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TMI Blog1964 (1) TMI 63X X X X Extracts X X X X X X X X Extracts X X X X ..... l 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 ₹ 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... als 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 State of Uttar Pradesh([1955] 1 S.C.R. 415) 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 expression in view of the controversy as to its nature, called Tharao, an order was passed by the Maharana of Sant St ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 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 Octo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tate. 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([1899] A.C. 572). This was the law laid down and given effect to by the Privy Council until India attained independence. Viren ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct 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(32 U.S. 51 at pp. 86-87) 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 cess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , and 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(1892) A.C. 491) and Johnstone v. Pedlar(1921) 2 A.C. 262). 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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(51 I. A. 357) 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 Chief Justice Marshall in Percheman's case(32 U.S. 51 at pp. 86-87) 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 J ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mer 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 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted 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, if any, which they might have enjoyed under the old. The only legal enforceable rights they could have as against the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es we have the decision in Secretary of State v. Rustam Khan(68 I.A. 109) 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(42 I.A. 229) and Vijayesingji's case (51 LA. 357) 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([1921] 2 A. C. 399), (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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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.( [1959] S.C.R. 729) and the other decisions already referred. The statement of the law therefore in Virendra's case([1955] 1 S.C.R. 415) 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 conce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecame 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 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, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efusal 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ainst 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 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 A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nted 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 pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ghts against succeeding sovereigns on a change of sovereignty. In the first place, Percheman's case(32 U.S. 51 at pp. 86-87) 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 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 providing 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 juris ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted 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 (32 U.S. 51 at pp. 86-87) was giving effect to provisions 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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(32 U. S. 51 at Pp. 86-87) 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 th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ade 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 enforceable against the predecessor State. We made this Reservation because in the Dalmia Dadri Cement case([1959] 729) 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([1955] 1 S.C.R. 415) 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 secondl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... c 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the observations in Percheman's case(32 U.S. at pp. 86-87) 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.( [1962] 1 Supp. S.C.R. 405) 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 terri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the right in question. 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 originating 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 ano ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 covenant 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ory 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 disc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... group 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Uttar Pradesh([1955] 1 S.C.R. 415). 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 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, juri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f 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 permi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 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 gra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 held that the title of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f 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([1959] S.C.R. 720) 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 again ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s not legally enforceable was clearly incapable of being protected by that section. The same view was restated by the learned Judge in Promod Chandra Deb v. The State of Orissa([1962] Supp. 1 S.C.R. 405). 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([1955] 1 S.C.R. 415) 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ciples 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...... 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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((1829) 2 Pet. 253. 134-159 S.C.-34) 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. In The American Insurance Co. and the Ocean Insurance Co. v. Bales of Cotton(1828) 7 L.Ed. 511), 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(1835) 9 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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([1962] Supp. (1) S.C.R). I am bound by that decision. O'Connell in The Law of State Succession 405. brings out the impact of the doctrine of act of State on that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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([1955] 1 S.C.R. 415) 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 privilege ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 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 fin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of one of the Thakores, an order was passed by the Divisional Forests Officer. It was as follows: .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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Bhoirajji v. Saurashtra State(61 Bom. L.R. 20) 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 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 un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd Others([1962] 1 S.C.R. 205). 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 th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 sho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o 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([1961] 1 S.C.R. 957. 964). These observations were based upon the earlier case in Ameer-un-nissa Begum and Others v. Mehboob Begum and Others(A.T.R. 1955 S.C. 352). 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 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... harao. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... public by Great Britain (1901). (3) e.g. the Ionian Islands by Britain to Greece (1864) or territory to Poland by Germany. 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. W ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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(International Law Opinions (1956) Vol 1. P. 1129; See also O'Connel Y. B. (1950) P. 93): 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 Br ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nternational 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. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 implem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dded 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. 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((1905) 2 K.B. 391), 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(1921) 2. A.C. 399) were cited before the Privy Council in Sardar Rustam Khan's case(1941) 68 I. A. 109). But Lord Atkin after referring to all cases from Kamachee Boye Saheba(1859.) 13 Moore P.C. 22), referred to the observations of Lord Halsbury in Cook v. Sprigg(1899 A.C. 572). It is well-established principle of law that the transactions of independent States between e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rstood 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 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([1955] 1 S.C.R. 415), 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 we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 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(L. R. 68 I.A. 109) 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, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aw 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 agreement in the Municipal Courts: Maharaj Umeg Singh and Ot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... agirdars. 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 sto ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... utory 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 Ruler. It is urged that the Ruler of Sant was an absolute Ruler in whom were vested all authority legislative, executive 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 acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted 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(A I.R. (1955) S.C. 352) 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 govern or regulate the rights of the parties con- cerned, though it could be ann ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 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([1961] S.C.R. 957) 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 fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de 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 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 no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt 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([1961] S.C.R. 957), Ameer-un-Nissa Begum's case (A.I.R. (1955) S.C. 352) and the Director of Endowments, Government of Hyderabad's case {A.I.R. 1956 S.C. 60): 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... et another judgment of this Court in The Bengal Nagpur Cotton Mills Ltd. v. The Board of Revenue, Madhya Pradesh and Others(A.I.R. 1964 S.C. 888) 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, 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er 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 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([1962] Suppl. 1 S.C.R. 405). 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 r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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, an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt 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. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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([1955] 1 S.C.R. 415) 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 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 ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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([1955] 1 S.C.R. 415) though a reference has also been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ition 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. 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([1959] S.C.R. 729); State of Saurashtra v. Memon Haji Ismail ([19601 1 S.C.R. 537) ; Promod Chandra Deb and Ors. v. The State of Orissa and Ors.( [1962] Supp. 1. S.C.R. 405); State of Saurashtra v. Jamadar Mahamad Abdulla and Ors.[19621 3 S.C.R. 970). The one decision in which the Privy Council's view is criticised is that of Virendra Singh's case([1955] 1 S C.R. 415). The view of the Privy Council has been expressed by Lord Dunedin in Vajesinghji v. Secretary of State for India(51 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 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 enforc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 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(42 I.A. 229). Such being the actual position 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(1962] 3 S.C.R. 970) and Promod Chandra Deb's c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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