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PETITIONER: STATE OF GUJARAT

       Vs.

RESPONDENT: DR. R.B. CHANDRACHUD

DATE OF JUDGMENT: 19/11/1968

BENCH: BACHAWAT, R.S. BENCH: BACHAWAT, R.S. SIKRI, S.M. HEGDE, K.S.

CITATION:  1971 AIR  846            1969 SCR  (2) 755  1969 SCC  (1) 300

ACT: Baroda State Merger  Huzur order passed by Maharaja relating to retirement terms of members of Executive Council prior to transferring  full executive authority to  new  Council--New Council  purporting  to  revoke  earlier  order  passed   in exercise of Maharaja’s prerogative powers-If  valid--Whether provisions  of  Baroda Merger   Agreement   and   subsequent continuance  of  all laws previously in  force  amounted  to recognition of claims relating to retirement benefits.

HEADNOTE: On   August  15,  1947  upon  the  passing  of  the   Indian Independence Act, 1947 when paramountcy of the British crown lapsed, the erstwhile State of Baroda acceded to India.   By a.  proclamation on August 25, 1948 the Maharaja  of  Baroda announced inter alia that the entire ’executive authority of the  State would immediately vest in his Executive  Council. On  March 21, 1949 he executed the Baroda  Merger  Agreement whereby the full powers in relation to the governance of the State were transferred to the Indian Government from May  1, 1949.   These powers were then delegated to  the  Provincial Government of Bombay.     The respondent was an official member of the  Maharaja’s Executive Council of the State of Baroda.  In January.  1948 when  it was considered likely that in view of the  imminent constitutional  changes m the State the members of  the  old Executive Council might be prematurely retired, the Maharaja enhanced the respondents salary, and by ’a Huzur order dated February 8, 1948, he fixed the pension and other  retirement benefits  of  the  respondent  and  another  member  of  the Executive  Council.  It was provided that in  the  event  of their premature retirement, they would get ’as  compensation an  amount  equivalent to what they would have  received  if they continued in service upto the date of retirement and  a full  pension of Rs. 500.00 per month from the date  of  the premature  retirement.   On  May  18,  1948,  the   Maharaja directed compulsory retirement of the respondent with effect from  June  1, 1948 and he therefore drew Rs.  95,196.00  on account  of  his  compensation.  At the instance  of  a  new Executive Council the Maharaja passed another Huzur order on

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July  22, 1948 modifying his previous orders  and  directing that  the  respondent ’and the other  officials  would  draw pension  only when they  reached the age of  retirement  and would  in  addition  draw  the salary  to  which  they  were eligible under the Account Rules.     On  April 22, 1949, the new Executive Council  purported to  review  and set aside the Huzur orders with  respect  to payment  of  compensation  to  the  retired  officials   and directed, inter alia, that a sum of Rs. 77,416.00 out of the compensation  received by the respondent be recovered.  from him under section 148 of the Baroda  Land Revenue code.   He was  compelled to refund Rs. 65,000.00 and a balance of  Rs. 12,416.00 was demanded from him by the Collector of  Baroda. The  respondent  filed a suit against the  State  of  Bombay asking  inter  alia for a declaration that the  Huzur  order dated February 8, 1948 as modified by the Huzur Order  dated July  22,  1948 was binding on the defendants and  that  the order  of  the  Executive  Council of  April  22,  1949  was invalid.  The  Trial 756 Court  decreed  the  suit and the  High  Court,  in  appeal, substantially  upheld the respondent’s case but reduced  the amount of the decree.     Apart from the validity of the Executive Council’s order of   April  22,  1949,  the  other  questions  arising   for determination in the ’appeal to this Court were whether  the Government  of  Baroda  was liable to  pay the  sum  of  Rs. 65,000  to the respondent; and if so, whether the  liability devolved upon the appellant State of Gujarat. HELD:  Dismissing the appeal:     (i)  The Huzur order of February 8, 1948 was  passed  by the Maharaja in the exercise of his prerogative and inherent powers.   The Executive Council had no authority  to  revoke that  order  and  until  the  Maharaja  passed  the   entire executive  authority to the Council on August 25,  1948,  he was  still the sovereign ruler.  The order of the  Executive Council  dated April 22, 1949 was therefore ultra vires  and not binding upon the respondent. [761 G]     (ii)  The direction in the order of April 22,  1949  for the  recovery  of  monies under s. 148 of  the  Baroda  Land Revenue  Code  was  illegal.  That  section  did  not  allow recovery  of moneys payable under an order of the  Executive Council.   The result of the illegal recovery of Rs.  65,000 from  the respondent was that to the extent of that  amount, the liability of the Baroda Government under the Huzur order dated February 8, 1948 remained outstanding. [762 A]     (iii)  Clause (1) of Article VIII of the  Baroda  Merger Agreement  guaranteed payment of reasonable compensation  to officials  whose  services were dispensed with  by  the  new Government.   Clause  (2,)  guaranteed  the  continuance  of pension  and  leave salaries sanctioned by the  Maharaja  to officers  who  had retired before the date  of  the  merger. Article VIH thus furnishes strong evidence of recognition by the  Government of India of the liability to pay  retirement compensation  under  the Huzur order  of February  8,  1948. Furthermore,  the  successor Governments continued  the  old laws  of  the  Baroda  State until  they  were  repealed  or altered.  The appellant resisted the respondent’s  claim  on the.  basis only of the order of April 22, 1949 but as  this was invalid, it must be held that the successor  Governments recognised and took over liability under the Huzur order  of February  8, 1948,  which  liability  had   since   devolved on  the appellant State of Gujarat.     Considering  that  the object of Article  VIII  was.  to guarantee  payment of retirement benefits to retired  public

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servants of the merged State, the word "pensionS" could  not be  given  any narrow interpretation and would  include  the lump sum payable to the respondent as compensation under the Huzur order dated February 8, 1948 as modified by the  Huzur order dated July 22, 1948. [765 A D]     M/s.  Dalmia  Dadri Cement Co. v.  The  Commissioner  of Income  Tax.  [1959]  S.C.R. 729; Pema Chibar  v.  Union  of India,  [1966] 1 S.C.R. 357; Jagannath Agarwala v. State  of Orissa,  [1962] 1 S.C.R. 205; Firm Bansidhar Premsukhdeo  v. State of Rajasthan, A.I.R. 1967 S.C. 40; State    of Gujarat v. Fiddali, [1964] 6 S.C.R. 461;  Vajesinghji  Joravarsingji v.  Secretary of State for India, [1924] L.R. 51  I.A.  357, 361;  R.N.  Pratap Singh Deo v. State of  Orissa,  [1964]  7 S.C.R.  112;   Union   of   India   v.  Gwalior  Rayon  Silk Manufacturing  (Weaving) Co., [1964] 7 S.C.R. 892; State  of Madhya  Pradesh v. Lal Bhargavendra Singh, [1966] 2   S.C.R. 56 Maharaja Shri Umaid Mills Ltd. v. Union of India,  [1963] Supp. 2, S.C.R. 757 515;  State  of  Madhya Pradesh v. Col. Ram  Pal,  [1966]  2 S.C.R.  53;  M/s.  Dalmia Dadri  Cement  Co.  Ltd.  v.   The Commissioner  of  Income-tax  [1964]  7  S.C.R.  124;  Nawab Bahadur  of  Murshidabad v. Karnani  Industrial  Bank  Ltd., L.R.  [1931] 58 I.A. 215, 219-20  and Secretary of State  v. Khemchand Jeychand, I.L.R. (1880) 4 Bom. 432, 436;  referred to.

JUDGMENT: CIVIL APPELLATE JURISDICTION:  Civil Appeal No. 579 of 1965.     Appeal  from  the judgment and decree dated  April   20, 28,  1960 of the Bombay High Court (Now Gujarat High  Court) in Appeal No. 172 of 1956 from Original Decree. N.S.   Bindra,  M.S.K.  Sastri  and  S.P.  Nayar,  for   the appellant. S.T. Desai, Y.S. Chitale and D.N. Misra. for the respondent. The Judgment of the Court was delivered by     Bachawat,  J. In January 1948 in  view of the   imminent constitutional   changes  in  the  Baroda  State,   it   was considered  likely  that  the  services  of  the  Diwan  Sri Sudhalkar, the appellant and Sri Gaekwad, the three official members  of  the  Executive Council of the  State  would  be prematurely terminated.  The respondent was then ’drawing  a salary  of  Rs.  2,000/-  per month and  was  to  retire  on February  14, 1952 on reaching the superannuation age of  56 years.   On  January 28, 1948 His Highness the  Maharaja  of Baroda   enhanced the respondents salary to Rs. 2,500/-  per month.   By separate orders the salaries of  other  official member’s  also  were  enhanced.   By  a  Huzur  order  dated February  8, 1948 the Maharaja fixed the pension  and  other retirement benefits of the respondent and Sri Gaekwad. The order was in these terms :--                     "His  Highness  the Maharaja  Saheb  has               been  pleased  to order that in the  event  of               premature   retirement   of   the   Government               Members,    Messrs.    D.V.    Gaekwad     and               Chandrachud,   they  will  get  forthwith   as               compensation an amount equivalent to the total               ,amount  they  would have  received  had  they               continued  in  service  up  to.  the  date  of               retirement and a full pension of Rs.  500  per               month   from   the  date  of   the   premature               retirement.                     2.  Mr.   D.V.   Gaekwad’s   salary   is

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             raised  to  Rs. 2,000/- from the date  of  his               confirmation as Naib Dewan. " On  the  same date the Maharaja by a separate  order   fixed the  pension and retirement benefits of Sri  Sudhalkar.   On May   18,  1948,  the  Maharaja  directed   the   compulsory retirement   of   the respondent with effect  from  June  1, 1948.   Soon thereafter the respondent drew from  the  State Treasury   Rs.  95,196/4/-   on  account   of   compensation allowance.  On June 1, 1948 he retired 758 from service.  On the same date Dr. Jivraj Mehta became  the Diwan and President of the Executive Council in place of Sri Sudhalkar.   On the representations of Dr. Jivraj Mehta  the Maharaja  passed  another  Huzur  order  on  July  22,  1948 modifying  his  previous  orders  and  directing  that   the respondent  and the other officials would draw pension  only as and when they would reach the age of retirement and  that the respondent would in addition draw the salary to which he might  be eligible under the Account Rules. In October  1948 there was correspondence touching  the  Huzur Orders between the  Maharaja and Dr. Jivraj Mehta.   On April 22, 1949  the Executive  Council  of the State of Baroda  headed  by   Dr. Jivraj Mehta purported to review and set ,aside  the   Huzur Orders  with  respect  to payment  of  compensation  to  the retiring  officials  and directed that (1 )  the  respondent would get 4 months’ privilege leave salary and as from April 1, 1949 the pension of Rs. 500/- per month sanctioned by the Maharaja,  (2)  the  amount received by  the  respondent  as compensation  be forfeited to the State and returned by  him to  the Treasury;  (3) Rs. 77,416/consequently due from  him after taking into account his salary and pension up to March 31,  1949 be recovered from him under s. 148 of  the  Baroda Land  Revenue Code.  Pursuant .to  thistle the  respondent’s properties  were attached on April 26, 1949. The  respondent was  compelled to refund to the State Treasury Rs.  55,000/- on April 27, 1949 and Rs. 10,000/on April 29, 1949. On March 14,  1952  the  Collector of Baroda sent  a  notice  to  the respondent demanding payment of the balance of Rs. 12,416/-. The respondent continued to draw pension at the rate of  Rs. 500/per month from April 1, 1949. On April 17, 1952 he  gave notice of his intention to file the present suit under s. 80 of  the  Code  of  Civil Procedure.  On  June  23,  1952  he instituted the suit against the State of Bombay asking for a declaration that the Huzur order dated FebrUary 8, 1948  ,as modified  by the Huzur order dated July 22, 1948  was  valid and  binding on the defendant, a declaration that the  order of  the Executive Council dated April 22, 1949 was  invalid, an injunction restraining the defendant from recovering  Rs. 12,416/- and a decree for Rs. 65,000/- and interest  thereon totaling Rs. 77,300/-, future interest and costs.  On August 31, 1955, the Trial Court decreed the suit.   On appeal, the High Court held that the respondent was entitled to  recover Rs.  65’000/’only without interest and was liable to  refund Rs. 17,250/- drawn on account of pension from April 1.  1949 up.  to  February 14, 1952.  Consequently,  the  High  Court reduced the money decree to Rs. 47,750/- give  proportionate costs  and  confirmed the rest of the decree.   The  present appeal  has  been  filed  by  the  State  of  Gujarat  after obtaining a certificate from the High Court.     It   is  necessary  at  this  stage  to  refer  to   the constitutional  and  political changes  culminating  in  the merger of Baroda State in the 759 Province   of  Bombay.   The  Maharaja  of  Baroda   enjoyed internal.  sovereignty in the State under the suzerainty  of

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the  British  crown.  In  1940  the  Maharaja  enacted   the Government  of  Baroda  Act  1940, (Act  No.  VI  of  1940). Section 3 provided that Baroda would continue to be governed by  the  Maharaja  and  that   all   rights,  authority  and jurisdiction appertaining to its government was  exercisable by him except as provided in the Act or "as may be otherwise directed  by His Highness."   Section 4 preserved  all   the Maharaja’s  powers, legislative, executive and judicial,  in relation  to the State and its government and his right  and prerogative  to make laws, and issue  proclamations,  orders and   ordinances   by  virtue  of  his  inherent  authority. Section 5 vested the executive’ authority of the State in an Executive Council consisting of the Dewan and other  members chosen  by  the  Maharaja  and  holding  office  during  his pleasure subject to the other provisions of the Act and  the directions  given by the Maharaja.  Section  18(d)  provided that  no Bill affecting any order passed by the Maharaja  in exercise  of  his prerogative could be moved  in  the  Dhara Sabha  without  the  previous  sanction  of  the   Maharaja. Section   32(f)  provided  that  pensions   and   gratuities sanctioned  by the Maharaja would be expenditure charged  on the  revenues of the State.  On August 15, 1947  the  Indian Independence Act, 1947 was passed and the paramountcy of the British crown lapsed.  On the same date the State of  Baroda acceded  to the Dominion of India. Under the  Instrument  of Accession  the  Maharaja  of Baroda ceded  to  the  Dominion legislature  the power to legislate for the State of  Baroda with    respect   of   defence,   external    affairs    and communications.  The  advent of independence in  India  gave momentum to the popular movement for transfer of power  from the   Maharaja  to  the  people  and  for  formation  of   a responsible government in the State.  On January 9, 1948 the Maharaja issued a proclamation directing the formation of  a body  elected  on  the basis of  ,adult  franchise  frame  a Constitution  for the State subject to certain  reservations and   announcing   his   intention   to   appoint    popular representatives,  to  the  Executive  Council.   By  another proclamation  dated August 25, 1948 the  Maharaja  announced that  (1) the Constitution framing assembly would have  full and  unrestricted authority to frame a Constitution for  the State in respect of all matters and subjects; (2) the entire executive  authority of the State would immediately vest  in the Executive Council, the Government of  Baroda  Act  would stand  amended  ,accordingly and the words "or  as  may  be’ otherwise  directed by His Highness" occurring in s.  3  and the whole of s. 4 of the Act would be deemed to be  omitted; On  September 16, 1948 the Maharaja promulgated  the  Baroda State Executive Rules.  Rule 6 provided that "the  Executive Council shall have the entire executive authority in  regard to  the administration of the State in ,all matters  without any  reservation." On March 21, 1949 the  Maharaja  executed the Baroda Merger Agreement whereby’ 760 he   ceded  to  the  Dominion  Government  full   authority, jurisdiction   and  powers  for  and  in  relation  to   the governance   of  the  State  and  agreed  to  transfer   the administration  of the State to the Dominion  Government  on May 1, 1949.  On May 1, 1949 the administration of the State was made over to the Dominion Government. As from that date, all  sovereign powers of the Maharaja of Baroda  ceased  and the  Dominion Government acquired full and  exclusive  extra provincial   jurisdiction  for  and  in  relation   to   the governance  of the State of Baroda.  By a  notification  No. 101-P  dated May 1, 1949 the Central Government in  exercise of  its  powers  under  s.  3(2)  of  the   Extra-Provincial

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Jurisdiction   Act,   1947  delegated  to   the   Provincial Government   of  Bombay  its  aforesaid   extra   provincial jurisdiction including the powers conferred by s. 4 of  that Act to make orders for the exercise of the jurisdiction.  By notification   No.   4530/46F  of  the  same    date,    the Government  of Bombay in exercise of the powers conferred by s. 4 of the Extra Provincial Jurisdiction Act, 1947 repealed the  provisions of the ’Government of Baroda  Act  excepting ss.  1, 2 and 36 to 45 with immediate effect.  On  the  same date the Government of Bombay promulgated the Administration of the  Baroda  State  Order Paragraph 3 of the Order vested the  executive  authority   of   the  State  in  a   special commissioner,  subject to the  supervision  and  control  of the Bombay Government.   Paragraph 4(i)(b) provided for  the continuance  of (a) of any law, or (b) of any  notification, order,  scheme,  rule,  form  or  bye-law  issued,  made  or prescribed under any law as were in force immediately before May  1,  1949  in the Baroda State.  On July  23,  1949  the Government   of   Bombay  promulgated   the   Bombay   State (Application  of Laws) Order 1949. Paragraph 3 of the  Order provided  for the extension and continuance of certain  laws to the Baroda State.  Paragraph 5 repealed ss. 1, 2, and  36 to  45  of the Government of Baroda Act  and  certain  other enactments.   Paragraph 5(iii)(a) provided ’that the  repeal would   not  affect  any  right,   title,   obligation    or liability  already  acquired, accrued or  incurred,  or  any remedy  or proceeding in respect thereof.  On July 27,  1949 the Governor General in exercise of his powers under s. 290A of the Government of India Act, 1935 promulgated the States’ Merger (Governors Provinces) Order 1949.  Paragraph 3 of the Order provided  that Baroda would be merged in the  province of  Bombay  and administered in all respects as if it formed ’part  of  that  Province.  Paragraph  4  provided  for  the continuance  of  laws  then in force in  the  merged  State. Paragraph 7 (1 ) provided that all liabilities in respect of such  loans, guarantees and other financial  obligations  of the Dominion Government as arose out of the governance of  a merged State, would as from August 1, 1949 be liabilities of the absorbing Province, unless the loan, guarantee or  other financial  obligation  was relatable  to  central  purposes. Paragraph 9 provided that any proceedings which if the order had not been passed 761 night lawfully have been brought in the merged State against the  Dominion  might in the case of  any  liability  arising before August 1, 1949 be brought (a) against the Dominion if the proceedings could have been brought against the Dominion had  the liability arisen after that date and (b)  otherwise against the absorbing Province.     The  questions arising for determination in this  appeal are as follows :--     (1 ) Was the order of the Executive Council dated  April 22, 1949 ultra vires its powers and invalid and not  binding on  the respondent; (2) Was the Government of Baroda  liable to pay the sum of Rs. 65,000/- to the respondent;  and   (3) if so, has the liability devolved upon the State of Gujarat.     The  Executive  Council Rules made by  the  Maharaja  of Baroda on September 16, 1948 vested in the Executive Council the   entire   executive   authority  in   regard   to   the administration  of the Baroda State in all  matters  without any reservation. The Executive Council had very wide powers, but,  in our opinion, they had no authority to override  and rescind  the  Huzur orders passed by the  Maharaja  himself. The prerogative and inherent powers of the Maharaja was  not delegated to the Executive Council.  The Maharaja was  still

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the sovereign ruler.  The members of  the  Executive Council were responsible to him and held office during his pleasure. No  appeal lay from his order to the Executive  Council   On the  contrary  under  Rule 46 of  the  Privy  Council  Rules promulgated  on  December  18, 1947 an  appeal  lay  to  the Maharaja  from an order passed by the Executive Council.  In view of s. 18(d) of the Baroda Constitution Act 1940 even  a legislative  bill affecting an order passed by the  Maharaja in the exercise of his prerogative rights could not be moved in the Dhara Sabha without his previous sanction.   Under s. 32(f)  pensions  and gratuities sanctioned by  the  Maharaja were charged on the revenues of the State.  The Fluzur order was  passed  by  the Maharaja on February  8,  1948  in  the exercise of his prerogative and inherent powers.  The  order was  executed  and  the monies were paid  under  it  to  the respondent. The Executive Council had no authority to revoke the Huzur order and to forfeit the monies. We hold that  the order  of  the Executive Council dated April  22,  1949  was ultra vires its powers and was illegal and not binding  upon the respondent.     It is now conceded that the direction in the order dated April  22, 1949 for the recovery of monies under s.  148  of the Baroda Land Revenue Code was illegal.  That section  did not  allow recovery of moneys payable under an order of  the Executive 762 Council.    The  attachment  levied  on   the   respondent’s properties was unlawful.  The recovery of Rs. 65,000/-  from the  respondent,  under the invalid order of  the  Executive Council cannot be justified as an act of State.  The  Courts below rightly found that the respondent was compelled to pay Rs.  65,000/-  under  coercion. The result  of  the  illegal recovery was  that  to  the  extent  of Rs. 65,000/- the Ii, ability of the Baroda Government under the Huzur Order dated February 8, 1948 remained outstanding. The  main  question  arising in the appeal  is  whether  the liability the Baroda Government under the Huzur order  dated February  8,  1948 devolved upon the  successor  governments after  the merger of the Baroda State on May 1,  1949.   The view which currently prevails in this Court is that in cases where the Government of India has acquired the territory  of a  sovereign  Indian  State  either   by  conquest,  treaty, cession or otherwise the privileges and rights obtained from the  predecessor State cannot be enforced by action  against the Government of India, see M/s. Dalmia Dadri Cement Co. v. The Commissioner of Income-tax(1) (cession  of  Jind),  pema Chibar v. Union of India(a) (conquest of Daman), nor can  it be  sued  in  the  municipal  courts  for  the  debts   ’and contractual  liabilities of the predecessor,  see  jagannath Agarwala v. State of Orissa(3) (Cession of Mayrbhunj),  Firm Bansidhar Premsukhdeo v. State of Rajasthan(4)  (Bharatpur), unless  it has chosen, to recognise the  right,   privilege, debt or liability by legislation, agreement,  or  otherwise. The rule extends to  the acts of the predecessor State after its  accession to the Dominion of India on August  15,  1947 and before its complete merger in the Dominion. In State  of Gujarat  v.  Fiddali(5)  the Ruler of Sant  State  issued  a resolution or Tharao granting certain forest rights on March 12,  1948 after the accession of the State to the  Dominion. On  June 10, 1948 he transferred  the administration of  the State to the Dominion under a merger ,agreement dated  March 19,  1948.  The Court held that the Tharao was  not  binding upon the successor government.  It was said that the  Rulers of  the   Indian  States parted with  their  sovereignty  in successive  stages,  firstly on accession,  and  finally  on

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merger.  As  a result of accession, the  Dominion  of  India acquired  power to legislate for the  territories   of   the acceding state in respect of defence, external affairs,  and communications.  Under s. 5 of the Indian  Independence  Act the Dominion was as from August 15, 1947 a union  comprising the  acceding  State.  But the acceding State  continued  to retain   its  separate existence and individual  sovereignty until its complete merger in ’the Dominion. (1) [1959] S.C.R. 729. (2) [1966] 1 S.C.R. 357. (3) [1962] 1 S.C.R. 205. (4) A.I.R. 1967 S.C. 40. (5) [1964] 6 S.C.R. 461. 763     The  question then is whether the successor  governments recognized the rights and liabilities under the Huzur  order dated February 8, 1948.  The onus of proving the recognition is  upon  the respondent, see Valesinghji  Joravarsingji  v. Secretary  of State for India(1).  The recognition  "may  be either  express  or may be implied from   circumstances  and evidence  appearing   from  the mode of dealing  with  those rights   of  the  new  sovereign,"  see  State  Gularat   v. Fiddali(2).     On  behalf  of the respondent it was  argued  that   the Huzur Order dated February 8, 1948 was a law and as such was recognised  and  continued  in force by  the  Government  of India.   We axe unable to accept this contention.   A  grant made by the Ruler of an Indian State is not a law, see State of Gujarat v. Fiddali(2), 461 (grant of forest rights), R.N. Pratap  Singh Deo v. State of Orissa(a) (grant  of  khorposh allowance),   Union   of   India   v.  Gwalior  Rayon   Silk Manufacturing  (Weaving)  Co.(4) (grant  of  exemption  from taxation),  State  of  Madhya Pradesh  v.  Lal  Bhargavendra Singh(5)  (grant  of  maintenance  allowance),  nor  is   an agreement  executed  by the Ruler a law, see  Maharaja  Shri Umaid  Mills Ltd. v. Union of India(6). Accordingly, it  was held  in State of Madhya Pradesh v. Col. Ram Pal(7) that  an order granting retirement pension in relaxation of the State Pension  and Gratuity Rules was not a law.  The Huzur  order dated  February 8, 1948 did not lay down a rule conduct  for the official members of the Executive Council generally.  It fixed  the  retirement  benefits of the  respondent  and  of Gaekwad  and  enhanced Gaekwad’s salary.  A  separate  order fixed  the  retirement  benefits  of  Sudhalkar,  the  other official member.  The order concerning the respondent was an executive  act  and had none of the characteristics  of  law unlike other laws it was not published in the Adhya  Patrika or  the official gazette of Baroda State.  We hold that  the order was not a law.     The next question is whether the Baroda merger agreement dated  March 21, 1949 recognised the rights and  liabilities under  the  Huzur  Order dated February 8,  1948.   Now  the Articles  of  the  merger  agreement  may  furnish  valuable evidence  of  the  affirmance of  rights  conferred  by  the predecessor  State, see M/s. Dab mia Dadri Cement  Co.  Ltd. v.   The  Commissioner of Income-tax(s).  In  the  State  of Madhya  Pradesh   v.  Shyam Lal(9) a  recognition  of  those rights  was  inferred  from articles  in  merger  agreements providing  for  the continuance of the laws of  the  merging State and for the taking over its assets and the liabilities by  the  new  State. In the present case Art.  VIII  of  the merger agreement (1) (1924) L.R. 51 I.A. 357, 361. (2) [1964] 6 S.C.R. 461 at p. 510. (3) [1964] 7 S.C.R. 112.

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(4) [1964] 7 S.C.R. 892. (5) [1966] 2 S.C.R. 56. (6) [1963] Supp. 2 S.C.R. 515. (7) [1966] 2 S.C.R. 53. (8) [1959] S C.R. 729 at p. 748. (9) [1964] 7 S.C.R. 124. 764 dated March 21, 1951 provided :--               (1 ) The Government of India hereby guarantees               either  the  continuance in service   of   the               permanent    members of the Public Services of               Baroda  on  conditions    which will  be  less               advantageous than those on which    they  were               serving   before   the  date  on   which   the               administration  of Baroda is made over to  the               Government     of  India  or  the  payment  of               reasonable compensation.                    (2)  The  Government  of  India   further               guarantees    the continuance of pensions  and               leave  salaries sanctioned    by His  Highness               the  Maharaja to the members of the     public               services  of  the  State who have  retired  or               proceeded on leave preparatory to  retirement,               before the    date on which the administration               of Baroda is made over    to the Government of               India. Clause (2) of Art. VIII applies to the respondent.  .He  was member  of the public services of the Baroda State,  and  he retired  before the date of the merger.  It  guarantees  the continuance  of the pension and’ leave salary sanctioned  to him  by  the Maharaja. Now what does the word  "pension"  in clause (2) of Art. VIII mean?  Ordinarily the word "pension" means  a  periodical  allowance  of  money  granted  by  the Government  in consideration or recognition  of  meritorious services.  The word "pension" in the Pensions Act, 1871,  s. 60(1)(g) of the Code of Civil Procedure,1908 and s. 6(g)  of the  Transfer  of  Property  Act,  1882  implies  periodical payments of money by Government to the pensioner,  see Nawab Bahadur  of Murshidabad v. Karnani Industrial  Bank  Ltd.(1) Pension,  gratuity  and provident fund  are  three  distinct types  of  retirement  benefits.   But  the  word  "pension" (pensionem, payment) in its widest etymological sense can be construed  as  including  all payments  of  every  kind  and description to a retiring government servant, see  Secretary of  State v.  Khemchand jeychand(2). The term  "pension"  is frequently, particularly in recent years, used in the  broad sense  of retirement allowance or adjusted compensation  for services rendered, see Corpus Juris Secundum, Vol. 67,  page 331;  Vol.  70,  page  425.   It  has  received  the   wider connotation  in  the  definition  sections  of  many  modern statutes.To  give a few illustrations, the  word   "pension" includes "any payment of a lump sum in respect of a person’s employment", see Fatal Accidents Act, 1959 (7 & 8 Eliz,  2c. 65) s. 2(2), "a superannuation allowance", see Midwives Act, 1936 (26  Geo. 5 & 1 Edw. 8c. 40) s. 2(6), a "gratuity"  and a return of contributions to a pension fund with or  without interest   thereon  or  any  other  addition  thereto,   see Transport  Act, 1947, (10 & 11 Geo. 6c. 49) s.  125(1),  Gas Act, 1948 (11 & 12--Geo.. 6c. 67) s. 74(1). (1) L.R. (1931) 58 I.A. 215, 219-20. (2) I.L.R. [1880] 4 Bom. 432, 436. 765      Now clause (1 ) of article VIII of the merger agreement guarantees  payment of reasonable compensation to  officials whose  services  are dispensed with by the  new  Government.

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Clause  2 guarantees  the continuance of pensions and  leave salaries  sanctioned  by the Maharaja to  officers  who  had retired before the date of the merger.  Considering that the object of article VIII is to guarantee payment of retirement benefits to retired public servants of the merged State,  we are  not  inclined  to give the  word  "pensions"  a  narrow interpretation.   In our opinion,  the  word  "pensions"  in clause 2 of article VIII includes  the  lump  sum payable to the  respondent as compensation under the Huzur order  dated February 8, 1948 as modified by the Huzur order  dated  July 22,  1948.  In substance, the Huzur order directed that  the respondent would get his full salary as his pension from the date of his premature retirement up to the completion of his superannuation age and allowed him to draw immediately   the entire  allowance  for  the  period in  one  lump  sum.  The allowance   so  payable  to  the  respondent,   a   retiring government  servant, in recognition of his past services  is "pension" within the meaning of cl. 2 of article VIII of the merger agreement.      Article  VIII  of the merger agreement  thus  furnishes strong evidence of recognition by the Government of India of the  liability  to  pay retirement  compensation  under  the Huzur  order  dated February 8, 1948.  We have also  noticed that the successor governments continued the old laws of the Baroda  State  until  they were repealed  or  altered.   The successor governments resisted the respondent’s claim on the ground that the order of forfeiture passed by the  Executive Council on April 22, 1949 was lawful. There was no  question of  their  disclaiming liability under the  Huzur  order  of February 8, 1948 in case it was found that the order of  the Executive Council dated April 22, 1949 was invalid.  In  the ’circumstances,  we  hold  that  the  successor  governments recognized and took over the liability under the Huzur order dated  February 8, 1958. If so, it is not disputed that  the liability  has  now devolved on the State  of  Gujarat.   It follows  that the Courts  below rightly decreed the suit.      This conclusion is sufficient to dispose of the  appeal and  we  express no opinion whether the liability  was  also recognized  by  paragraph 4(i)(b) of the  Administration  of Baroda State Order, paragraph 5(iii)(a) of the Baroda  State (Application of Laws) Order, 1949 or paragraph 7 (1 ) of the States’ Merger (Governors’ Provinces) Order, 1949.      In the result, the appeal is dismissed.  There will  be no order as to costs in this Court. R.K.P.S.                               Appeal dismissed. L4Sup CI/69--16 766