the appellants claimed the money -from the<br \/>\nState  of Madhya Pradesh, it neither accepted the claim\t nor<br \/>\npaid  them.  The appellants after giving a notice u\/s 80  of<br \/>\nthe Code of Civil Procedure filed a suit.\n<\/p>\n<p>On the pleadings, the Trial Court had framed several  issues<br \/>\nbut  it\t is unnecessary to notice them in any  great  detail<br \/>\nexcept\tto say that the claim of Rs. 80,000 was held  to  be<br \/>\nvalid,\tthat  this  amount was payable\ton  account  of\t the<br \/>\nconstruction  of  the build,-, things known  as\t Court,\t and<br \/>\nSecretariat  buildings,\t that the promote  was\tnot  without<br \/>\nconsideration, that the first defendant was the successor in<br \/>\ninterest  of  Surguja State and is liable to pay  the  claim<br \/>\nwith  interest\tand  that  the amount was  not\tdue  to\t the<br \/>\nplaintiffs  on\t-account  of  the  personal  obligation\t and<br \/>\nliability  of  the  2nd respondent.  The  Court\t also  found<br \/>\nagainst\t the  first  respondent on  the\t issue\trelating  to<br \/>\njurisdiction and negatived the defence that it is not liable<br \/>\nbecause of an act of State.  In so far as the defendant\t the<br \/>\nMaharaja of Surguja was concerned, it held that the suit was<br \/>\n<span class=\"hidden_text\">210<\/span><br \/>\nnot  maintainable  against him without the  consent  of\t the<br \/>\nCentral\t Govt.\tas required under section 86  of  the  Civil<br \/>\nProcedure  Code\t and that the liability was not\t a  personal<br \/>\nobligation  of the Maharaja but an obligation&#8221;\tincurred  on<br \/>\naccount of his State.  In the result as we said earlier\t the<br \/>\nCourt awarded a decree for Rs. 87,200 with full cost against<br \/>\nthe first defendant and discharged the second defendant.  In<br \/>\nappeal the High Court noticing that it is the admitted case-<br \/>\nof  the parties that the District Court and the\t Secretariat<br \/>\nbuilding were public property and were in the possession  of<br \/>\nthe  first defendant as such and that that the liability  in<br \/>\nrespect thereof was incurred by the Maharaja was not  merely<br \/>\nhis  personal  liability  but was a  liability\tincurred  on<br \/>\nbehalf\tof  the\t State of  Surguja,  however,  reversed\t the<br \/>\njudgment of the Trial Court by holding &#8220;the the liability of<br \/>\nthe  State  of\tSurguja under the- pronote  was\t at  best  a<br \/>\ncontractual  liability\tand  this liability  could  only  be<br \/>\nenforced  against the State of Madhya Pradesh if  after\t the<br \/>\ncession of the erstwhile State of Surguja, the new State had<br \/>\nexpressly  or impliedly, undertaken to meet that  liability&#8221;<br \/>\nwhich  it  had\tnot done.  When this appeal came  up  on  an<br \/>\nearlier occasion, a Civil Miscellaneous Petition 429 of 1969<br \/>\nwas   filed  by\t the  appellant;  that\tinasmuch   -as\t the<br \/>\npetitioners  had  been advised to approach the\tState  Govt.<br \/>\nagain for making proper representation and to canvass  their<br \/>\nclaim  before the appropriate authority on the basis of\t the<br \/>\nconcurrent  findings  of the Courts below and or  any  other<br \/>\nappropriate  orders, permission may be accorded to  them  to<br \/>\npursue this course.  The Respondents advocate did not oppose<br \/>\nthis petition and accordingly the matter was adjourned.\t But<br \/>\nit would appear that no concrete results could be achieved.<br \/>\nIn this appeal what we have to consider is whether the\tplea<br \/>\nof  an\tact  of State is sustainable having  regard  to\t the<br \/>\nconcurrent  findings of the Court namely that the Court\t and<br \/>\nSecretariat  buildings were constructed by  the\t appellants,<br \/>\nthat  the  erstwhile  Maharaja -the  second  respondent\t had<br \/>\nadmitted the claim and executed a. promisory note, that\t the<br \/>\nliability  was incurred in respect of public buildings\t-for<br \/>\nwhich  the  State  of Surguja was  liable.   The  fact\tthat<br \/>\nappellants  were asked to supply details of their claim\t and<br \/>\nthe  first respondent was prepared to consider it  has\tbeen<br \/>\nurged\tas  being  tantamount  to  the\tacceptance  of\t the<br \/>\nliability.  In our view no such inference can be drawn.\t  It<br \/>\nis  open  to  the State to examine  and\t to  satisfy  itself<br \/>\nwhether it is going to honour the liability or not, but that<br \/>\nis  not to say that it had waived its defence of an  act  of<br \/>\nState if such a defence was open to it.\t What constitutes an<br \/>\nact  of\t State\thas  been  considered  and  the\t  principles<br \/>\nenunciated  in numerous cases both of the Privy Council\t and<br \/>\nof  this Court have been stated.  Many of  these,  decisions<br \/>\nwere  examined\tand  discussed\tby the\tHigh  Court  in\t its<br \/>\njudgment and it is unnecessary for<br \/>\n(1) [1956] 2 S.C.R. 889.\n<\/p>\n<p><span class=\"hidden_text\">211<\/span><\/p>\n<p>us to re-examine them in any great detail.  These  decisions<br \/>\nlay  down  clearly that when a territory is  acquired  by  a<br \/>\nsovereign state for the first time that is an act of  State.<br \/>\nAs  pointed out in <a href=\"\/doc\/1251107\/\">Raja Rajender Chand v. Sukhi\t &amp;<\/a>  other(&#8216;)<br \/>\nthat  it  matters not how the acquisition has  been  brought<br \/>\nabout.\t It  may  be  by conquest,  it\tmay  be\t by  cession<br \/>\nfollowing  on treaty, it may be by occupation  of  territory<br \/>\nhitherto unoccupied by a recognised ruler.  In all cases the<br \/>\nresult\tis  the same.  Any inhabitant of the  territory\t can<br \/>\nmake  good  in the Municipal Courts established by  the\t new<br \/>\nsovereign  only such rights as that sovereign  has,  through<br \/>\nhis  officers,\trecognised.  The principle  upon  which\t the<br \/>\nliability of an erstwhile ruler is contested by the plea  of<br \/>\nan  act of State &#8220;is an exercise of sovereign power  against<br \/>\nan  alien and neither intended nor purporting to be  legally<br \/>\nfounded.   A defence of this kind does not seek\t to  justify<br \/>\nthe -action with reference to the law but questions the very<br \/>\njurisdiction of the Courts to pronounce upon the legality or<br \/>\njustice\t of the Action&#8217;s vide <a href=\"\/doc\/1838105\/\">State of Saurashtra  v.  Memon<br \/>\nHaji  Ismail<\/a>(&#8216;).  In Vaje Singh Ji Joravar Singh and  others<br \/>\nv. Secretary   of  State  for India in\tCouncil(&#8216;),  it\t was<br \/>\nobserved :\n<\/p>\n<p>&#8220;After\ta sovereign State has Acquired territory, either  by<br \/>\nconquest,  or by cession under treaty, or by the  occupation<br \/>\nof  territory theretofore unoccupied by a recognized  ruler,<br \/>\nor otherwise, an inhabitant of the territory can enforce  in<br \/>\nthe  -Municipal Courts only such -proprietary rights as\t the<br \/>\nsovereign has conferred or recognized.\tEven if a treaty  of<br \/>\ncession\t stipulates  that certain, inhabitants\tshall  enjoy<br \/>\ncertain\t rights that gives them no right which they  can  so<br \/>\nenforce.    The\t meaning  of  a\t general  statement   in   a<br \/>\nproclamation that existing rights will be recognized is that<br \/>\nthe  Government\t will  recognize  such\trights\tas  upon   &#8211;<br \/>\ninvestigation  it  finds existed.  The Government  does\t not<br \/>\nthereby renounce its right to recognize only such titles  as<br \/>\nit  considers  should  be recognized, nor  confer  upon\t the<br \/>\nMunicipal Courts any power to adjudicate in the matter&#8221;.<br \/>\n&#8220;It  is the acceptance of the claim which would\t have  bound<br \/>\nthe new sovereign State and the act of State would then have<br \/>\ncome to an end.\t But short of an acceptance, -either express<br \/>\nor implied, the time for the exercise of the Sovereign right<br \/>\nto reject a claim was still open&#8221;,<br \/>\n<span class=\"hidden_text\">212<\/span><br \/>\nIt  appears  to us that an act of State is  an\texercise  of<br \/>\nsovereign  power  over\ta territory which  was\tnot  earlier<br \/>\nsubject\t to its sway.  When such an event takes\t place,\t and<br \/>\nthe territory is merged, although sovereign might allow\t the<br \/>\ninhabitants  to\t retain\t their\told  laws  and\tcustoms\t  or<br \/>\nundertake  to honour the liabilities etc., it could  not  be<br \/>\nitself\tbound by them until it purported to act\t within\t the<br \/>\nlaws  by bringing to an end the defence of &#8216;act\t of  State&#8217;.<br \/>\nThe  learned advocate for the appellant was unable to  refer<br \/>\nus to any authority which will justify any variation of this<br \/>\nrule,  in  the case of liability incurred in  respect  of  a<br \/>\npublic\tproperty of the erstwhile State which the  successor<br \/>\nState  has  taken over and retains as part  ,of\t its  public<br \/>\nproperty.  The judgment of the High Court is in accord\twith<br \/>\nthe well recognized principles of law declared from time  to<br \/>\ntime  by  this Court.  In our view the defence\tof  &#8216;Act  of<br \/>\nState&#8217;\thowever unreasonable and unjust it may appear to  be\n<\/p>\n<p>-can   be  successfully\t pleaded  -and\tsustained   by\t Ist<br \/>\nrespondent  to\tnon  suit the  appellants.   The  appeal  is<br \/>\ndismissed accordingly but without -costs.\n<\/p>\n<pre>R.K.P.S.\t\t  Appeal  dismissed.\n<span class=\"hidden_text\">213<\/span>\n\n\n\n<\/pre>\n","protected":false},"excerpt":{"rendered":"<p>Supreme Court of India Choudhry Jawaharlal &amp; Ors vs State Of Madhya Pradesh on 30 October, 1969 Equivalent citations: 1970 AIR 1430, 1970 SCR (3) 208 Author: P J Reddy Bench: Reddy, P. Jaganmohan PETITIONER: CHOUDHRY JAWAHARLAL &amp; ORS. Vs. RESPONDENT: STATE OF MADHYA PRADESH DATE OF JUDGMENT: 30\/10\/1969 BENCH: REDDY, P. JAGANMOHAN BENCH: REDDY, [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-233528","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Choudhry Jawaharlal &amp; Ors vs State Of Madhya Pradesh on 30 October, 1969 - Free Judgements of Supreme Court &amp; High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/choudhry-jawaharlal-ors-vs-state-of-madhya-pradesh-on-30-october-1969\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Choudhry Jawaharlal &amp; 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