THE STATE OF MADHYA PRADESH versus SHRI MOULA BUX AND OTHERS

JJf ay, 5.

THE STATE OF MADHYA PRADESH

SHRI MOULA BUX AND OTHERS

(.J.L. KAPUR, K. SunnA RAo, M. HrnAYATULLAH, .T .. C. SHAH ancl RAGHUBAH DAYAL, JJ.)

Cii:il J[1]roced-ure-}Jartics-1.'luif aga.inst Governrnent of !'art Staie-Aitl/wrily to be named as defendani-Code of. Civil Procedure, 1908 (V of 1908), s. 79-rJenaal Ula11ses Act, 78!!7 (X of 1897). ss. 3(3), 3(8), ii(58) and 3(60)-Government of Part U Stafos Act, 1951 (49 of 1951) 8. 38 (2).

The respondents obtained lease for plucking tendu leaves from the Government of Vindhya Pradesh. Later, the Government cancelled the lease and sought to recover the balance of the lease money. The respondents filed suit for damages and for injunction restraining the Government from recovering the balance of the lease money and impleaded the State of Vindhya Pradesh as the defendant. They contended that the suit was incompetent as the proper defendant was the Union of India and not the State of Vindhya Pradesh.

Held, that the State ofVindhya Pradesh was the proper defendant to be sued and that the suit was properly filed. Under s. 3 (58) of the General Clauses Act "State" meant inte.r alia Part State and under Art. 239 (1) the Part State was administered hy Lieutenant Governor if the Pre•i-dent so ordered. Thus Part States hacL separate existence and were not merged with the Central Government. Though •State Government' was definei bys. 3(60) i!rid in relation to Part State as th~ Central Government the definition of 'Central Government' in relation to the administration of Part State meant the Lieutenant Governor within the scope of the authority under Art. 239 and thus the State Government. Thus cl. (b) of s. 79 applied and not cl. (a).

Satya Deo v. Padam Deo, (1955\ l S. C.R. 549,

referred to.

CIVIL ANPELLATE JURISDICTION : Civil Appeal

No. 127 of 1959.

Appeal from the Judgment and decree dated Febr11ary 2, 1956, of the Court of the Judicial Com-missioner, Vindhya Pradesh, in R.eview Application No. 15 of 1955.

B. Sen, B. K. B. Naidu and /. N. Shroff, for the appellant.

The State of Madhya Pradesh v.

G. C. Mathur, for the respondents.

Shri Mou/a Bux and others

1961. May 5. The Judgment of the Court was

delivered by

M. Hidayatullah J.

HrnAYATULLAH, J. This is 'ln appeal by the

State of Madhya Pradesh, which st'J.nds substituted for the State of Vindhya Pradesh under the States Reorganisation, Act, 1956, and is directed against an order of the Judicial Commissioner, Rewa, by which hll modified, on review, his judgement and decree in civil suit filed by the respondents against the State of Vindhya Pradesh. The appeal has been filed on certificate granted by tho Judicial Commissioner, Rewa.

The only question urged in this appeal is that the suit brought against the State of Vindhya Pradesh was defective, because the proper defen-dant was the Union of India. Since the question is one of law, it relieves us of the duty of narrati11g all the facts. .Brief' i stated, the suit was for damages valued at lea. 1,00,000/- and for perma-nent injunction against the State of Vindhya Pradesh. The suit was filed in the following circumstances: The respo11<lants are bidi merchants, and for that purpose, had obtained on October 18, 1951 from the Divisional Forest Officer, Rewa, lease for plucking and appropriating ten<lu leaves from the Makund1mr Range for three years, com-mencing from October 18, 1951 on payment of Rs. 1,63,000/- per year (Ex. P. 85). For some reasons into which it is not necessary to go, this contract w1s cancelled, and the right was put up for auction, but no bidders came. The Government therefore, demanded t.hc yearly instalments, claim-ing them under tho contract as the difference between the original contract amount less the

:-ilJPHEJ\lE COFHT REPORTS

amount fetched by way of freHh auction, whieh was nil. The snit wan filed for perpetual injunction against thi,; daim :md for <lamages on t,Jrn :iverment that the State of Viudhya Pradesh was guilty of breach of tho contract.

'l'hr: /'}tale c!f Jlacl!1y" Pmd<•h v. 8hri 1l!ou.la Bux and others

The trial Judge doereed both the parts of the <·.Jaim, placing the d:miages at Rs. 36,570/-. Appeals were filed by both sidus 'liefore the Judicial Com-missioner, the appeal of the State Government was allowed and that of the plantiffs dismissed, result-ing in the dismissal of tho entire suit. The Judicial Commissioner held that the State of Viudhya Pradesh was not juristic entity and the suit ought to have been filed against the Union of India. On an application for review the Judicial Commissioner held that there was an·error apparent on the face of his earlier judgment, and that the State of Vindhya Pradesh could be legally sued. He accordingly granted review, and modified his judgment and decree by upholding the claim for perpetual injunction, but he dismissed the claim for demages on merits. It is against this order that the present appeal has been filed with certificate.

JI. llidayatullah J.

Prior to the formation of the State of Vindhya Pradesh, Union of. 35 States in Baghelkhand and Bundelkhand had been formed by the Rulers in March, 1948. On December 26, 1949, this Union merged with India, and on Janua~y 22, Hl50, the United State of Vindhya Pradesh became Chief Commissioner's Province under the Government of India Act, 1935. On the commencement of the Constitution, the Chief Commissioner's Province of Vin<lhya Pradesh became Part State administer-ed by the President. In September, 1951, an Act known as tho Government of Part States Act, 1951, was passed liy Parliament, and under it, Lieutenant-Governor was appointed for Vindhya Pradesh. In 1956, under the States Reorganisation Act, 1956, this Part State became part of the State of Madhya Pradesh.

2 S.C.R.

The suit was filed on Mav 11, 1953, after notices under ~. 80 of"the Code (;f Civil Procedure \1·cn' sern·d, inter a.li<i, 011 the Secrct<ir,y, Forests and Industries 01c1p:1rtment, Vinclhya Pradesh and the Collector of Rewa. The defendants raised the plea for the first time iu appeal before the Judicial Commissioner that the suit was filetl against wrong tlefcntlaut. According to them, the proper defendant was tho Union of India. The Judicial Commissioner, relying upon Art. :ioo of the Con-stitution and the definition of "State" in Art. 264-, which did not include Part States, held that the State of Vindhya Pradesh was not juristic entity, and that the suit could not be filed against iL Later, on an application for review, he held that Art. 300 was not applicable to suits by or against Part States, and he, therefore, considered the matter in the light of s.79 of the Code of Civil Procedure. Before him, notification issued by the President appointing the Lieutenant-Governor as person authorised under Order 27 of the Code of Civil Procedure was produced, to which earlier his attention had not been called. He, therefore, held that, in view of the provisions of s. 79 and the definition of "State Government" in s. 3(60) of the General Clauses Act, the proper defendant was, in fact, the Stlite of Vindhya Pradesh. He accord-lligly observed 1U1 follows :

The State of Madhya Pradeah v.

Shri Mou /,a Bux and othera

M, Hiclayatullah

"The previous judgement of this Court was basea on the assumption that the State of Yindhya. Pradesh was not legal entity, that 1s, ent1ty capable of holding property and of entering into contracts. As has been shown above this IU!Sumption was erroneous."

In the view of the matter, he reviewed his order, with the result stated above.

The provisions which are material to the discussion may now be set down. Section 79 of the

The State of Madhya Pradesh v.

Shri Moula Bux and others

M. Hidava!ullah J.

Code of Civil Procedure lays down:

"79. In suit by or against the Government, the authority to be named as plaintiff or defendant, as the case may be, shall be-

( a) In the case of suit by or against the Central Government, the Union of India, and

(b) In the· case of suit by or against State Government, the State."

The following definitions in the General Clau-ses Act, 1897, as thev stood at the time, are also relevant: ·

"3 (8) 'Central Government' shall.-

* * * (b) in relation to anything done or to be done after the commencement of the Con· stitution, mean the President; and shall include-

(ii) in relation to the administratian of Part State, the Chief Commissioner or Lieutenant-Governor acting within the scope of the authority given to him or it under article 239 or article 243 of the Constitution, as the case may be : "

3 (58) 'State' shall mean Part State, Part State or Part State :

3 (60) 'State Government',--

(b) as respects anything done or to be done after the commencement of the Constitution, shall mean in Part State, the Governor, in Part State, Rajpramukh, and in Part State the Central Government: "

It is contended before us that s. 79, which

lays down the procedure for suits by or against

- 8.C.R. •) ~ SUPREME COURT l'tEPORTS

Government and the authority to be named as plaintiff or defendant provides that (a) in the ease of 11 suit by or against the Central Govern· ment, the Union of India and (b) in the case of suit by or against the State Government, the ~late, slrnll be named as.plaintiff or defendant, as the case 1rn1y be. It is contended thart under the General Clauses Act, s. 3 (8) , "Central Govern-ment" means in relation to anything done or to be done after the commencement of the Consti-tution, the President, vnd under s. 3(60), "State Government" means as respects anything done or to tie done after the commencement of Consti-tution, in the case of Part State, the Central Government. The contention, therefore, is that if the State Government me'.lns the Central Govern-ment in tbe case of Part States, then under cl. (a) of s. 79 of the Code of Civil Procedure, the proper party to sue would be the Union of India. This arqument was not accepted by the Judicial Commissioner, and, in our opinion, rightly.

The matter has to be looked at in this way.

"State" is defined by s. 3(58) as Part State or Part State or Part State. This shows that wherever the word "State" is used, it includes Part State. In Satya Deo v. Padarn Deo (') it has been held by this Court that Pa;t States 11ad separate existence and were not merged with the Central Government. "State Government" is then defined in s. 3(60) in rela-tion to Part State, as the Central Govem-ment and "Central Government" is defined in s. 3(8)(ii) as including the Lieutenant-Governor act-ing within the scope of authority given to him under Art. 239. Article 239 reads as follows :

"239(1) Subject to the other provisions

of this Part, State specified in Part rif the First Schedule shall be administered by the President acting, to such extent, as he (I) (1955) 1 S.C.R. 549.

1'hc Slate of

M ad!tya radcsh

S/iri Muula Btt;; and others

M, llidayatu llah J.

The Slate of Madhya Pradesh v.

Sh>"i Moala Bux and others M.Ilida_vatullah. J.

thinks fit, through Chief Commissioner or Lieutenant-Governor to be appointed by. him ....... "

The administration of Part State was thus being carried on under the provisions of Art. 239, and, as has been rightly pointed out by the Judicial Commissioner, was not affected by Art. 300. On April 8, 1953, the President issued the following notification :

"S. R. 0. 699"-In pursuance of clause (ll

of Article 239 and clause (l) of Article 243 of the Constitution, and in supersession of the notification of the Govemment of India in the• late Home Department No. 204/37-Judicial, dated the 5th May, 1938 and in partial modification of the notifi-cation of the Government uf India in the Ministry of States No. S. .. 0. 460 dated the 24th August, 1950, in so far as it rehtes to the Civil Procedure Cud.,, l!l08 (Act V of 1908), the President hereby directs that the functions assigned to the Central Govern-ment by Order XXVII of the First Schee dule be discharged by the Lieutenant-Gover-nor or the Chief Commissioner as the case may be, of every Part State except the State of Manipur, in respect of such Part Shte,and by the Cheif Commissioner of the Andaman and Nicobar Islands in respect of those Islands."

In view of this notification, the Lieutenant

Governor became the proper authority under 0.27 of the Code Civil Procedure. By virtue of the definitions of "Statp" and "Central Government" read with the rlefinition of "State Government", the Lieutenallt-Governor of the State was the proper party to be sued. The Government of Vindhya Pradesh meant the Lieutenant-Governor only by an amendment made in 1954 in the

Vindhya Prndeiill General Clauses Act. Since the contract in que8tion was entered into by the Government of Vindhya Pradesh aml could uut be consttued as contract with the Central Govern-ment, sec 8atye Deo V. Pa<lam Deo (') the suit lmd tu be brought against the State of Vindhyit Pradesh, and the State wa.s ~he proper authority to be named under s. 79(b) of the Code. In addi-tion to this there was the Act called the Govern-ment of Part States Act, and under s. 38(2) of that Act, all executive action of Part State was to be expressed to be taken in the name of the Lil•utenant-Govcrnor and the executive power of tho Government was tu be exercised by him, including the grant, sale, disposition or mortgage etc., of any property held for the pur-poses of the State. The combined effect of all these provisions was to constitute the Part State of Viqdhya Pradesh into separate State, and under Art. 239, the administration of it was to be dune by tho Prei;ident through such person, as he notified. Under the notification, the Lieutenant-Governor was appointed as the person to discharge the functions under 0. 27 and under s. 38 (2) of the Government of Part States Act he exercised the executive power of Government. The Government of the State of Vindhya Pradesh entered into the contract with the plaintiffs in respect of the property of the State. The definitions to which we have refer-red, made the State the proper authority to be sued, even though the State Government was defined in the General Clauses Act as the Central Government, because the definition of " Central Government" takes us to the Lieutenant-Gover-nor, and from the Lieutenant-Governor we go to the State. In this veiw of the matter, s. 7ii(a) of the Code, which says that in suit by or against the Central Government, the proper plain-tiff or defendant, as the case may be, is the Union

(I) (1955) I S.C.R. 549 •

1'/ie State of

Macl!tya l'iwlcolc

!:)Itri Jfuultt lJ1u· and other.

.M. 11-iclayatullul•

The State of Madhya Prade•li v

Shri Moula. Bux and others

M. idayatuUali J.

M•y, 5.

of India, does not apply to Part State, and only the definition in cl. (b) of the section :ipplies to this State, even though Part State. In our opinion, therefore, the decision of the Judicial Commissioner was correct.

Since no other point was urged in this

appeal, it must fail, and it is accordingly dismis-sed with costs. There is no need to pass any order on C. M. P. No. 40 of 1960 by which the respondents asked for amendment of the plaint and addition of the Union Govermnent as party. The application shall be filed.

Appeal dismissed

THE RIVER STEAM NAVIGATION CO., LT.D

SHYAM SUNDAR TEA CO., LTD.

(P. B. GAJENDRAGADKAR, K. N. WANCHOO AND K. c. DAS GUPTA, JJ.)

Common . Carr~er-Steam11hip Companv carrying, goods /,y steamer in main stream-Feeder aervice by boata in tributary-Goods lo•t in transit in ,uch service-Liability--Company, if, common carrier in the feeder aervice-Te•I Carriers Act, 1865 (3 of 1865), s. 2.

The question whether carrier is common carrier or not has to be decided on its public profession and such profession may be either by public notice or by conduct. It is immaterial if the carrying is limited to partic;iiar goops or particular routes or between specified points.

Lane v. Ootton12 Mod. 474; lngate v.Chriatia, (1950) 3 Car. and K. 61 andJhomon v. Midland Rly., Co. (1849) 4 Ex 367, referred to.