Nagi BrOrs. vs Dominion of India

Kapur, J.—This is a rule directed against an order of Mr. Bindra, Small Cause Court Judge Delhi, holding that the Courts in Delhi had no jurisdiction to entertain the suit. The rule was sued by my learned brother Khosla. J., on dated-03-1950.

As the question has now assumed some importance I took some time to decide the case. the pltf. Petitioner booked some goods from Lahore Baroda, but the goods were never delivered and brought a suit in Delhi for recovery of Rs. 321 damages against the Dominion of India through the Ministry of Railways. The pltf. who is a dismissed person, relied on Section 4, Displaced Persons institution of Suits Act, (Act xlvii [47] of 1948), which gives the displaced persons the right to institute suits in Courts within the local limits of case jurisdiction they reside provided the deft. or where there are more than one, each of the defts. actually and voluntarily resides or carries on business, or personally works for gain in India and is not a displaced person. There is no doubt that the deft., the Dominion of India, is not a displaced person. But can it be said that it actually and voluntarily resides or carries on business or personally works for gain in India?

With the State starting commercial and industrial enterprises this question does assume a degree of importance which it did not have before, but from the reported cases which are contained in our Law Reports it appears that the Dominion of India and now the Union of India cannot be brought within the definition of the phrase "carry on business or personally work for gain in India". As long ago as the year 1887 it was held by a Division Bench of the Calcutta High Court that the Govt. of India could not be said to be carrying on business within the meaning of these words of the section. There the interpretation was of Section 12, Letters Patent--"carry on business or personally work for gain". In Subbaraya Mudali v. The Government 1 Mad. H.C. 286. Scotland, C.J., had held that by Section 12, Letters Patent, a personal attendance to business was intended, although the learned Chief Justice did apply these words to the Govt. But in a later judgment of the Calcutta High Court, Doya Narain Tewary v. Secy. of State, a Division Bench of that Court disagreed with this judgment and held that these words were inapplicable to the Secretary of State for India in Council. The argument was addressed that although the business of governing the country was not business within the meaning of Section 12, Letters Patent, still as the Govt. was carrying on various trades such as the trades in opium and salt the Secretary of State would come within the words of that section. Mitter, J., with whom Trevelyan, J., concurred, said at p. 274.

But these trades are not carried on by the deft. in this case. As already observed the words carrying on of a business or trade are inapplicable to this case. These trades, if they can be properly called trades, are carried on in one sense by the Govt. officers in charge of them, but they are so carried on for the benefit of the Indian Exchequer.

In a later judgment of the Calcutta High Court, Rodrick v. Secy. of State 40 Cal. 308, this judgment was followed by Anr. Division Bench. The principle there enunciated was:

The Court has no jurisdiction to entertain a suit brought against the Secretary of State for India in Council, where the cause of action has arisen wholly outside the ordinary original civil jurisdiction of this Court, on the sole ground that the Secretary of State for India in Council dwelt or carried on business or personally worked for gain within the local limits of Calcutta, the capital of India at the time of the institution of this suit.

The High Court of Lahore in a Single Bench judgment by Hilton, J. in R.J. Wyllie and Co. v. Secy. of State AIR (17) 1930 Lab. 818, followed the Calcutta view. More recently a Division Bench of the Calcutta High Court (Harries, C.J. and Banerjee J.) in Dominion of India v. M/S. R.C.K.C. Nath and Co. AIR (37) 1950 Cal. 207, said:

So far a deft. 1, the Dominion of India, is concerned, I think, the same principle applies, which was applicable in suits against the Secretary of State for India in Council.

That was a case where the Plaintiff had brought a suit against the Governor-General of India in Council for damages for short delivery of goods which, he alleged, he entrusted to the Railway Administration for carriage from Aligarh to Khulna which was in the Dominion of Pakistan. The researches into the Law Reports do not show that the principle which would be applicable to commercial corporations has ever been applied to the Govt.. At least I am not aware of any case and none has been cited at the Bar which would show that the principle laid down in Doya Narain Tewary''s case has ever been dissented from in this country. I, therefore dismiss this petition and discharge the rule, but in view of the importance and newness of this case in regard to the Dominion of India I do not think the opposite party are entitled to costs.