- (1.) SARJOO Prosad, C. J. 1. This Special Bench was constituted on a reference made to me by a Division Bench of this Court presided over by Modi and Bhandari JJ. As the order of reference shows, the learned Judges were "not agreed on the proper interpretation to be put on Article 295 (2) of the Constitution in view of the opinions expressed" in their respective judgments. They, however, were pleased to formulate the point of reference as follows : " Whether the expression "government of the corresponding Indian State' used in Article 295 (2) of the Constitution with reference to Rajasthan properly means the Government of the United State of Rajasthan which was the only Indian State in existence at the time of the commencement of the Constitution Or it also includes the Government of any of the Covenanting States which had integrated with the United State before the Constitution came into operation? " Having had the benefit of perusing the judgments of the learned Judges making the reference and the advantage of hearing elaborate arguments of the learned Advocate General and the counsel appearing for the parties, I confess that I have felt considerable difficulty in answering the point formulated. The difficulty has been enhanced because of the narrow compass in which the matter has been laid before us, which tends to restrict unduly the scope of the enquiry. Rule 59 of the High Court Rules provides that "the Chief Justice may constitute a Bench of two or more Judges to decide a case or any question or questions of law formulated by a Bench hearing a case. In the latter event, the decision of such Bench on the question or questions so formulated shall be returned to the Bench hearing the case, and that Bench shall follow that decision on such question or questions, and dispose of the case after deciding the remaining questions, if any, arising therein. " Thus on the terms of Rule 59, this Bench is called upon to determine only the question formulated by Modi and Bhandari JJ. I do not find any other Rule in the High Court Rules, which provides specifically for cases where the Chief Justice may constitute a Bench of two or more Judges to hear and decide any difficult and important question of law arising in a case, or to constitute a Full Bench for the purpose of resolving any conflict of decisions in this Court. It appears to me, therefore, that Rule 59 cannot be exhaustive of the powers which the Chief Justice must possess in regulating the functioning of the Court to constitute appropriate Benches for the decision of such questions which may, from time to time, necessarily arise. I find that in these cases the most substantial question which arises for consideration is : " Whether on a true interpretation of Article 295 (2) of the Constitution, the State of Rajasthan can be said to have incurred the liabilities of the other Covenanting States which went to form the United State of Rajasthan, before the Constitution came into operation?" This was, in my opinion, the essential question which fell to be determined in these cases; and this Bench would have been in a happier position to determine the above question, if it had been formulated in that form. Since I have the honour of presiding myself over this Special Bench constituted for the purpose, I think that there can be no valid objection to my enlarging the scope of the enquiry in the present case, and formulating the auxiliary question in the manner that i have done, so that this Special Bench of three Judges may conveniently address itself to this important question of law bearing on the interpretation of Article 295 of the Constitution, and the decision given by this Court may be binding as an authority in future. 1 notice with some satisfaction that even he question formulated under reference does envisage this aspect of the interpretation of Article 295. This is evident from the latter part of the question formulated which says "whether the Government of any of the Covenanting States which had integrated with the United State of Rajasthan was also included in the expression 'government of the corresponding Indian State'. "
(2.) THERE can be no doubt that ex facie the words Government of the corresponding Indian State" as used in Article 295 (2) of the Constitution with reference to Rajasthan would mean the Government of the United State of Rajasthan which wns the only Indian State in existence at the time of the Commencement of the Constitution; but it would be an over simplification of the matter to suggest that this is about nil that the Article means. We have to remember that Article 295 relates to succession to property, assets, rights, liabilities and obligations; and in dealing with these rights and obligations one cannot forget the inexorable logic of the historical events which followed rapidly, almost in cataclysmic succession, before the United State of Rajasthan was formed by its constituent units. My learned brother Dave has very exhaustively dealt with the historical background leading to the evolution of the United State of Rajasthan and the successive Covenants and Agreements which culminated in the constitution of that State. It is true, no doubt, that as a result of these Covenants the various Covenanting independent Indian States then in existence in Rajasthan and recognised by the Government of the Dominion of India merged in the United State of Rajasthan, and in a sense gave up their sovereignty over their respective territories and vested it in the Rajpramukh of the United State of Rajasthan; but those Covenants, in my opinion, are the" fundamental source of the authority under which the United State of Rajasthan was created, and on the strength of which the Rajpramukh of the new State could exercise his executive, legislative or judicial functions. He was not like an independent sovereign who had acquired territory by force of conquest, or to whom any territory had been ceded by some diplomatic pressure exercised by himself; and who could, therefore, act on the strength of his own supremacy or authority. It would not have been, therefore, wrong to assume that the said Covenants were in the nature of constitutional documents which in form and substance governed the constitution of the new State. It is recognised on all hands that the integration of these States followed a unique pattern of its own for which there is hardly any precedent or parallel. THEREfore, it may not be altogether correct to treat these Covenants as mere agreements between high contracting parties to which no such constitutional sanctity could be attached as to enable the subjects of those Covenanting States which entered the Union to take advantage of the terms of those Covenants and enforce their rights in the municipal Courts of the successor State. Here the same document, from which flowed the rights, the authority, and the jurisdiction of the new sovereign also provided that "all the assets and liabilities of the Covenanting State shall be the assets and liabilities of the United State". The powers of the new sovereign, therefore, went hand in hand with the liabilities which the United State incurred for the Covenanting States; and any distinction drawn on the footing that the residents of the territories which came under the dominion of the Rajpramukh of the United State could not acquire any right of citizenship until the act of State had been completed ought not really arise. THERE is no interregnum for the completion of the act of State; the rights of the new sovereign and the rights of the citizens in the covenanting territories, they both inhere and spring together. In fact it is all a continuous flow. On a perusal of these documents, therefore it appears to me that the citizens of these territories entered the constitutional haven of the integrated Unit at least as safe and unseathed as they were earlier, if not actually better still. THEREfore, the declaration made by the new sovereign in the Covenants in question, to which he along with the other Sovereigns was a party, and by virtue of which alone he could take, cilice and assume his sovereign powers over the integrated territory quoad the residents of these territories should well be regarded as having the character of a constitutional guarantee or at least the character of a law which could be agitated in his Courts. As such the clauses entered in those Covenant providing [or the recognition of the rights of the subjects of ex-Sovereigns were capable of enforcement in the Courts of the new Sovereign. It was of course open to the new Ruler in the exercise of his plenary legislative authority at any subsequent stage to abrogate the old laws and enact new ones; but so long as he did not do so, the right of his subjects preserved under the existing laws remained unaffected, and could be the foundation of a legal action either between the subjects inter se or between the subject and the State in the Municipal Courts of the new State. It is true that the integration of the Indian States, which followed in quick succession, all happened with a view to the eventual accession of those States to the Dominion of India; and the Covenants which evidenced the integrations operated ad hoc merely for a temporary or transitional period; but even so, these Covenants and Agreements governed the constitution of the integrating States during that short period, and were meant to facilitate the constitutional merger of those States in the Indian Union. It is to be remembered that the Constitution of the Indian Union itself was then being hammered into shape by a Constituent Assembly, which consisted of the representatives of the people, including those residing in the territories of these Indian 'states. It, therefore, stands to reason that by the rapid changes in the constitutional evolution, the people of the Indian States were not to be deprived of their rights and privileges which their Rulers themselves had vouchsafed to them under their local Saws and their peculiar judicial system. I do not dispute the position that if the Rulers of these States at any stage before the commencement of the Constitution in the exercise of their sovereign authority had denied, repudiated or deprived their subjects of their rights the position might be different but otherwise would it be legitimate to assume that by those constitutional changes the rights ef the people living in those territories were meant to be frittered away without any constitutional protection? Any such assumption would be repugnant to the very spirit of our Constitution which has not only safeguarded but broad-based and consolidated the rights of the people. Even the terms of the Covenants and Agreements repel any such assumption. But it is said that these terms are of no advantage to the subject because they are mere "acts of State", and cannot be enforced in the municipal Courts, unless the Ruler nodded his assent to them. I venture to think, however, that the analogy of a conquered or ceded territory cannot be legitimately extended to integrations of the kind which took place under the above Covenants. The view that these Covenants had the status of a Constitution is supported by the high authority of the Supreme Court itself, in Thakur Amar Singhjt v. State of Rajasthan, (S) AIr 1955 SC 504. The question which arose in that case was about the vires of a legislation enacted by the Rajpramukh of Rajasthan. The answer to the question depended on the fact whether the Rajpramukh was the authority in whom the legislative power of the State was vested within the meaning of Article 385 of the Constitution. The Court held that under the Covenant it was the Rajpramukh who had the power to enact laws, and that, therefore, the Ordinance issued by him was valid. Of course. , the question whether the Covenant was an Act of State or whether it was a law conferring on the citizens of the defunct States rights which were enforceable in a Court of law was not directly considered; the Supreme Court nevertheless used the word 'constitution' with reference to the Covenant and relied upon the terms thereof in support of the authority which the Rajpramukh held. If the Covenant was treated as a Constitution for the purpose, it could be also treated as a Constitution for the purpose of protecting the rights of citizens in the covenanting territories; and need not have been aligned with an Act of State technically so called. I may point out that two other decisions of the Supreme Court converge on the same lines and fortify the reasonings which I have ventured to adopt. I mean the decisions in Virendra Singh v. State of Uttar Pradesh, AIR 1954 SC 447, and Bholanath J. Thaker v. State of Saurashtra, AIr 1954 SC 680. In the earlier case the question was whether certain absolute muafi grants of lands made by the Rulers of erstwhile States of Charkari and Sairola (which were independent States under the paramountcy of the British Crown, before the integration of the States into the United States of Vindhya Pradesh and their subsequent accession to the Indian Dominion) could' be revoked as Act of State by the State of Uttar Pradesh. Their Lordships proceeded to examine the divergent views of eminent jurists on the point. At one extreme, they observed, was the view of the Privy Council expressed in a series of cases, the effect of which was summarised in Vajesinghji Jora-varsinghji v. Secretary of State, AIR 1924 PC 219 at p. 217, and again in Secretary of State v. Rustam Khan, AIR 1941 PC 64 at p. 67, in the following words: " A summary of the matter is this when a territory is acquired by a sovereign State for the first time that is an Act of State. 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, recognised. Such rights as he had under the rule of predecessors avail him nothing. Nay more, even i 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. " At the other extreme was the view of Chief Justice Marshall of the United States Supreme Court as held in United States v. Percheman, (1863) 32 US 51 at pp 86, 87 wherein he observed: " It may not be unworthy of remark that it is very unusual, even in cases of conquest, lor 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; but their relations to each other, and their rights of property, remain undisturbed. If this be the modern rule even in cases of conquest, who can doubt its application to 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 so understand the cession. Neither party could consider itself as attempting 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 not to interfere with private property. " Their Lordships, however, refrained from indicating their preference for either of the two views, because in their opinion none of these decisions had any bearing on the problem which confronted them, namely "the impact of the Constitution on the peoples and territories which joined the Indian Union and brought the Constitution into being. " The flow of events upto the date of final accession was only of historical interest in the matter. Their Lordships held that whether the Privy Council view was correct or that of Marshall C. J. , it was agreed by all the authorities that it was within the competence of the new sovereign to accord recognition to existing rights in the ceded or conquered territories, and apply its own laws to them which could be examined and interpreted by the municipal courts of the absorbing State. Their Lordships found in the case in question that the title of the petitioners to the disputed land had not been repudiated upto 26-1-1950, when the Constitution came into force. They considered it immaterial whether or not the right of the Dominion Government to repudiate their title remained in abeyance till it was exercised, despite the agreement embodied in the Instrument of Accession and the legislation and notification quoted above because, in fact, any such right was never exercised; and in the circumstances they held that even according to the English view, the petitioners concerned were not without rights in the land, nor were they without any remedy when the Constitution came into force. They quoted with approval the dictum of Lord Atkinson in Johnstone v. "pedlar, 1921-2 AC 262 at p. 278: " It is on the authorities quite clear that the injury inflicted upon an individual by the Act of State of a sovereign authority does not by reason of the nature of the act by which the injury is inflicted cease to be a wrong. What these authorities do establish is that a remedy for the wrong cannot be sought for in the Courts of the sovereign authority which inflicts the injury, and that the aggrieved party must depend for redress upon the diplomatic action of the State, of which he is a subject. " They further referred to the principle underlying the decision in Mayor of Lyons v. East India Co. , 1 Moo Ind App 175 (PC), wherein the title of a foreign alien to land was upheld, not under the English law (because if that had applied there would have been an escheat), but under the law in India derived from non-British sources, that is to say, under the laws of the land before its cession, This was so, because those laws continued until changed and for that reason a title which would have been bad under the English law was upheld. It was also-observed that: " It is impossible for a sovereign to exercise as Act of State against its own subjects. However disputable the proposition may be that an Act of State can be exercised against a citizen who was once an alien the right being only in abeyance till exercised, there has never been any doubt that it can never be exercised against one who has always been a citizen from the beginning in territory which has from its inception belonged to the State seeking to exercise the right. " The principle, as we shall soon see, has an important bearing on the matter before us. They further pointed out that in the case in hand, there was no question of conquest Or cession. The new Republic was born on 26-1-1950 and all derived their rights of citizenship from the same source and from the same moment of time; so also, at the same instant and for the same reason, all the territory within its boundaries became the territory of India. " There is, as it were, from the point of view of the new State, Unity of Possession, Unity of Interest, Unity of Title and Unity of Time. " The same can be easily predicated of the United State of Rajasthan when it came into being. i feel tempted to quote at this stage an inspiring note in the judgment, which, if I may respectfully claim, very much coincides with my own view of that Constitution and the different changes in the political scene which formed a prologue as it were to the final Act, It is as under: ''it is impossible to think of those who sat down together in the Constituent Assembly, and of those who sent representatives there, as conqueror and conquered, as those who ceded and as those who absorbed, as sovereigns or their plenipotentiaries, contracting alliances and entering into treaties as high contracting parties to an Act of State. They were not there as sovereign and subject, as citizen and alien, but as the sovereign peoples of India, free democratic equals, forging the pattern of a new life for the common weal. Every vestige of sovereignty was abandoned by the Dominion of India and by the States and surrendered to the peoples of the land who through their representatives in the Constituent Assembly hammered out for themselves a new Constitution in which all were citizens in a new order having but one tie, and owing but one allegiance: devotion, loyalty, fidelity, to the Sovereign Democratic Republic that is India. At one stroke all other territorial allegiances were wiped out and the past was obliterated except where expressly preserved; at one moment of time the new order was born with its new allegiance springing from the same source! for all, grounded on the same basis: the sovereign will of the peoples of India with no class, no caste, no race, no creed, no distinction, no reservation. " It is important to remember that this was a case concerning right to property of a person residing in the territory of the Covenanting State; but the other case, to which I am about to refer, relates to rights under a contract claimed! against the successor State, That case is the decision of the Supreme Court in AIR 1954' SC 680, mentioned above. An official, who was in the service of the Wadhwan State, continued to serve that State till the administration of the State was made over to the Saurashtra Government on 16-3-1948. The Ruler of Wadhwan State had promulgated a Dhara (Act) No. 29 of St. 2004, under which the age of superannuation for the State civil servants was fixed at 60. The officer thus became entitled to remain in service till that age. The Ruler of the Wadhwan State entered into a Covenant for the formation of the United States of Kathiawar on the 24th January, 1948. Under Article 16 (1) of the Covenant, the United States of Kathiawar had' guaranteed continuance in service of the permanent members of the public services of each of the Covenanting State on conditions not less advantageous than those on which they were serving before the date on which the administration of the State was made over to the Rajpramukh or for payment of reasonable compensation, in case of earlier termination of their services. The Ruler of Wadhwan State made over the administration of the State to the Saurashtra Government. By an order dated 29-6-1948, the officer was retired by the Saurashtra State on payment of three months leave salary and a monthly pension on the ground that he had passed the age of superannuation which was taken at 55 years. The officer then filed a suit against the Saurashtra State claiming a certain sum of money by way of compensation on account of his premature compulsory retirement. It was contended for the State that Article 16 of the Covenant, on which the officer relied, could not be enforced in the municipal Courts; and the suit was incompetent; and that the services of the officer with the Wadhwan State were during the pleasure of the Ruler of the State, and that if the said Ruler could have compulsorily retired him without being liable to pay him any compensation whatever, the position of the officer could be no better so far as the Saurashtra State was concerned. These contentions 'were repelled. The Supreme Court held that the Ruler of Wadhwan State was competent to enact Dhara No. 29 of St. 2004; that when the Wadhwan State merged in the Saurashtra State all the existing laws continued until repealed; therefore, Dhara No. 29 of St. 2004 was still good law, and! could have been enforced in the municipal courts until either repealed or repudiated; and that not having been done,, the rights were carried over after the Constitution when the Indian Republic was formed with the result that the officer then became an Indian citizen, and his rights could not be defeated except by legislation, if any, under the Constitution. He could therefore, enforce his rights in the municipal court which were held entitled to examine the contracts and apply Dhara No. 29 of St. 2004 for the purpose of giving relief to the officer concerned. The terms of the Covenant could at least be looked into to see whether the Rajpramukh of the United States of Kathiawar had waived his rights to ignore rights given under the laws of the former sovereign; and all that the officer was seeking to enforce was the right which he had under the contract, as recognised by the existing laws of the then Wadhwan State, which continued to be in force even when the United States of Kathiawar was formed, and until the stage of the Indian Constitution coming into force. Even though the tenure of service of the officer with the Ruler of the Wadhwan State was initially during the pleasure of the Ruler, the Ruler put a fetter upon his powers to dispense with the services of the officer when he passed the Dhara in question, and this obligation of the Ruler passed on to the Saurashtra State, which did not repeal the Dhara, and in fact under Article 16 of the Covenant recognised the same. This decision, in my opinion, definitely supports the view that the liability of the Dholpur State, which could be enforced under the local laws, could equally be enforced' against the United State of Rajasthan so long as the laws then in force were not repealed by the successor State; and that the terms of the Covenant could be looked into for the purpose of enforcing those rights. The point of importance is that if the then existing laws under which the rights and remedies of the subjects were secured were not repealed even after the formation of the new State, they would continue to operate in those territories, and would continue to be Interpreted by the municipal courts of the new State in the enforcement of those rights. If these decisions of the Supreme Court had stood alone, I would have had no hesitation in holding, on the terms of the Covenants, that the liabilities of the erstwhile Indian States in natural sequence devolved on the United State of Rajasthan, and then, under Article 295 (2) of the Constitution, on the present State of Rajasthan and in each case they could be legally enforced. I am, how-over, embarrassed by the fact that the same learned Judge, who delivered the judgment of the Supreme Court in the earlier case of Thakur Amar Singhji, (S) AIR 1955 Sc 504 (supra), explained that decision in a later judgment of the Court in Dalmia Dadri Cement Co. ; Ltd. v. Commr, of Income-tax, AIR 1958 SC' 816. In the later case the learned Judge held that the Covenants in question were mere Acts of State and their terms could not be enforced in the municipal courts of the successor State. It was observed! that the expression "act of State" was not limited to hostile action between rulers resulting in the occupation of territories, but included all acquisitions of territory by a Sovereign State for the first time, whether by conquest or cession; and on principle it made no difference whether it was acquisition of new territory by an existing State or as in the present case, formation of a new State out of territories belonging to quondam States. In either case, according to their Lordships, there is establishment of new sovereignty over the territory in question and that is an Act of State. In coming to their conclusion their Lordships showed a decided preference for the view of the English" jurists as based upon the various Privy Council decisions. Vivian Bose, J. , in a short separate judgment of his own agreed with the judgment of the majority, though he demurred as to the reasons for the decision. He opined that though! the English authorities held that all lights to property including those in real estate, were lost when a new sovereign took over, except in so far as the) new sovereign chose to recognise them or, confer new rights on them, yet that did not appear to be the view of the international court of justice. The learned Judge thought that it would be a pity to disregard the trend of modern international thought and' continue to follow a line of decisions based on the views of an old imperialism, when we were not bound by them, and were free to mould our own laws in the light of modern thought and conceptions. He, however, held that in the case in question in so far as the right was claimed on the basis of contract, it would fall to the ground on any view; and in so far as it was not founded on any contract, it was an obligation sought to be fastened on the new State. To quote his words : " There is no contract between the new State and the appellant, so there also he is out of Court; and even if there was some agreement or understanding between the high contracting parties, it cannot be enquired into, or enforced, by the municipal Courts of the new State. " His Lordship appears to have drawn the same distinction that was drawn by Lord Alverstone C. J. in West Rand Central Gold Mining Co. v. Rex, (1905) 2 KB 391 at p. 411, where commenting on the American cases the noble Lord said that there was a difference between private rights of individuals in private property and contractual rights, which are sought to be enforced against the new sovereign. To what extent that distinction is valid in law is more than I can say. Here we enter the domain of both public and private international law; and since the law on the subject is still in a fluid, state, I would venture to suggest that if we apply the sains test to sovereign States as we apply to individuals in a civilised society, the exemption from liability should be confined only to such rights of individuals as arise out of tortious acts of the defunct State or as can be justified' On 'the principle of actio personalis cum moritus causa ; the exemption should not be extended to cover contractual rights as such, when the defunct State had already had the advantage of the contract to the detriment of the individual affected thereby. Be that as it may, we are bound by the law as laid down by their Lordships of the Supreme Court in their latest pronouncement, and, therefore we are constrained to hold that the declarations embodied in the terms of the Covenant, creating the United State of Rajasthan, which was an Act of State, could not be enforced in the municipal Courts of that State. If the said Covenant had been treated as a Constitution, as I am respectfully inclined to think it was, then under Article VI (2) (c) of the Covenant (see Appendix XL of the White Paper),, the contractual liabilities which devolved upon the new State could be duly enforced in the Courts of that State. Fortunately this is not the finale of the) problem. At this stage I consider it necessary to advert to two distinctive features of the above case, which in my opinion, are vital to the questions before us. Firstly, their Lordships thought it unnecessary to express any opinion on the contention based on Article 295 of the Constitution. The case, therefore affords no guidance on the interpretation of Article 295. Secondly, in the case in question it is, important to notice that immediately after the Rajpramukh of Patiala had taken over the administration of find on its merger: with the East Punjab States Union on (the terms of the Covenant, he promulgated the Patiala and East Punjab States Union Administration Ordinance (1 of St. 2005) repealing all laws in force in such Covenanting State immediately before the date of the merger. The new sovereign had thus directly and categorically repudiated the laws in force in those territories thereby sweeping away the rights preserved by those laws which went by the board. No subject residing in the Covenanting territories could, therefore, take the shelter of these laws for the protection or enforcement of the rights which he enjoyed, unless and until the new sovereign chose to recognise them. The question then arises: would the position in law have been any different, if the new sovereign had allowed those laws to operate, either by not doing anything to repeal them or to render them ineffective or by making an express declaration that the laws would continue in force until so repealed? There can be no doubt that it is open to the new sovereign to exercise his prerogative either way: he may repeal the laws in force in those territories or abandon his prerogative and allow the continuance of those laws for the benefit of the subjects in those territories. This abandonment of his prerogative can be gathered even from circumstances and not necessarily by an express declaration. The effect of the non-exercise of this sovereign right is that the person is not without his rights in the land, nor is he altogether without a remedy. It is just a question of means of redress. In Forester v. Secy, of State, Ind App Sup Vol 10 at p. 17: (1874) 12 Beng LR 120, the Begum whose estate the Government sought to confiscate as an Act of State, was only in de facto possession. The Privy Council held that the Government had purported to act under colour of a legal title, so its attempt at resumption was not an Act of State and consequently could be reviewed in the courts. Their Lordships thereupon proceeded to investigate the Begum's title, not under the British Government, but as, derived from the sovereign power which preceded it. So also in 1 Moo Ind App 175 (PC) as we have noticed already, the title of a foreign alien to land was upheld, not under the English law, (because if that had applied there would have been an escheat), but under the law in India derived from non-British sources; in other words, the title was upheld under the laws of the land before cession of the territory, on the principle that those laws continued until changed with the result that a title which would have been bad under the English Law was upheld as valid. It was recognised that as between Her Majesty and her subject there could be no such thing as an Act of State. In the case of AIR 1958 SC 816 (supra), the Supreme Court reiterated these principles. In repelling the argument of the learned counsel that the Patiala Union had affirmed the agreement, they observed thus : " If there were any acts of the new State, which were equivocal in character, it would have been possible to hold in the light of Article VI of the Covenant that its intention was to affirm the concessions in Clause (23) of Ex. A. But the act of the new sovereign immediately after he became in titulo, was the application of the Patiala State laws including the Patiala Income-tax Act to the territories of Jind involving negation of those rights. " It follows, therefore, that where the new sovereign does not repudiate the laws prevailing, in the acceding territory,, his conduct is equivocal, and the laws would be deemed to operate; and, therefore, in terras of Article VI of the Covenant those laws would continue to protect individual rights of the citizens. Here we find that under section 3 of the Rajasthan Administration Ordinance, 1949 (No. 1 of 1949) it was expressly provided that all the laws in force in any Covenanting State immediately before the commencement of the Ordinance in that State shall, until altered or repealed or amended by a competent Legislature or other competent authority, continue in force in that Since: and again by virtue of Article 372 of the Constitution these laws continued to operate as existing laws at the date of the commencement of the Constitution. Therefore, under the law of contract, the liabilities of the Dholpur State devolved on the United State of Rajasthan, and then on the present State of Rajasthan when the Constitution came into force, because each of the successor States and their the then Sovereigns recognised those laws, and lent their authority tacitly or by express declaration to their, continuance. Thus it was no longer open to the United State of Rajasthan so long as those laws continued to operate to repudiate the liability which arose under that law in favour of the individual concerned. Mr. Tyagi is right in contending that the authority directly bearing on the point is the decision of the Supreme Court in the case of AIR 1954 SC 680, referred to earlier. The attention of my learned brothers Modi and Bhandari was not pointedly drawn to this aspect of the matter. Bhandari J. observed that there was nothing in those laws, from which it could be inferred that the obligations of the former State of Dholpur devolved on the State of Rajasthan and that : " as between the subject and the subject the continuance of the existing law did bring about that result but as between the subject and the State, it cannot be said that the Government of Rajasthan has become the successor of all rights and liabilities of the Government of the former State of Dholpur. " This in my opinion would run counter to the principles established above. The very recognition of those laws and their operation in the absorbing State would guarantee the rights, which the citizens of those territories possessed, and their enforce-ability in the Courts of law in the new State. Once it is found that the laws of the land continue to operate, it lies within the province of the local Courts to interpret and apply the laws to particular facts in order to give relief to parties. No further guarantees or declarations by the Sovereign are required for the protection of the citizens' rights. I have already said that even in the Dalmia Dadri Cement case, AIR 1958 Sc 816, the principle was recognised and duly endorsed. Let me again quote a passage from that judgment to illustrate my point: " When the sovereign of a State meaning by that expression the authority in which the sovereignty of the State is vested, enacts a law which creates, declares, or recognises rights in the subjects, any infraction of those rights would be actionable in the Courts of that State even when that infraction is by the State acting through its officers. It would be no defence to that action that the act complained of is an act of State, because as between the sovereign and his subjects there is no such thing as an act of State, and it is incumbent on his officers to show that their action which is under challenge is within the authority conferred on them by law. " Where is then the authority for the assumption that the said laws operated only vis-a-vis the subject and the subject and not vis-a-vis the subject and the State? The Act of State so called has already terminated, and after the merger the new sovereign has by unequivocal declaration recognised the operation of the laws already in force in the Covenanting territories, thereby granting as it were a charter of rights and liberties to the subjects and the modes of securing them in the manner provided by these laws. Modi J. , says: " All such rights and liabilities of the various covenanting States had already devolved by virtue of the covenant on the United State of Rajasthan, much before the Constitution came into force and there they rested for what they were worth. " Obviously the learned Judge accepts that the liabilities did devolve upon the United State of Rajasthan; but they were of no avail to the persons concerned, since they could not be made good in the municipal Courts. Therefore, when the Constitution came into force, they rested where they were. In other words, though the rights were there, there was no remedy for enforcing them, and thus the rights were practically frozen. Though I regret I am unable to accept that any such situation arose; but even if it is assumed that the rights were frozen, the thaw set in almost simultaneously when the Rajpramukh of the United State on the terms of the Ordinance declared that the laws in force in the Covenanting territories immediately prior to their merger would continue in force.
(3.) THE learned Advocate-General concedes that if the laws operate between the subject and the subject, there is no valid reason why they should not be held to operate between the subject and the State. He, however, contends that prior to the merger of the States the liabilities of the defunct States cease to exist and the laws operated as if only prospectively when the new sovereign, who takes charge of the States, adopts those laws by his act or declaration. He further submits that the affirmation of" the laws operating in the territory does not amount to any affirmation of the obligations of the previous Government of that territory, which has been replaced by another Sovereign not ipso facto bound by these obligations. ' As I have shown, even on the English authorities these submissions and not tenable. If the laws operate, they serve to protect the rights of the parties even against the new Government. The same conclusion follows on a proper interpretation of Article 295 (2) of the Constitution. Article 295 (2) which is relevant for our discussion runs as under: " Subject as aforesaid, the Government of each State specified in Part B of the First Schedule shall, as from the commencement of this Constitution, be the successor of the Government of the corresponding Indian State as regards all property and asset and all rights, liabilities and' obligations, whether arising out of any contract or otherwise, other than those referred to in Clause (1 ). " It may be useful to quote here also Clause (1) because some importance has been attached in the course of the arguments to the difference in the language of the two clauses. The clause has two Sub-clauses, and is as follows : " As from the commencement of this Constitution : (a) all property and assets which immediately before such commencement were vested in any Indian State corresponding to a State specified in Part B of the First Schedule shall vest in the Union, if the purposes for which such property and assets were held immediately before such commencement will thereafter be purposes of the Union relating to any of the matters enumerated in the Union List, and (b) all rights, liabilities and obligations of the Government of any Indian State corresponding to a State specified! in Part B of the First Schedule, whether arising out of any contract or otherwise, shall be the rights, liabilities and obligations of the Government of India, if the purposes for which such rights were acquired or liabilities or obligations were incurred before such commencement will thereafter he the purposes of the Government of India relating to any of the matters enumerated in the Union List, subject to any agreement entered into in that behalf by the Government of India with the Government of that State. " It is important to remember that Schedule I of the Constitution has since been amended, and Parts A and B have been repealed; but curiously enough there have been no consequential changes in Article 295 of the Constitution, as one would naturally have expected. Why this anomaly has continued is difficult for me to say, and we have to look to the Constitution as it stood prior to this amendment in Order to ascertain what this Part B of the First Schedule is. Be that as it may, the point which we have to consider at present is whether the words "the Government of the corresponding Indian State" refer to the United State of Rajasthan corresponding to "rajasthan", the State specified in Part B of the First Schedule, or they also refer to its component Units. The learned Deputy Government Advocate followed by the learned Advocate General contends that the words have only reference to the "united State of Rajasthan", which was the only State in existence at the time of the commencement of the Constitution, and not to the component Indian States like Dholpur etc. which had already merged in the United State, and dissolved! their identity. Therefore, the Part B State of Rajasthan succeeded only to the liabilities of the United State of Rajasthan and not to the other Indian States. Shri V. P. Tyagi contends for the opposite view. The former view has found favour with Modi J. , while the latter with Bhandari J. I may mention at once that for reasons more than one, I am inclined to accept the latter interpretation of the language of the Article. Before I proceed to mention them, I would wish to recall some salient principles which bear on the interpretation of the Constitution. Accustomed as we have been in our day to day administration of justice to the interpretation of numerous statutes, we are apt to lose sight of the fact that the Constitution is unlike most of the statutes that we come across and has to be judged from somewhat different standards. ' The Constitution is the very framework of the body polity : its life and soul; it is the fountain-head' of all its authority; the main-spring of all its strength and power. The Executive, the Legislature, and the Judiciary are all its creation, and derive their sustenance from it. It is unlike other statutes which can be at any time altered, modified or repealed. Therefore, the language of the Constitution should be interpreted as if it were a living organism capable of growth and development if interpreted in a broad and liberal spirit, and not in a narrow and pedantic sense. The need for this caution is greater, where the Court is called upon to interpret the Constitution of the great democratic Republic of India devised by the people of the land who were anxious to insure for themselves a Government of the people, by the people and for the people. The Constitution was not merely concerned with the present and the past; but also built for the future. It would be small credit to the makers of the Constitution, if we start with the erroneous assumption that they failed to visualise the problems with which we are at present confronted, and that in the Constitution they did not provide for them, We cannot but presume that in the normal course they must have peeped into the future "far as human eye could see", or far as human intellect could prove, and foreseen these contingencies. Keeping, therefore, these considerations in view, let us now turn to consider which of the two viewpoints about the interpretation of Article 295 (2) of the Constitution is correct. Articles 294-300 occur in Part XII, Chapter III, of the Constitution. Chapter I deals with Finance, Chapter II with Borrowings, and' Chapter III, with which we are concerned, with Property, Contracts, Rights, Liabilities, Obligations and Suits. The Articles contained in this Chapter are integral parts of a scheme regarding the devolution and distribution of and succession to these assets and liabilities, and' the right to sue in respect of them after the commencement of the Constitution. Article 294 provides, broadly speaking, for the vesting of assets which were heretofore vested in His Majesty; they were to vest in the Union Government or the corresponding State according to the purpose for which they were vested in His Majesty : namely, if they were vested for the purposes of the Dominion of India, they would vest in the Union Government, and if for the purposes of the Governor's Province, then in the corresponding State. Similarly, all rights and liabilities and obligations of the Government of the Dominion of India, or of the Government of each Governor's Province, were to become the rights, liabilities and obligations respectively of the Government of India, & the Government of each corresponding State. Article 295 is substantially in similar terms, except that Clause 1 (a) of the Article deals with the disposal of property and assets heretofore vested in an "indian State corresponding to the State specified in Part B of the First Schedule". Here if the property and assets were held by the corresponding Indian State for any purpose relating to matters specified in the Union List, the property and assets would vest in the Union. Clause (1) (b) of the Article provides that all rights, liabilities, and obligations of the Government of any Indian State corresponding to Indian State specified in Part B of the First Schedule shall be the rights, liabilities and obligations of the Government of India, if they were acquired or incurred for purposes relating to matters enumerated in the Union List. Thus Clause (1) (b) stops short with the devolution of the rights, liabilities and obligations on the Union Government. Then comes Clause (2) of the Article, which is the most relevant clause, and this completes the picture by providing for the succession of the Government of each State specified in Part B of the First Schedule to the property and assets and all rights, liabilities and obligations of the corresponding Indian State before the commencement of the Constitution. I need not refer to the other Articles except Article 300, which provides inter alia that the Government of India or the Union of India and the Government of a State may sue Or be sued in relation to their respective affairs in like cases as the Dominion of India and the corresponding Provinces or the corresponding Indian States might have sued or been sued. Clause (2) (b) of Article 300 is also important. It is as under: " (2) If at the commencement of this Constitution : (b) any legal proceedings are pending to which a Province or an. Indian State is a party, the corresponding State shall be deemed to be substituted for the Province or the Indian State in those proceedings. " I have no doubt that the words "the corresponding Indian State" as occurring in Article 295 have the same meaning throughout in both the clauses. Bhandari J. has tried to make some distinction because of the use of the words "immediately before such commencement" in the first clause to which exception has been taken in the course of arguments. Let me also grant that no special significance attaches to these words, except that they pin point the time at which the assets devolve. It is conceded and it is a settled! principle of International Law also, when the new Sovereign takes over a State, he immediately succeeds to all the assets and property of the defunct State, Let me also assume that the working out of the rights, liabilities and obligations might occupy a little time, and hence the distinction ; nevertheless I find myself faced with serious anomalies if i accept the argument of the learned Advocate General that the words "corresponding Indian State" before the commencement of the Constitution with reference to the State of Rajasthan as specified in Part B of the First Schedule meant only the "united! State of Rajasthan", and not its Component Units. It is true that at the commencement of the Constitution the United State of Rajasthan under a Rajpramukh was only in existence and for various purposes the integrating States may be taken to have been dissolved; but; their territory, identity or Unit had not disappeared for all purposes, and in various ways the Constitution continued to recognise their existence. ;