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PETITIONER: THE STATE OF MADHYA PRADESH

       Vs.

RESPONDENT: SHRI MOUIA BUX AND OTHERS

DATE OF JUDGMENT: 05/05/1961

BENCH: HIDAYATULLAH, M. BENCH: HIDAYATULLAH, M. KAPUR, J.L. SUBBARAO, K. SHAH, J.C. DAYAL, RAGHUBAR

CITATION:  1962 AIR  145            1962 SCR  (2) 794  CITATOR INFO :  R          1985 SC 357  (15)

ACT: Civil  Procedure-Parties-Suit against Government of  Part  C State-Authority  to  be  named as  defendant-Code  of  Civil Procedure, 1908 (V of 1908), 8. 79-General Clauses Act, 1897 (X  of 1897). 88. 3(8), 3(8); 3(58) and 3(60)-Government  of Part C States Act, 1951 (49 of 1951) s. 38 (2).

HEADNOTE: The  respondents obtained a lease for plucking tendu  leaves from   the  Government  of  Vindhya  Pradesh.   Later,   the Government  cancelled  the lease and sought to  recover  the balance  of the lease money.  The respondents filed  a  suit for  damages and for injunction restraining  the  Government from recovering the balance of the lease money and impleaded the  State  of  Vindhya  Pradesh  as  the  defendant.   They contended  that  the  suit was  incompetent  as  the  proper defendant  was  the  Union of India and  not  the  State  of Vindhya Pradesh. Held,  that  the  State of Vindhya Pradesh  was  the  proper defendant  to be sued and that the suit was properly  filed. Under  s.  3 (58 of the General Clauses  Act  "State"  meant inter alia a Part C State and under Art. 239 (1) the Part  C State  was  administered  by a Lieutenant  Governor  if  the President  so  ordered.  Thus Part C States had  a  separate existence  and were not merged with the Central  Government. Though  ’State Government’ was defined by s. 3(60)  ibid  in relation  to  a Part C State as the Central  Government  the definition  of  ’Central  Government’  in  relation  to  the administration  of  a  Part C  State  meant  the  Lieutenant Governor  within the scope of the authority under  Art.  239 and  thus  the  State Government.  Thus cl.  (b)  of  s.  79 applied and not cl. (a). Satya Deo v. Padam Deo, (1955) 1 S. C. R. 549, referred to.

JUDGMENT:

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CIVIL APPELLATE JURISDICTION : Civil Appeal No. 127 of 1959.  Appeal from the Judgment and decree dated February 2, 1956, of the Court of the judicial Commissioner, Vindhya  Pradesh, in Review Application No. 15 of 1955,                             795 B.Sen,  B.  K.  B.  Naidu  and  I.  N.  Shroff,  for  the appellant. G. C. Mathur, for the respondents. 1961.  May 5. The Judgment of the Court was  delivered by HIDAYATULLAH,  J. This is ,in appeal by the State of  Madhya Pradesh,  which stands substituted for the State of  Vindhya Pradesh under the States Reorganisation, Act, 1956, and  is. directed  against  an order of  the  Judicial  Commissioner, Rewa,  by  which he modified, on reviews his  judgement  and decree in a civil suit filed by the respondents against  the State  of Vindhya Pradesh.  The appeal has been filed  on  a certificate granted by the Judicial Commissioner, Rewa. The  only  question urged in this appeal is  that  the  suit brought against the State of Vindhya Pradesh was  defective, because the proper defendant was the Union of India.  Since- the  question is one of law, it relieves us of the  duty  of narrating  all the facts.  Briefly stated the suit  was  for damages  valued  at  Ls.  1,00,000/-  and  for  a  permanent injunction  against the State of Vindhya Pradesh.  The  suit was  filed in the following circumstances:  The  respondents are  bidi merchants, and for that purpose, had  obtained  on October 18, 1951 from the Divisional Forest Officer, Rewa, a lease for plucking and appropriating tendu leaves from.  the Makundpur Range for three years, commencing from October 18, 1951 on payment of Rs. 1,63,000/- per year (Ex. P. 85).  For some  reasons  into which it is not necessary  to  go,  this contract  was  cancelled,  and  the right  was  put  up  for auction,  but  no bidders came.  The  Government  therefore, demanded  the  yearly instalments, claiming them  under  the contract  as  the difference between the  original  contract amount less the 796 amount fetched by way of fresh auction, which was nil.   The suit was filed for a perpetual injunction against this claim and  for damages on the averment that the State  of  Vindhya Pradesh was guilty of breach of the contract. The trial Judge decreed both the parts of the claim, placing the  damages  at Rs. 36,570/-.  Appeals were filed  by  both sides  before the Judicial Commissioner, the appeal  of  the State  Government  was allowed and that  of  the  plaintiffs dismissed,  resulting in the dismissal of the  entire  suit. The  Judicial  Commissioner held that the State  of  Vindhya Pradesh was not a juristic entity and the suit ought to have been  filed against the Union of India.  On  an  application for review the Judicial Commissioner held that there was  an error apparent on the face of his earlier judgment, and that the  State  of Vindhya Pradesh could be  legally  sued.   He accordingly  granted review, and modified his judgment’  and decree by upholding, the claim for perpetual injunction, but he dismissed the claim for damages on merits.  It is against this  order  that  the present appeal has  been  fired  with certificate. Prior  to the formation of the State of Vindhya  Pradesh,  a Union  of 35 States in Baghelkhand and Bundelkhand had  been formed by the Rulers in March, 1948.  On December 26,  1949, this  Union merged with India, and on January 22, 1950,  the United   State   of   Vindhya   Pradesh   became   a   Chief Commissioner’s  Province under the Government of India  Act, 1935.   On the commencement of the Constitution,  the  Chief Commissioner’s  Province of Vindhya Pradesh became a Part  C

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State administered by the President.  In September, 1951  an Act known as the Government of Part C States Act, 1951,  was passed  by Parliament, and under it,  a  Lieutenant-Governor was  appointed  for  Vindhya Pradesh.  In  1956,  under  the States Reorganisation Act, 1956, this Part C State became  a part of the State of Madhya Pradesh.                             797 The  suit was filed on May 11, 1953, after notices under  s. 80  of the Code of Civil Procedure were served, inter  alia, on the Secretary, Forests and Industries Department, Vindhya Pradesh  and the Collector of Rewa.  The  defendants  raised the  plea for the first time in appeal before  the  Judicial Commissioner  that  the  suit was  filed  against  a,  wrong defendant.  According to them, the proper defendant was  the Union  of  India.  The judicial Commissioner,  relying  upon Art. 300 of the Constitution and the definition’ of  "State" in Art. 264, which did not include Part C States, held  that the State of Vindhya Pradesh was not a juristic entity,  and that  the suit could not be filed against it.  Later, on  an application  for  review,  he held that  Art.  300  was  not applicable  to  suits by or against Part C States,  and  he, therefore, considered the matter in the light of s.79 of the Code of Civil Procedure.  Before him, a notification  issued by  the  President appointing the Lieutenant-Governor  as  a person  authorised  under  Order 27 of  the  Code  of  Civil Procedure  was produced, to which earlier his attention  had not  been called.  He, therefore, held that, in view of  the provisions of s. 79 and the definition of"’State Government" in  s.  3(60)  of’  the  General  Clauses  Act,  the  proper defendant  was, in fact, the State of Vindhya  Pradesh.   He accordingly observed as follows               "The  previous  judgement of  this  Court  was               based  on  the assumption that  the  State  of               Vindhya  Pradesh was not a legal entity,  that               is, entity capable of holding property and  of               entering  into contracts.  As has  been  shown               above this assumption was erroneous."               In  the  view of the matter, he  reviewed  his               order, with the result stated above.               The  provisions  which are material  to,  the,               discussion way now be set down.  Section 79 of               the               798               Code of Civil Procedure lays down:               "79.  In a suit by or against the Government,’               the  authority  to be named  as  plaintiff  or               defendant, as the case may be, shall be-               (a)   In the case of a suit by or against  the               Central Government, the Union of India, and               (b)   In  the case of a suit by or  against  a               State Government, the State."               The following definitions in the General Clau-               ses Act, 1897, as they stood at the time,  are               also relevant:               "3 (8) ’Central Government’ shall.-               (b)   in  relation to anything done or  to  be               done  after  the  commencement  of  the   Con-               stitution, mean the President;               and shall include-               (ii)in  relation to the administration of  a               Part  C  State,  the  Chief  Commissioner   or               Lieutenant-Governor acting within the scope of               the authority given to him or it under article               239 or article 243 of the Constitution, as the               case may be :"

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             3  (58) "State’ shall mean a Part A  State,  a               Part B State or a Part C State               3 (60) ’State Government’,--               (b)   as respects anything done or to be. done               after  the commencement of  the  Constitution,               shall mean in a Part A State, the Governor, in               a  Part B State, Rajpramukh, and in a ’Part  C               State the Central Government : " It  is contended before us that s. 79, which lays  down  the procedure for suits by or against                             799 Government  and  the authority to be named as  plaintiff  or defendant  provides  that(a)  in the case of a  suit  by  or against  the Central Government, the Union of India and  (b) in  the case of a suit by or against the  State  Government, the State, shall be-named as plaintiff or defendant, as  the case may be.  It is contended that under the General Clauses Act,  s.  3 (8), "Central Government" means in  relation  to anything  done or to be done after the commencement  of  the Constitution,  the  President, and under  s.  3(60),  "State Government"  means as respects anything done or to  be  done after  the  commencement of Constitution, in the case  of  a Part  C  State,  the Central  Government.   The  contention, therefore, is that if the State Government means the Central Government in the case of Part C States, then under cl.  (a) of  s. 79 of the Code of Civil Procedure, the, proper  party to  sue would be the Union of India.  This argument was  not accepted by the Judicial Commissioner, and, in our  opinion, rightly. The  matter  has to be looked at in this  way.   "State"  is defined by s. 3(58) as a Part A State or a Part B State or a Part C State.  This shows that wherever the word "’State" is used, it includes a Part C State.  In Satya Deo v. Padam Deo (1) it has been held by this Court that Part C States bad  a separate  existence  and were not merged  with  the  Central Government.  "State Government" is then defined in s.  3(60) in relation to a Part C State, as the Central Government and "Central Government" is defined in s. 3(8)(ii) as  including the Lieutenant-Governor acting within the scope of authority given to him under Art. 239.  Article 239 reads as follows               "239(1)  Subject  to the other  provisions  of               this Part, a State specified in Part C of  the               First  Schedule shall be administered  by  the               President acting, to such extent, as. he               (1)   (1955) 1 S.C.R. 549.               800               thinks fit, through a Chief Commissioner or  a               Lieutenant-Governor   to   be   appointed   by               him........" The administration of a Part C State was thus being  carried on  under  the  provisions of Art. 239,  and,  as  has  been rightly  pointed out by the Judicial Commissioner,  was  not affected  by  Art.  300.  On April 8,  1953,  the  President issued the following notification               S.  R. O. 699"-In pursuance of clause  (1)  of               Article  239 and clause (1) of Article 243  of               the  Constitution, and in supersession of  the               notification of the Government of India in the               late  Home  Department  No.   204/37-Judicial,               dated  the  5th  May,  1938  and  in   partial               modification   of  the  notification  of   the               Government of India in the Ministry of  States               No. S. R. 0. 460 dated the 24th August,  1950,               in so far as it relates to the Civil Procedure               Code,  1908  (Act V of  1908),  the  President

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             hereby directs that the functions assigned  to               the  Central  Govern by Order  XXVII  of,  the               First   Schedule   be   discharged   by    the               Lieutenant-Governor or the Chief  Commissioner               as  the  case may be, of every  Part  C  State               except  the  State of Manipur, in  respect  of               such   Part   C  State,  and  by   the   Cheif               Commissioner  of  the,  Andaman  and   Nicobar               Islands in respect of those Islands." In view of this notification, the Lieutenant Governor became the proper authority under 0.27 of the Code Civil Procedure. By  virtue  of  the  definitions  of  "State"  and  "Central Government" read with the definition of "State  Government", the Lieutenant-Governor of the State was the proper party to be  sued.   The  Government of  Vindhya  Pradesh  meant  the Lieutenant-Governor  only by an amendment made in  1954  in. the 801 Vindhya Pradesh General Clauses Act.  Since the contract  in question  was  entered  into by the  Government  of  Vindhya Pradesh  and could not be construed as a contract  with  the Central Government, see Staye Deo V. Padam Deo the suit  had to be brought against the State of Vindhya Pradesh, and  the State  was the proper authority to be named tinder s.  79(b) of  the Code.  In addition to this there was the Act  called the  Government of Part C States Act, and under s. 38(2)  of that Act,’ all executive action of a Part C State was to  be expressed to be taken in the name of the Lieutenant-Governor and  the  executive  power  of  the  Government  was  to  be exercised by him, including the grant, sale, disposition  or mortgage  etc., of any property held for the poses  of’  the State.   The combined effect of all these provisions was  to constitute  the  Part  C  State of  Vindhy  Pradesh  into  a separate State, and under Art. 239, the administration of it was  to be done by the President through such person, as  he notified.   Under the notification, the  Lieutenant-Governor was appointed as the person to discharge the functions under 0. 27 and under s. 38(2) of the Government of Part C  States Act he exercised the executive power of Government.    The Government of the State of Vindhya Pradesh entered into  the contract  with the plaintiffs in respect of the property  of the State.  The definitions to which we have referred,  made the  State the proper authority to be sued, even though  the State  Government was defined in the General Clauses Act  as the  Central Government, because the definition  of  Central Government"  takes us to the Lieutenant-Governor,  and  from the Lieutenant-Governor we go to the State.  In this veiw of the matter, s. 79(a) of the Code, which says that in a  suit by  or against the Central Government, the proper  plaintiff or defendant, as the case may be, is the Union (1) (1955) 1 S.C.R. 549. 802 of  India,  does not apply to a Part C State, and  only  the definition in el. (b) of the section applies to this  State, even though a Part C State.  In our opinion, therefore,  the decision of the Judicial Commissioner was correct. Since no other point was urged in this appeal, it must fail, and  it  is accordingly dismissed with costs.  There  is  no need  to pass any order on C. M. P. No. 40 of 1960 by  which the  respondents  asked  for amendment  of  the  plaint  and addition   of  the  Union  Government  as  a   party.    The application shall be filed. Appeal dismissed

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