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Judgment
Baxi, J.—The Plaintiffs were until 31-5-1948 carrying on business as Liquor Merchants in the Porbandar State. They filed this suit against
the Saurashtra State on 27-9-1949 In the Court of the Assistant judge, Porbandar, alleging that on 31.05.1945 by a contract or Ijara dated 9/31-
1-1943 entered into between them and the Porbandar State under its order bearing No. 584 of the same date the Plaintiffs were granted an Ijara
for manufacturing and sale of liquor In the Porbandar State for a period of 9 years ending 31 -5-1955 at an annual payment of RE. 11,151/-
subject to the terms and conditions contained in the said Ijara.
Alter the merger of the Porbandar State with the Saurashtra State a Council of administration for the Porbandar State was appointed by the Raj
Pramukh and by its order bearing No. 97 dated 31-5-1948 the Council introduced total prohibition in the Porbandar State and forbade the
manufacture and sale of liquor from 1-6-1948. The senior Police Officer of the State was directed to take over the Plaintiffs'' distillery and slocks
from l-6-1948.
The Plaintiffs'' contention is that the order of the Council terminating the Ijara was illegal, ultra vires and in contravention of the existing Abkari law
in the Porbandar State and that by the said order the Plaintiffs'' contract or Ijara with the State had been wrongfully terminated, The Plaintiffs also
alleged that the order deprived'' them of their rights and profits and business'' and had no legislative sanction behind it They prayed for a
declaration that the order passed by the Council of Administration was illegal end ultra vires of the Porbandar State Abkari Rules which constituted
the law for the lime being in force in relation to it and for a declaration that the termination of the contract was wrongful and illegal.
They also claimed a decree for Rs. 9,00,000/-as compensation for loss or damage caused to the Plaintiffs for the wrongful and illegal termination
of their contract and'' deprivation of their business and property including loss of assets and profits. Particulars of the claim are given in an miriexure
Ex. C to the plaint according to which the Plaintiffs claim Rs. 1,42,000/- as the value of the distillery plants, machinery, building etc., and Rs.
7,58,000/- for loss of profit for the unexpired portion of the Ijara.
By Ordinance No. XIII of 1950 dated 19-1-1050 the Prohibition Act was amended by the ad dilation of the following Section 149 to the
adapted Bombay Prohibition Act:
after the entries relating to Section 148, the following shall be inserted, namely:
After Section 148, the following new section shall be inserted, namely:
149- (1) Notwithstanding anything contained'' in this Act or any other law for the time being in force, no suit or other proceeding shall lie or
continue'' against the Government in any Civil Court in respect of any claim for compensation on account of any licensed, permit, pass or
authorizations having been cancelled or suspended either b3fore or after the coming into force of this Act;
(2) All suits or other proceedings pending in any Civil Court on 1-1-1950 or filed thereafter in respect of such claims shall abate;
(3) Subject to the provisions of Section 55, (a) any holder of a licence, permit, pass or authorization may apply to such officer, not below the rank
of a District and Sessions Judge, as may be appoint ed by Government in this behalf, for compensation in respect of such claims;
(b) the decision of such officer passed in accordance with such principles and procedure as may, be prescribed by Government shall be final,
subject to appeal which may be preferred'' within 30, days of the date of his decision to the Saurashtra Revenue Tribunal.
On 6-3-1950 the State filed a written statement on preliminary grounds but on being directed to file a complete written statement a second written
statement was filed. Various defences against the suit were taken on behalf of the Statu but the main defence so far as this judgment is concerned
was that the suit had abated by virtue of Section 2(2) of the above Ordinance.
After the above'' written statement was filed the Plaintiff''s applied to the High Court under Article 228 of the Constitution (Civil Mice. Appln. No.
15 of 1950). On 4-9-1951 the Division Bench ordered that the suit lie withdraw but left the question whether the when suit should be decided by
the High Court or only the substantial questions of law as to the interpretation of the Constitution to be determined at the hearing of the suit. The
suit was accordingly set clown for hearing on the board of Mr. Justice Chhatpar sitting as single Judge who framed the following issues:
Whether Section 2(2) or any part thereof of Ordinance No. XIII of 1950 (being Section 149, Bombay Prohibition Act, 1949, an adapted) is
void having regard to the provisions contained in Section 107(3), Government of India Act, 1935, and is otherwise inoperative and ineffective in
law.
Whether Section 2(2) or any part thereof of Ordinance No. XIII of 1950 (being Section 149, Bombay Prohibition Act, 1949, as adapted) is
void having regard to the provisions of the Revised Instrument of Accession dated 22-5-1948 and or Section 107(2) Government of India Act,
1935.
Whether Section 2(2) or any part thereof of Ordinance No. XIII of 1950 (being S. 149, Bombay Prohibition Act, 1949, as adapted) is void by
reason of it being inconsistent with the provisions contained in all or any of the Articles 14, 19 or 31, Constitution of India.
Whether Section 2(2) or any part thereof of Ordinance No. XIII of 1950 (being S. 149, Bombay Prohibition Act, 1949, as adapted'') is invalid
or ineffective being in contravention of or repugnant to the provisions contained in Article 295(2), Constitution of India.
Whether in view of Section 54(3) and Section 149 (Claus. (1) and (2) ), the amendments In the adaptation of the Bombay Prohibition Act by
Ordinance No. XIII of 1950 the suit abates.
Whether any abatement of the suit his taken place or can take place without an order of the Court.
Whether the contract or Ijara dated 9/31ist June, 1946 referred to in para 3 of the plaint were not or are not enforceable and binding contracts
against the State of Porbandar and or the Defendants as contended in paras 6, 7 and1 8 of the written statement.
Whether under Article VI of the covenant dated 17-1-1948 the Defendants did not become liable to carry out all obligations and liabilities of the
Porbandar State being one of the Covenanting States.
Whether the order bearing No. 97 dated 31-5-1943 issued1 by the Council of Administration of the Porbandar State is Illegal and ultra virus
and in contravention of the existing Abkari Law in force in the Porbandar State at the time.
Whether the order dated 21-5-1948 is an administrative order as an act of sovereignty in exercise of sovereign powers and this Hon''ble Court
has, therefore, no jurisdiction to entertain the suit as alleged in para 15 of the second written statement dated 30-5-1951.
Whether there was no express statutory provision under which the Ruler of Porbandar State could be sued and whether the Plaintiff could not
have sued the old Porbandar State as alleged in para 15 of the second Written Statement dated 30-5-1951.
Whether the defence that the order No. dated 81-5-1948 being an act of sovereignty and/or act of State, the Defendants are immune from
being sued in a Court of Law is not contrary to the provisions of, Article 300(2), Constitution of India.
Whether the contract or Ijara dated 9/31 January 1946 should be considered as opposed to public policy and good morals as alleged in para
10 of the second! written statement dated 30-1-1951.
Whether the notice of termination of the contract was sufficient in law.
Whether the Plaintiffs have suffered loss and damage''; if so, to what extent.
What relief ?
Issues Nos. 1 to 14: are issues of law while issue No. 15 is an issue of fact and issue No. 13 is the (general issue. By his order dated 1-4-1952
Chhatpar, J. decided that issues Nos. 1 to 14 Should be determined by the High Court and referred them to the Division Bench.
Mr. M.O. Shah, who appeared- on behalf of the State, submitted that when the High Court withdraws a pending case from a subordinate Court
under Article 228 it has jurisdiction to dispose of the whole case itself, but if it does not do so if; could only determine questions of law referred to
in Article 228 i.e., questions of law as to the interpretation of the Constitution and should return the case to the Court from which it was withdrawn
for disposal in conformity with the opines of the High Court on the Constitutional issues. He submitted that Chhatpar, J. having decided not to
dispose of the whole suit, the Divisional Bench should not determine any other issue except the Constitutional issues.
All other issues must be left for the decision of the trial Court. Now according to both the Parties issues Nos. 1 to G were constitutional questions
of law referred to in Article 228 and according to Mr. Shah issue No. 12 also related to these questions and urged that we should decide these
sues only. Mr. J.C. Bhatt, who appeared for the Plaintiffs, while not seriously disputing the correctness of, Mr. Shah''s submission, suggested that
as the learned Single Judge had decided all the issues of law, i.e., constitutional as'' well as ether issues of law, we should determine all- the issues
referred to us.
In our opinion Chhatpar J, having decided that the High Court should not dispose of the case, its jurisdiction to determine any Issues except those
relating to the questions of law refer-rode to in Article 228 ceased and all other issues, whether of law or fact, must be disposed of by the trial
Court. Issues Nos. 1 to 4 and 12 are undoubtedly issues of law as to the Interpretation of the Constitution and must be decided by us.
But in our opinion, issue No. 5 does not fall within the ambit of Article 228, as its determination depends upon the interpretation of Section 2(2) of
the ordinance and the eonntrucMon of the plaint and not on the determination of any constitutional question of law. But since this Issue is
connected with issue No. 6, we shall deal with it along with issue No, 6 to the extent to which it is necessary to do so.
Nevertheless the actual decision on issue No. 6 will be left to the trial Court. Turning now to issue No. 6 though it does not in terms fall within the
scope of Article 228 it is intimately connected birth the determination of a substantial question as to the interpretation of the Constitution in this
way.
The Ordinance came into force before the Constitution and if the suit abated by the passing of the Ordinance without an order of the Court, the
abatement took place before the Constitution and we have to consider the effect of the subsequent coming into force of the Constitution on such
abatement.
If an order of the Court is necessary to cause-abatement of the suit, then it is clear that the suit is pending as no formal ""order of abatement has
been made till now and the question whether in view of the provisions of the Constitution we can give effect to the'' Ordinance by passing the order
of abatement even if the Ordinance-18 found to be in. contravention of the provisions of the Constitution will have to be considered.
The issue, therefore, involves a substantial question as to the interpretation of the Constitution and must be dealt with by us, We heard learned
Counsel on both sides on all the issues but for reasons stated above we shall determine issues Nos. 1 to 4, 6 and 12 only. Our findings on these
issues are as under: No. 1 in the negative; No. 2 in the negative; No. 3 In the negative; No. 4 in the negative; No. 5 if the suit or any part thereof is
governed by Section 2(2) of Ordinance 13 of 1950, then it abates to that extent. But whether it is so governed by Section 2(2) of the said.
Ordinance or not and abates on that account or whether it abates wholly or in part should be decided by the trial Court; No. 6 the abatement of
the suit takes place on the passing of the Ordinance without an order of the Court; No. 12 decision not necessary.
Issues Nos. 1 and 2: Ordinance No. X Hl of 1950 was passed before the Constitution came into force. The Constitution not being retrospective in
effect the above provisions of the Ordinance are not touched by it.
Reliance is, however, placed on the revised Instrument of Accession signed by the Raj Pra mukh of the Saurashtra State on 22-5-1948 under
which the Raj Pramukh gave the Dominion Legislature power to enact laws relating to the subjects mentioned in the Federal and concurrent Lists I
and II in the Government of India Act. H was argued on behalf of the Plaintiff that by enacting Ordinance No. XIII the Raj Pramukh toot away the
right of suit which the Dominion Code of Criminal Procedure gives to the subjects by Section 9.
The provisions of the Ordinance were thus '' repugnant to the provisions of Dominion Code of Criminal Procedure and the Ordinance not having
been reserved! for the consideration of the Governor-General and received his assent, it could not prevail against the provisions of the Code of
Procedure Code by virtue of the provisions of the Government of India Act, Section 107.
This argument assumes that by the execution of the revised Instrument of Accession the Pom-""inion Laws in relation to matters mentioned in Lists I
and II in Sen. VII, Government of India Act became automatically applicable to the Saurnfhtra State and the legislative authority or'' the Raj
Pramukh in relation to those matters became fat object to the limitations consultation in Section 107, Government of India Act, 1935.
This very argument was advanced before the Supreme Court and rejected by it in ''Shiv Bahadur Singh V. State of Vindhya Pradesh. AIR SC 394
(A), which Involved consideration of the revised Instrument of Accession signed by the Raj Pramukh of Vindhya'' Pradesh and the Covenant of
Merger of Vindhya Pradesh States.
The Supreme Court pointed out that the provisions of the Government of India Act under which an Instrument of Accession has been executed
keep the position of the Provinces distinct from the position of the acceding States. After referring to Sub-section (2) of Section 6 the Supreme
Court
pointed out how the authority of the Dominion federal Legislature extended to only those matters specified in the Instrument of Accession, Their
Lordships also quoted Section 101, Government of India Act which expressly provides that:
Nothing in this Act shall be construed as empowering the Federal Legislature to make laws for a Federal State otherwise than in accordance with
the Instrument of Accession of that State un any limitations contained therein.
And held that mere reference In the instrument of Accession to the legislative Items in respect of which the Dominion Legislature could make laws
applicable to the State of Vindhya Pradesh as I and II did not carry with it the necessary replication that the Dominion Legislature alone had the
power to make laws for the State in respect of those items and to that extent curtailed the legislative authority of the Raj Pramukh.
Their Lordships observed that the Rajprannkh''s authority was derived from Arts. 6 and 9 of the Covenant of Merger and limitation on that
authority was placed for the first time by the Constitution The above principles apply to Saurashtra State also and it cannot be said that on the
signing of the revised Instrument of Accession the Raj Prwnukh lost his legislative power in respect of matters mentioned in the Federal or
concurrent lists or that the laws of the Federal Legislature facto'' came into operation in Saurashtra and the legislative authority of the Raj Pramukh
in these matters became subject to the limitations contained in Section 107. Government of India Act.
In Saurashtra the Raj Pramukh provided by Section 4 of Ordinance No. 1/1948 that when the administration of a Covenanting State has been
taken over by him all laws, Ordinances, Acts, Rules, and Regulations, etc., having the force of lay in the State shall continue to remain in force until
repealed1 or amended in accordance with the provisions of the Ordinance. Therefore, the law relating to Civil Procedure, which obtained in the
various Covenanting States at the time of the merger, became the CPC for the areas comprising those States.
By Ordinance XXV of 1948 certain Central and Bombay Acts were adapted and applied to the Saurashtra State. These Acts have been
enumerated in the Schedule to that Ordinance. The Dominion CPC with certain adaptations was included in this Schedule and, therefore, it
became the CPC of the Saurashtra State.
It was nevertheless the local CPC of the Saurashtra State and was not the Dominion CPC of the Dominion of India. This position continued right
till the introduction of the Constitution on 26-1-1950 and thereafter till the Union Code of Civil Procedure, with amendments was extended to Part
B States by Act II of 1931.
The Raj Pramukh could, therefore, amend or modify the local Code of Criminal Procedure and there was no Limitation on this power. Therefore
assuming that the impugned Section 2(2) of the Ordinance modified the Dominion CPC as adapted and applied to Saurashtra, the Raj Pramukh
was within his legislative competence in enacting that Ordinance. It was only after the Union Code of Criminal Procedure was extended'' by Act II
of 1951 that limitations were placed by the Constitution on his power to modify it.
A similar view was taken in Raja Harisingh and Another Vs. State of Rajasthan and Others, in which Wanchoo C.J. observed as follows:
But the legislative authority vested in the Raj Pramukh by Article 10 was unfettered at the lime when the Covenant? was paused, and it only came
to be lettered with the passing of the Constitution.
The Article referred to by the learned Chief Justice is Article 10(3), Rajasthan Covenant and is substantially, in the same terms as Article 9(3) oil
the Saurashtra Covenant and1 the above dictum of the learned Chief Justice applies with equal force to Saurashtra.
Therefore the contention Hint Section 2(2) of Ordinance XIII is void by virtue of the provisions of the Government of India Act or the provisions
of the revised Instrument of Accession, must be rejected and we hold that the said Sub-section was intra vires of the Raj Pramusn''u authority
under the Covenant.
It was contended on behalf of the Plaintiffs that even if the Ordinance was a valid piece of legislation) it was controlled by Section 9 of
Ordinance XXV of 1948 by which the CPC was adapted1 to Saurashtra. That Section saved all rights and privileges already acquired under the
former laws. It was argued that the Schedule to the Ordinance which enumerator the Acts adapted by the Ordinance is controller by Section 9 and
nothing contained in the schedule could override the provisions of Section 9.
If therefore any enactment mentioned in the schedule contained a provision which gave to it retrospective effect and took away vested rights such
provision could not prevail against the express provisions of Section 9 of the Ordinance. This argument has no force.
Section 9 enacts the principle that a legislative enactment has as a rule no retrospective J effect. But it is open to tile Legislature to provide special
exceptions to that rule and this can be done by adding suitable clauses in the adapt-j ed Acts in the Schedule.
Maxwell on ""interpretation of Statutes"", 9th Edn. at page 176 observes as follows:
Where a general intention is expressed, and also a particular intention which is incompatible with the general one, the particular intention is
considered an exception to the general one. Even when the later, or later part of the enactment; is in the negative, it is sometimes reconcilable with
the earlier one by so treating it.
If, for instance, an Act in one Section authorised a corporation to sell a particular piece of land'' and in Anr. prohibited it from selling ""any land"", the
first section would be treated, not as repealed by the sweeping terms of the other, but as being an exception to it."" Accordingly we hold that the
provisions of Ordinance XIII must prevail against the provision of Section 9 of Ordinance No. XXV of 1948.
Issues Nos. 3, 4 and 12: The impugned Sub-section of. the Ordinance is challenged on the ground that it is in contravention of the various
Articles of the Constitution, But, the Ordinance was enacted on 19-1-48, before the Constitution and we have to consider the effect of the
Ordinance on the suit on that date.
The suit in so far as it was governed by the impugned Sub-section went out of the cognizance of the Civil Court on 19-1-50 by the passing of the
Ordinance and as we shall show later, It abated on that date. There was therefore no pending, suit before the Court when the Constitution came
into force.
It is now well settled that the Constitution Is not retrospective in operation and suits which were barred or which had abated before the
Constitution cannot be revived. Our answer to these issues is therefore in the negative as regards suits the cognizance of which was already boned
or which had abated before the Constitution
Issues Nos. 5 and 6 The Ordinance XIII of 1950 was enacted before the Constitution. We have shown that there was nothing in the revved
Instrument of Accession or the Government of India Act, 1935 which rendered the impugned tub-section invalid or outside the legislative
competence of the Raj Pramukh and the jurisdiction to the Civil Court to proceed with the determination of the Plaintiffs'' claim or so much of it
which is governed by the impugned sun-section awed and the suit abated to the extent of that claim on the passing of the Ordinance.
But the learned Counsel for the Plaintiffs argued that a formal order of abatement wa3 necessary before the suit could abate. As no BUCII
order has been passed till today the suit continues to be pending in spite of the Ordinance and we will have to consider whether today i.e. alter the
Constitution we can pass an order of abasement and thereby give an effect to the Ordinance the provisions of which are impugned on the ground
that they are repugnant: to various Articles of the Constitution. The answer to this argument is two-fold.
Firstly the jurisdiction of the Court was already taken away by Sub-section (1) of S. 149 of the adapted Prohibition Act and ''no order of the
Court is necessary to bring this about. The fact that further proceedings have been taken after the passing of the Ordinance cannot have the effect
of investing the Court with jurisdiction which it had already lost.
Subsequent proceedings were necessary in order to decide whether the present suit or any part of it fell within the ambit of the Ordinance. The
Plaintiffs challenged the validity of Section 2(2) of the Ordinance and got the suit transferred1 to this Court for determination of the Constitutionality
of the Sub-section and the Court was called upon to decide the question of its constitutionality and until that was done it could1 not be said that the
suit had become defunct.
These proceedings take some time but once the Court comes to the conclusion that the impugn ed Sub-section was constitutionally valid and the
Plaintiffs'' claim or any part of it was governed by that Sub-section its duty is to hold that its jurisdiction over the suit or so much of it as was
governed by the impugned Sub-section came to an end as from the date of the Ordinance. Secondly Section 2(2) of the Ordinance which provides
Hint: '' ""All suits or other proceedings pending In any Civil Court on 1-1-1950 or filed thereafter in respect of such claims shall abate."" clearly
shows that the abatement takes place by of the Ordinance find no order of the Court was necessary to bring It about. No doubt as shy on above
subsequent proceedings were necessary in order to ascertain whether the Suite''s contention that the suit had abated was well-founded but that
does not affect the crucial question as to the date and mode of abatement.-The abatement took place on the Passing of the Ordinance and
subsequent proceedings do not have the effect of keeping it alive. The provisions of Order 22, Code of Criminal Procedure relating to abatements
of suits show the. It is the happening of the event upon which the suit abates that an abatement takes place without an order of the Court. We,
therefore, hold that the abatement of the suit takes place on the passing of the Ordinance without an order of the Court.
Mr. J.C. Bhatt for the Plaintiffs argued that even if the impugned Sub-section can be-'' constitutionally upheld his'' suit did not fall with in its
ambit. He urged that that Sub-section provided for suits for compensation for cancellation- of a permit etc., granted or deemed to be grant ed
under the Prohibition Act and which was continued till the Prohibition Act was applied to Saurashtra.
But his I para was cancelled long before the Prohibition Act came into force and his Ijara, cannot be said to be granted or deemed to bag ranted
under the Act. He further urged that if the suit at all abated it could only abate as regards the Plaintiffs'' claim of Rs. 7,52,000/- for compensation
for loss of profit for the unexpired-period1 of the contract but the rest of the claim for the value of the Distillery, plant, storage, tanks etc., the
particulars of which have been, mentioned in Ex. to the plaint could not abate nor did the Court''s jurisdiction to adjudicate that-part of the
Plaintiff''s claim cease by the Ordinance.
These contentions which bear on issue No. 5 will have to be urged by the Plaintiffs before the trial Court and will have to be decided by the-said
Court while deciding that issue and we do not propose to deal with them, as they do not-fall, within the ambit of Article 228. All that we can say at
this stage is that the Court''s jurisdiction, came to an end over so much of the Plaintiff''s claim as would fall within the ambit of Sub-section (2), of
Section 2 of Ordinance XIII of 1950.
We order that the case should be return ed to the Court of the Assistant Judge, Porbander, with a copy of our judgment and we direct that the
said Court on receipt thereof"" shall proceed to dispose of the case in conformity with our judgment. As the suit is very old the Assistant Judge will
give special precedence to it and will dispose it of without delay. The costs of this hearing'' shall be the costs in the cause.
Shah, C.J.
I agree.