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PETITIONER: STATE OF GUJARAT

       Vs.

RESPONDENT: VORA FIDDALI BADRUDDIN MITHIBARWALA

DATE OF JUDGMENT: 30/01/1964

BENCH: AYYANGAR, N. RAJAGOPALA BENCH: AYYANGAR, N. RAJAGOPALA DAYAL, RAGHUBAR MUDHOLKAR, J.R. SINHA, BHUVNESHWAR P.(CJ) SUBBARAO, K. HIDAYATULLAH, M. SHAH, J.C.

CITATION:  1964 AIR 1043            1964 SCR  (6) 461  CITATOR INFO :  R          1964 SC1793  (15)  RF         1964 SC1903  (17)  R          1966 SC 442  (4)  R          1966 SC 704  (10)  R          1967 SC  40  (5)  R          1971 SC 530  (129,322,364,365,370)  F          1971 SC 744  (6)  R          1971 SC 846  (7,8,9)  D          1971 SC 910  (6)  RF         1971 SC1594  (8)  RF         1975 SC1518  (33)  RF         1981 SC1946  (18)  RF         1986 SC1272  (75,76)  R          1987 SC  82  (7)

ACT: Act  of State-Ruler of a native state granted certain rights in  forest to grantees-State merged with Dominion of  India- Dominion of India did not recognise the grant-Effect of non- recognition  before Constitution and  after  Constitution-If non-recognition  of  the grant amounts to an act  of  State- Government of India Act 1935-Constitution of India, Art. 32.

HEADNOTE: The  Ruler  of the State of Sant had issued a  Tharao  dated 12th  March 1948, granting full right and authority  to  the jagirdars  over  the forests in their  respective  villages. Pursuant to the agreement dated March 19, 1948, the State of Sant merged with the Dominion of India.  On October 1, 1948, Shree  V.  P. Menon, Secretary to the Government  of  India, wrote  a  letter  to the Maharana of  Sant  State  expressly declaring  that  no  order passed or  action  taken  by  the Maharana  before  the  day  of  April  1st  1948,  would  be questioned.   After  merger  there was  obstruction  by  the forest  officers  when  the  respondents  were  cutting  the forests,  but after some correspondence they were  permitted to  cut  the trees on furnishing an  undertaking  that  they

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would  abide  by  the  decision  of  the  government.    The Government of Bombay, after considering the implications  of the  Tharao,  decided  that  the order  was  mala  fide  and cancelled  it  on  8th  July  1949  In  the  meantime  these respondents  were  stopped from working the forests  by  the Government of Bombay. 462 Thereupon  these respondents filed suits for declaration  of rights in the forests and for a permanent injunction against interference   with   those  rights  by  the   State.    The respondents  claimed in these suits that the rights  of  the grantees  to the forests were not liable to be cancelled  by the Dominion of India after the merger of the State of  Sant in June, 1948, by executive action, and that the  Government of Bombay was not competent to obstruct them in the exercise of those rights.  Their claims were opposed by the State  of Bombay  mainly  on  the  ground  that  in  the  absence   of recognition,  express or implied, by the successor State  of the  rights conferred by the former ruler on  the  jagirdars the  respondents  could not enforce them  in  the  Municipal Courts.   These  respondents filed five  suits  against  the State  of Gujarat.  All suits except one were  dismissed  by the  Trial Court.  The District Judge on appeal ordered  the dismissal of that suit also and dismissed the appeals of the plaintiffs in the other suits.  The plaintiffs then appealed to the High Court and the High Court allowed all appeals and the suits were decreed.’ The High Court held on the basis of the  letter written by Shri V. P. Menon, Secretary that  the succeeding sovereign had waived or relinquished its right to repudiate the Tharao.  The High Court further held that  the Tharao  was  not a legislative action of the Ruler  of  Sant State.   The  State  Government appealed to  this  Court  by special leave.  Hence the appeal. Per majority: Hidayatullah  J. (i) The Act of State comes to an  end  only when  the  new  sovereign  recognises  either  expressly  or impliedly the rights of the aliens.  It does not come to  an end  by  an  action  of subordinate  officers  who  have  no authority  to  bind the new  sovereign.   Till  recognition, either express or implied, is granted by the new  sovereign, the  Act of the State continues.  In the present  case,  the Act  of  State  could  only come to  an  end  if  Government recognised the rights flowing from Tharao.  That  Government never  did.  There was thus no recognition of the Tharao  or the  rights  flowing from it at any time.   In  the  present case,  the  subordinate officers of  the  Forest  Department allowed  each respondent to cut the trees on  furnishing  an undertaking  that  he  would abide by the  decision  of  the Government  and so the question of waiver or  relinquishment does not arise. Secretary  of  State in Council for India v.  Kamachee  Boye Sahaba,  (1859)  13 Moore P. C. 22, Secretary  of  State  v. Sardar Rustom Khan and Others, (68) I. A. 109, MIS.   Dalmia Dadri Cement Co. Ltd. v. Commissioner of Income-tax,  [1959] S.C.R.  729,  The State of Saurashtra v. Memon  Haji  Ismale Haji,  [1960] 1 S.C.R. 537, Jagan Nath Agarwala v. State  of Orissa, [1962] 1 S.C.R. 205, State of Saurashtra V.  Jamadar Mohamed  Abdulla  and  Ors., [1961] 3 S.C.R.  970  and  Vaje Singhji Jorwar Singh v. Secretary of State for India, (1924) L.R. 51 I.A. 357, relied on. Virendra Singh and Ors. v. The State of Uttar Pradesh [1955] 1 S.C.R. 415, disapproved. Bhola  Nath  v. State of Saurashtra, A.I.R. 1954  S.C.  680, Bhojrajji  v.  The State of Saurashtra, 61  Bom.   L.R.  20, referred to.

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463 (ii) The  Act of State did not come to an end by  virtue  of Article  299(1) of Government of India Act, 1935 and so  the respondents could not claim the protection of that  section. Section 299(1) did not come into play because it could  only come  into  play after the rights were recognised.   In  the present  case  the  rights  were  never  recognised  by  the Government. (iii)     The  original  Act of State continued  even  after January  26, 1950, because there was no state succession  on January 26, 1950 in so far as the people of Sant State  were concerned.  For them state succession was over some time  in 1948.  The Act of State which began in’ 1948 could  continue uninterrupted  even beyond 1950 and it did not lapse or  get replaced by another Act of State.  These rights in  question cannot  be  protected under the Constitution  because  these rights were not recognised even before 1950. (iv) That  the impugned Tharao was not a law as it  did  not lay  down any rule of conduct.  It was a grant made  to  the Jagirdars mentioned in the Tharao.. The fact that Maharana’s Tharao  was passed to benefit a larger number of persons  en bloc  does  not  make it any the more a law if  it  did  not possess  any of the indicia of a law.  The Tharao  did  give rights  to  the grantees but did not lay down  any  rule  of conduct.   It is a grant and as a grant it was open  to  the new sovereign not to recognise it. Madhorao  Phalke  v. The State of Madhya  Bharat,  [1961]  1 S.C.R. 957, distinguished. Ameer-unnissa  Begum  and  Ors. v. Mahboob  Begum  and  Ors. A.I.R. 1955 S.C. 352. distinguished. Maharaja Shri Umaid Mills Ltd. v. Union of India and Others. A.I.R. 1963 S.C. 953 and The Bengal Nagpur Cotton Mill  Ltd. v.  The Board of Revenue, Madhya Pradesh and Others,  A.I.R. 1964 S.C. 888 relied on. (v)  The  right  claimed here is not  even  a  concessionary right such as has received the support of the  International writers.  It is more of the nature of a gift by the Ruler at the expense of the State.  It lacks bona fides which is  one of the things to look for.  There is no treaty involved  and whatever  guarantee there is, Art. 363 of  the  Constitution precludes  the  Municipal  Courts  from  considering.   This distinguishes  the  jurisdiction and power  of  the  Supreme Court  of  the  United  States  in  which  consideration  of treaties is included.  In the United States the Constitution declares  a treaty to be the law of the land.  In India  the position  is different.  Article 253 enables legislation  to be made to implement international treaties.  This Court has accepted  the principles laid down by the Courts in  England in  regard  to the limits of the jurisdiction  of  Municipal Courts.   The view of the Supreme Court of United States  or the view taken in international law has not been accepted by this Court.  Politically and 464 ethically  there might have been some reason to  accept  and respect  such  concessions but neither is a reason  for  the Municipal Courts to intervene.  The Rule that the Act of the State can be questioned in a Municipal Court has never  been adopted  and it has been considered that it is a matter  for the  political departments of the State.  However  desirable it  may be that solemn guarantees should be respected,  this Court  should  not impose its will upon the  State,  because this is outside its jurisdiction. In  this case, the present respondents who were not  parties to  the  merger agreement or to the letter  written  by  Mr. Menon  which  was  made expressly a part  of  the  Agreement

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cannot  take  advantage  of cl. 7.  If  they  were  parties, Article 363 would bar such plea. Maharaj  Umeg  Singh and Others v. The State of  Bombay  and Others. [1955] 2 S.C.R. 164, relied on. U.S. v. Percheman, 32 U.S. 51 at 86, disapproved: Shapleigh v. Miar, 299 U.S. 468, referred to. Salaman v. Secretary of State for India, [1906] 1 K. B. 613, referred to. Cook v. Sprigg. [1899] A.C. 572, referred to. Foster v. Nielson. (1829) 2 Pet. 253, referred to. Birma  v. The State, A.I.R. 1951 Rajasthan 1 to 7,  referred to. Amodutijani  v.  Secretary Southern Nigeria, [1921]  2  A.C. 399, referred to. Clark V. Allen, 331 U.S. 503. referred to. West  Rand Central Gold Minning Co. v. Regem, [1905] 2  K.B. 391, referred to. Secretary of State v. Bai Raj Bai, (1915) L.R. 42 I.A.  229, relied on. Per  Shah J. (1) The rule that cession of territory  by  one State to another is an act of State and the subjects of  the former  State  may enforce only those  rights  in  Municipal Courts which the new sovereign recognises has been  accepted by this Court. M/s.   Dalmia  Dadri Cement Co., Ltd.   V.  Commissioner  of incomeTax, [1959] S.C.R. 729, jagannath Agarwala v. State of Orissa, [1962] 1 S.C.R. 205, Promod Chandra Dev v. State  of Orissa,  [1962]  Suppl.   1  S.C.R. 405  and  the  State  of Saurashtra v. Jamadar mohd.  Abdullah, [1962] 3 S.C.R.  970, relied on. The Secretary of State In Council of India v. Kamachee  Boye Sahaba,  7 Moore’s I.A. 476, Vajesinghji  Joravarsinghji  v. Secretary  of State for India in Council, L.R. 51  I.A.  357 and  Secretary  of State v. Sardar Rustam Khan  and  Others, L.R. 68 I.A. 109, relied on. 465 (ii) The Constitutional provisions in the United States  are somewhat  different.  Under the Constitution of  the  United States  each treaty becomes a part of the law of  the  land; the  provisions  thereof are justiciable and  the  covenants enforceable  by the Courts.  In India the treaties have  not the  force  of  law  and  do not  give  rise  to  rights  or obligations enforceable by the Municipal Courts. In   the  present  case  by  virtue  of  Art.  363  of   the Constitution,  it is not open to the respondents to  enforce the  covenants of the agreement as stated in the  letter  of guarantee  written  by  Mr. V. P.  Menon  in  the  Municipal Courts. United States v. Parcheman, [1833] 32 U.S. 51 at 86, 87, not relied on. Cook v. Sprigg. [1899] A.C. 572, referred to. Maharaj  Umeg  Singh and Others v. The State of  Bombay  and Others, [1955] 2 S.C.R. 164, relied on. (iii)     An  act of State may be spread over a  period  and does  not  arise  merely  an the  point  of  acquisition  of sovereign  right.   Nor  is the new  sovereign  required  to announce his decision when he assumes or accepts sovereignty over  foreign  territory, about the rights  created  by  the quondam sovereign, on pain of being held bound by the  right so  created.  There. fore till the right to property of  the subjects  of the former Indian State was recognized  by  the new  sovereign there was no title capable of being  enforced in the courts of the Dominion or the Union. (iv) The  functions  of  a  State  whether  it  contains   a democratic  set  up  or is  administered  by  an  autocratic

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sovereign  fall  into  three  broad   categories--executive, legislative and judicial.  The line of demarcation of  these functions  in an absolute or autocratic form  of  government may be thin and may in certain cases not easily discernible. But  on that account it is not possible to infer that  every act of an autocratic sovereign has a legislative content  or that every direction made by him must be regarded as law. The legislative power is the power to make, alter, amend  or repeal  laws and within certain definite limits to  delegate that  power.   Therefore It is power to lay down  a  binding rule  of conduct.  Executive power is the power  to  execute and  enforce  the laws, and judicial power is the  power  to ascertain,   construe.   and  determine   the   rights   and obligations  of  the  parties before  a  tribunal.   In  the present case the order dated March 12, 1948, is expressly in the form of a grant of the rights which were not  previously granted and does not either expressly or by implication seek to lay down any binding rule of conduct.  The impugned order was  not  a law or an order made under any  law  within  the meaning of cl. 4 of the Administration of the Indian  States Order of 1948. Promod  Chandra  Deb and Others v. The State  of  Orisa  and Others,  (1962] Suppl.  1 S.C.R. 405,  Ameer-un-Nissa  Begum and  Others v. Mahboob Begwn and Others, A.I.R. (1955)  S.C. 352, Director of Endow- 134-159 S.C.-30. 466 ments,  Government of Hyderabad v. Akram Ali, A.I.R.  (1956) S.C. 60, Tilkayat Shri Govindlalji Maharaj etc. v. State  of Rajasthan    and   Others,   A.I.R.   (1963)   S.C.    1638, distinguished, discussed. Madhorao Phalke v. The State of Madhya Bharat, [1961] 1  S.C R 957 discussed. Maharaja  Shree Umaid Mills Ltd. v. Union of  India,  A.I.R. 1963 S.C. 953, relied on. The Bengal Nagpur Cotton Mills Ltd. v. The Board of Revenue, Madhya  Pradesh and Others, C.A. No. 416 of 1961 decided  on July 30, 1963, relied on.  (v)  To attract s. 299(1) of the Government of  India  Act, 1935, there must, exist a right to property which is  sought to  be  protected.  The subjects of the acceding  State  are entitled only to such rights as the new sovereign chooses to recognize,  in  the absence of the any  recognition  of  the rights  of the respondents or their  predecessor  Jagirdars, there was no right to property of which protection could  be claimed.  On the Sam* reasoning, grantees of the Ruler could not claim protection under Art 31(1) of the Constitution. Per Mudholkar J. (i) The rule of international law on  which the  several  Privy Council decisions as to  the  effect  of conquest or cession on the private rights of the inhabitants of the conquered or coded territory are founded has become a part  of the common law of this country.  This being a  "law in  force"  and at the commencement of the  Constitution  is saved by Art. 372 of the Constitution.  The Courts in  India are,  therefore, bound to en. force that rule and  not  what according  to Marshall C.J. is the rule  at.   International Law  governing the same matter, though the latter has  also, received  the  approval of several text book  writers.   The rule  which  has.  been  applied  in  this  country  is  not inequitor nor can it be regarded to be an anachronism. Virendra Singh v. The State of Uttar Pradesh, [1955]  S.C.R. 415   United  State  v.  Percheman,  (1833)  32   U.S.   51. disapproved. Secretary of State for India v. Kamachee Boye Sahiba, (1859) is  Moore P. C. 22, Asrar Ahmed v. Durgah Committee,  Ajmer,

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A.I.R.  1947  P.C. 1, Dalmia Dadri Cement Co.  Ltd.  v.  The Commissioner  of  Incometax,  [1959] S.C.R.  729,  State  of Saurashtra  v. Memon Haji Ismail [1960] 1 S.C.R. 537,  State of Saurashtra v. Jamadar Mohamed Abdullah and Ors., (1962] 3 S.C.R. 970, Vajesinghji v. Secretary of State for India,, 51 I.A. 357 and Secretary of State for India v. Bai Rajbai,  42 I.A.  229  Promod Chandra Dev v. State of  Orissa  and  Ors. [1962] Supp.  1 S.C.R. 405, relied on (ii)  Two  concepts  underlie  our law.   One  is  that  the inhabitants  of  acquired  territories bring  with  them  no rights enforceable against the new sovereign.  The other  is that  the Municipal Courts have no jurisdiction  to  enforce any  rights claimed by them, against the  sovereign  despite the  provisions  of a treaty unless their rights  have  been recognised by the 467 new  sovereign after cession or conquest.  In other words  a right which cannot on its own strength be enforced against a sovereign in the Courts of that sovereign must be deemed  to have  ceased  to exist.  It follows therefore that  a  right which has ceased to exist does not, require repudiation. Municipal   courts  derive  their  jurisdiction   from   the Municipal law and not from the laws of nations and a  change in  the laws of nations brought about by the consent of  the nations of the world cannot confer upon a Municipal Court  a jurisdiction  which  it does not enjoy under  the  Municipal law. (iii)     The  grantees  of the Ruler could  not  claim  the protection  of s 299 of Government of India Act, 1935 or  of Art.  31 of the Constitution of India as they  possessed  no right to property enforceable against the new sovereign. (iv) The impugned Tharao was not law. Madhorao  Phalke  v. The State of Madhya  Pradesh  [1961]  1 S.C.R. 957, referred to. Per  minority  Sinha C.J. and Ayyangar J. (i)  The  juristic basis  of the theory underlying the Privy Council  decisions is  that with the extinction of the previous  sovereign  the rights  theretofore  exerciseable by the  subjects  of  that sovereign  by  virtue  of grants  for  that  sovereign  were likewise extinguished and that without recognition which  is really tantamount to a fresh grant by the new sovereign,  no title enforceable in the municipal courts of the  succeeding sovereign  came  into being.  The doctrine of Act  of  State evolved  by English courts is one purely of  municipal  law. It  denies to such a court jurisdiction to enquire into  the consequences of acts which are inseparable from an extension of  its  sovereignty.   That  doctrine  was,  however.   not intended to deny any rule of International Law. The British practice that has prevailed in this country  has not proved in actual practice to lead to injustice, but  has proceeded  on a just balance between the acquired rights  of the  Private  individual and the economic interests  of  the community,  and therefore there is nothing in it so  out  of tune  with notions of propriety or justice to call  for  its rejection.   Even in the case of Virendra Singh  this  Court did not express any decisive opinion in favour of  accepting the observations in Percheman’s case as proper to be applied by  the  municipal  courts  in India.   This  Court  has  in subsequent  decisions followed the Privy Council  decisions. The  view of the Supreme Court of the United States has  not been  accepted  by  this  Court  for  the  reason  that  the Constitutional  position  in regard to  the  recognition  of treaties  in  both countries are different.  In  the  United States  a  treaty  has the force of law, which  is  not  the position  here.  Besides, in India by virtue of Article  363

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of  the  Constitution,  Municipal  Courts  are  deprived  of jurisdiction to enforce any rights arising from treaties. 468 Vinrendra  Singh  v. The State of Uttar  Pradesh,  [1955]  1 S.C.R. 415, disapproved. Vajesinghji  v. Secretary of State for India, 51  I.A.  357, Cook v. Sprigg, [1899] A.C. 572, relied on. walker  v.  Baird,  [1892] A.C. 491,  Johnstone  v.  Pedlar, [1921] 2 A.C. 262, referred to.  United States v. Percheman, 32 U.S. 51, disapproved. M/s,  Dalmia  Dadri Cement Co. Ltd. v. The  Commissioner  of Incometax,  [1959]  S.C.R. 729, Jagan Nath Agarwala  v.  The State of Orissa, [1962] 1 S.C.R. 205, Promodh Chandra Dev v. The  State of Orissa, [1962] 1 Supp.  S.C.R. 405, The  State of  Saurarhtra v. Jamadar Mohamad Abdulla, [1962]  3  S.C.R. 970,  Secretary of State for India v. Kanzachee Boye  Sahiba [1859]  7 Moore, I.A. 476, Secretary of State for  India  in Council  v. Bai Rai Bat, 42 I.A. 229 and Secretary of  State v. Rustom Khan, 68 IA. 109. relied on. Amodu  Tijani v. Secretary Southern Nigeria, [1921]  2  A.C. 399, referred to. West  Rand  Central Gold Mining Co., v. Rex, [1905]  2  K.B. 391. referred to. Asrar Ahmed v. Durgha Committee, Ajmer, A.I.R. 1947 P.C.  1, relied on Attorney-General  of Canada v. Attorney-General of  Ontario, [1937] A.C. 326, referred to. (ii) Where  the  new sovereign assumes jurisdiction  and  it does some act and there is ambiguity as to whether the  same amounts to a recognition of a pre-existing right or not, the covenant  and  the  treaty right be looked at  in  order  to ascertain the intention and purpose of that equivocal   act, but beyond This the covenant and the treaty cannot by  them- selves  be used either as a recognition pure and simple  or, as waiver of a right to repudiate the pre-excisting  rights. It is needless to point out that since the enforceability of the  rights  against the succeeding sovereign  springs  into existence only on recognition by the sovereign, there La no, question of a waiver or the right to repudiate. In  the present case the High Court erred in holding on  the basis  of cl. 7 of the letter of Shri V. P. Menon  that  the Government waived their right to repudiate the grant made by the previous ruler. Bhola  Nath v. The State of Saurashtra, A.I.R.  (1954)  S.C. 680. distinguished 469 (iii)     Just previous to the Constitution the grantee  had no  right  of property enforceable against the  State.   The coming into force of the Constitution could not,  therefore, make  any difference, for the Constitution,  did,not  create rights in property but only protected rights which otherwise existed. (iv) In the present case the "Tharao" was not a grant to any individual but to the holders of 5 specified tenures in  the State.  The ’Tharao’ is more consistent with its being a law effecting  an alteration in the tenures of the 5 classes  of Jagirdars by expanding the range of the beneficial enjoyment to  the forests lying within the boundaries of the  villages which had already been granted to them.  In this light,  the ’Tharao’ would not ’be administrative order in any sense but would  partake of the character of legislation by  which  an alteration was effected in the scope and content of  tenures referred  to.  The "Tharao" dated March 12,  1918  satisfies the  requirement  of  "a law" within  Art.  366(10)  of  the Constitution and in consequence, the executive orders of the

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Government  of  Bombay by which the forests  right%  of  the plaintiffs  were sought to be denied were illegal and  void. The  "Tharao"  was in truth and substance a  law  which  was continued  by Art. 372 of !he Constitution and therefore  it could  be revoked by the appellant by legislative  authority and not by an executive act. Madhorao  Phalke v. The State Madhya Bharat [1961]  1  S.C.R 957, Ameer-un-nissa Begum v. Mahboob Begum, A.I.R. 1955  Sup 4  Court,  352  and Director of  Endowments,  Government  of Hyderabad Akram Ali, A.I.R. 1956 S.C. 60, relied on. Per  Subha Rao J. (i) The decision in Virendra Singh’s  case is  not  only  correct,  but. is also  in  accord  with  the progressive  trend  of modern international  law.   It  may, therefore,  be stated without contradiction that in none  of the  decisions of this Court that were given  subsequent  to Vires. dra Singh’s ease the correctness of that decision was doubted.  After all, an act of State is an arbitrary act not based on law, but on the modern version of ’Might is right’. It  is  an act outside the law.  There  were  two  different lines of approach.  One adopted by the imperialistic nations and  the other by others who were not.  That divergence  was reflected  in English and American Courts.  All the  jurists of  International law recognise the continuity of  title  to immovable  property of the erstwhile citizens of the  ceding state  after the sovereignty changed over to  the  absorbing state.   It may, therefore, be held that so far as title  to immovable   property   is   concerned   the   doctrine    of International law has become crystallized and thereunder the change  of  sovereignty  does not affect the  title  of  the erstwhile  citizens of the ceding state to  their  property. In America the said principle of International Law has  been accepted without any qualification. M/S.   Dalmia Dadri Cement Co. Ltd.  V. The Commissioner  of Income-tax,  [1959]  S.C.R. 729, Jagannath Agarwala  v.  The State  of Orissa, [1962] 1 S.C.R. 205, Promodh Chandra  Dev. v. The State of Orrissa 470 [1962]  Supp. 1 S.C.R. 405, State of Saurashtra  v.  Jamadar Mohmed   Abdulla,  [1962]  3  S.C.R.  970,   discussed   and distinguished. United States v. Percheman, (1833) 32 U.S. 51, relied on. Foster  v.  Neilson,  (1829) 2  P.E.T.,  253,  The  American Insurance Co. and the Ocean Insurance Co. v. Bales of Cotton (1828) 7 L.Ed. 511, Charles Dehault v. United States, (1835) 9  Ed. 117, Vajeenngli Joravarsingji v. Secretary  of  State for India in Council, (1951) I.A. 357, referred to. (ii) The law in England is that the municipal courts  cannot enforce the acquired rights of the erstwhile citizens of the ceding  state  against the absorbing state unless  the  said state  has  recognized or acknowledged  their  title.   This Court  accepted  the English doctrine of Act of State  in  a series of decisions. The  word  "recognize"  means  "to  admit,  to  acknowledge, something  existing before".  By recognition  the  absorbing state  does  not  create or confer a  new  title,  but  only confirms   a  pre-existing  one.   Non-recognition  by   the absorbing  does  not  divest the title, but  only  makes  it unenforceable against the state in municipal courts. Pramod Chandra Dev. v. The State of Orissa, [1962] Supp.   1 S.C.R. 503, relied on. (iii)     The  doctrine of acquired rights, at any  rate  in regard  to  immovable property has  become  crystallized  in International  Law.   Under  the said law  the  title  of  a citizen  of  a  ceding state is preserved and  not  lost  by cession.   The  change of sovereignty does  not  affect  his

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title.   The municipal laws of different countries  vary  in the matter of its enforceability against the state.  As  the title exists, it must be held that even in those  countries, which accepted the doctrine of act of State and the right of a  sovereign  to  repudiate the title,  the  title  is  good against all except the State.  Before the Constitution  came into force the State did Dot repudiate the title.  When  the Constitution  of  India came into force the  respondent  and persons  similarly situated who had title to immovable  pro- perty in the Sant State had a title to the said property and were  in actual possession thereof.  They had title  to  the property except against the State and they had, at any rate, possessory title therein.  The Constitution in Article 31(1) declares  that no person shall be deprived of  his  property save  by  authority  of  law.   That  is,  the  Constitution recognised  the title of the citizens of erstwhile State  of Sant, and issued an injunction against the sovereign created by it not to interfere with that right except in  accordance with law.  A recognition by the Supreme Law of the land must be in a higher position than that of an executive  authority of  a  conquering  State.  It was held  that  the  title  to immovable  property of the respondent was recognised by  the Constitution  itself  and,  therefore,  necessarily  by  the sovereign which Is bound by it. 471 In the present case the letter written by the Government  of India  dated ’October 1, 1948, clearly recognized the  title of the respondents to their properties.  The letter  clearly contains  a  statement in paragraphs 5 and  7  thereof  that enjoyment of Jagirs, grants etc., existing on April 1, 1948, were guaranteed and that any order passed or action taken by the  Ruler  before the said date would  not  be  questioned. This  is a clear recognition of the property rights  of  the respondent and similar others. Virendra  Singh  v.  The State of Uttar  Pradesh,  [1955]  1 S.C.R. 415, relied on. M/S.   Dalmia Dadri Cement Co. Ltd. v. The  Commissioner  of Incometax  [1959],  S.C.R. 729, Jagan Nath Agarwala  v.  The State of Orissa [1962], 1 S.C.R. 205, Promodh Chandra Dev v. The State of Orissa’ [1962], Supp. 1 S.C.R. 405 and State of Saurashtra v. Jamadar Mohamed Abdullah [1962], 3 S.C.R. 970, discussed and distinguished.

JUDGMENT: CIVIL APPELLATE JURISDICTION: Civil Appeals Nos. 182-186  of 1963. Appeals  by special leave from the judgment and order  dated January  1961  of the Gujarat High Court in  Second  Appeals Nos. 105, 106, 107, 112 and 193 of 1960. C.   K. Daphtary, Attorney-General, R. Ganapathy Iyer, R.   K. P.  Shankardass and R. H. Dhebar, for the appellant (in  all the appeals). Purshottam Trikamdas, B. Parthasarathy, J. B.  Dadachanji O. C.  Mathur and Ravinder Narain, for the resdondents (in  all the appeals). January  30, 1964.  Hidayatullah J., Shah J., and  Mudholkar J.   delivered  separate  Judgments  allowing  the   appeal. Raghubar  Dayal  J.  agreed  with  the  order  proposed   by Hidayatullah  J.  The dissenting opinion of Sinha  C.J.  and Rajagopala Ayyangar J. was delivered by Ayyangar J.    Subba Rao J. delivered a separate dissenting opinion. AYYANGAR  J.-In  this batch of five  analogous  appeals,  by special  leave,  the  main  question  for  determination  is

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whether the rights which were in controversy between the 472 parties in the courts below could be enforced by the  Munici pal courts; or in other words, whether or not "Act of State" pleaded  by the State of Gujarat is an effective  answer  to the claims made by the respective respondents to the  rights over  forests  claimed by them in the suits giving  rise  to these appeals. Vora  Fiddali  Badruddin Mithibarwala is the  respondent  in Civil  Appeals  Nos. 182 and 184 of 1963.   Vora  Hakimuddin Tayabali  Amthaniwala is the respondent in Civil Appeal  No. 183 of 1963.  Mehta Kantilal Chandulal is the respondent  in Civil Appeal No. 185 of 1963, and Pathan Abbaskhan Ahmedkhan is  the respondent in Civil Appeal No. 186 of 1963.  In  all these Appeals the State of Gujarat is the appellant. The course these litigations have taken in the courts  below may  briefly be stated as follows: The respondent  in  Civil Appeal No. 182 of 1963, is the assignee of the rights of one Vora  Hatimbhai  Badruddin and was brought on  a  record  as plaintiff  during  the  pendency of the suit  in  the  trial court,  namely,  the  court  of  the  Civil  Judge   (Senior Division)  at Godhra, being Civil Suit No. 115 of 1950,  for an   injunction  and  ancillary  reliefs  to  restrain   the appellant  and  its  officers  from  interfering  with   the plaintiff’s  alleged  rights to cut and  carry  away  timber etc.,  from the Gotimada jungle, rasing his rights  under  a contract dated August 21, 1948, for a period of three  years on  payment of a consideration of Rs. 9,501 to the  Jagirdar of the village, Thakore Sardar Singh Gajesingh.  Civil  Suit No.  134  of 1950, giving rise to Civil Appeal  No.  184  of 1963, was also instituted by the same plaintiff who  claimed by  virtue  of an assignment of the rights under  a  similar contract  in respect of another forest in  village  Nanirath for a period of four years, the consideration being the cash payment  of Rs. 9,501.  Civil Suit No. 106 of  1951,  giving rise to Civil Appeal No. 183 of 1963. was instituted by Vora Hakimuddin Tayyabali Amthaniwalla. His claim was based on an agreement  with the Jagirdar. dated December 7, 1948, for  a period  of  four years for a consideration of Rs.  6,501  in respect  of the forest in village Rathda.  All  these  three suits, in which the reliefs claimed 473 were similar, were tried together and disposed of by a  com- mon  judgment,  delivered by the trial court on  January  3, 1956.   All  the suits were dismissed.  The Court  took  the view  that the rights of the plaintiffs, such as they  were, could  not be enforced by the courts.  Civil Appeal No.  185 of  1963 arises out of Suit No. 80 of 1953, filed  by  Mehta Kantilal  Chandulal.  He owned the Inami villages  Lalekapur and Narsingpur and alleged that he had given a contract  for cutting the trees in his villages for a consideration of Rs. 11,000 on May 29, 1948, for a period of four years, and that his  transferee  had  been  prevented  by  the  State   from exercising  those  rights.   He also prayed  for  a  similar injunction,  as  in  the other suits.  This  suit  was  also dismissed  by the trial court by its judgment,  dated  March 23,  1956.   The last of the suits is Suit No. 90  of  1955, giving rise to Civil Appeal 186 of 1963.  The plaintiff  had claimed  to have obtained similar right of felling trees  in the forest belonging to the Jagirdar of Mayalapad on  August 16,  1948 for Rs. 1,191 for a period of three  years.   This suit  was decreed by a judgment dated August 6,  1956.   The unsuccessful  plaintiffs filed four appeals to the  District Judge, Panch Mahals, at Godra, being appeals Nos. 17, 18, 19 and 48 of 1956.  All the appeals were heard together and, by

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a common judgment, were dismissed on February 28, 1957,  the judgment  of  the  trial court  being  confirmed.   The  5th appeal, being appeal No. 74 of 1956, was filed by the State. Ile  appeal  was  allowed by  a  separate  judgement,  dated September  30, 1957, dismissing the suit.   The  plaintiffs- respondents filed five second appeals, being Second  Appeals Nos. 105, 106, 107, 112 and 193 of 1960 in the High Court of Gujarat.   The appeals were heard together and were  allowed on  January  24, 1961 with the result that  the  suits  were decreed  and the appellant was restrained by  an  injunction from  interfering  with  the plaintiffs’  enjoyment  of  the rights  in  the forests, as claimed by them.  As  the  State failed  to obtain the necessary certificate of fitness  from the  High  Court, it moved this Court and  obtained  special leave to appeal.  And that is how these appeals have come up to this Court.  These appeals were first heard by a Bench of five  Judges, and it was directed that the matter be  placed for  hearing  by  a larger Bench, as the Bench  was  of  the opinion that the decision of this Court in Virendra Singh v. The 474 State of Uttar Pradesh(1) required reconsideration.  That is how  these  appeals  have been placed  before  this  special Bench. Before  dealing  with the questions that  arise  for  deter- mination in these appeals, it is necessary and convenient at this stage to set out the course of events leading up to the institution  of  the suits aforesaid, giving rise  to  these appeals.   The several villages, the forest rights in  which are  in dispute in these cases, formed part of the State  of Sant.   The steps in the transition of this State under  its ruler who was designated the Maharana into an integral  part of  the  territory of the Union of India  conformed  to  the usual  pattern.   With the lapse of the paramountcy  of  the British   Government   on  the  enactment  of   the   Indian Independence  Act, the ruler achieved complete  sovereignty. Soon  thereafter by an instrument of accession  executed  by the ruler, the State acceded to the Dominion of India so  as to  vest  in  the latter power in relation  to  3  subjects- Defence, External Affairs and Communications.  On March  19, 1948  the  ruler entered into a merger  agreement  with  the Governor-General of India by which "with a view to integrate the territory with the Province of Bombay at as early a date as possible", the full and exclusive authority and powers in relation  to the administration of the State were  ceded  to the, Dominion Government.  The agreement was to take  effect from  June 10, 1948.  It is necessary to set out two of  the Articles of this Agreement.  Article 1 ran thus:               "1.   The Maharana of Sant hereby cedes to the               Dominion Government full exclusive  authority,               jurisdiction and powers for and in relation to               the  governance  of the State  and  agrees  to               transfer  the administration of the  State  to               the  Dominion  Government on the 10th  day  of               June,  1948 (hereinafter referred to  as  "the               said day").               And from the said day the Dominion  Government               will be competent to exercise the said powers,               (1)   [1955] 1 S.C.R. 415.               475               authority and jurisdiction in such manner  and               through such agency as it may think fit." Under  Article  3  of the agreement,  the  ruler  agreed  to furnish to the Dominion Government before October 1, 1948  a list of all his private properties over which he was,  under

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the  terms  of the agreement, to retain full  ownership  and enjoyment. After  this  agreement came in force on June 10,  1948,  the Central  Government  delegated its functions to  the  Bombay Government  by  virtue  of the powers vested in  it  by  the Extra-Provincial Jurisdiction Act, 1947.  Subsequently, Shri V.  P.  Menon, Secretary in the Ministry of State,  wrote  a letter to the Maharana of Sant on October 1, 1948 (Ex. 194). This letter was entitled a "Letter of Guarantee" and was  to be treated as supplementary to the Agreement of Merger dated March  19, 1948.  Amongst other matters. it provided by  cl. 7:               "No order passed or action taken by you before               the date of making over the administration  to               the Dominion Government will be questioned un-               less  the  order was passed  or  action  taken               after  the 1st day of April, 1948, and  it  is               considered  by the Government of India  to  be               palpably unjust or unreasonable.  The decision               of  the Government of India in  their  respect               will be final." In view of the forthcoming integration of (,lie territory of Indian States into the Dominion of India, the Government  of India Act, 1935, was amended and s. 290-A was inserted.   In exercise  of  the  powers conferred  by  that  section,  the Governor-General  of  India promulgated  the  States  Merger (Governor Provinces) Order, 1949, on July 27 1949 which came into force on August 1, 1949.  As a result of that order the integration of Indian States, including the Sant State  with that  of the province of Bombay, was completed  with  effect from that date, namely August 1, 1949. In  the  meantime,  the ruler of the Sant  State  passed  or issued "a resolution" or Tharao on March 12, 1948, which has given rise to the present series of litigations.  Under this "’instrument" marked as Ex. 192, to use a neutral expres- 476 sion  in  view of the controversy as to its  nature,  called Tharao,  an order was passed by the Maharana of  Sant  State whose  terms  will  be referred to later  and  discussed  in greater detail, granting forest rights to holders of certain specified tenures.  The holders of such tenures in the  Sant State entered into a number of agreements with the, parties, parting with their rights in the forest timber, e.tc., for a specified period, in consideration of cash payments made  by those  third parties to the holders of the tenures.   It  is not  necessary to set out in detail all those agreements  it is enough to mention, by way of a sample the agreement dated August 21, 1948 (Ex. 175) whereby the tenure-holder  granted as briefly adverted to earlier to Vohra Hatimbhai  Badruddin Mithiborwala the right to cut and remove timber and firewood from  the forest of Mouja Gothimada for a  consideration  of Rs.  9,501  for  a  period  of  three  years.   The  written agreement contains quite a number of clauses which it is not necessary  to set out for the purposes of this case.   After the  aforesaid  grants, correspondence started  between  the grantors  and  the grantees on the one hand, and  the  State Forest  Department on the other.  When the  District  Forest Officer  was informed about the transactions aforesaid.  and the  grantees  applied for authorisation  to  remove  timber etc.. the Forest Authorities ordered that no export  outside would   be  permitted,  pending  receipt  of   orders   from Government.   They  also required an  undertaking  from  the purchaser  that  he would abide by the decision  and  orders passed  by  the Government.  Thereupon the  grantor,  Thakur Sardar Singh Gaje Singh gave an undertaking to abide by  the

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decision  and orders of the Government of Bombay in  respect of  the Gothimada forests "rights over which were  conferred on  me. by Santrampur State Government on March 12, 1948  in their  resolution  No. G. 371, dated March  12,  1948."  The Divisional  Forest Officer, by his order dated  January  10, 1949,  passed an order under the provisions of r. 4  of  the Rules  under s. 41 of the Indian Forest Act authorising  the grantee  to remove forest produce like timber  firewood  and charcoal from Gothimada forest. This  was  followed by a memorandum by  the  Conservator  of Forests  North Western Circle of the Bombay State  by  which the Divisional Forest Officers were directed to conti- 477 nue to issue authorisations to contractors of Jagirdars  who had obtained rights over the forests in the Sant State under the Tharao of the ruler, dated March 12, 1948.  He, however, pointed  out  that until the question of the rights  of  the grantees  over  private forests was finally settled  by  the Government an undertaking should be taken from the,  persons concerned that they would abide by the orders passed by  the Government in respect of their rights.  This, as stated  al- ready  had  been  obtained by  the  District  Officers  even earlier.   On July 8, 1949, the Government of Bombay  passed an order in which they stated "Government considers that the order  passed by the ruler of the Sant State under  his  No. 371, dated March 12, 1948, transferring forest rights to all the Jagirdars of the Jagir villages, are mala fide and  that they should be cancelled........ This decision or order was, however,   not  communicated  to  the  jagirdars  or   their contractors  though  effect was given to it  by  the  Forest Authorities  by  stopping all further fellings.   Some  time thereafter the respondents issued notices under s. 80 of the Civil  Procedure  Code to the Government of  Bombay  seeking respect for their rights under the Tharao of March, 1948 and after  waiting for two months filed the suits out  of  which these  appeals arise.  By the written statements which  they filed, the Government of Bombay raised principally the  def- ence that the act of the ruler in passing the Tharao was not binding  on  them as the successor State and  that  they  in exercise  of  their sovereign authority, had  cancelled  the concession  as  unreasonable and mala fide by  their  order, dated July 8, 1949, already referred.  It might be mentioned that after the suit was instituted and while it was  pending before the trial judge a formal resolution of the Government of  Bombay was passed and published on the 6th of  February, 1953,  in  which they set out the legal  position  that  the rights  acquired  under the Tharao were not  enforceable  as against the Bombay Government as the successor State  unless those  rights were recognised and that as on the other  hand the same had been specifically repudiated, the Jagirdars and their  contractors  had no title which  they  could  enforce against the Government. We  have already narrated the course of the litigations  and this would be the convenient stage at which to indicate 478 the  grounds on which the learned Judges of the  High  Court have  upheld  the  claims  of the  plaintiffs  who  are  the respondents  in the several appeals before us.   There  were two, principle points that were urged on their behalf before the learned Judges.  The first was that the Tharao of  March 12, 1948, was in truth and substance a ’law’, a  legislative act of the ruler of Sant, which was continued under Art. 372 of  the  Constitution  and that in  consequence  the  rights obtained  by the grantees thereunder could not be  abrogated or  set  at  naught  by a mere  executive  order  which  the

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Government  resolution of February, 1953,  undoubtedly  was. This  submission was rejected by the Court holding that  the Tharao  was merely a grant originating in an  administrative or  executive order of the ruler.  The other contention  was that  through the agreement of merger by which the  integra- tion  of the Sant State with the Dominion of  India  brought about  an  "act of state" and that  accordingly,  no  rights based  on the agreement of merger, dated March 19, 1948,  or in  the supplementary letter, dated October 1,  1948,  could be,  asserted  or enforced in the Municipal  Courts  of  the successor   State  unless  the  same  were   recognised   by Government  still cl. 7 of the letter of Shri V.  P.  Menon, dated October 1, 1948, to the ruler could be referred to and relied  on for the purpose of drawing an inference that  the right of the Government to repudiate the grant by the  ruler had been waived.  This submission was accepted and it was on this  reasoning  that the learned Judges  have  decreed  the suits of the several plaintiffs. It  is  the correctness of these two  conclusions  that  are being challenged before us, the first by the respondente and the  other  by  the  appellant  State.   Arising  from   the submissions of the learned Attorney-General the points  that require examination are as to the legal effect of the acces- sion, integration and merger of the Sant State in the Indian Union, on the rights that the plaintiffs acquired under  the Tharao,  dated  March  12, 1948  and  secondly  whether  the provisions  in s. 299 of the Government of India Act,  1935, or  those contained in Part III of the  Constitution  affect the nature or enforceability of those rights.  ’Me questions to be considered under the first head in particular are:-               (a)   Whether  the rights acquired  under  the               previous               479               ruler are enforceable against the  Governments               of  the  Union and the  States  without  those               rights  being  recognised by  the  appropriate               Government.               (b)   What is the effect of the letter of  the               Government of India, dated October 1, 1948, on               the  right  of  the Government  to  refuse  to               recognise a grant under the Tharao.               (c)   What  is the effect of the  Government’s               communication  to  the  Chief  Conservator  of               Forests   dated  July  8,  1949  and  of   the               resolution of Government of February, 1953. Under the second head, besides the constitutional guarantees protecting rights to property contained in the Government of India  Act  and the Constitution, the effect  in  the  first instance  of s. 5 of the Government of India Act,  1935,  of the  acceding States becoming part of the Dominion of  India and  later of the manner in which the Constitution of  India was framed. The  other question that requires consideration  is  whether the Tharao dated March 12, 1948 is merely a grant  originat- ing in an executive order or is it a law which is  continued in operation by Art. 372 of the Constitution. In Virendra Singh’s case(1) this Court held that even on the basis  that  the merger of the Indian States in  the  Indian Union  and the treaties by which that was accomplished  were acts  of State, still by reason of the manner in  which  the Constitution of India was brought into being and because  of the  provisions  which  it contained,  in  particular  those guaranteeing  property rights of its citizens, the  acquired rights  of the inhabitants of the Indian States quoad  their rulers  could  not, after the Constitution, be  annulled  or

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abrogated by arbitrary executive action on the part of  the, Union or State Governments.  The learned Judges thus assumed as correct the rule of Public International Law relevant  to that  context expounded by the Privy Council in a number  of decisions rendered on appeals from the Indian  (1) [1955] 1 S.C R. 41 480 High  Courts.  For this reason we consider that it would  be convenient  for a proper appreciation of the points  now  in controversy to premise the discussion by briefly setting out the principles underlying these decisions of the Privy Coun- cil, reserving their detailed examination to a later  stage. These principles have been tersely summarised and the  ratio of  the  rule explained by Lord Dunedin  in  Vajesinghji  v. Secretary of State for India etc.(1) in a passage which  has been  often  quoted  in later cases on the  subject  and  we consider that it would be sufficient if we extract it.   The learned Lord said:               "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,  recognized.  Such               rights  as  he had under the  rule  of  prede-               cessors avail him nothing.  Nay more, even  if               in  a treaty of cession it is stipulated  that               certain   inhabitants  could   enjoy   certain               rights,  that does not give a title  to  those               inhabitants  to enforce these stipulations  in               the  municipal courts.  The right  to  enforce               remains   only  with  the   high   contracting               parties." (italics ours). This has been accepted as expressing the constitutional  law of  the  United Kingdom and the same  has  been.applied  tot merely to claims or titles which were sought to be  enforced against the Indian Government but also in other parts of the British Empire-See Cook v. Spring(2).  This was the law laid down  and given effect to by the Privy Council  until  India attained independence. 151 IA 357.     (2) [1899] A.C. 572. 481 Virendra  Singh  v.  State of Uttar  Pradesh  (1),  however, struck a different note particularly as regards the  matters covered  by the sentences we have given in italics  in  Lord Dunedin’s  exposition  of the law, and to this  decision  we shall immediately turn.  The facts of the case were  briefly these:  On January 5, 1948, the ruler of Sarila granted  the village  Rigwara  to the petitioners who  moved  this  Court while  on the 28th of January, 1948, the ruler  of  Charkari granted certain other villages to the same petitioners.   As the rights of the petitioners were sought to be nullified by an  order  of the Government of Uttar Pradesh they  filed  a petition under Art. 32 of the Constitution praying that  the order of the Government of Uttar Pradesh revoking the grants in  their  favour  be declared void  and  for  consequential reliefs. A few more facts in regard to the constitutional history  of these  two  States is necessary to be stated  to  appreciate

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some  of  the  matters  which figured  in  the  decision  in Virendra  Singh’s case(2).  After the date of the  grant  in favour  of  the  petitioners 35 States  in  Bundelkhand  and Bhagalkhand,  including Charkari and Sarila agreed to  unite themselves  into  a State to be called the United  State  of Vindhya Pradesh.  While this Union was in existence, certain officials  of this Government interfered with the rights  of the  petitioners but the Government of the United  State  of Vindhya  Pradesh  issued orders directing  the  officers  to abstain from such interference.  Subsequently the rulers  of the  35 States dissolved their Union and ceded to  the  Gov- ernment of Indian Dominion all their powers and jurisdiction and   the  Dominion  constituted  the  area  into  a   Chief Commissioner’s  province for the purpose of  administration, but the four villages granted to the petitioners were,  how- ever,  detached  from the centrally administered  State  and absorbed  into  Uttar  Pradesh.  On  August  29,  1952,  the Governor of Uttar Pradesh revoked the grants made in  favour of  the  petitioners.   The question before  the  Court  was whether  this order of revocation of the grants made by  the former rulers was justiciable in courts and if  justiciable, valid. (1)  [1955] 1 S. C. R. 415. S.C.-31 482 The  judgment  of  the Court was delivered by  Bose  J.  The learned  Judge  after  stating  the  question  arising   for decision  as  being "whether the Union  Government  had  the right  and  the power to revoke these grants as  an  act  of State?",  pointed out that jurists had held divergent  views on  this  matter.   At one extreme, he said,  was  the  view expressed by the Privy Council in a series of cases to which reference  was  made  and as summarising  their  effect  the passage from the judgment of Lord Dunedin we have  extracted already  was  cited.  At the other extreme was the  view  of Marshall  C.J., in United States v. Percheman(1) from  which he quoted the following:               "It may not be, unworthy of remark that it  is               very  unusual, even in case of  conquest,  for               the conqueror to do more than to displace  the               sovereign   and  assume  dominion   over   the               country.   The modern usage of nations,  which               has become law, would be violated; that  sense               of justice and of right which is  acknowledged               and felt by the whole civilised world would be               outraged,   if  private  property  should   be               generally  confiscated,  and  private   rights               annulled.  The people change their allegiance;               their  relation to their ancient sovereign  is               dissolved;  by their relations to each  other,               and   their   rights   of   property,   remain               undisturbed.   If this be the modem rule  even               in  cases  of  conquest,  who  can  doubt  its               application to the case of an amicable cession               of territory?...... A cession of territory  is               never  understood  to  be  a  cession  of  the               property  belonging to the  inhabitants.   The               King  cedes that only which belonged  to  him.               Lands  he had previously granted were not  his               to cede.  Neither party could consider  itself               as   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

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             the  same  time the lands and the  people  who               inhabit them, would be                (1)  32 U.S. 51 at pp. 86-87.               483               necessarily understood to pass the sovereignty               only,  and  not  to  interfere  with   private               property After  referring  to a few other decisions  of  the  English Courts the learned Judge proceeded:               "We  do  not  intend to discuss  any  of  this               because,   in  our  opinion,  none  of   these               decisions has any bearing on the problem which               confronts  us,  namely,  the  impact  of   the               Constitution  on the peoples  and  territories               which joined the Indian Union and brought  the               Constitution into being........               Now  it is undoubted that the  accessions  and               the  acceptance  of them by  the  Dominion  of               India were acts of State into whose competency               no  municipal  court could  enquire;  nor  any               Court in India, after the Constitution, accept               jurisdiction to settle any dispute arising out               of them because of Article 363 and the proviso               to Article 131; all they can do is to register               the  fact  of accession............  But  what               then;  Whether  the  Privy  Council  view   is               correct  or that put forward by Chief  Justice               Marshall  in  its broadest  outlines  is  more               proper, all authorities are agreed that it  is               within the competence of the new sovereign  to               accord  recognition to existing rights in  the               conquered   or  ceded  territories   and,   by               legislation  or  otherwise, to apply  its  own               laws  to them and these laws can,  and  indeed               when the occasion arises must, be examined and               interpreted  by  the municipal courts  of  the               absorbing State." The  learned Judge then went on to point out that the  title of  the  petitioners to the disputed villages had  not  been repudiated  upto  January  26, 1950.  Because  of  the  non- exercise  of  the  right to repudiate till  that  date,  the petitioners  were admittedly in de facto possession  of  the villages and the learned Judge adverted to the  circumstance that  those possessory rights could have been  asserted  and enforced  against all persons except the rulers who  granted the lands, and 484 except  possibly  the  succeeding  State.   Considering   it unnecessary  to  pronounce  whether these  rights  could  be enforced against the rulers as well as the Dominion of India as  the  succeeding  sovereign, he observed  that  as  these rights  were  factually  in existence at  the  date  of  the Constitution and as by that date the subjects of the  rulers of Charkari and Sarila had become the subjects of the Union, there could be no question of the Union Government  claiming to  exercise  an " act of State" operating  to  deprive  the petitioners of their property following in this respect  the well-known decisions of Walker v. Baird(1) and Johnstone  v. Pedlar(2).   He further explained that "the Constitution  by reason  of the authority derived from and conferred  by  the peoples  of this land blotted out in one  magnificent  sweep all  vestiges  of  arbitrary  and  despotic  power  in   the territories  of  India and over its citizens and  lands  and prohibited  just such acts of arbitrary power as  the  State now seeks to uphold."

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The  passage  extracted and indeed the  entire  judgment  is replete  with  a  description  of  the  poetry  of   India’s constitutional evolution as an unified State during the most momentous  period  of her history from  the  Declaration  of Independence on August 15, 1947, to the coming into force of the Constitution on January 26, 1950 and of the saga of  the march  of  the subjects of the former  Indian  princes  from being subjects of an autocratic ruler to a modern  democatic set up in which they are full-fledged citizens of India,  in language at once picturesque and of authentic eloquence.  We should  not  be  understood to minimise in  any  manner  the political significance of the events described or  underrate their  importance, content or meaning if we differ  somewhat from  certain of the conclusions drawn on matters which  are relevant for the purposes of the points arising for decision in these appeals. Pausing here we ought to point out that several decisions of this  Court subsequent to Virendra Singh’s case(4) of  which it  is sufficient to refer to Mls.  Dalmia Dadri Cement  Co. Ltd. v. The Commissioner of Income Tax(4), Jagan- (1) (1892) A.C. 491.               (2) (1921) 2 A.C. 262. (3) [1955] 1 S.C.R. 415.           (4) [1959] S.C.R. 729. 485 nath  Agrawala v. State of Orissa(1), Promod Chandra Deb  v. The  State of orissa(2) and State of Saurashtra  v.  Jamadar Mohamad  Abdulla(3) have proceeded on the acceptance of  the constitutional doctrine enunciated by the Privy Council.  We shall be referring to them later, but before doing so it  is necessary  to  set  out certain matters  which  are  not  in controversy. The  native Indian rulers were undoubtedly sovereign in  the territories  under their jurisdiction and they  parted  with their  sovereignty in stages, firstly on accession, then  on integration and finally by what has been felicitously termed in the White Paper on Indian States as ’unionization’  i.e., by State territory becoming part and parcel of the territory of the Union of India which meant the complete extinction of their  separate existence and individual sovereignty and  of their  States as separate political units.  Proceeding  next to  deal with Virendra Singh’s case(4) a close  analysis  of the   reasoning  underlying  the  decision   discloses   the following as its ratio:               (1)   There  were  two schools of  thought  as               regards the effect of a change in  sovereignty               in respect of the enforceability of the rights               of private individuals against the  succeeding               sovereign.   At one end of the scale were  the               decisions of the Privy Council which proceeded               on  the  acceptance  of  the  principle,  that               rights enforceable against the previous  ruler               or  sovereign ceased to be enforceable by  the               Municipal  Courts of the succeeding  sovereign               unless  and  until a  competent  authority  or               organ  of the succeeding sovereign  recognised               those rights.  The passage in the judgment  of               Lord   Dunedin  in  Vajesingjis  case(5)   was               typical  of  this view.  On  the  other  hand,               there was another and, if one might say so, an               opposite  view expressed in the  decisions  of               the  Supreme  Court of the  United  States  of               which the classic exposition by               (1)  [1962] 1 S.C.R. 205.  (2) [1962] 1  Supp.               S.C.R. 405.               (3) [1962] 3 S.C.R. 570.  (4) (1955] 1  S.C.R.               415.

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              (5)  51 I. A. 357.               486               Chief Justice Marshall in Percheman’s  case(1)               was typical, that the proper and just rule  of               Public International Law which should be given               effect  to  by municipal courts was  that  the               changes  in sovereignty over a  territory  did               not  or  should  not have any  effect  on  the               rights  of  the private  individuals  even  as               regards the enforceability of their claims  as               against   the  State  and  that  it  was   the               obligation certainly moral, if not also legal,               of the succeeding sovereign to give effect  to               such rights previously acquired by gants  from               the  previous sovereign.  After  pointing  out               these  divergent views the learned Judges,  in               Virendra   Singh’s  case(2),   considered   it               unnecessary   to  express  their  opinion   as               regards  the correctness or  acceptability  of               either  view, but proceeded, however,  on  the               assumption that the constitutional doctrine as               enunciated  by the Privy Council  appealed  to               the facts of the case before them.               (2)   Starting  from  the  position  that  the               petitioners  obtained  a  good  title  to  the               villages  granted  to them by  the  rulers  of               Sarila and Charkari, they proceeded to analyse               the  nature of the title which they had  under               the  grants.  As a result of this  examination               they  arrived at the conclusion that  even  on               the  basis  of  the  decisions  of  the  Privy               Council, their title was only voidable at  the               option  of  the  succeeding  sovereign.   They               recognised that the changes that took place in               the  constitutional position of the  State  of               Charkari  and Sarila undoubtedly brought in  a               change  in the sovereignty of  that  territory               and  hold that the changes thus brought  about               including   the  treaties  which  marked   the               transition  were "Acts of State" and that  the               interpretation or enforcement of rights  under               the  treaties was outside the jurisdiction  of               municipal courts.  The petitioners, they held,               could  not, therefore obtain any advantage  by               reliance on any provision in the               (1) 32 U.S. 51 at pp. 86-87.               (2) [1955] 1 S.C.R. 415.               487               treaty  safeguarding their rights,  for  apart               from  the treaties being "Acts of State"  they               were engagements between two sovereign  States               and  enforceable between them at the  instance               of   the  high  contracting  parties   through               diplomatic  channels  and not by  recourse  to               municipal courts, and the petitioners not even               being  parties  to  the  treaties  could   not               obviously claim any right to enforce them.  In               this  connection the terms of Art. 363 of  the               Constitution   which  contained   an   express               embargo  on the enforcement by  the  municipal               courts  of the, provisions of  these  treaties               were adverted to as reinforcing this position.               (3)   If guarantees contained in the  treaties               be   put  aside,  the  next  question  to   be               considered  was whether the Governments  which

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             emerged as a result of the Constitution,  were               competent  to  avoid or repudiate  the  titles               obtained by the petitioners under the previous               ruler  by  an "Act of State".   They  answered               this   question  in  the  negative  for   four               reasons:               (i)   The constitution emerged as a result  of               the  conjoint  action of the subjects  of  the               former Indian rulers and the people of  former               British India.  When as a result of this joint               effort  the  Constitution  was  brought   into               existence there was no question of conquest or               cession  so as to attract those  doctrines  of               Public  International  Law  relating  to   the               effects  of rights arising out of  changes  in               sovereignty   brought   about   by   conquest,               cession, treaty etc.               (ii)  The subjects of the former Indian rulers               became, when the Constitution emerged,  Indian               citizens,  and as against its own subjects  or               citizens there was no question of any "Act  of               State" by any Indian Government.               (iii) Even  if the previous rulers had  vested               in them autocratic powers to revoke grants               488               made by them in favour of their subjects,  the               Government  of the Union and the States  which               were  functioning under a  Constitution  which               contained   fundamental  rights   guaranteeing               protection   of   property   rights    against               arbitrary executive action could’not claim  to               exercise  those  arbitrary powers  which  they               might have inherited from the previous rulers,               and               (iv)  The petitioners had at the  commencement               of the Constitution a possessory title to  the               property granted to them and had also a  right               at that date, to continue in possession unless               and  until their title which was voidable  was               extinguished by repudiation by the Governments               which  were established by  the  Constitution.               These   proprietary  rights   were,   however,               protected  by Arts. 19 (1) (g) and 31  (1)  of               the Constitution and so the petitioners  could               not  be deprived of their  proprietary  rights               except by competent legislation enacted  after               the commencement of the Constitution. We  shall now proceed to examine the above reasoning of  the learned  Judges.   Reserving  for  later  consideration  the arguments  addressed to us regarding the divergent views  of judges,  jurists and writers on Public International Law  on the  topic of the enforceability of the rights derived  from previous  sovereigns  against a succeeding  sovereign  on  a change of sovereignty, we shall proceed on the same lines as in  Virendra Singh’s case(1) viz., on the acceptance of  the rule as enunciated in the decisions of the Privy Council. It  is necessary, first to understand the precise scope  and implications of these decisions and of the law explained  in them.   The  earliest of these usually referred to  in  this connection is Secretary of State for India v. Kamachee  Boye Sahiba(2)  which  was concerned with the  justiciability  in municipal  courts of a seizure by the East India Company  of not merely the Raj but even of the private properties of the (1)  [1955]  1 S.C.R. 415.  (2) (1859) 7 MOO.   I.A.  476-13 MOO.  P.C. 22.

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489 Raja  of  Tanjore.   The Privy Council held  in  a  judgment delivered by Lord Kingston that as the seizure had been made by  the  Company as a sovereign power the  municipal  courts "had no means of forming or the right of expressing if  they had  formed any opinion of the propriety or the  justice  of that  act." That is, however, a different aspect of what  is termed ’Act of State’ from what is strictly relevant to  the facts  before  us.   That  decision  was  referred  to  with approval by the Privy Council in a case from India-Secretary of  State  for India in Council v. Bai Rajbai(1)  where  the point  in  controversy  was somewhat akin to  those  in  the present  appeals.   The question at issue before  the  Privy Council  was  whether  the respondent was  entitled  to  the continued  ownership  and  possession of  a  village  called Charodi in the province of Gujarat.  The respondent’s  title to  the  village was ultimately based on rights  claimed  to have  been granted by the Gaekwar of Baroda.  The  territory in  which the village was situated was ceded by the  Gaekwar to  the  British  Government  in 1817.   The  claim  of  the respondent  to  full  ownership  of  the  property  was  not recognised  by the Indian Government after the  cession  and Government  held  that  the respondent had no  more  than  a leasehold  interest.  The question before the Privy  Council was  whether  the  respondent  was  entitled  to  assert  in municipal  courts rights more extensive, than what had  been recognised  by  the  authorities.  Dealing  with  this  Lord Atkinson delivering the judgment of the Board stated:               "....It is essential to consider what was  the               precise   relation  in  which   the   kasbatis               (respondents)  stood to the Bombay  Government               the moment the cession of their territory took               effect,   and  what  were  the  legal   rights               enforceable  in  the tribunals  of  their  new               sovereign,  of  which  they  were   thereafter               possessed.   The relation in which they  stood               to   their  native  sovereigns   before   this               cession,  and  the legal rights  they  enjoyed               under them, are, save in one respect, entirely               irrelevant  matters.  They could not carry  in               under the new regime the legal rights,               (1)   42 I.A. 229.               490               if  any, which they might have  enjoyed  under               the  old.  The only legal  enforceable  rights               they could have as against their new sovereign               were  those,  and only those, which  that  new               sovereign, by agreement expressed or  implied,               or by legislation, chose to confer upon  them.               Of  course,  this implied agreement  might  be               proved by circumstantial evidence, such as the               mode  of  dealing  with  them  which  the  new               Sovereign  adopted, his recognition  of  their               old rights, and express or implied election to               respect  them and be bound by them, and it  is               only  for the purpose of  determining  whether               and  to  what  extent the  new  sovereign  has               recognised  these  antecession rights  of  the               kasbatis,  and  has elected or  agreed  to  be               bound  by them, that the consideration of  the               existence,  nature, or extent of these  rights               becomes a relevant subject for enquiry in this               case.   This  principle  is   wellestablished,               though  it  scarcely seems to have  been  kept               steadily  in view in the lower courts  in  the

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             present  case.  It is only necessary to  refer               to  two authorities on the point, namely,  the               case  of  Secretary  of  State  for  India  v.               Kamachee Boye Sahiba [(1859) 7Moo.  I.A. (476)               decided  in the year 1859, and Cook v.  Sprigg               (1899) A.C. 572] decided in the year 1899." This passage would appear to indicate that the effect of the change  of  sovereignty is not to  treat  rights  previously enforceable against the former ruler as only voidable at the instance  of the succeeding sovereign, but to effect a  com- plete destruction of those rights until by recognition or by legislation of the succeeding sovereign the same is obtained by  the  previous grantee.  A question very similar  to  Bai Rajbais  case(1)  arose in Vajesingji’s  case(2)  where  the statement  of  the  law as explained by  Lord  Atkinson  was approved  and Lord Dunedin, as already stated, conveyed  the same idea when he said:               "Any inhabitant of the territory can make good               in the municipal Courts established by the new                (1) 42 1.A. 229.   (2) 51 I.A. .357.               491               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." It  need hardly be stated that this passage, just like  that extracted  from Lord Atkinson, is wholly  inconsistent  with the theory that an inhabitant of a territory in which  there has been a change of sovereignty carries with him a voidable title  to  property  which  inheres in  him  until  by  some positive  act  of the new sovereign he is divested  of  that right. Coming  nearer to the present times we have the decision  in Secretary  of State v. Rustam Khan(1) which related  to  the enforceability of the right to certain land claimed to  have been  acquired under the Khan of Kalat against  the  British Government  after the cession by the Khan of  the  territory which  included  the  villages in which  the  lands  of  the respondent were situate.  For the appellant the plea  raised was  ’Act  of State’ and the decisions of the Board  in  Bai Rajbai’s case(2) and Vijayesingji’s case (3) were relied on. Among  the  submissions made to the Board on behalf  of  the respondent we would refer to two as of some relevance to the points  under  consideration  in  these  appeals.   The  two contentions were: (1) that a mere change in sovereignty  was not to be presumed to disturb the rights of private  owners, and  the terms of the cession by which full sovereignty  was transferred  were  to be construed as  passing  only  public property-relying  for  this proposition on Amodu  Tijani  v. Secretary  Southern  Nigeria(4), (2) that the  effect  of  a change  in sovereignty in regard to title to land which  had been perfected under a previous sovereign was different from that  in  regard to personal obligations.   For  the  latter proposition  support was sought on the observations of  Lord Alverstone  C.J.  in West Rand Central Gold  Mining  Co.  v. Rex(5) reading:               "It must not be forgotten that the  obligation               of  conquering States with regard  to  private               pro-                (1) 68 I.A. 109.  (2) 42 I.A. 229.                (3) 51 LA. 357.    (4) [1921] 2 A. C. 399.                (5). [1905] 2 K.B. 391               492               perty  and private  individuals,  particularly               land to which title had already been perfected

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             before the conqueror annexation are altogether               different from the obligations which arise  in               respect of personal rights by contract." We have referred to these arguments and particularly to  the citation  of these two decisions, because they  are  usually referred  to  in  connection with  a  suggestion  that  even according to the British view rights of private  individuals to  land  and interests in relation to land continue  to  be enforceable unaffected by changes in sovereignty. Lord  Atkinson  who  delivered the  judgment  of  the  Board pointed  out that the cession of the territory by  the  Khan constituted  a complete transfer of all sovereignty  to  the British Government, stated:               "On  the  legal position that arises  in  such               circumstances  there  is a wealth  of  weighty               authority." After  referring in detail to the earlier decisions  of  the Board in Kamachee Boye(1), Cook v. Sprigg,(2) Bai Rai Bai(2) and  Vijayesingji,  (4) applied them to the facts  and  held that as the title which was asserted had not been recognised by  the British Government; allowed the appeal and  directed the dismissal of the suit of the respondents.  If the  Privy Council  decisions  lay down the law correctly  and  we  are applying  that  law, the fact that it is land  or  immovable property  which is claimed or as regards which the right  is asserted  makes  no difference for the  application  of  the principle. The last decision to be referred to in this context is  that reported. as Asrar Ahmed v. Durgah Committee, Ajmer(5) where Lord Simonds said:               "From  this it follows that the rights,  which               the inhabitants of that State enjoyed  against               its   former  rulers,  availed  them   nothing               against  the British Government and could  not               be asserted in the Courts established by  that               Government               (1)   (1859)  7 Moo. I. A. 476.13  Moo.   P.C.               22.               (2) [1899] A.C 572.   (3) 42 I.A. 229.               (4) 51 I.A. 357.     (5) A.I.R. 1947 P. C. I.               493               except  so far as they had been recognised  by               the  new sovereign power.  Recognition may  be               by legislation or by agreement express or  im-               plied.  This well-established rule of law  for               which reference may be made to 42 I.A. 229  at               p.  237 and 51 I.A. 357 at p. 360, appears  to               their Lordships to be peculiarly applicable to               an  office, to which material benefits  apper-               tain  and which, so far the records show,  had               consistently been regarded as within the  dis-               position of the sovereign power." As we have already pointed out, these decisions of the Privy Council have been referred to and followed by this Court  in Dalmia  Dadri Cement Co.(1) and the other decisions  already referred.  The statement of the law therefore in  Virendra’s case(2)  that  if the doctrine of Public  International  Law enunciated   by   the  Privy  Council  were   applied,   the petitioners in that case had a voidable title, which inhered in them even after the change of sovereignty, is not seen to be correct.  If the view expressed by the Privy Council  was to  be adopted there is no escape from the conclusion,  that the  grantees under the previous rulers did not  carry  with them,  on-  a  change of sovereignty,  as  subjects  of  the succeeding sovereign any inchoate rights as against the  new

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sovereign,  but  their rights in so  far  as  enforceability against  the new sovereign was concerned sprang into  exist- ence  only  on recognition express or implied  by  the  duly constituted  competent authorities of the  succeeding  sove- reign, apart from legislation. Pausing here we might observe that this error on the part of the  learned  Judges  in  appreciating  the  ratio  of   the judgments  of  the Privy Council necessarily  led  them  ’to assume  that the petitioners before them had certain  rights which  they  continued  to enjoy even after  the  change  of sovereignty and which were protected by the guarantees  con- tained in Arts. 19 and 31 of the Constitution. The  next  step in the reasoning of  the  learned  Judgeswas based on  the  fact  that the Constitution  was  framed  not merely by the people inhabiting the Provin- (1) [1959] S.C.R. 729.        (2) [1955] 1 S.C.R. 415. 494 ces of India but as a result of their conjoint action  along with  the subjects of the former Indian rulers.   From  this the inference was drawn that those rules of Public  Interna- tional Law which recognised the rights of a successor  State to refuse to be bound by obligations incurred by or enforce- able against the predecessor State had no application to the change in sovereignty -brought about when the Union of India was brought into existence.  This was on the theory that for that doctrine to operate there must be a cession or transfer of  territory  by one ruler to another and  that  where  the people  of  the entire subcontinent by their  united  action brought  into existence a new sovereign State there  was  no question of transfer of territory from one sovereign to  an- other  to  afford scope for the application of the  rule  of Public International Law. With  the  greatest respect to the learned Judges,  we  feel constrained  to differ. that a new sovereign emerged on  the unification  of  India by the merger or  absorption  of  the Indian States with the Provinces of British India cannot  be questioned  and  that this was by the process of  the  sove- reignty  of  the rulers of the former  Indian  States  being extinguished cannot be disputed either. We  are  here  not  concerned  with  whether  India  as   an International person has undergone any change, vis-a-vis  in its  relationship with other States or in the  International Organisations but in a more limited and, so to speak, domes- tic sphere.  The territories under the rulers of the  former Indian  Princes  undoubtedly passed from  one  sovereign  to another  when  as  a result of  the  ’unionisation’  by  the Government of India, they became integral parts first of the Dominion  of  India  and later of the  Union  of  India.   A transfer  of territory from under one sovereign  to  another may  be effected in a variety of ways-conquest,  annexation, by  cession under a treaty after a war or without a war,  by revolution  by  emancipation  of  subject  peoples  and   by territorial resettlements.  These changes possess one common feature viz., that one sovereign ceases to rule a  territory and  another  takes its place.  For the application  of  the rules  which  have  been  evolved  in  connection  with  the problems arising from such succession, little turns for  the purpose  of British Constitutional Law on either the  manner in which the change of 495 sovereignty was brought about or whether the absorption  was partial  or complete in the sense of a total  extinction  of the  previous sovereignty of the absorbed State, leaving  no trace  of  survival after the merger.  In passing  we  might mention  that, in fact. it was in most cases the  rulers  of

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the  Indian States who ejected the merger and who on  behalf of their State and their subjects participated by themselves or through their representatives in the deliberations  which brought  into existence the Constitution, and the legal  and political  unity  of India.  If, then, as a  result  of  the absorption  there was a State succession,  its  consequences have to be judged by tests or principles similar to those by which State succession is brought about by other means.   We cannot, therefore, agree that the manner in which the Indian States ceased to exist or in which the Constitution and with it  the complete political unification of the  territory  of India was brought about negatives the applicability of rules which   govern  the  enforceability  of  rights  against   a succeeding sovereign on State succession. The point next to be considered is whether the fact that the subjects  of  the  former Indian rulers  became,  after  the Constitution, citizens and subjects of the Indian Union pre- cludes  the Indian Government from refusing  recognition  to titles which such persons could have enforced against  their previous  rulers on the well-accepted principle that  "there can be no act of State against its own subjects." The appli- cation  of this principle last mentioned of which Walker  v. Baird(1) and Johnstone v. Pedlar(2) are classic examples, is intimately  bound  up with the question as  to  the  precise nature  of the action taken by a succeeding State,  when  it refuses  to accord recognition to the right of a former  in- habitant  of  the  territory of  an  earlier  sovereign  and enforce.able against the predecessor. If  the true position in law were that a positive action  is necessary to be taken by the succeeding sovereign before  it interferes  with the pre-existing rights of the subjects  of the former ruler and that the action thus taken is really  a continuance  of the act of the State by which the  territory of the former ruler became transferred to the new sovereign, it  is  possible that the rule that there can be no  act  of State by (1) [1892] A.C. 491.        (2) [1921] 2 A.C. 262. 496 the  Government  against its own subjects  might  have  some application.   But  if, on the other hand, the  true  theory were,  that  on  the extinction of the  sovereignty  of  the previous  ruler  over the territory  ceded  or  surrendered, there  is an extinction ipso jure of the rights  enforceable against  the  State and that it is really a new  right  that springs  into  existence on recognition  by  the  succeeding sovereign,  it  would be manifest that the  refusal  of  the succeeding  sovereign to recognise preexisting rights  could in  no sense be an act of State.  No doubt, that refusal  is in  the exercise of sovereign power but by such exercise  it neither annihilates nor affects any enforceable right  which its  subjects had against it.  We consider, therefore,  that if the doctrine of Public International Law expounded by the Privy Council were held applicable to the termination of the rights arising on the change of sovereignty in India, as the learned Judges in Virendra Singh’s case(1) did, the power of the Government of India as at present constituted to  refuse to  recognise  titles  originating in  executive  grants  by former  Indian rulers cannot be negatived by resort  to  the rule of law laid down in Walker v. Baird(2) and Johnstone v. Pedlar(3). The next proposition of law which underlies the decision  in Virendra Singh’s case(1) is that the arbitrary and  absolute powers  which the former Indian rulers possessed  to  revoke grants  made  by them did not survive the  change  in  sove- reignty brought about by the Constitution, when as a  result

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of the setting up of a democratic polity informed by justice and  the  rule of law, the right to exercise  any  arbitrary power was abandoned and was no longer available for revoking the grants made by the former rulers.  If the theory of Pub- lic  International Law which was explained and given  effect to by the decisions of the Privy Council rested on the  doc- trine that the powers of the succeeding sovereign to  recog- nise  or not to recognise grants by the preceding  sovereign or to repudiate them was based on the rights of the previous ruler  so  to revoke or repudiate, the argument  would  have considerable  force.   The juristic basis -  of  the  theory underlying  the  Privy Council decisions is  that  with  the extinction of the previous sovereign the rights  theretofore exercisable (1) [1955] 1 S.C.R. 415.      (2)  (1892] A.C. 491. (3)  [1921] 2 A. C. 262. 497 by the subjects of that sovereign were likewise extinguished and that without recognition which is really tantamount to a fresh  grant by the new sovereign, no title  enforceable  in the  municipal courts of the succeeding sovereign came  into being.  If this latter be the correct juristic approach, and that is what the decisions of the Privy Council lay down  as we  have shown by the extracts we have made of the  relevant passages  in Bai Rajbai’s(1) and in Vajeysinghji’s(2)  case, then  it  matters not whether the earlier grant  was  by  an absolute ruler who could revoke his grant or by a ruler of a different  type who could not or even if he could,  had  re- nounced his rights to revoke by unilateral executive action. In  either case, where the question at issue is whether  the right could be enforced against the succeeding sovereign  in its  courts,  nothing turns on the power  of  the  preceding ruler to derogate from his grant; for it is not by virtue of any  power  derived  from the previous  sovereign  that  the succeeding  sovereign claims the right not to recognise  the earlier  rights  or  grants but as an incident  of  its  own sovereignty and sovereign power.  In the circumstances,  the existence  of  the  arbitrary powers of  the  native  Indian rulers  and  its  absence  in  the  Governments  under   the Constitution  is not relevant, nor the fact that these  were not  inherited by and did not devolve on the Governments  of the Union and the States functioning under the Constitution. The  last of the steps in the reasoning underlying  Virendra Singh’s  case(1) proceeds on the basis that the  petitioners had  brought with them from their previous rulers  into  the Indian Union certain rights in the property granted to them, enforceable  against the Government in regard to which  they were  entitled  to the protection of Arts. 19 and  31.  This question  has  to  be approached from  two  points  of  view arising  from the two stages through which the territory  of the  former  Indian rulers became part of the  territory  of India under the Constitution.  The first stage is  concerned with  the  effect of the changes which took place  from  the accession of the States to the Dominion of India followed by the  merger  agreement executed by the rulers all  of  which were governed by the provisions of the Government of India (1) 42 I.A. 229.    (2) 51 I.A. 357- (3) [1955] 1 S.C.R. 415. 134-159 S.C-32 498 Act, 1935 as it stood from time to time and the second stage with the complete ’unionization’ of these territories so  as to form part of an unified polity, the Union of India. So far as the first stage is concerned, there was  certainly a  transfer of sovereignty over the territory of the  former

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Indian rulers to the Government of India for the purposes of the  exercise  by  the latter of  sovereignty  with  plenary powers  of  administration.  Sections 290A  and  290.B  were introduced into the Government of India Act for enabling the administration by the Dominion Government of the territories of  the acceding States which under s. 5 of that Act  became part of the Dominion of India.  At this stage the powers  of the  Government  of  India for  the  administration  of  the acceding   territories  were  exercised  under   the   Extra Provincial  Jurisdiction Act (Act XLVII of 1947) which  used the phraseology ’areas outside Provinces which were acquired by  the  Central  Government by  treaty,  agreement,  grant, usage,  sufferance  or  other  lawful  means’.   It  may  be mentioned  that  under  orders  made  by  virtue  of  powers conferred by the Extra Provincial Jurisdiction Act all  laws theretofore  in  force prevailing in the  territories  which were  being  administered under that Act were  continued  in force.   Later  by  an order issued under  s.  290A  of  the Government  of India Act, known as the States  Merger  Order 1949, laws in operation in the merged States, were continued until repealed or modified.  If in that situation the law as to  acquired rights enforceable against the successor  State as enunciated by the Privy Council applied, all grants which rested solely on executive action could acquire vitality for being enforced against the administration by the  Government of  India  or  its  delegates  only  if  those  rights  were recognised;  for  there was here a true case of  State  suc- cession-transfer  of territory by one sovereign  to  another and without the complication arising from the fact that  the rulers   or  the  people  of  the  various   Indian   States participating  in the making of the Constitution  which  the people  of  India gave to themselves.  We have  already  ex- plained  that  if the view of the Privy Council  as  to  the effect  of  a change in sovereignty were  accepted,  it  un- mistakably points to their being no survival of any  vestige of  rights  on  the extinction of  the  sovereignty  of  the previous 499 ruler  and to the emergence of any right only by the  action express or implied of the new sovereign.  If this  principle were  applied, there would have been no rights  of  property vesting in the grantee which he could assert against the new ruler.   No doubt, if the grantees were in  possession  they would  have  a  right to  retain  their  possession  against private trespassers but that is not the question with  which we  are here concerned, for what is now under  consideration is  the  capacity  of these grantees  to  assert  rights  as against the Government which is totally different from their right to possession as to the rest of the world.  Digressing a little it may be pointed out that s. 299 of the Government of  India  Act, 1935 as well as Arts. 19 and  31  which  are referred  to  in this connection deal exclusively  with  the inference  with  proprietary rights by the  State  and  have nothing  to do with rights inter se between the grantee  and his fellow subjects or citizens. If,  therefore, we are correct in our understanding  of  the decisions  of the Privy Council that on a change  of  sover- reignty  no scintilla of right inhered in the grantee  quoad his  right to assert or enforce his rights under the  grants against  the rulers survived the change of sovereignty,  the guarantee  against deprivation of property contained  in  s. 299  of  the  Government of India  Act,  1935,  availed  him nothing,  for  when  the  succeeding  sovereign  refused  to recognise  the  rights obtained by him  under  the  previous sovereign  its action deprived him of no right to  property;

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because  he  brought with him no rights  from  the  previous ruler which he could assert against the new sovereign. The position, therefore, reduces itself to this: Just previ- ous to the Constitution the grantee had no right of property enforceable against the State and in regard to which, there- fore,  he could invoke the protection of Arts. 19 and 31  of the Constitution.  The coming into force of the Constitution could  not,  therefore, make any difference;  for  the  Con- stitution  does  not  create rights  in  property  but  only protected  rights which otherwise existed.  It is  necessary to  add  that  if the learned  fudges  in  Virendra  Singh’s case(1)  were  right  in their understanding  of  the  Privy Council decision to  (1) [1955] 1 S.C.R. 415. 500 mean that a grantee under the previous ruler had a  voidable title  which  he  continued to possess and  enjoy  until  by action  of  the  succeeding ruler the same  was  revoked  or repudiated,  they  might also be right in  their  conclusion that   such  title  as  the  grantees  had  could   not   be extinguished by the executive action of the Union or of  the State  Governments because of the guarantee of the right  to property  contained in Arts. 19 and 31. But, if as  we  have shown,  the  decisions  of the Privy  Council  do  not  lend support  to such a view, the conclusion in Virendra  Singh’s case(1)  as  regards this last proposition  also  cannot  be correct. This takes us to the consideration of the question which was raised by Mr. Purshottam Tricumdass submitting to us that we should discard the theory of Public International Law  which underlies  the decisions of the Privy Council. but  that  we should  accept and give effect to what might be  termed  the American  view  as formulated by Chief Justice  Marshall  in U.S.  v. Percheman(2) which was approved and applied in  the later decisions of the American Supreme Court to which  also he drew our attention.  Learned Counsel submitted that  this Court  was not bound by the decisions of the  Privy  Council and  was  free to adopt the more rational,  just  and  human doctrine which found expression in these American decisions. In this connection his thesis was that the doctrines evolved by  the Privy Council were conditioned by Britain  being  an Imperialist  and  expansionist power at the date  when  they originated and were applied and that while these might  have been  suited  to the regime of a colonial power,  they  were wholly  out of place in the set up of this country and  with the type of Constitution under which it functions. Having  considered this matter carefully we are  clearly  of the opinion that there is no justification or reason to dis- card  the  British  view  as  regards  the  jurisdiction  of municipal  courts  to  enforce  rights  against   succeeding sovereigns on a change of sovereignty.  In the first  place, Percheman’s  case(2)  itself  came  before  the  courts  for ascertaining  the  proper construction of the  treaty  under which Florida was surrendered to the United States by  Spain under  the  Florida treaty dated February 22, 1819,  on  the terms of which the (1) [1955] 1 S.C.R. 415. (2) 32 U.S. 51 at pp. 86-87. 501 respondent contended that his title to the property  claimed by  him had been recognised and confirmed.  The place  of  a treaty entered into by the United States and the  provisions contained  in  it, in the Constitutional Law of  the  United States,  we shall be referring to later, but that apart  the Florida  treaty was followed by an Act of Congress  of  1828

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,entitled "an Act supplementary to the several Acts  provid- ing  for  the  settlement of confirmation  of  private  land claims  in  Florida."  Under the terms of this  Act  of  the Congress,  ,Commissioners were set up to investigate  claims by  private  individuals  to lands and in  cases  where  the validity   of  a  claim  set  up  was  not  upheld  by   the Commissioner,  provision was made for resort to  courts  for resolving  the dispute.  There was, therefore, no scope  for invoking  the  British rule of the lack of  jurisdiction  of municipal  courts  to adjudicate on unrecognised  titles  to property,  even  if such a doctrine was applicable  and  the only  point in controversy was as to the  interpretation  of the clauses of the treaty relative to the titles which  were recognised because on any view of the law if the treaty  and the  Act of Congress confirmed the respondent’s  title,  the same  was enforceable in the municipal courts of the  United States. Before passing on from this decision it is necessary to bear in  mind the difference in constitutional law prevailing  in the  United  States and in India as regards  the  effect  of treaties  and the provisions contained therein.  Art. 6  cl. (2) of the United States Constitution reads:               "6.......................               (2)   All  treaties  made, or which  shall  be               made,  under  the  authority  of  the   United               States, shall be the supreme law of the  land;               and  the Judges in every State shall be  bound               thereby, anything in the Constitution or  laws               of any State to the contrary notwithstanding." Willoughby   explains*  the  object.  and  effect  of   this provision thus:               "....  the primary purpose of this  provision,               (Art.  VI cl. (2) was to make indubitable  the               supremacy of treaties over State Statutory or               *Constitution  of  the United States  Vol.  1,               548.               502               constitutional  provisions...... it has,  from               the beginning been held that treaties, so  far               as  they  are self-executory, operate  in  the               United    States,    by   virtue    of    this               constitutional provision, to create  municipal               law  which  the  courts  are  called  upon  to               recognise and apply." In the United Kingdom and in India the position is  entirely different.   A treaty is, in British jurisprudence,  treated merely as a contract between two States and does not  become a  part of the law of the land unless by an express  Act  of the  Legislature.   A  treaty  does  not  confer  rights  or obligations between the State and its subjects or as between Subjects, such rights can be conferred only by an  enactment of the Legislature.  As explained by Lord Atkin in Attorney- General of Canada v. Attorney General of Ontraio(1):               "Unlike some other countries the  stipulations               of  treaty  duly ratified do  not  within  the               Empire, by virtue of the treaty alone have the               force of law" It  was in recognition of this constitutional position  that s. 106 of the Government of India Act, 1935 was enacted. Its terms  are  in  substance  re-enacted in  Art.  253  of  the Constitution which reads:               "253.    Notwithstanding   anything   in   the               foregoing   provisions   of   this    Chapter,               Parliament  has power to make any law for  the               whole  or any part of the territory  of  India

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             for  implementing  any  treaty’  agreement  or               convention with any other country or countries               or  any  decision made  at  any  international               conference, association or other body." and  to  reinforce this position we have Art. 363  by  which municipal courts are deprived of jurisdiction to enforce any rights arising from certain treaties.  It would be  apparent that in the context of the different constitutional position regarding  treaties  in the two countries, the rule  of  law which  was enunciated by the American Supreme Court,  cannot automatically be applied here.  For in ultimate analysis the court   in  Percheman’s  case  (2)  was  giving  effect   to provisions (1) 1937 A. C. 326 at P. 347.  (2) 32 U.S. 51 at pp. 86-87. 503 of the treaty with Spain which was the law of the land,  and if  the treaty provisions were different, these again  would have  been  enforced  by the courts.   We  are  making  this observation  not to minimise the importance of the  doctrine of  Public  International  Law explained  by  Chief  Justice Marshall, but to point out that the decision must be  under- stood  in the setting of the provisions of the  treaty  with Spain and the articles of the American Constitution. As indicated earlier, we are not insensible to the  position that  apart  from  the place of treaties  in  American  Con- stitutional Law what Marshall C.J., expounded was a doctrine of  Public  International Law which lie  considered  it  was necessary; just and proper for succeeding States to  observe in  their  dealings  with the  rights  acquired  by  private individuals  under  predecessor sovereigns.   We  shall  now proceed to deal with the question whether we should  discard the rule as enunciated in the decisions of the Privy Council and adopt that which was formulated in Percheman’s case(1). There are several reasons why we are unable to accept C.  J. Marshall’s exposition in Percheman’s case(1) as laying  down a law which has to be given effect to by municipal courts in this country.  In the first place, it could not be said that the broad terms in which Marshall C.J., stated the  doctrine that  every  private  rights  derived  from  a   predecessor sovereign  ought  to continue to be  enforceable  against  a successor  sovereign and that a change in sovereignty  makes no difference to the enforceability of private rights, be it against other individuals or the succeeding State, has  been in  that  absolute  form accepted as valid  by  jurists  and writers  on Public International Law.  Even in  treaties  in Public  International Law in which the most  extended  scope has  been afforded to the enforceability of  acquired-rights against  a successor State two limitations have always  been recognised: (1) that the origin of the right should be  bona fide  and not one designed to injure the economic  interests of the successor State, and (2) that the right should not be a political concessions Next, jurists and even the Permanent Court of  International Justice have drawn a marked distinction between (1) 32 U.S.  1 at pp. 86-87. 504 that might be termed the theory of the law and the  enforce- bility  of these rights and in municipal courts.  C.C.  Hyde in   is  treatise  on  Public  International  Law(*)   after referring  of the decision in Percheman’s case(1) and  those which allowed it adds:               "Acknowledgement  of  the  principle  that   a               change of sovereignty does not in itself serve               to  impair rights of private property  validly               acquired in areas subjected to a change,  does

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             not, of course, touch the question whether the               new  sovereign  is obliged  to  respect  those               rights when vested in the nationals of foreign               States, such as those of its predecessor." Similarly   George  Schwarzenberger  in  his   International Law(**) after referring to a passage in the decision of  the Permanent  Court  of International Justice in  the  case  of German Settlers in Poland reading:               "Private rights acquired under existing law do               not cease on a change of sovereignty.  No  one               denies  that the German Civil Law,  both  sub-               stantive and adjective, has continued  without               interruption  to operate in the  territory  in               question.   It can hardly be maintained  that,               although  the  law  survives,  private  rights               acquired  under  it  have  perished.   Such  a               contention is based on no principle and  would               be contrary to an almost universal opinion and               practice" adds  that though the Permanent Court of International  Jus- tice  negatively stated that private rights  acquired  under existing  law do not cease on a change of  sovereignty,  the Court did not expressly pronounce on the question whether in the  absence of legislation to the contrary on the  part  of Poland,  she  was  bound by International  Law  to  consider German  Civil  Law as valid in the ceded  territories.   The doctrine  of act of State evolved by English Courts  is  one purely  of  municipal  law.   It  denies  to  such  a  Court jurisdiction to enquire into the consequences of acts  which are inseparable from an extension of its sovereignty.   That doc- (*) Vol.  IP. 433. (**)Vol. 1 p. 83. (1) 32 U. S. 51 at Pp. 86-87. 505 trine was, however, not intended to deny any rule of  inter- national law. Next  we might examine the juristic concept  underlying  the American  view, putting aside for the moment what one  might call  authority.   There has been at one time  a  school  of thought among writers on Public International Law which  has described  the process of State succession as if it  were  a transmission of sovereignty bringing in for this purpose the analogy  of  an heir in private law clothing  the  successor with  the  totality of the rights and  obligations  qua  all inhabitants without exception or modification.  This  theory has now been discarded because of the realisation that there could  be  no analogy between individuals  and  States,  nor could   the  theory  be  sustained  in  the  face   of   the circumstance  that it does not accord with  practice,  which after  all is one of the basic foundations of the  rules  of Public  International  Law.  It is hardly necessary  to  add that  ’there  is -here no inconsistency with the  comity  of nations.   Nor  could it be maintained that  the  theory  is just,  because  it  would force  upon  the  successor  State obligations  which might have owed their birth to  political considerations  which  would  not  survive  the  predecessor State.   Besides,  it  must not be  forgotten  that  when  a successor   State  exercises  its  sovereignty   even   over territory which has passed to it from a preceding ruler,  it does not do so as a representative of or by delegation  from the latter-as in the case of the heir in Private Law, but as a  sovereign of the -territory deriving authority  from  its own  constitution  and  set  up.  It  is  true  that  Public International  Law might lay on the successor  State  duties

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with respect to the acquired territory and to the rights  of the  inhabitants thereof but those must be  compatible  with its  undoubted sovereignty.  It is in recognition of such  a position  that  successor States give effect to  laws  which regulate   rights  inter  se  between  the  subjects   which theretofore   applied,  save  in  so  far  as   either   its constitution  or its legislation has made  other  provision. We  are,  however, here concerned with rights  possessed  by individuals  in  the  predecessor’s  territory   enforceable against the previous rulers and even as regards these we are concerned with a very limited range of rights-rights arising out of grants of immovable property or concessions of rights in relation thereto and 506 enforceable  against  the predecessor State.  We  made  this Reservation because in the Dalmia Dadri Cement case(1) which dealt  with  the continued enforceability  of  a  concession regarding the levy of income -tax, even Bose J. agreed  that such  rights  did  not survive and in  a  separate  judgment confined  the operation of the principle that he  enunciated in Virendra Singh’s case(2) to rights of immovable property. If the theory that rights and duties or rather the bundle of them  pass ipso jure from the predecessor to  the  successor State  is  discarded and at the same time it  is  recognised that International Law and justice which underlies that body of  law  might impose some obligations which  the  successor State  should respect, two questions arise: First  what  are the  obligations which International Law might  impose?  and secondly, whether these obligations which are not the  crea- tures   of  municipal  law,  might  give  rise   to   claims enforceable in municipal courts. It  is  impossible to lay down exact rules as to  the  inter ests  which  are  protected by a  consensus  of  opinion  as acquired  rights.   So  much, at least,  is  clear  that  to receive  the  protection of International Law  the  interest must have been properly vested in the sense that it must not have been voidable at the instance of the predecessor  State and  bona fide and legally acquired.  Neither the comity  of nations, nor any rule of International Law can be invoked to prevent  a  sovereign State from safeguarding  its  national economy  and taking steps to protect it from abuse.  On  the one side the principles of acquired rights demands that  the interest  of the private individual be not abrogated and  on the  other side the public interest of the  successor  State has  to  be  considered.  It is this  conflict  between  the public  and private aspects that hinders the laying down  of hard and fast rules. As has been pointed out by O’Connell in his Treatise on  the Law  of  State  Succession,  the  problems  posed  by  State succession  in  International Law are notably  different  in character from those of municipal law though they arise at a different  plane, but there is no necessary reason  why  the one  system  should  not draw on the  doctrine  or  concepts formulated and found to be adequate within the other (1) [1959]   729. (2) [1955] 1 S.C.R. 415. 507 system.  The principle of universal succession based on ana- logy  from  the  civil  law  was  essentially  juristic   in character,  but  the analogy was wrong and the  practice  of States was not consonant with the theory.  The rejection  of this doctrine led to the assumption that solutions are to be found  on experience alone.  The choice of  the  appropriate theory  by  writers was’ coloured by  their  standpoint  and their legal (Experience.  In theory, therefore, we must have

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regard  both to past experience and the necessities  of  the present  and  while  on  the  one  hand  not  being   unduly restrictive, ought not on the other become so doctrinaire as to  deprive  the State of the option not to  recognise  even mala fide transactions. Looked at from this point of view the British practice  that has  prevailed  in  this country has not  proved  in  actual practice  to lead to injustice, but has proceeded on a  just balance  between the acquired rights of the private  indivi- dual  and  the  economic interests  of  the  community,  and therefore there is nothing in it so out of tune with notions of propriety or justice to call for its rejection. It  is undoubted that the British doctrine was part  of  the jurisprudence and the constitutional practice that prevailed in pre-Constitution India.  Most certainly it does not  need to be stated that the British Parliament when it enacted the Government  of India Act as the constitutional framework  by which this country should be governed, could not have had in contemplation  any  other rule by which the  rights  of  the inhabitants newly brought into the political set up by other territories  becoming part of India.  With  this  historical background  it  would  not be a violent  presumption  if  we assume  that the framers of the Constitution should also  be taken  to have proceeded on the basis of the  acceptance  of this  doctrine and this state of the law, unless  one  found some  provision or indication in the Constitution  repugnant to its continuance.  As already pointed out, the position of treaties  vis-a-vis municipal law was not changed.   On  the other hand, by Art. 363 an embargo was laid in express terms on  municipal  courts  giving effect to  the  provisions  of treaties with rulers of Indian States.  This, in our opinion is a clear indication that the Constitution-makers  intended no 508 departure from the Constitutional doctrine that was thereto- fore accepted as law.  It would, of course, be different  if the  provisions of any treaty became embodied in  subsequent legislation; then they would be enforced as part of the  law of the land. It  is also not to be assumed that  the  Constitution-makers were  oblivious of the need for continuity of the  law  when the Indian States were absorbed and a change in  sovereignty took  place.  By Art. 372 of the Constitution all  the  laws which were in force in these States just as in British India without  any  distinction  were continued  until  they  were altered  or repealed by competent legislation.  It  is  only necessary  to  point out that in the  interval  between  the merger  of  these States and the coming into  force  of  the Constitution,  there were other provisions to which we  have already adverted which continued the laws which obtained  in these territories till Art. 372 could be availed of.   There was  thus no legal vacuum or hiatus created so far  as  laws were  concerned and it is only where the right sought to  be enforced  was  created  not  by the  laws  of  the  previous sovereign but merely as a result of an administrative  order that we have the problem to be solved in these appeals.   If the  definition of law in Art. 366(10) were as that in  Art. 12  so  as  to include even executive  orders  every  right, however,  created  would  have  been  continued.   But   the Constitution-makers  decided  otherwise  and  preferred   to continue  only  laws as  distinguished  from  administrative orders. Next  we have the circumstance that the doctrine  enunciated in the decisions of the Privy Council have been accepted  as correct  and  thus applicable  equally  in  postConstitution

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India in a series of decisions of this Court commencing from Dalmia Dadri Cement Co.(1) and unless compelling reasons are found  for holding that all these were wrongly  decided,  it would  be neither proper or even open for us to depart  from these precedents, and as explained earlier, there are none. Lastly,  as  we have already noticed, even in  the  case  of Virendra Singh(2), though the divergent views of the jurists on this question of Public International Law were set (1)(1959] S.C.R. 729. (2) [1955] 1 S C.R. 415. 509 out the court did not express any decisive opinion in favour of  accepting  the observations in  Percheman’s  case(1)  as proper  to be applied by the municipal courts in India.   In the face of these circumstances we would not be justified in departing from the decisions of the Privy Council which have been  accepted and applied by this Court.   These  decisions both  of  the Privy Council as well as the earlier  ones  of this  Court were reviewed and the propositions laid down  in them  were examined and summarised by this Court  in  Promod Chandra  Deb and Ors. v. The State of Orissa and Ors.(2)  as laying down the following propositions:               "(1)  ’Act  of State’ is the  taking  over  of               sovereign  power  by  a State  in  respect  of               territory  which was not till then a  part  of               its  territory, either by conquest, treaty  or               cession, or otherwise, and may be said to have               taken place on a particular date, if there  is               a proclamation or other public declaration  of               such taking over.               (2)   But  the  taking  over  full   sovereign               powers  may be spread over a number of  years,               as a result of a historical process.                (3)  Sovereign power, including the right  to               legislate for that territory and to administer               it,  may  be acquired  without  the  territory               itself   merging   in  the   new   State,   as               illustrated in the case of Dattatraya  Krishna               Rao  Kane v. Secretary of State for  India  in               Council [(1930) L.R. 57 I.A. 318].               (4)   Where  the  territory has not  become  a               part of the -State the necessary authority  to               legislate in respect of that territory may  be               obtained  by  a legislation of the  nature  of               Foreign Jurisdiction Act.               (5)   As an act of State derives its authority               not from a municipal law but from  ultra-legal               or supra-legal means, Municipal Courts have no               power to examine the propriety or legality  of               an act which comes within the ambit of ’Act of               State.’               (1)  32 U.S. at pp. 86-87.       (2) [1962]  1               Supp. S.C.R. 405.               510               (6)   Whether  the Act of State has  reference               to  public  rights or to private  rights,  the               result is the same, namely, that it is  beyond               the   jurisdiction  of  Municipal  Courts   to               investigate  the  rights  and  wrongs  of  the               transaction  and to pronounce upon  them  and,               that  therefore, such a Court  cannot  enforce               its  decisions,  if any.  It may be  that  the               presumption  is that the pre-existing laws  of               the  newly  acquired territory  continue,  and               that  according  to  ordinary  principles   of

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             International  Law  private  property  of  the               citizens  is respected by the  new  sovereign,               but  Municipal Courts have no jurisdiction  to               enforce such international obligations.               (7)   Similarly,  by virtue of the  treaty  by               which  the new territory has been acquired  it               may have been stipulated that the  pre-cession               rights of old inhabitants shall be  respected,               but  such stipulations cannot be  enforced  by               individual   citizens  because  they  are   no               parties to those stipulations.               (8).  The  Municipal Courts recognised by  the               new   sovereign   have  the  power   and   the               jurisdiction to investigate and ascertain only               such rights as the new sovereign has chosen to               recognise   or  acknowledge  by   legislation,               agreement or otherwise.               (9)   Such an agreement or recognition may  be               either express or may be implied from  circum-               stances  and evidence appearing from the  mode               of  dealing  with  those  rights  by  the  new               sovereign.   Hence, the Municipal Courts  have               the  jurisdiction to find out whether the  new               sovereign has or has not recognised or acknow-               ledged   the   rights  in   question,   either               expressly or by implication, as aforesaid.               (10)  In  any controversy as to the  existence               of   the   right  claimed  against   the   new               sovereign,  the  burden of proof lies  on  the               claimant  to establish that the new  sovereign               had  recognised or acknowledged the  right  in               question."               511 We consider this summary succinctly expressed the rule to be applied  in  this  country as  regards  the,  enforceability against the Governments in India of private rights originat- ing  in  executive or administrative orders  of  the  former Indian rulers. The  next matter to be considered is the correctness of  the view  expressed  by  the High Court, that  even  though  the treaty be an Act of State, and the merger agreement executed by  the ruler a document on which no rights  enforceable  in municipal courts could be based, still cl. (7) of the letter of Shri V. P. Menon dated October 1, 1948 could be  referred to  and  relied  upon  for founding  an  argument  that  the Government waived their right to repudiate the grant made by the previous ruler.  We consider that the submission of  the learned  Attorney-General  that the learned Judges  were  in error in this respect is well-founded.  If the treaty or its provisions  cannot be looked at to spell out any  right.  as the  learned  Judges themselves conceded. the use  to  which they have put the provisions of cl. (7)-that the  Government would not re-examine grants made earlier than April 1, 1948, is virtually the same though called by another name.  We can see   no  sensible  distinction  between  reliance  on   the provisions of the treaty as pointing to a recognition by the Government of rights claimed and reliance on it for the pur- pose of establishing that Government had waived their  right not  to recognise such rights.  In substance, they  are  the same though the nomenclature employed is different. In  support of the reasoning on which this  distinction  was accepted  the  learned Judges have placed  reliance  on  the approach  to this question in Virendra Singh’s case(1).   We have discussed this matter fully in the earlier part of this judgment  and  there is no need to repeat it.   The  learned

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Judges have further referred to and relied on a decision  of this  Court in Bholanath v. The State of  Saurashtra(2)  and certain observations contained in it.  We do not agree  that the  observations in the decision, though  couched  somewhat widely  could properly be understood in the manner in  which the  learned Judges have done.  The question that  arose  in the case was whether the condition of service of a person (1) [1955] 1 S.C.R. 415       (2) A. I. R. 1954 S. C. 680. 512 originally employed as an officer of one State continued  to govern  his services after that State became merged  in  the Government  of  Saurashtra.   The condition  of  service  in controversy  was  as to the age at which an officer  had  to retire  on superannuation.  By an enactment of the ruler  of Wadhwan  State  this was, in the case of officers  like  the appellant  before this Court, fixed at 60.  An order by  the Government  of Saurashtra retiring him after he reached  the age of 55 against his will, gave rise to the suit from which the proceedings before this Court arose.  There was  contro- versy  in the Courts below as to whether the  law  embodying the  service  conditions  was  competently  enacted  by  the Wadhwan  State.   But this contention was not  persisted  in this court, and the court recorded a finding that the  terms of  service of the appellant were regulated by a  law  which was  competently enacted and that the law was  continued  by Art.  372  in the Saurashtra State.  On that  finding  there could  really be no defence to the appellant’s  claim.   The decision in favour of the appellant was rested on the ground that  the law of the Wadhwan State was continued by  express provisions  contained, first, in statutes of the  Saurashtra State  and, again, by Art. 372 of the Constitution when  the latter merged in the Dominion of India.  On this it followed that  without  a valid change in the law the rights  of  the appellant   could  not  be  restricted.   In  stating   this position, however, the following words were used:               "The  Covenant  (between  the  ruler  of   the               Wadhwan  State  and the State  of  Saurashtra)               could  be  looked at to see  whether  the  new               sovereign  had  waived his  rights  to  ignore               rights  given  under the laws  of  the  former               sovereign." We do not understand this passage to mean that the  covenant which  under  Art.  363 could itself not be  looked  at  for founding  any right, could be used indirectly for  inferring that  rights  were recognised, without anything  more.   The true  position appears to us to be that where the new  sove- reign assumes jurisdiction and it does some Act and there is ambiguity as to whether the same amounts to a recognition of a  pre-existing  right or not, the covenant and  the  treaty might  be looked at in order to ascertain the intention  and purpose of that equivocal act, but beyond this the cove-  513 nant and the treaty cannot by themselves be used either as a recognition pure and simple or, as the learned Judges of the High Court have held, as waiver of a right to repudiate  the pre-existing rights.  It is needless to point out that since the  enforceability  of the rights  against  the  succeeding sovereign springs into existence only on recognition by  the sovereign, there is no question of a waiver of the right  to repudiate.  The expression ’right to repudiate’ in this con- text  is  a  misnomer and there could be no  question  of  a waiver of such right. This,  however,  does not conclude the matter, for  we  have still  to  deal with the question whether the grant  by  the ruler of the Sant State which was embodied in a ’resolution’

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of his was a "law" or was merely an executive or administra- tive order.  Learned Counsel for the respondent submitted to us  that the grant under the Tharav No. 371 dated March  12, 1948 was not a grant by executive power but was in truth and substance  a  law  which was continued by Art.  372  of  the Constitution  and which, therefore, could be undone only  by legislation  and not by any executive fiat as has been  done in  the present case and in this connection relied  strongly on  the decisions of this Court in Madhaorao Phalke  v.  The State of Madhya Bharat(1) and in Promod Chandra Deb and Ors. v.  The  State of Orissa and Ors. (2).  Both  in  the  trial Court  as  well  as  before the High  Court  the  cases  had proceeded  on the footing that the ruler of the  Sant  State was  an absolute monarch with no constitutional  limitations upon  his authority, and it was not suggested that this  was incorrect.   He was the supreme legislature as well  as  the supreme  head  of the executive so that his  orders  however issued would be effective and would govern and regulate  the affairs  of the State including the rights of the  citizens; (vide Ameer-un-nissa Begum v. Mahboob Begum(3) and  Director of Endowments, Government of Hyderabad v. A kram Ali(4)   We should, however, hasten to point out that though in the case of  such  absolute  monarchs  the  distinction  between  the administrative  action under their executive power and  laws passed by them as the supreme legislature (1) [1961] 1 S.C.R. 957.   (2) [1962] 1 Supp.  S.C.R. 405. (3) A.I.R. 1955 S.C. 352.  (4) A.I.R. 1956 S.C. 60. 134--159 S. C.---33. 514 of  the  State,  possess  no  deference  as  regards   their effectiveness,  still the distinction between the two is  of vital  importance  for  the  purpose  of  determining  their continued  efficacy  after  the coming  into  force  of  the Constitution.   Under Art. 372 of the Constitution-"all  the law  in force in the territory of India  immediately  before the  commencement  of this Constitution  shall  continue  in force  therein  until altered or repealed or  amended  by  a competent  Legislature or other competent  authority".   The expression "existing law" is defined in Art. 366(10):               "Existing law means any law, Ordinance,  Order               bye-law,  rule  or regulation passed  or  made               before  the commencement of this  Constitution               by any legislature, authority or person having               power  to make such a law,  Ordinance,  Order,               bye-law, rule or regulation." This  definition  would  include  only  laws  passed  by   a competent   authority  as  well  as  rules,   bye-laws   and regulations  made  by virtue of statutory power.   It  would therefore  not  include  administrative  orders  which   are traceable not to any law made by the Legislature but  derive their force from executive authority and made either for the convenience  of  the administration or for  the  benefit  of individuals, though the power to make laws as well as  these orders was vested in the same authority-the absolute  ruler. What survives the Constitution and is continued by Art.  372 are  those  laws  which  could trace  their  origin  to  the exercise of legislative power. The  problem  next is to discover that which is  "law"  from that  which is merely an executive order and this is  by  no means  an  easy one to solve.  In the case  of  some  States where there are rules which prescribe particular forms which the  laws  have  to  or generally  take  or  where  laws  as distinguished  from  executive orders are issued  bearing  a defined nomenclature, there is not much difficulty.  But the cases  which have come up before this Court have shown  that

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this is by no means the universal rule.  In the case of  the Sant State with which we are concerned it was not  suggested that there was any particular formality or process 515 which had to be observed in the promulgation of laws or  any particular form which laws had to take or took or that  they went by any particular nomenclature to distinguish them from executive or administrative orders.  We have, therefore,  to consider  whether  from the nature of  ’the  instrument  its contents  and  its general effect-whether the  Tharav  dated March 12, 1948 constitutes a law within Art. 366(10) and  is therefore  continued by Art. 372 or whether it is merely  an executive  grant or administrative order which might  confer rights  but which without recognition by the Union or  State Government  cannot  be enforced in the municipal  courts  of this country. We  shall  therefore proceed to consider the  terms  of  the Tharav and for this purpose it would be convenient to set it out in full. It  is headed ’Tharav Order’ by Maharana, Santrampur  State, dated  March  12,  1948.  It was explained to  us  that  the expression of ’Tharav’ meant a resolution.  The text of this resolution or order by the Maharana is as follows               "The   Jivak,   Patavat   Inami,   Chakariyat,               Dharmada  villages  in Sant  State  are  being               given  (granted) to Jagirdars and the  holders               of the said villages are not given rights over               forests.    Hence   after   considering    the               complaints  of certain Jagirs, they are  being               given  full  rights  and  authority  over  the               forests  in the villages under their  vahivat.               So,  they  should manage the  vahivat  of  the               forest    according   to   the   policy    and               administration  of the State.  Orders in  this               regard to be issued.                                   Sd/- in English                                Maharana, Santrampur State." There  are a few matters to which it is necessary to  advert in  this  document : The first of them is that it is  not  a grant  to  any  individual,  that is,  treating  him  as  an individual  or  as one of a number of individuals  or  to  a group 516 treating  them  merely as separate individuals, but  to  the holders  of  five  specified  tenures  in  the  State-Jivak, Patavat, Inami, Chakariyat and Dharmada villages.  Next,  it states that the rights in the forests of the villages of the several  kinds of tenure-holders are-being given to them  in response  to  the  representations made  in  regard  to  the villages in the possession and enjoyment of the Jagirdars as regards  this  matter.   Lastly,  the  tenure-holders   were directed  to manage and administer the forest  according  to the  policy  and administration of the State.   The  learned Judges of the High Court have treated the ’Tharav’ as merely an  administrative order treating it as if consisted  of  as many grants of forest rights to the tenure-holders as  there were  such holders and this was the view that  was  stressed upon us strongly by the, learned Attorney-General.  We  are, however,  not  impressed  by  this  argument.   We  have  no evidence  as  regards the creation of  the  several  tenures referred (to in the Tharav to base any conclusion as flowing from  the original grant.  No doubt, there is on record  the translation  of the -rant of the village of Gothimada  dated 1867, but from this it does not follow that everyone of  the grants comprised in the’ five tenures specified was of  this

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pattern,  We consider that the ’Tharav’ is  more  consistent with its being a law effecting an alteration in the  tenures of  the five classes of Jagirdars by expanding the range  of the  beneficial  enjoyment to the forests lying  within  the boundaries of the villages which had already been -ranted to them.   In  this  light,  the  ’Tharav’  would  not  be   an administrative  order in any sense but would partake of  the character of legislation by which an alteration was effected in  the scope and content of the tenures referred  to.  This aspect  is reinforced by the reference to the complaints  of the  tenure-holders  whose  grievance  apparently  was  that though villages had been granted to them for their enjoyment under  the  several  tenures, they were  not  permitted  any rights  in  the forests within their villages.  It  was  not thus  a case of an individual grant but the yielding by  the ruler  to the claims of these large group of  Jagirdars  who requested that their rights should be extended.  Lastly, the manner  of  the enjoyment was specified as having to  be  in accordance with the policy and administration in the 517 State.   It is obvious that there must have been some  rules which have the force of law as regards the administration of these  forests and the enjoyment by the Jagirdars  was  made subject to the observance of these laws. We,  therefore, consider that the ’Tharav’ dated  March  12, 1948  satisfies  the  requirement of  a  "law"  within  Art. 366(10),  and  in consequence, the executive orders  of  the Government  of  Bombay  by which the forest  rights  of  the plaintiffs were sought to be denied were illegal and void. The result is that we agree with the learned Judges that the plaintiffs  were entitled to succeed, though  for  different reasons, and we direct that the appeals should be dismissed. The appellant will pay the costs of the respondents-one  set of hearing fees. SUBBA  RAO J.-I have had the advantage of going through  the judgment  of  my learned brother, Rajagopala Ayyangar  J.  I agree with him that Ex. 192 is law and that it continued  in force after the making of the Constitution.  This conclusion would be enough to dispose of the appeals.  But,  Rajagopala Ayyangar  J.,  further expressed his disagreement  with  the unanimous view propounded by this Court in Virendra Singh v. The State of Uttar Pradesh(1).  As I regret my inability  to share  his view, I shall state the reasons for my  agreement with the decision in Virendra Singh’s case. As  the question raised is common to all the appeals, it  is enough  if  I  take  up Civil Appeal No.  182  of  1963  for consideration.   The  facts  necessary  to  appreciate   the alternative  contention may now be briefly stated.   In  the year 1947, the then ruler of the Sant State made a grant  of the  village  Gotimada  to  the  predecessor-in-interest  of Thakor  Sardarsingh  Gajesing.  On August  15,  1947,  India obtained  independence.  Under s. 7 of the  Indian  Indepen- dence  Act, 1947, the suzerainty of the British  Crown  over the  Indian  States lapsed, with the result the  Sant  State became  a  full  sovereign State.  On March  12,  1948,  the Maharana (1)  [1955] 1 S.C.R. 415. 518 of  Sant State issued an order conferring full  rights  over forests  to  the  holders of villages in  the  State,  which included  the  said Gotimada village.  On  March  19,  1948, there  was an agreement, described as the  Merger  Agreement entered  into  between the Maharana of Sant  State  and  the Dominion Government of India where under the Maharana  ceded to   the  Dominion  Government  full  exclusive   authority,

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jurisdiction and power for and in relation to the governance of the Sant State and agreed to transfer the  administration of  the  Sant State to the Dominion Government on  June  10, 1948.   It was also agreed that as from June 10,  1948,  the Dominion Government would be competent to exercise full  and exclusive  authority,  jurisdiction and powers  for  and  in relation to the Governance of the Sant State in such  manner and  through such agency as it might think fit.   Under  the other articles of the said agreement certain personal rights and  privileges of the Maharana were preserved.   After  the merger, under s. 3 of the Extra Provincial Jurisdiction Act, 1947,  the Government of India delegated the  administration of  the Sant State to the State of Bombay.  From October  1, 1949, under the States’ Merger (Governor’s Provinces)  Order 1949,  the  said State became part of the State  of  Bombay; that  is to say, from June 10, 1948 to October 1,  1949  the Bombay  State administered the Sant State as a delegates  of the  Dominion  of  India, and thereafter  the  State  became merged with the State of Bombay.  The Sant State, therefore, became  part of the Dominion of India on June 10,  1948  and thereafter  the citizens of that State became, the  citizens of the Dominion of India.  On August 21, 1948 the respondent entered into a contract with Thakor Sardarsing Gajesing  for cutting of the trees in the forest of village Gotimada.   On October  1,  1948 i.e., 4 months after the merger  and  more than  a  month after the said contract, Shri  V.  P.  Menon, Secretary  to the Government of India, Ministry  of  States, wrote  a  letter  to the Maharana of  Sant  State  expressly declaring  that  no  order passed or  action  taken  by  the Maharana  before the date of making over the  administration to  the Dominion Government would be questioned  unless  the order was passed or action taken after the 1st day of  April 1948,  and  if considered by the Government of India  to  be palpably unjust or unreasonable.  By that letter it was also guaranteed that, 519 among others, "the enjoyment of ownership" of jagirs, grants etc.,  existing  on  April 1, 1948 would  be  respected.   A combined  reading of the paragraphs of this letter makes  it clear  that  the  Dominion of India declared  in  clear  and unambiguous  terms that no grants made or orders  issued  by the Maharana before April 1, 1948 would be questioned by it. It  may  be  mentioned that in the last  paragraph  of  this letter  it was stated that the contents of the letter  would be regarded as part of the Merger Agreement entered into  by the Maharana with the Governor-General of India.  It may  be recalled  that  this  letter was written  months  after  the merger  and after the citizens of the extinct  State  became the citizens of the absorbing State.  The effect of the last paragraph  of  the  said letter will be  considered  in  due course. On   July   8,  1949  the  Government  of  Bombay   sent   a communication   to  the  Commissioner,  Northern   Division, stating that the Government considered that the order passed by  the ruler of Sant State on March 12,  1948  transferring forest rights to all the Jagirdars of the Jagir villages was mala fide and that it should be cancelled.  It was suggested that the Commissioner should do some other preliminary  acts before  taking  further action in the matter.  It  would  be seen from this communication that the order was not actually cancelled,  but there was some correspondence in respect  of that  matter  and that it was not even communicated  to  the jagirdars.   There  was obstruction by the  forest  officers when  the contractor was cutting the trees, but  after  some correspondence  he  was permitted to cut the  trees,  on  an

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undertaking  that  he  would abide by the  decision  of  the Government.   On February 6, 1963 the Government  of  Bombay passed a resolution after receiving a report from the Forest Settlement Officer specially appointed by it to  investigate the  rights of jagirdars.  It was stated in  the  resolution )that  the Tharav issued by the ruler of Sant State in  1948 was mala fide and, therefore, not binding on the Government. Thereafter,  it  scrutinized  the  claims  of  jagirdars  to forests  in  74  villages in the erstwhile  Sant  State  and recognized their rights in some of the villages.  So far  as Gotimada  village.  is  concerned, it was  stated  that  the question  of  forest rights in the said  village  was  still under the 520 consideration of the Government and necessary orders in that behalf would be issued in due course.  It is clear that till 1953 the Government did not refuse to recognize the title of the  Jagirdars to forests; indeed, in the case  of  Gotimada village no final order was made even on that date.  On these facts,  the question that arises is whether  the  respondent would  be entitled to a permanent injunction issued  by  the High  Court restraining the appellant from interfering  with his right to cut trees in Gotimada village. The  argument of the learned Attorney-General, so far as  it is  relevant to the question which I propose to  deal  with, runs  as follows : After the merger of the Sant  State  with the  Dominion  of  India the jagirdar had nO  title  to  the forests  against the Dominion of India unless it  recognized such  a  right, and that, as in the instant  case  the  said Government  did  not  recognize  such a  right,  he  or  his assignees could not maintain any action against the State on the  basis  of his title to the said forests.   He  conceded that on the basis of the finding of the High Court that  the Dominion  of  India  did  not repudiate  the  title  of  the jagirdar  to  the forests till after the  Constitution  came into force, the decision of this Court in Virendra Singh  v. The  State  of  Uttar Pradesh(1) is against  him.   But  he, contended  that it was not correctly decided and indeed  its binding force was weakened by later decisions of this Court. As  the  correctness  of the decision  in  Virendra  Singh’s case(1) is questioned, it is necessary to consider the scope of  that  decision  in some detail  and  also  to  ascertain whether  later  decisions  of  this Court  had  in  any  way weakened  its  authority.  The facts in that  case  were  as follows.  The  petitioners  in  that case  were  granted  in January, 1948,Jagirs and Muafis by the Ruler of Sarila State in one village and by the Ruler of Charkhari State in  three villages.   In March, 1948, a Union of 35 States,  including the  States  of Sarila and Charkhari. was  formed  into  the United  States  of  Vindhya Pradesh.   The  Vindhya  Pradesh Government  confirmed these grants in December,  1948,  when its Revenue Officers interfered with them questioning  their validity.   The  integration of the States however  did  not work well and the same 35 Rulers entered into an (1)  [1955] 1 S.C.R. 415. 521 agreement  in December 1949, and dissolve the newly  created State  as from January 1, 1950, each Ruler acceding  to  the Government  of  India  all  authority  and  jurisdiction  in relation  to  the  Government  of  that  State.   After  the Constitution  came  into  force,  the  Government  of  Uttar Pradesh in consultation with the Government of India revoked the grant of Jagirs and Muafis in four of the villages.   On an application filed by the petitioners under Art. 32(2)  of the  Constitution,  this  Court issued a  writ  against  the

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State.  From the said facts it would be seen that the grants were  made to the petitioners before the merger, and it  was held  that  the Government had no right to revoke  the  said grants  after  the Constitution came into force.   Bose  J., speaking for the Court, elaborately considered the  doctrine of  "Act  of  State" in the light of  English  and  American decisions  and the opinions of jurists of International  Law and came to the following conclusion :               "We  think  it is clear on a review  of  these               authorities that whichever view be taken, that               of  the Privy Council and the House of  Lords,               or  that  of  Chief  Justice  Marshall,  these               petitioners,  who were in de facto  possession               of  the  disputed lands, had  rights  in  them               which  they  could have enforced  up  to  26th               January, 1950, in the Dominion Courts  against               Fill  persons except possibly the  Rulers  who               granted  the  land  and  except  possibly  the               State.   We  do  not by any  means  intend  to               suggest that they would not have enforced them               against  the Rulers and the Dominion of  India               as  well,  but  for  reasons  which  we  shall               presently  disclose  it is  not  necessary  to               enter into that particular controversy.  It is               enough  for the purpose of this case  to  hold               that  the petitioners had., at any  rate,  the               rights defined above." Pausing  here  it will be noticed that this  Court  did  not express  a  final  opinion  on  the  question  whether   the petitioners could have enforced their title to the  property against the Rulers before the Constitution came into  force. but it had definitely held that the petitioners had title to the property against all 522 persons  except the Rulers.  On the basis of  that  finding, Bose   J.,   proceeded  to  consider  the  impact   of   the Constitution  on  the  said  finding.   The  learned   Judge observed:               "But however that may be, there is no question               of conquest or cession here.  The new Republic               was.  born  on  26th January,  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 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." Then the learned Judge proceeded to state:               "All  the citizens of India, whether  residing               in  States or Provinces, will enjoy  the  same               fundamental rights and the same legal remedies               to enforce them." This decision struck a new and refreshing note.  It  pleaded for  a departure from imperialistic traditions and to  adopt the  American traditions, which are in consonance  with  the realities of the situation created by our Constitution.   It gave new orientation to the doctrine of the act of State  to reflect  the modern liberal thought embodied in our  Consti- tution.   It  held that citizens of a ceding  State  have  a title  to  their property against all  except  possibly  the ruler.   Though it inclined to go further and hold that  the change  of  sovereignty  does not affect the  title  of  the citizens of the ceding State even against the new sovereign,

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it did not think fit to decide that question finally, as  it found  ample  justification  to sustain  the  title  of  the petitioners   therein  against  the  sovereign   under   our Constitution.  It pointed out that the concept of ceding and absorbing States is foreign to our Constitution and that all the  people of India, to whichever part of the country  they might  have belonged, through their representatives,  framed the  Constitution  recognizing the fundamental rights  of  a citizen  to hold property and not to be deprived of it  save by authority of law.  In that view it 523 held  that  the title of the petitioners in  -,hat  case  to their Property was protected by the Constitution.  This is a unanimous and considered decision of five learned Judges  of this  Court.   I shall not obviously differ from  this  view unless there are compelling reasons to do so.  I find none. I  shall  now  proceed to consider  whether  the  subsequent decisions  of this Court threw any doubt on the  correctness of  the decision in regard to the following two  aspects  on which  it  had given a firm decision: (1) The citizen  of  a ceding  State does not lose his title to immovable  property but  continues  to have a right thereto against  all  except possibly  the absorbing State; and (2) on the making of  the Constitution,  his  title thereto became  indefeasible  even against the absorbing State. Where  a  company  entered  into  an  agreement,  with   the erstwhile State of Jind whereunder it had to pay  income-tax only  at concessional rates, it was held in  Mills.   Dalmia Dadri  Cement Co. Ltd. v. The Commissioner of  Income-tax(1) that,  after the said State merged with the Union of  India, the  latter was not bound by the contractual obligations  of the  ceding  State on the basis of the  principle  that  the treaty  between the two sovereigns was an act of  State  and the  clauses  of  that  treaty  were  not  enforceable.   In Jagannath  Agarwala v. State of Orissa (2) it was held  that after  Mayurbhanj  State  had merged with  the  Province  of Orissa  the  two money claims of the appellant  against  the Maharaja  of Mayurbhanj State were not  enforceable  against the Orissa State on the ground that the Act of State did not come  to an end till the claims made by the  appellant  were rejected   and,   therefore,   municipal   courts   had   no jurisdiction in the matter.  Where the petitioners held Khor Posh grants from the Rulers of Talcher, Bamra and  Kalahandi under  the  respective  State laws it  was  held  in  Promod Chandra  Deb  v.  The  State  of  Orissa(3)  that  the  laws continued  to have legal force after the merger of the  said States with the Union of India.  Where the Nawab of Junagadh State  made grants of property before he fled the State,  it was held in (1) [1959] S.C.R. 720.          (2) [1962] 1, S.C.R. 205.               (3) [1962] Supp. (1) S.C.R. 405. 524 State  of Saurashtra v. Jamadar Mohamad  Abdullah(1)    that the  cancellation  of  the  said  grants  by  the   Regional Commissioner,  who assumed charge of the  administration  of the  State  before the said State was  integrated  with  the United States of Saurashtra, was an act of State. The  question now raised did not arise for consideration  in those  cases.  This Court accepted the English  doctrine  of Act of State and acted on the principle that till the  right of an erstwhile citizen of a ceding State was recognized  by the absorbing State, he has no enforceable right against the State.   The  scope  and extent of the  title  to  immovable property of a citizen of a ceding State was not examined  in those decisions.  Nor the impact of the Constitution on such

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rights  was  considered  therein.  In  M/s.   Dalimia  Dadri Cement  Co.  Ltd. v. The Commissioner of  Income-tax(1)  the following  observations are found at D. 741, which may  have some bearing on the first aspect of the question:               "It  is also well-established that in the  new               set-up these residents do not carry with  them               the rights which they possessed as subjects of               the ex-sovereign, and that as subjects of  the               new  sovereign, they have only such rights  as               are granted or recognized by him." This  observation is couched in wide terms.  But this  Court was not concerned in that case with the distinction  between pre-existing  title  of a citizen of a ceding State  to  his property  against all and that against the  State.   Indeed, Bose J., in his dissenting judgment, made it clear that they were  only  concerned  in that  case  with  the  contractual obligation of the erstwhile sovereign and that they were not dealing  with the question of the title of the  citizens  to immovable  property.  That the judgment had also nothing  to do  with the second aspect was made clear by  the  following observations  of  Venkatarama Aiyar J.,  who  expressed  the majority view, at p. 749:               "This  argument  assumes that  there  were  in               existence  at the date when  the  Constitution               came into               (1) [1962] 3 S.C.R. 970.               (2) [1959] S.C.R. 720.               525               force, some rights in the petitioner which are               capable  of being protected by Art.  19(1)(f).               But  in the view which we have taken that  the               concessions  under cl. (23) of Ex.  A came  to               an  end  when Ordinance No. 1 of S.  2005  was               promulgated, the petitioner had no rights sub-               sisting  on the date of the  Constitution  and               therefore  there  was  nothing  on  which  the               guarantees  enacted  in Art. 19(1)  (f)  could               operate." These observations indicate that this Court did not go  back on  the decision in Virendra Singh’s case(1) indeed, it  re- jected  the  argument based on that decision on  the  ground that  the  appellant lost his rights if any,  under  a  pre- Constitutional  valid Ordinance.  In State of Saurashtra  v. Jamadar  Mohamad  Abdulla(2),  Mudholkar  J.,  speaking  for himself  and  for  Sarkar  J., expressed  the  view  on  the question  of impact of s. 299(1) of the Constitution Act  of 1935  on the title to immovable property of a citizen  of  a ceding State thus, at p. 1001:               "...... before the respondents could claim the               benefit of s. 299(1) of the Constitution  Act,               1935,  they had to establish that on  November               9, 1947, or thereafter they possessed  legally               enforceable   rights  with  respect   to   the               properties in question as against the Dominion               of  India.  They could establish this only  by               showing  that their pre-existing rights,  such               as  they  were recognized by the  Dominion  of               India.  If they could not establish this fact,               then it must be held that they did not possess               any  legally  enforceable rights  against  the               Dominion  of India, and, therefore, s.  299(1)               of  the  Constitution Act, 1935,  avails  them               nothing.  As already stated s. 299(1) did  not               enlarge  anyone’s right to property  but  only               protected the one which a person already  had.

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             Any right to property which in its very nature               is   not  legally  enforceable   was   clearly               incapable of being protected by that section."                (1) [1955] 1 S.C.R. 415, 433, 4. 37.                  (2) (1962] 3 S.C.R. 970. 526 The  same view was restated by the learned Judge  in  Promod Chandra  Deb  v. The State of Orissa(1).  It may  be  stated that  the said question did not arise for  consideration  in either of those two decisions, for in the former the cancel- lation of the order issued by the Ruler of the ceding  State was made before the merger and in the latter, the Court held that  the laws whereunder the grants were made continued  to have  legal force after the merger of the  concerned  States with the Dominion of India.  It may be pointed out that  Das J.,  in  the earlier decision and Sinha C.J., in  the  later decision,  who  delivered  the leading  judgments  in  those cases,  had specifically left open that question.   It  may, therefore,  be stated without contradiction that in none  of the  decisions of this Court that were given  subsequent  to Virendra  Singh’s case(2) the correctness of  that  decision was  doubted.   Indeed,  in the latest  two  decisions,  the principle  was sought to be extended to a situation  arising under  the Government of India Act. but the majority of  the learned  Judges  left open the question, though two  of  the learned  Judges constituting the Bench expressed their  view against such an extension.  On the findings, I have  accept- ed,  the said question does not arise for  consideration  in this  case  and  I  do not propose  to  express  my  opinion thereon. If that be the position. is there any justification for this Court  to refuse to follow the decision in Virendra  Singh’s case(1).   In  my  -View,  the said  decision  is  not  only correct, but is also in accord with the progressive trend of modern international law.  After all, an act of State is  an arbitrary act not based on law, but on the modern version of "might  is  right".  It is an act outside the law.   In  the primitive society when a tribe conquered another tribe,  the properties  of  the  vanquished were at  the  mercy  of  the conqueror.  The successful army used to pillage, plunder and commit acts of arson and rape.  When society progressed, the doctrine  of  Act of State was evolved. which really  was  a civilized  version  of  the primitive acts  of  pillage  and plunder  of the properties of the conquered tribe.  But  the further progress of civilization brought about by custom and agreement factual recognition of pre-existing rights of  the people  of  the conquered State.  There were  two  different lines of (1) [1962] Supp.  1 S.C.R. 405. (2) [1955] 1 S.C.R. 415. 527 approach-one adopted by imperialistic nations and the  other by  others who were not.  That divergence was  reflected  in English and American Courts.  All the jurists of internatio- nal  law  recognise  the continuity of  title  to  immovable property of the erstwhile citizens of ceding State after the sovereignty  changed  over  to the absorbing  State.   In  A Manual  of International Law by Georg  Schwargenberger,  4th Edn., Vol. 1, at p. 81 the learned author says:               "Private rights acquired under the law of  the               ceding State are not automatically affected by               the  cession.  They must be respected  by  the               cessionary State." A  more  emphatic  statement is found in The  Law  of  State Succession by O’Connell.  Under the heading "The Doctrine of

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Acquired  Rights" the learned author points out, at pp.  78- 79:               "........  only sovereignty and its  incidents               expired with the personality of a State.   The               relationships   of  the  inhabitants  one   to               another,  and  their rights of  property  were               recognized to remain undisturbed." He observes at p. 104:               The doctrine of acquired rights is perhaps one               of  the few principles firmly  established  in               the law of State succession, and the one which               admits of least dispute." In Hyde’s International Law, second revised edition, Vol. 1, at  p.  433, the following extract from the  Sixth  Advisory Opinion of September 10, 1923 of the Court of  International Justice is quoted:               "Private rights acquired under existing law do               not cease on a change of sovereignty.  No  one               denies  that the German Civil Law, both  subs-               tantive  and adjective, has continued  without               interruption  to operate in the  territory  in               question.   It can hardly be maintained  that,               although  the  law  survives,  private  rights               acquired  under  it  have  perished.   Such  a               contention is based on no principle and  would               be contrary to an almost universal opinion and               practice......"               528 In  Oppenheim’s International Law, 8th edition, Vol.  1  the               same  legal  position is re-stated at  p.  571               thus:               "It  must be specially mentioned that, as  far               as  the  law  of  Nations  is  concerned,  the               subjugating State does not acquire the private               property  of  the inhabitants of  the  annexed               territory.  Being now their sovereign, it  may               indeed  impose any burdens it pleases  on  its               new  subjects-it  may  even  confiscate  their               private property, since a sovereign State  can               do  what  it  likes  with  its  subjects;  but               subjugation  itself does not by  International               Law affect private property." Starke  in his book, An Introduction to  International  Law, 5th edn., observes, at p. 274:               "Such  of  these rights as  have  crystallised               into   vested  or  acquired  rights  must   be               respected   by  the  successor   State,   more               especially  where the former municipal law  of               the   predecessor  State  has   continued   to               operate,  as though to guarantee the  sanctity               of the rights." Much  to  the same effect the relevant statement  of  inter- national  law  is found in Briggs’ The Law of  Nations,  2nd edn.  It may, therefore, be held that so far as title to im- movable property is concerned the doctrine of  international law  has  become crystallised and thereunder the  change  of sovereignty  does  not  affect the title  of  the  erstwhile citizens of the ceding State to their property. In America the said principle of International Law has  been accepted  without  any qualification.   Chief  Justice  John Marshall  of the United States Supreme Court has  succinctly stated  the  American  legal position in  United  States  v. Percheman (1) thus:               "The  people  change their  allegiance;  their               relation   to  their  ancient   sovereign   is

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             dissolved; but their relations to each  other,               and   their   rights   of   property,   remain               undisturbed.  If this be               (1)   (1833) 32 U.S. 51. at 86, 87. 529               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  sove-               reignty  only,  and  not  to  interfere   with               private property." This  principle  has  been  accepted  and  followed  by  the American  Courts in -other decisions.  But it is  said  that the  view  of the American Courts is really based  upon  the circumstance  that  international treaties are part  of  the supreme law of the land. Article VI of the Constitution of the United States declares that  all treaties made, or which shall be made,  under  the authority of the United States, shall be the supreme law  of the  land;  and  the Judges in every State  shall  be  bound thereby,  anything in the Constitution or laws of any  State to the contrary notwithstanding.  Chief Justice Marshall  in Foster v. Neilson(1) said:               "Our Constitution declares a treaty to be  the               law  of the land.  It is, consequently, to  be               regarded in courts of justice as equivalent to               an   act  of  the  legislature,  whenever   it               operates  of  itself without the  aid  of  any               legislative provision." A  treaty in America may be deemed to be a law of the  land; but the American view is not solely based on treaties. (1) (1829) 2 Pet. 253. 134-159 S.C.-34. 530 In The American Insurance Co. and the Ocean Insurance Co. v. Bales of Cotton(1), Chief Justice Marshall clearly  recorded the view of the American Courts thus:               "On  such transfer of territory, it has  never               been   held   that  the   relations   of   the               inhabitants   with  each  other  undergo   any               change."               Again  the  learned Chief Justice  in  Charles               Dehault  v.  The  United  States(2)  expressly               pointed  out the existence of the said  rights               apart from any treaty.  He observed:               "Independent  of  treaty  stipulations,   this               right would be held sacred.  The sovereign who               acquires an inhabited territory acquires  full               dominion  over it; but this dominion is  never               supposed  to  divest  the  vested  rights   of               individuals to property." Therefore,  the  distinction sought to be made  may  perhaps

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have  some relevance, if in a particular treaty there. is  a specific  term  that the United States shall  recognize  the acquired rights of a citizen of a ceding State, but none  if the  treaty does not contain such a covenant.  The  American decisions, therefore, cannot be distinguished on this narrow ground;  they have recognized the doctrine of  International Law  and  inter-woven  it in the  texture  of  the  American municipal law. The Courts in England have developed the doctrine of act  of State  which,  in  the  words  of  Stephen,  means  "An  act injurious  to the person or property of some person  who  is not at the time of that act a subject of Her Majesty;  which act is done by a representative of Her Majesty’s  authority, and  is  either sanctioned or subsequently ratified  by  Her Majesty." A treaty whereunder a sovereign territory is ceded is  held  to be an act of State, for it is  not  done  under colour  of any title but in exercise of a  sovereign  power. Has  the  law  of England denied the  doctrine  of  acquired rights so well-settled in International Law? (1) (1828) 7 L.Ed. 511.        (2) (1835) 9 L.Ed. 117, 131. 531 In Vajesingji Joravarsingji v. Secretary of State for  India in Council(1), the Judicial Committee summarized the law  on the subject thus:               "When  a territory is acquired by a  sovereign               State  for  the first time that is an  act  of               State.  Any  inhabitant of the  territory  can               make good in the Municipal Courts  established               by the new sovereign only such rights as  that               sovereign    has,   through   his    officers,               recognized.   Such rights as he had under  the               rule  of predecessors avail him nothing.   Nay               more,  even  if in a treaty of cession  it  is               stipulated  that  certain  inhabitants  should               enjoy  certain  rights, that does not  give  a               title to those inhabitants to enforce    these               stipulations in the municipal Courts.    The               right to enforce remains only with the   high               contracting parties............". The sentence in the said passage, namely, "such rights as he had  under  the  rule of predecessors  avail  him  nothing", cannot  be, in the context in which it appears,  interpreted as  a denial of the doctrine of acquired rights  evolved  by International  ]Law, but it only refers to the  question  of enforceability  of  such an acquired right  in  a  municipal court.   The  same view has been expressed in  a  number  of English decision.  Therefore, the law in England is that the municipal  courts cannot enforce the acquired rights of  the erstwhile citizens of the ceding State against the absorbing State  unless the said State has recognized or  acknowledged their  title.  This Court accepted the English. doctrine  of act of State in a series of decisions noticed by me earlier. What does the word "recognize" signify?  It means "to admit, to  acknowledge, something existing before." By  recognition the  absorbing State does not create or confer a new  title, but only confirms a pre-existing one.  It follows that  till the  title Is recognized by the absorbing State, it  is  not binding  on  that State.  An exhaustive exposition  of  this branch  of law is found in Promad Chandra Dab’s case(2).   I am  bound by that decision.  O’Connell in The Law  of  State Succession (1)  51  I.A. 357. 360.        (2) [1962] Supp.  (1)  S.C.R. 405. 532 brings  out  the impact of the doctrine of act of  State  on

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that  of acquired rights under International Law, at p.  88, thus:                "The  doctrine  of  act of State  is  one  of               English municipal law.    It merely denies  an               English Court jurisdiction     to inquire into               the consequences of Acts of the     British               Government  which  are  inseparable  from  the               extension  of its sovereignty.  The  court  is               not entitled to ask if such acts are ’just  or               unjust,  politic or impolitic’ or  what  legal               rights  and duties have been carried  over  in               the  change of sovereignty.  The  doctrine  is               not  intended,  however,  to deny  a  rule  of               International Law." In the words of the same author, the fact that a right  can- not be enforced does not mean that it does not exist.   Non- recognition  by the absorbing State does not  divest  title, but  only  makes  it  unenforceable  against  the  State  in municipal courts. The  result  of the discussion may be summarized  thus:  the doctrine  of  acquired  rights, at any  rate  in  regard  to immovable property, has become crystallized in International Law.  Under the said law the title of a citizen of a  ceding State  is preserved and not lost by cession.  The change  of sovereignty does not affect his title.  The municipal law of different countries vary in the matter of its enforceability against  the  State.  As the title exists. it must  be  held that even in those countries, which accepted the doctrine of act  of State and the right of a sovereign to repudiate  the title,  the  title  is good against all  except  the  State. Before  the Constitution came into force the State  did  not repudiate  the title.  When the Constitution of  India  came into force the respondent and persons similarly situated who had  title  to immovable property in the Sant  State  had  a title  to  the said property and were in  actual  possession thereof.  They had title to the property except against  the State  and they had, at any rate, possessory title  therein. The Constitution in Art. 31(1) declares that no person shall be deprived of his property save by authority of law.   That is, the Constitution recognized the title of the citizens of the  erstwhile  State  of Sant,  and  issued  an  injunction against the 533 soveriegn  created  by it not to interfere with  that  right except in accordance with law.  A recognition by the supreme law of the land must be in a higher position than that of an executive  authority  of  a  conquering  State.   I   would, therefore, hold that the title to immovable property of  the respondent  was  recognized by the Constitution  itself  and therefore,  necessarily by the sovereign which is  bound  by it.  1, therefore, respectfully hold that  Virendra  Singh’s case(1) has been correctly decided. Apart from the recognition of the title of the respondent by the  Constitution,  in this case the letter written  by  the Government   of  India,  dated  October  1,  1948,   clearly recognized the title of persons situated in the position  of the  respondent  to  their  properties.   But  the   learned AttorneyGeneral  contends that the letter shall be  regarded as  part  of the merger agreement and  therefore  its  terms cannot be relied upon for the purpose of recognition of  the respondent’s title or of evidence of the Govemment’s  waiver of  its  right to repudiate the respondent’s title.   It  is true  that  in the concluding portion of the  letter  it  is stated  that the contents of the letter will be regarded  as part  of the merger agreement.  But the merger  had  already

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taken place on June 10. 1948 and this letter was written  on October  1, 1948.  It does not appear from that letter  that the  Maharana  of  Sant State, who-ceased to  be  the  Ruler except  in name for certain privileges, was a party  to  it. This letter, therefore, can at best be treated as one of the acts  of the Government of India implementing the  terms  of the merger agreement.  It cannot, therefore, be said to be a part of the merger agreement.  If it was not, by calling  it so  it did not become one.  At the time the letter was  sent all the citizens of the erstwhile Sant State had become  the citizens of India.  The letter contains a clear statement in paragraphs  5 and 7 thereof that enjoyment of  ownership  of jagirs, grant etc. existing on April 1, 1948 were guaranteed and  that  any  order passed or action taken  by  the  Ruler before  the  said date would not be questioned.  This  is  a clear  recognition of the property rights of the  respondent and similar others.  It is necessary, therefore, to  express my opinion on the ques- (1)  [1955] 1 S.C.R. 415. 534 tion  whether,  even if the said letter formed part  of  the merger agreement, any recital therein can be relied upon  as evidence  of  recognition  of  pre-existing  titles  by  the absorbing  State  or  waiver  of  its  sovereign  right   to repudiate the said titles. For the aforesaid reasons I agree that the appeal should  be dismissed with costs. For  the same reasons Civil Appeals No. 183 to 186  of  1963 are also dismissed with costs. HIDAYATULLAH J.-These appeals by the State of Gujarat impugn a common judgment of the High Court of Gujarat dated January 24, 1961.  The respondents were plaintiffs in five suits for declaration   of  rights  in  forests  and   for   permanent injunction  against  interference with those rights  by  the State.  All suits except one were dismissed by the Court  of first  instance.  The District Judge on appeal  ordered  the dismissal of that suit also and dismissed the appeals of the plaintiffs in the other suits.  The plaintiffs then appealed to  the  High Court and by the judgment  under  appeal,  all appeals were allowed and the suits were decreed.  The  State Government has now appealed to this court by special leave. The  forests  in  respect  of  which  the  declaration   and injunction  were sought are situated in the former State  of Santrampur  (also  called Sant State).   Santrampur  Was  an Indian  State  and  the  Ruler  attained  independence   and sovereignty  on August 15, 1947 on the ceasing of the  para- mountcy of the British Crown.  The Ruler at first ceded  his sovereignty  on three subjects to the Government.  of  India but  on March 19, 1948, ceded the territory of the State  to the  Government  of India by an agreement  which  came  into force from June 10, 1948.  The Central Government, by virtue of powers vested in it by the Extra-Provincial  Jurisdiction Act,  1947,  delegated  its  functions  to  the   Provincial Government of Bombay and on June 2, 1948, the Administration of the Indian States Order was passed and it was applied  to Sant State from June 10, 1948.  On July 28, 1948, the Indian States (Application of Laws) Order, 1948 535 was passed.  Certain enactments in force in the Province  of Bombay  were  extended  to Sant State  and  then  under  the States’  Merger  (Governor’s Provinces)  Order,  1949,  Sant State became a part of the Province of Bombay from August 1, 1949.  On October 1, 1948, a letter of guarantee was written to  the Ruler by Mr. V. P. Menon in which it was stated.  as follows:

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             ".......               7.    No order passed or action taken by you               before   the   date   of   making   over   the               administration to the Dominion Government will               be  questioned unless the order was passed  or               action taken after the 1st day of April, 1948,               and  it  is considered by  the  Government  of               India  to be palpably unjust or  unreasonable.               The  decision  of the Government of  India  in               this respect will be final."               It was Added that the letter would be read  as               part of the original Merger agreement.               A  week before ceding the territories  of  his               State,  the  Ruler of Sant made  a  Tharao  or               Thavan order as follows:               "Order                3.   Ta. Mu.  Outward Register No. 371.   The               Jivak,  Patayat, Inami,  Chakariyat,  Dharmada               villages   in  Sant  State  are  being   given               (granted) to Jagirdars and the holders of  the               said  villages  are  not  given  rights   over               forests.    Hence   after   considering    the               complaints  of certain Jagirs, they are  being               given  full  rights  and  authority  over  the               forests  in the villages under their  vahivat.               So.  they  should manage the  vahivat  of  the               forest   according  to  the  policy  and   ad-               ministration  of  the State.  Orders  in  this               regard to be issued.                               Sd. In English.                       Maharana, Sant State." 536 The former grants which were made in favour of the jagirdars and holders of the villages have not been produced, but they were  probably  like the grant of  village  Gothimada  dated December 1, 1857, which was to the following effect:               "........               You have to do the vahivat (management) of the               land  situate within the permanent  boundaries               of  the  outskirts  of the  villages  in  four               directions.  This village has been granted for               the appropriation and enjoyment of the  income               thereto   except  in  respect  of  civil   and               criminal  matters.  So you must behave in  the               State in accordance with the custom and  usage               and  practice of other Thakarati  villages  of               the State.               If  any  person of the village is  ordered  in               regard to any work or matter then you  should-               not  in any way interfere therein but  produce               the said person as per order.               You  have to act and behave according  to  the               said clauses and should remain with  integrity               and honesty and loyal to the State. Dated:  1-               12.1867 A.D.S.Y. 1929 Magsar. Sudu 5." After  the Tharao was issued on March 12, 1948, some of  the Thakores  executed  contracts in favour  of  the  plaintiffs between  May 1948 and 1950.  The agreements which were  made with  the contractors are on the file of the  appeals.   The Thakores  and  the  contractors then began  to  take  forest produce  but they were stopped in April 1949.   The  present five  suits  were  then  filed.   Four  of  the  suits  were instituted  by the contractors and the fifth by one  of  the Thakores in the capacity as inamdar. After  merger,  a  question arose  whether  these  contracts

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should  be  approved  or  not.   On  January  1949,  on  the application  of one of the Thakores, an order was passed  by the Divisional Forests Officer.  It was as follows: 537 .lm15 "Gothimada village of santrampur State.  Application of  the owner  requesting to grant authorization to  the  Contractor and states that he has no objection if the authorization  is issued.   Is the authorization up to Lunawada  and  Signally only,  time-limit up to 31-3-1949.  No export outside to  be permitted,  pending  receipt  of  orders  from   Government. Written  undertaking to be taken from the purchaser that  he will  abide by the decision and orders passed by  Government and  then the authorization handed over.  Send copy to  F.O. Lunawada." Similar orders were passed in respect of other villages  and undertakings  were  taken  from the Thakores  and  the  con- tractors.  A sample is quoted here- "UNDERTAKING: I, Thakore Sardarsingh Gajesingh hereby give an  undertaking to abide by the decision and or ers passed by the Government of Bombay in respect of Gothimada forests, rights over which were conferred on me by Santrampur State Government on 12-3- 48 in their resolution No. G. 371 dated 12-3-48.               Authorization  Nos.  111, 112 of  1948-49,  in               respect of village in Santrampur State  issued               by  the Divisional Forest Officer,  Integrated               States Division, Devgad Baria in favour of Mr.               Hatimbhai  Badruddin is subject to  the  above               undertaking. Dated 1-2-49.                                 Sd. in Gujarathi." The Conservator of Forests, North Western Circle also issued a memorandum on January 18, 1949 stating:               "........               However, to safeguard the Government  interest               written  undertaking should be taken from  the               jahagirdars, Inamdars of person or persons.               538.               concerned  that he or they would abide by  the               decision  or orders passed by the Bombay  Gov-               ernment  in respect of such  private  forests,               when the question of rights over such  private               forests is finally settled." When the undertakings were furnished, passes were issued  to the  contractors.  In April 1949, however, the work  of  all the contractors was stopped and on July 8, 1949,  Government sent   a  communique  to  the  Collector  of  Panch   Mahals repudiating the Tharao of March 12, 1948.  In this letter it was stated as follows:               "Reference your memorandum No. ADM(P)  50-A11,               dated  24th  May, 1949,  Government  considers               that the order passed by the Ruler of the Sant               State  under  his No. 371, dated  12th  March,               1948  transferring  forest rights to  all  the               jagirdars of the jagir village, are mala  fide               and  that they should be  cancelled.   Before,               however, taking further action in the  matter,               please ascertain whether the possession of the               forests in question is with Government or  has               gone  to the Jagirdars.  If the possession  is               still  with Government please ask the  Officer               of  the Forest Department to retain  the  same               and to refuse to issue passes, etc. to private               contractors and purchasers.

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              By order of the Governor of Bombay.               Sd/-       ". It appears that this was not communicated to the contractors of the Thakores.  On June 29, 1951, the Government of Bombay passed  a resolution that the Maharana’s order would not  be given effect to.  Another resolution was passed on  February 6, 1953 as follows:               "On the eve of the merger of the Sant State in               the  State of Bombay, the Ruler of that  State               issued  Tharav  No. 371 on 12th  March,  1948,               under  which Jiwai, Patawat,  Inami,  Chakriat               and Dhannada Jagirdars and inamdars were given               full forest rights over the villages in  their               charge.  The Government               539               of  Bombay, after considering the  implication               of the Tharav, decided that the order was mala               fide  and cancelled it on 8th July, 1949  vide               Government  Letter,  Revenue  Department   No.               2103-M  49 dated the 8th July, 1949.   By  the               time these orders were issued, the tree growth               in  the Jagiri forests concerned  was  already               sold  by some of the Jagirdars and  the  trees               cut.   Further cutting of trees and export  of               trees  cut was however stopped by  the  Forest               Department after receipt of the orders of  8th               July,  1949.  On representation being made  to               Government,   however,  agreed  to  allow   to               release  the material felled from  the  forest               under   dispute,  pending  decision   on   the               settlement  of forest rights, subject  to  the               condition  that the contractor  furnished  two               sureties  solvent for the material removed  or               deposited  with the Divisional Forest  Officer               certain  amount  per wagon load  of  material.               The  owner of the material was also  asked  to               give a written undertaking that he would abide               by the ultimate decision of Government.                .............               5.    Government   is,  however,  pleased   to               examine  individual  cases  of  Jagirdars  and               inamdars  irrespective of the Tharav of  1948,               on   the  basis  of  the   Forest   Settlement               Officer’s Report and other considerations.               7.    The  question  of forest rights  in  the               following    villages    is    still     under               consideration  of  Government  and   necessary               orders  in that behalf will be issued  in  due               course:-               (1)   Nanirath. (2) Gothimada. (3) Rathada.                .............." Before  this the suits we are dealing with were filed.   The contention  of the plaintiffs was that the Merger  agreement of  March  1948  was not an Act of  State,  because  it  was preceded by surrender by the Ruler of sovereignty in respect of three subjects.  This contention was not accepted in  the High  Court and has not been raised here.  The next  conten- tion was that the Tharao or order of March 12, 1948 was a 540 legislative act and as all the old laws of the State were to continue  to  be in force except as modified by  the  Indian States  (Application of Laws) Order, 1948, the Tharao  could be  revoked by the appellant by Legislative  authority  only and not by an executive act.  The High Court did not  accept this  contention, because according to the High  Court,  the

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Tharao  was not a piece of legislation, but was a  -rant  by the  Ruler.   The  third contention  was  that  the  Central Government  through  Mr. V. P. Menon has undertaken  not  to question  any order or action taken before 1st April,  1948, and that this created a bar to the repudiation of the  order of  the Maharana dated March 12, 1948.  This contention  was not  accepted by the High Court.  The High Court  held  that the letter formed a part of an Agreement which could only be enforced by the High Contracting Parties, if at all, but not by any other person, and in any event, municipal courts  had no  authority  to  enforce the agreement.   The  High  Court relied  upon Art. 363 of the Constitution and the  decisions of this Court. The  High  Court, however, accepted the  contention  of  the plaintiffs, that it was open to the succeeding sovereign  to waive  or relinquish its right to repudiate the  actions  of the  previous Ruler and to acknowledge either  expressly  or impliedly  the  rights  conferred on  the  subjects  of  the previous  Ruler  and that this had been done in  this  case. They referred to the permission which had been given by  the officers of the Forest Department to the plaintiffs in  this suit  to  cut  and carry away the timber  and  regarded  the letter  of  Mr.  V.  P. Menon  as  evidence  of  waiver  and relinquishment.   They  held on the  authority  of  Virendra Singh  and  Others  v. The State  of  Uttar  Pradesh(1)  and Bholanath  J.  Thakar  v. State of Saurashtra  (2)  and  the judgment of the Bombay High Court in Bhoirajji v. Saurashtra State(3)  that the Government must, in these  circumstances, be held to have waived or relinquished its rights to enforce the Act of State against the plaintiffs. On behalf of the appellant, it is urged (a) that the Act  of State continued till the resolutions were passed and there (1) [1955] 1 S.C.R. 415.       (2) A.I.R. (1954) S.C. 680 (3)  61 Bom.  L.R. 20. 541 was no waiver or relinquishment in favour of the appellants, and  (b) that the action of the subordinate officers of  the Forest  Department  did  not bind Government  and  the  res- pondents  cannot take advantage of the letter of Mr.  V.  P. Menon.  On behalf of the respondents, in addition to meeting the  above arguments, it is contended that the Tharao was  a law and could only be revoked by another law.  It is further argued that after the Merger, s. 299(1) of the Government of India  Act, 1935 which read "No person shall be deprived  of his  property  in British India save by  authority  of  law" protected   the  respondents  and  this  protection   became absolute  on January 26, 1950, by reason of Art. 31  of  the Constitution.   As the resolutions in question  were  passed after the commencement of the Constitution, it is urged that they  cannot affect the rights of the respondents  who  came under the protection of Art. 31 of the Constitution.  It  is contended  that  in  any case, the Act of  State  could  not operate  against  the citizens of the State which  the  res- pondents became on the Merger or on the inauguration of  the Constitution.   It  is  also argued on behalf  of  the  res- pondents  on the authority of a case of the Permanent  Court of  International Justice and certain cases of  the  Supreme Court of the United States that the Act of State should  not interfere with rights in property held from a former Ruler. The  appellant  contends  in reply that  the  Act  of  State continued,  because  the  contractors,  and  jagirdars  were permitted  to  work the forests on their  furnishing  under- takings,  and it was only completed against them  in  April, 1949,  when they were asked to stop their work  even  though the  actual order of Government deciding whether  to  accept

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the  Tharao or not was communicated to them in 1953.  It  is argued  that  what  was  of real  consequence  was  not  the decision of the Government but the stoppage of the work.  It is  also argued that s. 299(1) did not protect  the  respon- dents  against  the Act of State and that as  there  was  no State  succession on January 26, 1950, the original  Act  of State  did not come to an end.  It is also pointed out  that this  Court has not accepted the rule of  International  Law referred  to  in Virendra Singh’s case(1)  and  has  instead acted on (1)  [1955] 1 S.C.R. 415. 542 the doctrine of Act of State as interpreted by the Courts in England.   I shall deal with these points in brief,  because most  of them have been decided against the  respondents  in the  High  Court  on the basis of earlier  rulings  of  this Court. To begin with, this Court has interpreted the integration of Indian States with the Dominion of India as an Act of  State and has applied the law relating to an Act of State as  laid down  by  the  Privy  Council in  a  long  series  of  cases beginning  with Secretary of State in Council for  India  v. Kamachee  Boye Saheba(1) and ending with Secretary of  State v. Sardar Rustam Khan and Other(2).  The cases on this point need  not be cited.  Reference may be made to  M/s.   Dalmia Dadri Cement Co. Ltd. v. Commissioner of Income-tax(3),  The State  of Saurashtra v. Menon Haji Ismali Haji(4),  jaganath Agarwala  v. State of Orissa(4) and State of  Saurashtra  v. Jamadar  Mohamed Abdulla and Others(5).  In these  cases  of this Court, it has been laid down that the essence of an Act of  State  is an arbitrary exercise of  sovereign  power  on principles which are paramount to the Municipal Law, against an  alien and the exercise of the power is neither  intended nor  purports  to be legally founded.  A  defence  that  the injury is by an Act of State does not seek justification for the  Act  by  reference  to  any  law,  but  questions   the jurisdiction  of  the court to decide upon the  legality  or justice  of  the action.  The Act of State comes to  an  end only  when the new sovereign recognises either expressly  or impliedly the rights of the aliens.  It does not come to  an end  by  any  action of subordinate  officers  who  have  no authority  to  bind the new  sovereign.   Till  recognition, either express or implied, is granted by the new  sovereign, the Act of State continues. If we apply these tests (rightly applied in the High Court), we  reach the result that the Government of Bombay  and  the Central  Government  could refuse to  recognise  the  rights created  on  the  eve of the Merger by  the  Tharao  of  the Maharana  and to say that it was not acceptable to them  and therefore not binding on them.  Such action may be (1)  (1859) 13 Moore P.C. 22. (3)  [1959] S.C.R. 729 (5)  [1962] 1 S.C.R. 205. (2) (1941) 68 I.A. 109. (4)  (1960] 1 S.C.R. 537. (6) [1962] 3 S.C.R. 970. 543 harsh or unfair; but the Municipal Courts cannot declare  it to  be so, because unless the rights are irrevocably  recog- nised  earlier the Municipal Courts have no jurisdiction  to pronounce  upon the legality or the justness of the  action. It  is for this reason that the respondents pleaded  in  the High Court that there was a waiver or relinquishment of  the Act  of  State in their favour.  Relinquishment  and  waiver were again relied upon by the respondents before us and they refer  to  two circumstances from which an  inference  about waiver or relinquishment can be raised.  The first is cl.  7 of the letter of Mr. V. P. Menon quoted above and the second

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is  the conduct of the officers of the Forest Department  in allowing  the  contractors  and the jagirdars  to  work  the forests in accordance with the Tharao of the Maharana.   Cl. 7  of a similar letter of guarantee was considered  by  this Court  in  Maharaj  Umeg Singh and Others v.  The  State  of Bombay and Others(1).  In that case also arguments were  the same  as  here.   It was then  contended  that  the  Ruler’s agreement with the Government ensured for the benefit of the subjects even if they were not parties to the agreement.  It was  then pointed out on behalf of the Government  that  the agreement,  if  any, could not be sought to be  enforced  by persons who were not parties to it.  This Court observed:               "We do not feel called upon to pronounce  upon               the validity or otherwise of these contentions               also   for   the  simple   reason   that   the               petitioners would be out of Court either  way.               If  they  were  deemed to be  parties  to  the               agreements of merger and letters of  guarantee               they  would  be  faced with  the  bar  to  the               maintainability of the petitions under Article               363  of the Constitution which lays down  that               neither the Supreme Court nor any other  Court               shall have jurisdiction in any dispute arising               out  of any provision of a treaty,  agreement,               covenant,  engagement, sanad or other  similar               instrument which was entered into or  executed               before the commencement of the Constitution by               any Ruler of an Indian State and to which  the               Government of               (1)   [1955] 2 S..C.R. 164. 544               the  Dominion of India...... was a party.   If               on the other hand they were deemed not to have               been parties to the same they would not be the               contracting parties and would certainly not be               able to enforce these obligations." It would, therefore, appear that the present respondents who were  not parties to the Merger agreement or to  the  letter written by Mr. Menon which was made expressly a part of  the Agreement  cannot  take  advantage of cl. 7.  If  they  were parties, Art. 363 would bar such a plea. It  is next contended that the Act of State had come  to  an end  after the Government of India Act, 1935 was applied  to the State and the State became a part of the territories  of the Government of India.  This argument was raised to  claim the  benefit  of s. 299 (1) of the Government of  India  Act 1935.     The  interference  with  the  rights  in   forests conferred by   the  Tharao  and  the  agreements  with   the contractors    based  on  the Tharao took, place  in  April, 1949.  It was contended that on June 10, 1948, the  subjects of Sant State became Indian citizens and they were protected by s. 299(1).  The Officers of the Forest Department did not unconditionally  allow the forests to be worked.  They  made it clear to the contractors and the jagirdars that what they were  doing was not final and that Government was  going  to decide about the Tharao and the contracts later.  No  doubt, the  forests were allowed to be worked, but  an  undertaking was obtained from each contractor and jagirdar.  This showed that  the officers of the Forest Department did not  attempt to bind the Government, even if they could.  It is true that the  -order of Government to stop work was not  communicated to the contractors and the jagirdars but the working of  the forests was as a matter of fact stooped much earlier and the learned  Attorney-General is right in pointing out  that  it was  all  that mattered.  This action of  the  officers  was

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later  approved by Government when it decided that it  would not  allow  any  rights  to flow from  the  Tharao  and  the contracts.  In other words, while Government was considering the   matter,   the  officers  of  the   Forest   Department tentatively  allowed  the  forests to be worked  but  in  no manner to bring the Act of State to art end.  The Act 545 of State could only come to an end if Government  recognised the rights flowing from the Tharao.  That, Government  never did.   There  was thus no recognition of the Tharao  or  the rights  flowing from it at any time.  It was pointed out  by this  Court in Aggarwala’s case(1) that Government may  take time to consider and delay does not militate against the Act of State.  In that case also the decision of Government  was taken after the coming into force of the Constitution.  This Court pointed out, agreeing with Vaje Singhji jorawar  Singh v.  Secretary  of  State for  India(2)  that  enquiries  may continue  for some time without any inference of  waiver  or relinquishment.  No doubt, in Bholanath Thaker’s case(3) and in  Virendra  Singh’s case(4) waiver or  relinquishment  was inferred from the conduct of Government.  Such an  inference may  legitimately be raised where Government,  after  having accepted   the  rights,  attempts  to  go  back  upon   such acceptance.   There  must, however, be a  clear  indication, either expressly or by implication, that Government has,  in fact,  accepted  the  rights.   In  the  present  case,  the subordinate  officers of the Forest Department  allowed  the forests to be worked, making it quite clear that  Government was  considering the matter and took undertakings  from  the respondents  that  they  would  abide  by  the  decision  of Government.  Government passed an order declining to  accept the Tharao.  The order so passed was not communicated to the respondents  but  later it was reiterated  as  a  resolution which was communicated. To avoid this result, there are two arguments upon which the respondents rely and they are the main contentions in  these appeals.   The respondents seek support for the judgment  by challenging  the  decision  on some of  the  points  decided against them.  The first is that the Tharao was a law  which could only be rescinded by another law.  In this connection, the  respondents  rely upon the observations  made  by  this Court in Madhaorao Phalke v. The State of Madhya  Bharat(5). These observations were based upon (1)  [1962] 1 S.C.R. 205. (2) (1924) L. R. 51 I. A. 357. (3)  A I.R. (1954) S.C. 680.  (4)  [1955] 1 S.C.R. 415. (5) [1961] 1 S.C.R. 957. 964. 134-159 SC-35. 546 the  earlier  case  in Ameer-un-nissa Begum  and  Others  v. Mehboob Begum and Others(1).  In these cases, it was pointed out that the distinction between legislative, executive  and judicial  acts  of  an absolute Ruler (such  as  the  Indian Rulers  were)  was  apt  to disappear  when  the  source  of authority was the sovereign.  These observations are  sought to  be  applied here.  In the past also  these  observations were invoked on occasion.  In so far as the subjects of  the Ruler were concerned, they were bound to obey not only  laws but any orders of the Ruler, whether executive or  judicial. For  them  they did not exist any  difference  because  each emanation  of  the  will of  the  sovereign  required  equal obedience  from them.  But it does not mean that  the  Ruler acted  legislatively  all the time and never  judicially  or executively.  If this was the meaning of the observations of this Court, then in Phalke’s case(2) it would not have  been necessary to insist that in determining whether there was  a

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law  which  bound the succeeding sovereign,  the  character. content   and   purpose  of  the  declared  will   must   be independently considered.  In Ameer-un-nissa’s case,(3) this Court  was concerned.  With a Firman of the Nizam  and  that was  one of the accepted modes of making laws  in  Hyderabad State.   In Phake’s case(2), this Court was  concerned  with Kalambandis which were held by this Court to be laws binding upon  the subsequent Government unless repealed or  replaced by  other  law.   The Kalambandis were  so  regarded  partly because the Maharana had himself laid down that  Kalambandis issued by him were to be regarded as law, and partly because the  Kalambandis  created  a tenure which  carried  with  it pensions.   The  pensions  were grants  but  the  manner  of enjoyment  of  the pensions was determined by the  rules  of tenure  provided  in  the  Kalambandis  also  bearing   upon succession  and devolution.  These cases were  distinguished in more recent cases when the observations were sought to be extended  to others which were clearly not  legislative  and reference  may be made to Maharaj shree Umaid Mills Ltd.  v. Union  of India and Others(3) and The Bengal  Nagpur  Cotton Ltd. v. The Board of Revenue, Madhya Pradesh and  Others(4). It was pointed (1) A.T.R. 1955 S.C. 352.      (2) [1961] 1 S.C.R. 957, 964. (3) A.T.R. 1963 S.C. 953.    (4) A.I.R. 1964 S.C. 888. 547 out  in these two cases that the observations  in  Ameer-un- nissa’s  case(1)  Phalke’s  case(2) could  not  be  read  as indicating that everything that the Maharaja said or ordered was a law.  In the latter case, this Court pointed out  that a proper law would be one which was made in accordance  with the  traditional mode of making laws in the territory or  in accordance  with some procedure which was expressly  devised for  tile  occasion.   It was pointed out that  law  is  the result  of  a  legislative process and the  result  must  be intended  to  bind  as a rule of conduct; it  must  not  for example be a contract or a grant or a gift etc. Viewed from this angle, it is quite obvious that the  Tharao was  not  a  law.   It was a grant  made  to  the  jagirdars mentioned  in the Tharao.  It is contended that it  is  made applicable  to persons belonging to five  different  tenures and  that  the ’management’ of the forests was  to  be  done according to the policy and administration of the State.  No doubt, the Tharao is applicable to a large number of persons enjoying  different  tenures but it is stated  therein  that orders  were to be issued individually to all of them.   The Tharao  was  issued only 8 days before the  Merger.   It  is surprising  that the Maharaja thought of the  complaints  of the  grantees on the eve of the Merger.  The fact  that  the Maharana’s  Tharao was passed to benefit a large  number  of persons  en bloc does not make it any the more a law  if  it did  not  possess  any  of  the  indicate  of  a  law.   The respondents would not admit that if it had been addressed to individuals, it would have changed its character from a  law to a grant.  This fact makes no difference to its character. content  and purpose.  Further, the original grant of  which the  Tharao became a part was also a grant.  One such  grant has  been quoted above.  The word "Vahivat" does  show  that the  grant was for management but in this context, it  means more than management.  It was customary to use this word  in conferring  rights which were liable to be  resumed.   These grants did give rights to the grantees but did not lay  down any  rule  of conduct.  It may be pointed out that  in  Umeg Singh’s case(3) it was contended that cl. 5 of the letter of (1) A.I.R. 1955 S.C. 352.       (2) [1961]  1 S.C.R. 957, (3) [1955] 2 S.C.R.164.

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548 Mr.  Menon prevented legislation and it was then  held  that the grants were not legislative measures of the Maharaja and did  not bar the making of laws to set the grant at  naught. In that case also there was a Tharao in dispute. The  Tharao cannot,  therefore,  be treated as a law at all.   It  is  a grant and as a grant it was open to the new sovereign not to recognise it. It  was contended that in any event, after the  commencement of  the Government of India Act, 1935, the  respondents  had the protection of s. 299(1).  This point was raised but  was left  open by the majority in Jamadar’s case(1) to which  we have  already  referred.   On  that  occasion,  Sarkar   and Mudholkar JJ. in a separate judgment held that s. 299(1) did not  afford any protection.  The learned Judges pointed  out that  s.  299(1) did not add to the rights  of  persons  but protected  such rights as existed.  If on the Merger of  the territories   of  the  Indian  Rulers  with  those  of   the Government  of India. there was Act of State and if as  held by  this Court in the cases to which reference  has  alreadY been  made it was open to the Government of India to  decide whether  or not to recognise certain rights, the  Government of India could do so.  In that event, s. 299(1) did not come into  play  because it could only come into play  after  the rights were recognised.  The Act of State continued  because Government was taking time to consider whether to accept the Tharao  or  not and while the decision  was  being  reached, there   was  a  second  change  inasmuch  as   the   present Constitution  was passed.  It is contended that there was  a lapse  of  the  original Act of State  because  of  a  State succession  on January 26, 1950, and as this was before  the Resolutions   of  1951  and  1953,  the   respondents   were protected. The  first question to consider is whether there took  place in  1950 a State succession.  State succession  takes  place either in law or in fact.  It takes place in law when  there is  a juridical substitution of one State for  another.   It take  place in-fact when there is (a) annexation (2) or  (b) cession(2) (1)  [1962] 3 S.C.R. 970. (2)  e.g. Algiers by France (1831) or South African Republic by Great Britain (1901). (3)  e.g. the Ionian Islands by Britain to Greece (1864)  or territory  to Poland by Germany. 549 or (c) fusion of one State with another into a federal Union (2)  or  (e) partition ration of secession(3).  It  will  be seen that on the 26th January, 1950, there was no succession in  fact  because  none  of these  events  took  place.   As Oppenheim defined "succession"---               "A succession of International Persons  occurs               when  one or more International  Persons  take               the  place of another International Person  in               consequence of certain changes in the latter’s               position International Law, 5th edn. p. 151." In this sense, though the people of India gave themselves  a Constitution, there was no State succession in so far as the people  of  Sant State were concerned.  For them  the  State succession  was  over sometime before.  No doubt,  when  the Dominion  of India became a sovereign  Democratic  Republic, there  was a breaking away from the British Crown, but  that was  a  State succession in a different field.  We  are  not concerned  with  the  secession of India  from  the  British Crown,  but  with State succession between  Sant  State  and India, and there was no second succession in 1950.  Whatever

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had  happened had already happened in 1948 when  Sant  State merged  with the Dominion of India.  The Act of State  which began in 1948 could continue uninterrupted even beyond  1950 and  it  did  not lapse or get replaced by  another  Act  of State.   The Constitution no doubt guaranteed the rights  of citizens  after 1950 but these rights granted by  the  Ruler were  fort recognised even before 1950 and the  Constitution gave  its  support  to those rights  which  were  extant  on January 26, 1950. It only remains to consider the argument of Mr.  Purushotham based  on  the view of Chief Justice John Marshall,  of  the Supreme  Court  of the United States expressed  in  U.S.  v. Percheman(3) followed by Cardozo J. in 1937 (1)  e.g.   Fusion  of  Serbia  with  croat  etc.  to   form Yugoslavia. (2) e.g. Hawaii in U.S.A.      (3) e.g. India and Pakistan. (4) e.g. U.S.A. from Britain.   (5) 32 U.S. 51 at 86, 87. 550 in  Shapleigh  v.   Mier(1).  It was there  laid  down  that private ownership is not disturbed by changes in sovereignty and that according to the modern usage of nations a  cession of territory is not understood to be cession of the property of the  inhabitants. These two cases were referred to in the judgment of Bose J. in Virendra Singh’s case (2) who pointed out  that these principles were also reflected in the  Sixth Advisory  Opinion  of September 10, 1923  of  the  Permanent Court of International Justice.  Mr. Purushotham cited other cases  where  the  Supreme Court of the  United  States  had considered   obligations  which  old  Spanish  and   Maxican treaties  had created.  It was argued that  this  represents the modern and progressive view and we were asked to  revise the entire law of Act of State as understood in India during the past 100 years and particularly the last dozen years. The principle on which this Court has acted in the past  few years has been amply indicated earlier in this judgment.  It may be summarized in the words of Fletcher Moulton, L. J. in Salaman v. Secretary of State for India(3):               "An Act of State is essentially an exercise of               sovereign   power,   and   hence   cannot   be               challenged,  controlled or interfered with  by               municipal courts.  Its sanction is not that of               law,   but  that  of  sovereign  power,   and,               whatever  it be, municipal courts must  accept               it,  as it is without question.  But  it  may,               and often must, be part of their duty to  take               cognizance of it.  For instance, if an act  is               relied  on  as being an act of State,  and  as               thus  affording an answer to claims made by  a               subject, the courts must decide whether it was               in  truth  an act of State, and what  was  its               nature and extent". The  Courts  in  England  have also  acted  on  the  further principle  which may be shortly stated in the words of  Lord McNair(4): (1) 299 U.S. 468 at 470.         (2) [1955] 1 S.C.R. 415. (3)  (1906] 1 K. B. 613. (4)  International  Law Opinions (1956) Vol 1. P. 1129;  See also   O’Connel  Y. B. (1950) P. 93. 551               "The  term  ’Act of State’ is used,  not  only               narrowly  to  describe the  defence  explained               above, but also, perhaps somewhat loosely,  to               denote   a  rule  which  is  wider  and   more               fundamental  namely, that ’those acts  of  the               Crown which are done under the prerogative  in

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             the  sphere  of  foreign  affairs’  (sometimes               called ’Acts of State’ or ’Matters of State’);               for instance, the making of peace and war, the               annexation  or abandonment of  territory,  the               recognition   of  a  new  State  or  the   new               Government of an old State, etc., cannot  form               the  basis  of an action brought  against  the               Crown,  or  its  agents or  servants,  by  any               person  British  or alien, or by  any  foreign               State,  in British Municipal Tribunals.   Such               acts are not justiciable in British Courts, at               the  suit  either of British  subjects  or  of               aliens; they may form the subject of political               action  in Parliament or, when -the  interests               of  foreign  States  or  their  nationals  are               involved,  of  diplomatic protest  or  of  any               international  judicial  process that  may  be               available". We are not concerned with the obligations created by  treaty which  according to the opinions of some writers  ’run  with the land’ and bind the territory.  Other writers, as pointed out  by Lord McNair in his Law of Treaties by Keith  in  his Theory  of State Succession and Crandall in Treaties,  Their Making  and Enforcement. hold that on cession, the  treaties are  abrogated automatically.  Such a view was taken by  the United Kingdom and United States when Algiers was annexed by France  and by the former when South Africa was  annexed  by Great  Britain  and  by the United  States  when  Korea  was annexed by Japan in 1910. (See Mervyn jones B. Y. B.  (1947) P.  360;  Dr. C. W. Jenks B. Y. B. (1952 P.  105).   On  the other hand, the treaties of the annexing or cessionary State are  held  to  apply  to the  new  territories.   These  are treaties  with  other  States which is not  the  case  here. Where is the treaty here?  The rights conferred by the Ruler were not the result of a treaty.  Nor 552 can  the  Merger agreement be exalted to the position  of  a treaty.  There is no treaty involved here.  Even if it  were possible  to hold that there was a treaty between the  Ruler and  the  Central  Government,  there is  no  power  in  the Municipal Courts in India to pronounce upon the Agreement as the subject is outside their jurisdiction by reason of  Art. 363.   This distinguishes the jurisdiction and power of  the Supreme Court of the United States in which consideration of treaties  is  included.  The bar of  our  Constitution  also precludes the consideration whether these agreements can  be to be of the nature of treaties. As  regards the principles of International Law, it  may  be pointed   out  that  after  the  Report  of  the   Transvaal Concessions Commission and Professor Keith’s theories in his book, the attention of the world communities has indeed been drawn  to  the  preservation  of  economic  concessions  and acquired  rights by the annexing or cessionary State.   When the  Indian  Islands were ceded to Greece the  Law  Officers (Sir Robert Phillimore was one of them) advised:               "Both   according   to   the   principles   of               International  Law  and the  practice  of  all               civilised States, ceded territories pass,  cum               onere to the new sovereign.’               (Opinion of 15th August, 1863, F. 0. 83/2287.)               McNair International Opinions, Vol. 1 p. 156. Similar  advice was given on the occasion of  annexation  of Peruvian territory by Chile (1884), of Madagascar by  France (1896), cession of Cuba and the Philipines by Spain  (1898). McNair ibid pp. 157 et seq.  Again at the annexation of  the

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Boer  Republics  between 1900 and 1909 what  should  be  the attitude of Britain led to domestic controversy.  The  legal advisor to the High Commissioner advised that responsibility arising  from  obligations  incurred by  the  South  African Republic  and Orange Free State could be repudiated but  the Law Officers in England reported that a Government  annexing territory  annexes it subject, speaking generally,  to  such legal  obligations as have been incurred by  the  previously existing Government. The obligations included  concessionary contracts but the Law Officers added a 553 rider  that  "the duty to observe such contracts  cannot  be enforced  in  a  municipal court; it  rests  merely  on  the recognition  of International Law of what is equitable  upon the  acquisition  of property of the conquered  State"  (see opinion of 30th November, 1900, F.O. quoted by B. Y. B. 1950 at p. 105). The  Transvaal  Concessions Commission made  its  report  in April 1901.  The report said inter alia:               "After  annexation,  it  has  been  said,  the               people  change  their  allegiance,  but  their               relations  to each other and their  rights  of               property  remain  undisturbed;  and   property               includes   rights  which  lie   in   contract.               Concessions  of the nature of those which  are               the  subject  of enquiry present  examples  of               mixed   public  and  private  rights  :   they               probably  continue to exist  after  annexation               until abrogated by the annexing State, and  as               a  matter of practice in modern  times,  where               treaties   have  been  made  on   cession   of               territory,  have  often  been  maintained   by               agreement." The  Commission, however said that no rule of  International Law  compelled this but added that the best  modern  opinion favoured   that  such  rights  should  be  respected.    The distinction between what is a rule of law and what is a rule of  ethics  was criticised : see Westlake in (1901)  17  Law Quarterly Review p. 395.  However, Prof.  Keith gave support to the view.  The report of the Commission was  considerably influenced by the opinion in Cook v. Sprigg(1) International experts, however, in drafting the terms of settlement of the first Balkan War accepted a new formula in 1920 by which the cessionary  State was treated: as subrogated in  all  rights and changes.  These opinions were put to test in some  cases before  the  Permanent  Court of  International  Justice  in connection  with the Jaffa Concessions and the case  of  the German Settlers Case.  In the former, the Court decided, for technical  reasons,  that it had no jurisdiction  but  added that "if Protocol XII left intact the general principles  of subrogation,"  the administration of Palestine was bound  to recognise the Jaffa, (1)  [1899] A.C. 572. 554 Concessions  "in  consequence of the general  principles  of International Law." In the case of Settlers of German origin in territory ceded by Germany to Poland and German  interest in Upper Silesia case (P.C.I.J. series B No. 6 and series  A No.  7)  the doctrine of acquired rights  was  accepted,  in respect  of private rights.  The term "acquired rights"  has not received a consistent meaning in this connection.  It is not  the  notion of ius quaesitum which was  the  result  of juristic activity following upon the social contract theory. In  International  Law, it has different meanings.   At  one extreme  is  the  view  that  it must  be  "a  grant  to  an

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individual of rights under municipal law which touch  public interest"  and at the other end "every economic  concession" is held included.  Of course even International Law does not recognise,a   universal  succession.   The  term    economic concessions" must involve a contract between the State or  a public authority on the one hand and a concessionaire on the other and must also involve an investment of capital by  the latter  for erection of public works or exploitation in  the public  sector.   Such  cases  are  the  Mavromma  is  case, Lighthouses  case,  Lighthouses  in  Crete  and  Samos  case (P.C.I.J.  Series  A No. 5 and Series A B No. 62 and  71  ). Cases  of  mere  private rights  without  any  corresponding benefit  to the public are not regarded as  concessions  but there are two cases in which it has been ruled that  private rights  must  be  respected.  They are the  case  of  Poland mentioned above.  Most of the cases deal with Concessions in which there are reciprocal advantages. All  this recognition is still in the diplomatic field.   It has never gone beyond political consideration except in  the United States.  The cases of the United States are mostly to be  found  in 2-12 Peters and the leading case is U.  S.  v. Percheman  (1).  Occasionally the question of  concessionary rights  has been considered in the Courts in England  :  but -of  that latter.  In U. S. v. Percheman(1),  Chief  Justice John Marshall observed:               "It  may not be unworthy of remark that it  is               very  unusual, even in cases of  conquest  for               the               (1)   7. Pet. 61. 555               conqueror  to  do more than  to  displace  the               sovereign   and  assume  dominion   over   the               country.   The modem 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." These  words of Chief Justice Marshall have been  quoted  in legal  opinions and have influenced  international  opinion. The question has been raised that we must accent this as the exposition  of  the law to be applied  by  municipal  courts

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here. The  doctrine  in  the  United  States  is  not   unlimited. Limitations were pointed out by Chief Justice John  Marshall himself in the case of Foster v. Nielson(1).  That case (1)  [1829] 2 Pet. 253. 556 involved the effect upon private land titles of a phrase  in an  Article of a treaty with Spain.  That phrase was  "shall be ratified and confirmed to those in possession".  It  was, as  the  Chief Justice said, in the "language  of  contract" and.  it required legislative implementation  before  titles could be claimed.  This has led to a differentiation between self  executing  treaties and  non-self-executing  treaties. Says Chief Justice John Marshall:-               "A treaty is in its nature a contract  between               two  nations, not a Legislative Act.  It  does               not generally effect, of itself, the object to               be  accomplished,  especially so  far  as  its               operation is infra-territorial; but is carried               into execution by the sovereign powers of  the               respective parties to the instrument.               In the United States a different principle  is               established.   Our  Constitution  declares  ’a               treaty  to  be the law of the  land.   It  is,               consequently,  to  be regarded  in  courts  of               justice   as   equivalent   to   an   Act   of               Legislature,  whenever it operates  of  itself               without the aid of any legislative  provision.               But when the terms of the stipulation import a               contractwhen either of the parties engages  to               perform a particular act-the treaty  addresses               itself  to  the political,  not  the  Judicial               Department;  and the Legislature must  execute               the  contract before it can become a rule  for               the Court." In  India, the position is different.  Article  253  enables legislation to be made to implement international  treaties. This means that the law would bring the treaty in the  field of  municipal  law.  The matter was considered  in  one  cam Birma v. The State(1), where the High Court declared:               "Treaties  which are a part  of  international               law  do not form part of the law of  the  land               unless  expressly made so by  the  legislative               authority". This accords with what has been said by me but the judgment seems to suggest that treaties which do not affect private (1)  A.I.R. [1951] Rai. 127. 557 rights also require legislative implementation.  This is not quite  accurate,  because  it  is  not  necessary  that  all treaties must be made a part of municipal law.  I agree with Alexander  in "International Law in India" in  International and  Comparative  Law  Quarterly (1952) p. 289  at  p.  295. Preuss [Michigan Law Review (1953) p. 1123 n. 151 calls it a rare  example  of a treaty which was  not  enforced  without legislative sanction.  The only other example he gives is Re Arrow River and Tributaries Slide and Boom Co. Ltd. (1932) 2 B.L.R. 250. see B.Y.B. (1953) 30, pp. 202, 203. The precedent of the United States cannot be useful  because it  has been held by the Supreme Court of the United  States that,  although  the Courts have no power  to  question  the validity of the Act of State, they can consider its  effect. See U. S. v. Percheman(1) at P. 86 and that the  enunciation of treaties must be accepted by Courts, Clark v. Allen  (2). Our   practice  and  Constitution  shows  that   there   are

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limitations upon the powers of Courts in matters of treaties and  Courts cannot step in where only political  departments can  act.  The power of the Courts is further  limited  when the  right is claimed against the political exercise of  the power of the State. Again,  the right claimed here is not even  a  concessionary right  such as he has received the support of  international writers.  It is more of the nature of a gift by the ruler at the expense of the State.  It lacks bona fides which is  one of the things to look for.  There is no treaty involved  and whatever guarantee there is, the Constitution precludes  the municipal   courts   from  considering.    Politically   and ethically  there might have been some reason to  accept  and respect  such  concessions but neither is a reason  for  the municipal   courts  to  intervene.   The  position  of   the municipal courts according to English Jurisriudence has been noticed  in  earlier  cases.   To  them  may  be  added  the following considerations.  In Amodu Tijani v.     Secretary, Southern Nigeria (3) it was said:               "a  mere  change in sovereignty is not  to  be               presumed   as  meant  to  disturb  rights   of               private owners, and               (1) 7. Pet.  61             (2) 331 U.S. 503.               (3)   [1921] 2, A.C. 399. 558               the general terms of a cession are prima facie               to be construed accordingly." (p. 407).               Again, in West Rand Central Gold Mining Co. v.               Regem(1), it was said:               "It must not be forgotten that the obligations               of  conquering states with regard  to  private               property of private individuals,  particularly               land  as to which the title had  already  been               perfected  before the conquest  or  annexation               are altogether different from the  obligations               which  arise in respect of personal rights  by               contracts." The observations in Amodu Tijani’s case(2) were cited before the Privy Council in Sardar Rustam Khan’s case(3).  But Lord Atkin  after  referring  to all  cases  from  Kamachee  Boye Saheba(4), referred to the observations of Lord Halsbury  in Cook v. Sprigg(5).               "It is well-established principle of law  that               the transactions of independent States between               each  other  are governed by other  laws  than               those  which municipal courts administer.   It               is  no  answer  to say that  by  the  ordinary               principles   of  international   law   private               property  is respected by the sovereign  which               accepts the cession and assume the duties  and               legal obligations of the former sovereign with               respect  of such private property  within  the               ceded  territory.   All that can  be  properly               meant   by  such  a  proposition,   is   that,               according  to  the well  understood  rules  of               international law, a change of sovereignty  by               cession ought not to affect private  property,               but  no  municipal tribunal has  authority  to               enforce such an obligation". Lord Atkin referred in his judgment to Secretary of State v. Bai Raibai(6) and Vajje Singh’s case(7 ) as laying the (1) (1905) 2 K.B. 391.(2) (1921) 2. A.C. 399. (3) (1941) 68 I. A. 109.(4) (1859.) 13 Moore P.C. 22 (5) 1899 A.C. 572.  (6) (1915) L. R. 42 I.A. 229. (7) (1924)     L. R. 51 I.A. 357.

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559 limits of the jurisdiction of municipal courts.  These cases have been applied in several decisions by this Court and the view  of the Supreme Court of the United States or the  view taken in International Law has not been accepted.  It is not that  the  Courts in England have not been  pressed  by  the rules  of  International  Law as  a  science.   As  Westlake pointed  out  in  the  Nature and  ]Extension  of  Title  by Conquest (op. cit.):               "The authorities on the law of England  appear               to   be  prepared  to  pay  that  homage   ;to               international  law.  We may refer to what  was               said by Vice-Chancellor Lord Cranworth in King               of  the Two Sicilies v. Willcox, I Sim.   N.S.               327-9,  and by Vice-Chancellor Wood in  United               States of America v. Prioleau, 2 Ham. 563; and               to the generality of the proposition laid down               by  Vice Chancellor James in United States  of               America v. Mcrae, L.R.8. Eq. 75.  ’I apprehend               it,’   he  said,  ’to  be  the  clear   public               universal  law  that any government  which  de               facto   succeeds  to  any  other   government,               whether by revolution or restoration, conquest               or  reconquest,  succeeds to  all  the  public               property,  to  everything  in  the  nature  of               public (property, and to all rights in respect               of  the  public  property,  of  the  displaced               power, whatever may be the nature or origin of               the title of such displaced powers". But  the rule that the Act of State can be questioned  in  a Municipal Court has been adopted and it has been  considered that  it  is a matter for the political departments  of  the State.  To quote from Cook v. Sprigg(1).               ".... if there is either an express or a well-               understood   bargain,   between   the   ceding               potentate  and  the Government  to  which  the               cession  is made, that private property  shall               be respected, that is only a bargain which can               be enforced by sovereign               (1)   [1899] A.C. 572. 560               against  sovereign in the ordinary  course  of               diplomatic pressure." I do not, therefore, accept the contention that a change  of opinion  is  necessary.   Even Bose J., did  not  decide  in Virendra Singh’s case(1), on the basis of international  law or  the opinion of the Supreme Court of the  United  States. In   my  opinion,  these  are  matters  for  the   political department of the State.  However, desirable it may be  that solemn guarantees should be respected, we cannot impose  our will upon the State, because it is outside our jurisdiction. For these reasons, I-would accept the appeals and would  set aside  the  judgment under appeal and  restore  the  decrees dismissing the suits with costs throughout. SHAH J.-The Ruler of Sant State had made grants of  villages to jagirdars but without right to trees.  On March 12, 1948, the  Ruler issued an order reciting that the holders of  the villages  were not given "rights of the forests"  and  after considering  the complaints of certain jagirdars  they  were given  full  rights and authority over the  forests  in  the villages  under their vahivat.  The jagirdars were  directed to   manage  "the  forests  according  to  the  policy   and administration  of  the State".  The  respondents  claim  in these appeals that the rights of the grantees to the forests were  not  liable to be cancelled by the Dominion  of  India

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after  the merger of the State of Sant in June 1948, and  by executive action the Government of Bombay was not  competent to obstruct the exercise of those rights. Pursuant to the agreement dated March 19, 1948 as from  June 1,  1948,  the  State of Sant merged with  the  Dominion  of India.    The   sovereignty  of  the   Ruler   was   thereby ,extinguished  and  the subjects of the  Sant  State  became citizens  of the Dominion of India.  Accession of one  State to another is an act of State and the subjects of the former State  may,  as held in a large number of decisions  of  the Judicial  Committee and of this Court, claim  protection  of only  such  rights  as  the  new  sovereign  recognises   as enforceable  ’by  the subjects of the former  State  in  his municipal courts. (1)  [1955] 1 S.C.R. 415. 561 In  The Secretary of State in Council of India  v.  Kamachee Boye  Saheba(1) the jurisdiction of the courts in  India  to -adjudicate  upon  the validity of the seizure by  the  East India  Company  of the territory of Rajah of Tanjore  as  an escheat,  on  the  ground that the dignity of  the  Raj  was extinct  for want of a male heir, and that the  property  of the late Rajah lapsed to the British Government, fell to  be determined.  The Judicial Committee held that as the seizure was  made by the British Government, acting as  a  sovereign power, through its delegate the East India Company it was an act  of  State, to, inquire into the propriety  of  which  a Municipal   Court  had  no  Jurisdiction.   Lord   Kingsdown observed at p. 529:               "The   transactions  of   independent   States               between each other are governed by other  laws               than those which Municipal Courts  administer:               Such Courts have neither the means of deciding               what is right, nor the power of enforcing  any               decision which they may make."               In  Vajesingji joravarsingji v.  Secretary  of               State for India  Council(1) the Board observed               (at p. 360):               "......  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 recognized ruler.  In               all  cases  the  result  is  the  same.    Any               inhabitant  of the territory can make good  in               the  municipal courts established by  the  new               sovereign  only such rights as that  sovereign               has,  through his officers, recognised.   Such               rights   as,   he  had  under  the   rule   of               predecessors  avail  him nothing.   Nay  more,               even   if  in  a  treaty  of  cession  it   is               stipulated  that  certain  inhabitants  should               enjoy  certain  rights, that does not  give  a               title to those               (1) 7 Moode’s I.A. 476. (2) L.R. 51 I.A. 357.               184-159 s.c.- 476. 562               inhabitants  to enforce these stipulations  in               the  municipal courts.  The right  to  enforce               remains   only  with  the   high   contracting               parties." In Secretary of State v. Sardar Rustam Khan and Others(1) in considering  whether  the  rights of a  grantee  of  certain

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proprietary  rights  in lands from the then Khan  of  Kalat, ceased  to  be enforceable since the agreement  between  the Khan  and the Agent to the Governor-General  in  Baluchistan under which the Khan had granted to the British Government a perpetual lease of a part of the Kalat territory, at a  quit rent,  and had ceded in perpetuity with full  and  exclusive revenue, civil and criminal jurisdiction and all other forms of administration, it was observed by Lord Atkin  delivering the judgment of the Board that :               "... in this case the Government of India  bad               the  right to recognise or not  recognise  the               existing  titles to land.  In the case of  the               lands  in suit they decided not  to  recognize               them, and it follows that the plaintiffs  have               no  recourse  against the  Government  in  the               Municipal Courts." The  rule that cession of territory by one State to  another is an act of State and the subjects of the former State  may enforce only those rights which the new sovereign recognises has been accepted by this Court in M/s.  Dalmia Dadri Cement Co.  Ltd.  v. The Commissioner of  Income-tax(2);  jagannath Agarwala  v.  State of Orissa (3); Promod  Chandra  Deb  and Others v. The State of Orissa and Others(4) and The State of Saurashtra v. Jamadar Mohamad Abdulla and others(5), and may be regarded as well settled. Mr.   Purshottam  on  behalf  of  the  respondents   however contended  that this rule was a relic of  the  imperialistic and  expansionist philosophy of the  British  Jurisprudence, which (1) L. R. 68 I.A. 109.         (2) [1959] S.C.R. 729. (3) [1962] 1 S.C.R. 205.  (4) [1962] Suppl. 1 S.C.R.405. (5) [1962]     3 S.C.R. 970. 563 is  inconsistent  with our Constitutional  set-up.   Counsel submits   that  in  jurisdictions  where  truly   democratic institutions  exist  the  rule laid  down  by  the  Judicial Committee  has  not  been accepted.  The  rule  is,  counsel submits,   inconsistent   with  the  true  spirit   of   our Constitution, which seeks to eschew all arbitrary authority, and  establishes  the  rule  of  law  by  subjecting   every executive  action to the scrutiny of the courts and to  test it  in the light of fundamental rights.  Counsel  says  that the true rule should be the one which has been recognized by the Supreme Court of the United States that of the accession of  a  State  to another, private  rights  of  the  citizens enforceable  against their sovereign are not  affected,  and may  be  enforced in the Courts of the  new  sovereign.   In support  of  this argument Mr. Purshottam  relied  upon  the observations made by Marshall, C.  J.,  in United States  v. Percheman(1):               "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  consider   itself   as               attending a wrong to individuals, condemned by               the  practice  of the whole  civilised  world.

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             The  cession of a territory by its  name  from               one   sovereign  to  another,  conveying   the               compound  idea  of surrendering, at  the  same               time  the  lands and the  people  who  inhabit               them, would be necessarily understood to  pass               the  sovereignty only, and to  interfere  with               private property. " But  the  rights and their enforceability in  the  Municipal Courts  of  a  State  must  depend  upon  the  will  of  the sovereign.   The  sovereign  is the  fountain  head  of  all rights, all laws and (1)  (1833] 32 U.S. 51, at 86, 87. 564 all justice within the State and only those rights which are recognised  by the sovereign are enforceable in his  Courts, The Municipal Courts which derive their authority from their sovereign and administer his laws cannot enforce the  rights Which  the  former sovereign whose territory has  merged  or been  seized  by the new sovereign recognised  but  the  new sovereign has not, for the right to property of the  citizen is only that right which the sovereign recognises. It  may also be observed that the constitutional  provisions in the United States are somewhat different.  Under the Con- stitution of the United States each treaty becomes a part of the law of the land, the provisions thereof are  justiciable and the covenants enforceable by the Courts.  Recognition of the  rights of the citizens of the acceding State being  the prerogative  of  the sovereign, if rights be  recognized  by treaty  which by the special rules prevailing in the  United States  become  part of the law of the land, they  would  be enforceable by the Municipal Courts, Under the rule  adopted by  this Court, a treaty is a contract between two  nations, it  creates rights and obligations between  the  contracting States. but there is no judicial tribunal which is competent to enforce those rights and obligations.  The treaties  have not  the  force  of law and do not give rise  to  rights  or obligations enforceable by the Municipal Courts as  observed by Hyde in his ’International Law" vol. 1 p. 433:               "Acknowledgement  of  the  principle  that   a               change  of  sovereignty - does not  in  itself               serve  to  impair rights of  private  property               validly  acquired  in  areas  subjected  to  a               change,   does  not,  of  course.  touch   the               question whether the new sovereign is  obliged               to  respect  those rights when vested  in  the               nationals of foreign States, such as those  of               its predecessor.  Obviously, the basis of  any               restraint  in  that regard which  the  law  of               nations may be deemed to impose must be sought               in another quarter." The  observations  made  by Marshall C.  J.,  have  received repeated recognition in treaties of cession concluded by the 565 United States.  But as observed by Lord Halsbury in cook  v. Sprigg(1)               "It  is  a well-established principle  of  law               that  the transactions of  independent  States               between each other are governed by the others,               laws   than  those  which   Municipal   Courts               administer. it is no answer to say that by the               ordinary   principles  of  international   law               private property is respected by the sovereign               which  accepts  the cession  and  assumes  the               duties  and  legal obligations of  the  former               sovereign   with  respect  to   such   private

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             property within the ceded territory.  All that               can  be properly meant by such, a  proposition               is that according to the well-understood rules               of  international law a change of  sovereignty               by   cession  ought  not  to  affect   private               property, but no municipal tribunal has autho-               rity to enforce such an obligation." It  was then urged that by cl. 7 of the letter of  guarantee written  by Mr. V. P. Menon on behalf of the  Government  of India  on  October  1, 1948, which was  to  be  regarded  as expressly  stated  in  that letter, as part  of  the  merger agreement dated March 19, 1948, the Government of India  had undertaken to accept all orders passed and actions taken  by the Ruler prior to the date of handing over of the  adminis- tration to the Dominion Government.  Clause 7 of the  letter is in the following terms:               "No order passed or action taken by you before               the date of making over the administration  to               the Dominion Government will be questioned un-               less  the  order was passed  or  action  taken               after  the  1st day of April 1948, and  it  is               considered  by the Government of India  to  be               palpably unjust or unreasonable.  The decision               of  the Government of India in  their  respect               will be final." But  by  virtue of Art. 363 of the Constitution, it  is  not open  to  the respondents to enforce the covenants  of  this agree- (1)  [1899] A.C. 572. 566 ment in the Municipal Courts: Maharaj Umeg Singh and  Others v. The State of Bombay and ohers(1). It was then urged that the Government of Bombay as  delegate of  the  Dominion of India had recognised the right  of  the respondents  when  they were permitted to cut  the  forests. But  the plea of recognition has no force.  It is true  that some  of  the  forests  were permitted  to  be  cut  by  the contractors under special conditions pending decision of the Government  of  Bombay.  The Conservator  of  Forests  North Western  Circle  had  ordered that the question  as  to  the approval to be given to the agreement dated March 12,  1948, was  under  the  consideration of the  Government  and  that written  undertakings  should be taken from  the  jagirdars, inamdars  or persons concerned that they would abide by  the decision  or  orders  passed by  the  Bombay  Government  in respect of such private forests when the question of  rights over  such  private  forests will be  finally  settled.   On January  9,  1949, on the application of  the  jagirdar  the Divisional  Forest Officer agreed to issue authorisation  to the  contractor  valid upto March 31, 1949, subject  to  the condition  that  export  outside was  not  to  be  permitted pending  receipt of the orders by the Government and that  a written undertaking was given by the purchaser that he would abide  by the decision and orders passed by Government.   In pursuance of this arrangement undertakings were given by the contractors  and  the  jagirdars agreeing to  abide  by  the decision  and the orders to be passed by the  Government  of Bombay  in respect of the forest rights and  admitting  that the  authorization issued by the Divisional  Forest  Officer was  subject  to  those undertaking.   The  Forest  Officers therefore   did   not  allow  the  forests  to   be   worked unconditionally.   Cutting  of trees in the forests  by  the contractors  was  permitted  subject to  certain  terms  and conditions and on the clear undertaking that the question as to  the right and the terms under which they could  cut  the

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forests would be decided by the Government. The Government of Bombay on July 8, 1949, resolved that  the order passed by the Ruler of the Sant State dated March  12, 1948, transferring forest rights to holders of the (1)  [1955] 2 S.C.R. 164. 567 jagirs villages were mala fide and that they should be  can- celled, but before taking further action in the matter,  the Commissioner should ascertain whether the possession of  the forests in question was with the Government or was with  the jagirdars.  The order proceeded to state: "It the possession is  still  with  Government please ask the  Officer  of  the Forest Department to retain the same and to refuse to  issue passes,  etc.,  to private contractors and  purchasers’.   A copy  of  this order was forwarded to the  Forest  Officers, Santrampur  for  information and guidance and  it  is  found endorsed  on that order that no transit passes be  issued-to the  jagirdars to whom rights over forests were conceded  in March  1948  and all further felling in such  jagir  forests should  be stopped at once and compliance reported.   It  is true  that  the  order  of the  Governor  was  not  directly communicated  to the jagirdars or the contractors.   But  if the conduct of the Forest Officers in permitting cutting  of the  forests  is  sought  to be relied  upon,  it  would  be necessary  to take into consideration the orders  passed  by the  Conservator  of  Forests,  North-Western  Circle,   the undertakings given by the contractors and the jagirdars  and the order passed by the Governor of Bombay and the execution of that order by stoppage of the cutting of the forests.  It appears that cutting of trees in forests was permitted  only upto some time in 1949 and was thereafter stopped altogether by order of the Revenue Department. The final resolution cancelling the agreement was passed  on February 6, 1953.  It was recited in the resolution that the Tharav  issued by the Ruler in 1948 had been  considered  by the Government to be mala fide and the same had already been repudiated  and  it  was not binding on  the  Government  of Bombay  both by law and under the agreement of  integration, in   spite  of  the assurance contained  in  the  collateral letter.   It was also recited.               "Since the Tharav  has not been recognised  by               Government    but   has   been    specifically               repudiated,   everything  done  in   pursuance               thereof  including the contracts entered  into               after passing of the Tharav. is not valid and,               therefore, binding on this Government. " 568 Having regard to the conduct of the Officers of the  Govern- ment  of  Bombay and the resolution of the  Government,  the plea  that the Government of Bombay as delegate of  the  Do- minion had renounced its right not to regard itself as bound by  the  order  made by the Ruler of Sant  State  cannot  be sustained. The  next question which falls to be determined  is  whether the  order  can be regarded as "law" within the  meaning  of cl.4 of the Administration of the Indian States Order, 1948. Clause 4 (1) provided:               "Such provisions, or such parts of provisions               (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 the appointed day  in               any Indian State shall continue in force until               altered,  repealed  or amended  by  an  order,               under  the Extra Provincial Jurisdiction  Act,

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             1947 (XLVII of 1947):               Provided  that the powers that were  exercised               by the Ruler of an Indian State in respect  of               or in relation to such Indian State under  any               such provisions of law immediately before  the               appointed day, shall be exercised by the  Pro-               vincial  Government or any  officer  specially               empowered  in  this behalf by  the  Provincial               Government." It  was  urged that the order issued by the  Ruler  of  Sant State was either "law" or an "order made or prescribed under any  law" in force immediately before the appointed day  and by  virtue  of  cl. 4 of the Administration  of  the  Indian States  Order,  it  must  be  deemed  to  have  remained  in operation  and any action taken in contravention thereof  by executive  action  was unjustified.  Our attention  has  not been invited to any statutory provisions relating to forests in  the  State of Sant, nor does the order dated  March  12, 1948,  purport  to be issued in exercise  of  any  statutory power.  On the face of it the order grants certain rights in forests  which  had  not  been  previously  granted  to  the jagirdars by the 569 Ruler.   It is urged that the Ruler of Sant was an  absolute Ruler in whom were vested all authority legislative,  execu- tive and judicial, and whatever he did or directed had to be complied with and therefore his actions and directions  must be  deemed  to be "law" within the meaning of cl. 4  of  the Administration  of  the Indian States Order.  But  the  fact that  ;the  Ruler of Sant State was an  absolute  Ruler  not bound by any constitutional limitations upon the exercise of his  powers does not, in my judgment, invest every  exercise of his powers with legislative authority.  The functions  of a  State  whether  it contains a  democratic  set-up  or  is administered  by  an autocratic sovereign  fall  into  three broad categories--executive, legislative and judicial.   The line  of  demarcation of these functions in an  absolute  or autocratic form of Government may be thin and may in certain cases not be easily discernible.  But on that account it  is not  possible  to  infer that every  act  of  an  autocratic sovereign has a legislative content or that every  direction made  by  him must be regarded as law.  That an  act  or  an order of a sovereign with absolute authority may be enforced and  the  subjects have no opportunity  of  getting  redress against infringement of their rights in the Municipal Courts of -the State will not be decisive of the true character  of the functions of the sovereign in the exercise of which  the act was done or the order was made.  The distinction between functions executive, legislative and judicial vested in  one person  may not be obliterated, merely because they  are  in fact exercised or are capable of being exercised indiscrimi- nately. In the ultimate analysis, the legislative power is the power to  make, alter. amend or repeal laws and  within,;  certain definite  limits  to delegate that power.  Therefore  it  is power  to  lay down a binding rule  of  conduct.   Executive power  "is  the power to execute and enforce the  laws,  and judicial power is power to ascertain, construe and determine the rights and obligations of the parties before a  Tribunal in  respect of a transaction on the application of the  laws and  even  in  an absolute regime this  distinction  of  the functions  prevails.  If an order is made during the  regime of  a  sovereign who exercises absolute powers,  and  it  is enforced or executed leaving nothing more to be done there- 570

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under to effectuate it, any discussion of its true character would  be  an idle exercise.  Where however in a  set-up  in which  the  rule of law prevails, to  support  action  taken pursuant to an order you have to reach the source of  autho- rity in the power of the previous autocratic sovereign,  the true nature of the function exercised may become  important, when  the laws of the former State are by express  enactment continued by the new sovereign. The  order  dated March 12, 1948, conveys to  the  jagirdars rights  which had been previously excluded from the  grants. The  form  of  the  order is of  course  not  decisive.   An important,  test  for  determining  the  character  of   the sovereign  function  is whether the order  expressly  or  by clear implication prescribes a rule of conduct governing the subject  which  may be complied with  a  sanction  demanding compliance therewith.    The order dated March 12, 1948,  is expressly in the form of a  grant of the rights  which  were not previously granted and    does  not either expressly  or by implication seek to lay down any binding rule of conduct. I am therefore unable to hold that the order issued on March 12,  1948, by the Ruler of Sant State was "law" or an  order made  under  any  law within the meaning of  cl.  4  of  the Administration of the Indian States Order. 1948. Cases  which  have  come  before this  Court  in  which  the question  as to the binding effect of orders issued  by  the Rulers  of  the former Indian States fell to  be  determined clearly illustrate that principle.  In Ameer-un-Nissa  Begum and others v. Mahboob Begum and others(1) the question as to the  binding character of two ’Firmans’ dated  February  24, 1949, and September 7, 1949, issued by H. E. H. the Nizam of Hyderabad  fell  to be determined.  The Court in  that  case observed (at p. 359);-               "The   ’Firmans’  were  expressions   of   the               sovereign  will  of the Nizam  and  they  were               binding  in the same way as any  other  law-,-               nay, they would override all other laws  which               were  in  conflict with them.  So  long  as  a               particular ’Firman’ held the field, that alone               would gov-               (1) A I.R. (1955) S.C. 352. 571               ern or regulate the rights of the parties con-               cerned,  though it could be annulled or  modi-               fied by a later ’Firman’ at any time that  the               Nizam willed."               The  Court  declined to consider  whether  the               ’Firmans’were in the nature of "legislative               enactment" or "judicial orders" and observed:               "The   Nizam   was  not   only   the   supreme               legislature, he was the fountain of justice as               well.   When  he constituted a new  Court,  he               could,  according  to  ordinary  notions,   be               deemed  to  have  exercised  his   legislative               authority.  When again he affirmed or reversed               a judicial decision, that may appropriately be               described as a judicial act.  A rigid line  of               demarcation, however, between the one and  the               other would from the very nature of things  be               not justified or even possible." In  that  case the primary question which the Court  had  to consider  was whether certain ’Firmans’ issued by the  Nizam could  be  enforced.   It was held that  the  order  may  be legislative  or judicial in character, but it could  not  be regarded as executive.  It may be noticed that no action was required to be taken after the cessor of the sovereignty  of

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the Nizam, in pursuance of the ’Firmans’.  The ’Firmans’ had become  effective, and titles of the parties stood  adjusted in  the  light of those ’Firmans’ during the regime  of  the Nizam. In Director of Endowments.  Government of Hyderabad v. Akram Ali(1)  the  effect  of a ’Firman’ issued by  the  Nizam  on December   30.  1920,  directing  that  the   Ecclesiastical Department to supervise a Dargah within the jurisdiction  of the Nizam until the rights of the parties were enquired into and adjudicated upon by a civil court fell to be determined. The Court in that case held that the right of Akram Ali  who claimed  to  be hereditary Sajjad Nashin  and  Mutwalli  was subject  to  the order of the Nizam which  had  been  passed before  the Hyderabad State merged with the Union  of  India and the applicant having no rights it could (1)  A.I.R. 1956 S.C. 60. 572 be  enforced at the date of the Constitution and the  Courts were  incompetent to grant him relief till the  rights  were determined by the Constitution.  The effect of the  ’Firman’ was  to  deprive  the respondent Akram Ali  and  all  ’other claimants  of all rights to possession pending enquiry  into the  case.  It is clear from the observations made  in  that judgment that the only decision of the Court was that by the ’Firman’  the rights of the Sajjad Nashin and  Mutwalli  was suspended till determination by the civil court of his right to possession.  The ’Firman’ was given effect not because it was  regarded as the expression of the legislative will  but because it had become effective before the Constitution came into effect suspending the rights of the applicant. In Madhorao Phalke v. The State of Madhya Bharat(1) the true character  of certain ’Kalambandis’ issued by the Rulers  of Gwalior  fell  to  be determined.   The  appellant  was  the recipient  of a hereditary military pension granted  by  the Ruler  of Gwalior to his ancestors in recognition  of  their military  services.   The  right  to  receive  pension   was recognised  by the ’Kalambandis’ of 1912 and 1935 issued  by the  Ruler.   After  the formation of the  State  of  Madhya Bharat under the Constitution, the Government of that  State by an executive order terminated the right of the appellant. The  ’Kalam-bandis’  though  not  issued  in  the  form   of legislative enactments were issued for the administration of the  department  relating to the Shiledari  units.  and  the nature  of the provisions unambiguously impressed upon  them the character of statutes or regulations having the force of law.  The ’Kalambandis’ recognised and conferred  hereditary rights: they provided for the adoption of a son by the widow of a deceased Silledar subject to the approval of the  State and  also  for  the  maintenance  of  widows  out  of  funds specially  set apart for that purpose, and contemplated  the offering  of  a  substitute when a silledar  became  old  or otherwise unfit to render service: they made detailed provi- sion as to mutation of names after the death of a  silledar. They further enacted that the Asami being for the  shiledari service it could not be mortgaged for a debt of any  banker, and if a decree holder sought to proceed against the amount (1)  [1961] S.C.R. 957. 573 payable  to him, execution had to be carried out in  accord- ance  with and in the manner and subject to the  limitations prescribed  in  that  behalf.  The  ’Kalambandis’  were  not treated as administrative orders issued merely for the  pur- pose of regulating the working of the administration of  the department of irregular forces, and were therefore to be re- garded  as  regulations having all  the  characteristics  of

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legislative enactments. In  Promod  Chandra  Deb’s case(1)  the  true  character  of ,certain  ’Khor  Posh’  grants  granted  by  the  Rulers  of Talcher,  Bamara and Kalahandi fell to be determined,  in  a group  of petitions for enforcement of  fundamental  rights. Out  of  the four petitions, petition No. 167  of  1958  was dismissed  ,on the ground that under an order passed by  the Extra Provincial Jurisdiction Act, 1947, a grant made by the Ruler  ,of  Bamra in favour of the petitioner  was  annulled before Bamra became part of the Union of India and the right created  by the grant had on that account ceased  to  exist. In two other petitions Nos. 168 of 1958 and 4 of 1959 it was found by the Court that the maintenance grants in favour  of certain  members of the family of the Ruler were  recognised by  the Government of India ’and the right  thus  recognised was  given  effect  to and payments  pursuant  thereto  were continued  for  nearly eight years after the merger  of  the State.  This Court held that the State having recognized its obligation to pay the maintenance grants which were  -agreed to be granted under the statutory law and the custom of  the State, the grants could not be annulled by executive action. In the principal writ petition No. 79 of 1957 the grants  by the  Ruler  of Talcher was made subject to  the  -terms  and conditions  laid  down  under  Order 31  of  the  Rules  and Regulations  of the State of Talcher of 1937.   These  Rules and Regulations of Talcher of 1937 were regarded as the  law of the State and it was in accordance with the law that  the ’Khor Posh’ grants were made by the Ruler.  If was held that these grants had the effect of law.  Sinha C.J.,  delivering the majority judgment of the Court observed (at p. 436):               "There is also no doubt that the grant made by               the   ruler  of  Talcher  in  favour  of   the               petitioner                (1)  [1962] Suppl.  1 S.C.R. 405. 574               continued  to be effective until  the  Merger.               The  nature  and conditions of such  grant  of               Khorposh are governed by the provisions of the               laws of that State as embodied in Order 31  of               the  ’Rules and Regulations of Talcher,  1937.               Under the laws of Talcher, the petitioner  had               been  enjoying his Khorposh rights  until  the               cash grant, as it became converted in  1943-44               as  aforesaid,  was stopped by  the  State  of               Orissa, in April, 1949." In the view of this Court the terms and conditions,  subject to  which the grant was made, were on the facts of the  cast in  the  nature  of legislative acts  and  not  exercise  of executive functions.  The Court in that case did not purport to  lay  down that any act done by the Ruler whether  it  be executive,  legislative or judicial must be  regarded  since the  merger  of  the  State  as  in  the  exercise  of   the legislative  will of the Ruler and therefore  continuing  as law. In  a  recent  judgment  of  this  Court  in  Tilkayat  Shri Govindlalji Maharaj etc. v. State of Rajasthan and others(’) the  ’Firman’ issued by the Udaipur Darbar in 1934  relating to  the administration of the temple of Sharnathji at  Nath- dwara,  which was expressly declared to be a public  temple, and governing the devolution of the right to the  management of  the temple, and certain incidental matters, fell  to  be determined.  The ’Firman’ consisted of four clauses.  By the first  clause it was declared that according to the  law  of Udaipur  the shrine of Shrinathji had always been and was  a religious  institution  for the followers of  the  Vaishnava

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Sampradaya  and that all the property immovable and  movable dedicated,  offered or presented to or otherwise  coming  to the deity Shrinathji had always been and was the property of the shrine and that the Tilkayat Maharaj for the time  being was  merely the custodian manager and trustee. of  the  said property  for the shrine.  The second clause prescribed  the rule of succession and declared that it was regulated by the law  of primogeniture, and provided that the Udaipur  Darbar had  absolute  right to depose any Tilkayat Maharai  on  the ground that such Tilkayat Maharaj was unfit. The (1)  A.I.R. (1963) S.C. 1638. 575 third clause provided for measures to be taken by the  Ruler for  management  of the shrine during the  minority  of  the Tilkayat Maharaj and by the last clause it was provided that in  accordance  with  the law of Udaipur  the  Maharana  had declared Shri Damodarlalji-the then Tilkayat Maharajunfit to occupy  the  Gaddi  and had approved of  the  succession  of Goswami Govindlalji to the Gaddi of Tilkayat Maharaj.   This ’Firman’ declared the character of the trust relating to the Shrinathji temple, laid down rules as to the succession  and provided  for  the  management during the  minority  of  the Tilkayat, and declared the right of the State to remove  the Tilkayat and for enforcement of that right by declaring that the  then Tilkayat was unfit to occupy the Gaddi.  This  was in substance though not in form exercise of the  legislative will  of the sovereign.  Its operation was not exhausted  by its  enforcement  during  the  regime  of  the  Maharana  of Udaipur.  Devolution of the Gaddi, and declaration about the power  of the Ruler over the shrine were intended to  govern the administration of the shrine for all times.  It is  true that  in  that case in paragraph-32 it  was  observed  after referring  to  Madhorao  Phalke’s  ease(1),   Ameer-un-Nissa Begum’s case (2 ) and the Director of Endowments, Government of Hyderabad’s case(3):               "In  the  case of an absolute Ruler  like  the               Maharana  of Udaipur it is difficult  to  make               any  distinction  between an  executive  order               issued by him or a legislative command  issued               by him.  Any order issued by such a Ruler  has               the force of law and did govern the rights  of               the parties affected thereby." It was not and could not be laid down that all orders issued by  an absolute Ruler were legislative in character: it  was merely sought to be emphasized that so long as the territory of Udaipur and the shrine were under the sovereignty of  the Maharana  the distinction between commands  legislative  and executive  was academic, for all orders and commands of  the Ruler  had to be obeyed alike.  But since the merger of  the State with the Union of India, the question (1) [1961] S.C.R. 957,         (2) A.I.R. (1955) S.C. 352. (3)  A.I.R. 1956 S.C. 60, 576 whether the ’Firman’ was a mere executive order or a  legis- lative  enactment assumed vital importance.  If the  command was merely executive unless the rights created thereby  were recognized by the Dominion of India they had no validity and no  reliance  could  be placed upon them  in  the  Municipal Courts.   If  the command was legislative, the laws  of  the former   State  having  been  continued  upon  merger,   the legislative   command   retained   vitality   and   remained enforceable.   In  the  context  in  which  it  occurs   the statement set out did not and was not intended to lay  down, that  there is no distinction between  legislative  commands and  executive  orders which have to be enforced  after  the

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merger of the State with the Indian Union. I  may refer to decisions which illustrate  the  distinction between  legislative  commands and executive orders  of  the Rulers of the former Indian States. In Maharaja Shree  Umaid Mills  Ltd.  v. Union of India and  Others(1)  the  question whether  an  agreement between the Ruler of  Jodhpur  and  a limited Company whereby the Ruler agreed to exempt or  remit certain  duties  or royalties and to hold  the  Company  not liable  to  pay taxes and further gave an assurance  to  the Company to amend the laws so as to make them consistent with the  agreement was not regarded as "law" within the  meaning of  Art. 372 of the Constitution.  In the view of the  Court the  agreement rested solely on the consent of the  parties: it  was  entirely  contractual in nature an a  none  of  the characteristics  of  law.  The Court in that  case  observed that  every  order  of an absolute  Ruler  who  combines  in himself   all   functions  cannot  be   treated   as   "law" irrespective of the nature or character of the order passed. There  is, it was observed, a valid distinction  between  an agreement  between  two or more parties even if one  of  the parties  is  the  sovereign  Ruler,  and  the  law  relating generally  to agreements; the former rests on  consensus  of mind, the latter expresses the will of the sovereign.   This case  supports the proposition that every act done or  order passed  by an absolute Ruler of an Indian State cannot  have the force of law or be regarded as "law" since the merger of his  territory  with  the ’Union of  India’.   To  have  the vitality of law after (1)  A.I.R. (1963) S.C. 953. 577 merger, it must be the expression of the legislative will of the Ruler, There  is yet another judgment of this Court in  The  Bengal Nagpur  Cotton  Mills Ltd. v. The Board of  Revenue,  Madhya Pradesh and Others(1) in which also the question whether  an agreement  between the Ruler of Rajnandgaon and  M/s.   Shaw Wallace  and Company in connection with the setting up of  a textile factory on certain concessional terms in the  matter of imposition of octroi duties on imported goods fell to  be determined.  It was observed in that case:               "It  is plain that an agreement of  the  Ruler               expressed  in the shape of a contract;  cannot               be  regarded as a law.  A law must follow  the               customary  forms  of law-making  and  must  be               expressed as a binding rule of conduct.  There               is  generally  an established method  for  the               enactment of laws, and the laws, when enacted,               have  also a distinct form.  It is  not  every               indication  of the will of the Ruler,  however               expressed,   which  amounts  to  a  law.    An               indication of the will meant to bind as a rule               of  conduct  and enacted with  some  formality               either  traditional or specially  devised  for               the  occasion,  results in a law  but  not  an               agreement to which there are two parties,  one               of which is the Ruler." The order of the Ruler of Sant dated March 12, 1948, was not in  the  form of a legislative enactment.  It also  did  not seek to lay down a course of conduct: it merely purported to transmit  certain  rights which were till the  date  of  the order vested in the Ruler to the jagirdars who were grantees of  the  villages.  It is difficult to hold  that  an  order merely granting forest rights not in pursuance of any legis- lative authority, but in exercise of the power of the  sove- reign  in whom the rights were vested, to the  jagirdars  to

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whom the villages were granted without forest rights, can be regarded  as  "law"  within  the meaning of  cl.  4  of  the Administration  of the Indian States Order, 1948,  when  the order was not intended to lay down any binding rule of (1) A.I.R. 1964 S.C. 888. (2) 134-154 S.C. 37. 578 conduct  of the grantees and merely purported to convey  the rights which till then were vested in the Ruler. The other question which remains to be determined is whether the respondents are entitled to the protection of s.  299(1) of the Government of India Act, 1935, or Art. 31 (1) of  the Constitution.  Undoubtedly the order which deprives them  of the  right to cut forest trees which they claimed  from  the jagirdar  who derived them under the grant dated  March  12, 1948, from the Ruler of Sant is an executive order.  Section 299(1)  of the Government of India Act, 1935, protection  of which  was claimed on the merger of the State of  Sant  with the Dominion of India provided:               "No  person shall be deprived of his  property               in  British India save by authority of law." The clause conferred protection upon the property rights  of persons  against any executive action not supported by  law. To attract the clause, there must, however, exist a right to property  which is sought to be protected.  If  for  reasons which  we  have  already stated  in  considering  the  first question,  the subjects of the acceding State  are  entitled only  to  such  rights  as  the  new  sovereign  chooses  to recognize,  in the absence of any recognition of the  rights of the respondents or their predecessor jagirdars, there was no  right to property of which protection could be  claimed. As  held  by this Court in State of  Saurashtra  v.  Jamadar Mohamad   Abdulla  and  others(1)  orders  passed   by   the Administrator  of the State of Junagadh appointed on  behalf of the Government of India (which had assumed charge of  the administration of the State after the Nawab of Junagadh fled the  country) on various dates between November 9, 1947  and January  20,  1949, cancelling grants in favour  of  certain persons in whose favour the grants had previously been  made by the Nawab of Junagadh were not liable to be challenged in suits  filed  by  the grantees in the Civil  Courts  of  the Dominion,  on  the plea that the properties had  been  taken away without the authority of law.  This Court held that the impugned  orders  cancelling  the grants in  favour  of  the respondents  and taking of the properties arose out  of  and during  an  act of State and they could  not  be  questioned before Municipal Tribunals, for the (1)  (1962] 3 S.C.R. 970. 579 orders of cancellation were passed before the change over of de jure sovereignty. There  is  no support for the assumption made  by  the  res- pondents that an act of State arises merely at a fixed point of time when sovereignty is assumed.  An act of State may be spread over a period, and does not arise merely on the point of acquisition of sovereign right: see Promod Chandra  Deb’s case(1).  Nor is the new sovereign required to announce  his decision when he assumes or accepts sovereignty over foreign territory,   about  the  rights  created  by   the   quondam sovereign,  on  pain of being held bound by  the  rights  so created.    The   decision  of  this  Court   in   jagannath Agarwalla’s  case(2) pointedly illustrates  this  principle. The  State of Mayurbhanj merged with the Province of  Orissa on January 1, 1949, but an order dated June 28, 1952 made by the Board of Revenue acting on behalf of the State of Orissa

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rejecting the claim made by a person who had entered into an agreement or arrangement with the Maharaja of Mayurbhanj  in 1943  was held to be in the course of an act of  State,  the rejection of the claim being in pursuance of an order issued under  s. 4 of the Extra Provincial Jurisdiction Act, 47  of 1947.  Therefore till the right to property of the  subjects of  the  former  Indian  State was  recognized  by  the  new sovereign  there was no title capable of being  enforced  in the Courts of the Dominion or the Union. It  was then urged that in any event since the enactment  of the  Constitution, by executive action a person may  not  be deprived  of  his  right to property,  and  this  protection applies  as much to rights granted by the former  Rulers  to persons  who  on merger became citizens of the  Dominion  of India  as  to  rights of property  of  other  citizens.   In substance it is urged that even if there was no  recognition of  the  right to property which was granted by  the  former sovereign by the Dominion Government, after the enactment of the constitution the right granted by the former Rulers  may only  be  taken  away  by legislative  command  and  not  by executive   action.    This   argument   proceeds   upon   a misconception  of  the  nature  of  the  fundamental   right conferred by Art. 31(1) of the Constitution.  In terms,  the Article   confers  a  right  to  claim  protection   against deprivation of property otherwise than by (1) [1962] Suppl. 1 S.C.R. 405. (2) [1962] 1 S.C.R. 205. 580 authority  of law.  A right to property is undoubtedly  pro- tected   against  all  actions  otherwise  than  under   the authority  of  law.  But the clause postulates  a  right  to property which is protected.  It does not purport to  invest a  person  with  a  right to property  which  has  not  been recognized  by the Dominion of India or the Union.  Even  if the right to property was recognized by the Indian State  of which  the  claimant  was  subject, so long  as  it  is  not recognized   by  the  Dominion  or  the  Union  it  is   not enforceable  by the Courts in India.  On the merger  of  the State  of Sant with the Dominion of India,  undoubtedly  the respondents  became citizens of the Dominion and  they  were entitled  like  any other citizen to the protection  of  the rights which the Dominion recognized. It  has  also  to be remembered  that  promulgation  of  the Constitution did not result in transfer of sovereignty  from the Dominion of India to the Union.  It was merely change in the form of Government.  By the Constitution, the  authority of the British Crown over the Dominion was extinguished, and the sovereignty which was till then rooted in -the Crown was since  the  Constitution came into force  derived  from  the people  of  India.   It is true  that  whatever  vestige  of authority  which the British Crown had over the Dominion  of India,  since  the  Indian  Independence  Act  was   thereby extinguished, but there was no cession, conquest  occupation or  transfer of territory.  The new governmental set up  was the  final  step in the process of evolution  towards  self- government.   The fact that it did not owe its authority  to an  outside agency but was taken by the  representatives  of the  people made no difference in its true  character.   The continuance of the governmental machinery and of the laws of the  Dominion, give a lie to any theory of  transmission  of sovereignty  or of the extinction of the sovereignty of  the Dominion,  and from its ashes, the springing up  of  another sovereign  as suggested in Virendra Singh and Others v.  The State of Uttar Pradesh(1) which  will presently examine. If  therefore  the respondents had under the  Government  of

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India Act, 1935, after the merger not acquired any right  to the forests by virtue of any recognition of the Tharav dated March 12, 1948, the promulgation of the Constitution (1)  [1955] 1 S.C.R. 415. 581 did  not invest them with any additional rights which  would convert  either  their  claims to  the  forest  rights  into property  or to enable them to enforce in the Indian  Courts such claims not recognized by the State as fundamental right to  property.   By Art. 31 right to  property  is  protected against all actions save by authority of law.  But if  there was  no  right  to property, an  executive  action  refusing recognition  of a claim to property could not infringe  Art. 31 of the Constitution. In  Virendra Singh’s case(1) this Court held that since  the promulgation of the Constitution grants which had been  made by the previous Rulers, even if they were not recognized  by the Dominion of India or the Union, could not be  interfered with  except  by  authority  of  law.   In  that  case   the petitioners  were grantees from the Rulers of the States  of Sarila and Charkhari of certain villages before those States merged  with the Dominion of India.  The  States  originally merged  with the Union of Vindhya Pradesh, and  the  Vindhya Pradesh  Government confirmed the grants in  December  1948. But  the  Union  of  the  States  of  Vindhya  Pradesh   was dissolved, and the covenanting States separately acceded  to the  Dominion  of India, and surrendered all  authority  and jurisdiction in relation to the governance of the States and executed  instrument  called  ’The  Vindhya  Pradesh  Merger Agreement’.   The  States which formed the  Vindhya  Pradesh were  transformed  into a Chief Commissioner’s  Province  on January  23, 1950.  The grants of the four villages made  in favour of the petitioners Were revoked in August 1952 by the Government  of  the State of Uttar Pradesh  to  which  State those  villages  being enclaves within  its  territory  were transferred.   The grantees of the villages then  petitioned this Court under Art. 32 of the Constitution challenging the validity  of  the orders revoking the grant  of  jagirs  and maufis in the four villages as violative of Arts. 31 (1) and 19 (1 ) (f ) of the Constitution.  This Court observed  that the  properties in question were the properties  over  which the  Rulers  had  right of disposition at the  date  of  the grants, and the grants were absolute in character and  would under  any  civilised  system of law pass  an  absolute  and indefeasible  title to the grantees and that  assuming  that the titles were defensible at the mere will of  (1) [1955] 1 S.C.R. 415. 582 the  sovereign  the  fact remained that  they  were  neither resumed by the former Rulers nor confiscated by the Dominion of  India as an act of State and upto the 25th  of  January, 1950,  the  right and title of the grantees to  continue  in possession was good and was not interfered with.  The  Court accordingly  held  that the Constitution  by  the  authority derived from and conferred by the people of India; destroyed all   vestige  of  arbitrary  and  despotic  power  in   the territories  of  India and over its citizens and  lands  and prohibited just such acts of arbitrary power as the State of Uttar  Pradesh in that case was seeking to uphold.   It  was further  observed that the Dominion of India and the  States had  abandoned their sovereignty and surrendered it  to  the people of the land who framed the new Constitution of  India and as no sovereign can exercise an act of State against its own  subjects, the orders of revocation of the  grants  were invalid.   In my view the conclusion of the Court  proceeded

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upon two assumptions, neither of which was true:               (i)   that the sovereignty of the Dominion  of               India and of the States was surrendered to the               people  of India, and in the exercise  of  the               sovereign power the people gave themselves the               new Constitution as from January 26, 1950; and               (ii)  the  petitioners  who were in  de  facto               possession of the disputed lands had rights in               them which they could have enforced upto  26th               January, 1950, in the Dominion Courts  against               all persons except possibly the State. These assumptions are not supported by history or by consti- tutional  theory.   There is no warrant for holding  at  the stroke of mid-night of the 25th January, 1950, all our  pre- existing political institutions ceased to exist, and in  the next  moment  arose  a new set  of  institutions  completely unrelated to the past.  The Constituent Assembly which  gave form to the Constitution functioned for several years  under the  old regime, and set up the constitutional machinery  on the foundations of the earlier political set up.  It did not seek to destroy the past institutions: it raised an  edifice on what existed before.  The Constituent Assembly molded  no new 583 sovereignty:it  merely gave shape to the aspirations of  the people,  by destroying foreign control and evolving  a  com- pletely  democratic form of government as a  republic.   The process was not one of destruction, but of evolution. For  reasons  already stated it is impossible to  hold  that what were mere claims to property till the 25th of  January, 1950,  could  be regarded as enforceable  against  any  one. Till  the Dominion of India recognised the right,  expressly or  by implication there was no right to property which  the Courts  in  India could enforce.  There is  nothing  in  the Constitution which transformed the claims which till January 25, 1950, had not been recognized into property rights so as to  prevent  all further exercise of the act of  State,  and extinguish  the powers of the Union to refuse  to  recognize the claims. The  order passed in August 1952 revoking the grants by  the Rulers  of Sarila and Charkhari was in my view in  substance an  act  of State.  It is true that there can be no  act  of State  by  a sovereign against his own  subjects.   But  the State was seeking to refuse to recognize the claims made  by the  grantees from the former Rulers, and the fact that  the act  of State operated to the prejudice of persons who  were at  the  date of refusal of recognition  citizens,  did  not deprive  the  act  of  State  of  either  its  character  or efficacy. These  appeals must therefore be allowed and the suit  filed by the respondents dismissed with costs throughout. RAGHUBAR DAYAL J.-I agree with the views expressed R, by  my learned  brother  Ayyangar J., on all the points  except  in regard to the Tharao dated March 12. 1948, being law. I  agree with brother Hidayatullah J., that this  Tharao  is not law, and further agree with him in the order proposed. MUDHOLKAR J.-This Bench has been constituted for considering whether the reasoning underlying the decision of this  Court in Virendra Singh v. The State of Uttar Pradesh(1) that  the inhabitants  of the Indian States brought with  them,  after the merger of those States in the Dominion of India pursuant to agreements entered into by the Rulers of those (1) [1955] 1 S.C.R. 415. 584 States, rights to property granted to them by the Rulers  of

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those  States,  is  correct or not.  The  decision  and  the various  grounds  upon which it rests  have  been  carefully examined by my brother Ayyangar J., in his judgment and I am generally in agreement with what he has said.  As,  however, I  take  a somewhat different view on some  of  the  matters which arise for consideration in this case this judgment has become necessary. The  facts  have been set out fully in the  judgment  of  my learned  brother  and, therefore, it will be  sufficient  to mention only such of them as are necessary to elucidate  the questions  which I propose to deal with.  In consequence  of two  agreements  entered into by the former  Ruler  of  Sant State, the territory of that State merged in the Dominion of India  as  from June 10, 1948.  Prior to that  date  it  had acceded  to  the Dominion of India on three  subjects  only. This State, along with other ruling States in India,  became an  independent  sovereign State in the year 1947  when  the Dominions of India and Pakistan were constituted.  By virtue of the powers vested in the Central Government by the  Extra Provincial Jurisdiction Act, 1947 it delegated its functions to  the Government of Bombay which passed the Indian  States (Application  of  Laws) Order, 1948 on July 28,  1948.   In, consequence of that Order certain laws in force in the  Pro- vince of Bombay were extended to the merged territories.  By the  operation  of the Indian States  (Merger  of  Governors Provinces)  Order, 1949, the Sant State became part  of  the Province of Bombay. The  agreement  relating to the merger of the State  in  the Dominion of India was entered into by the Ruler of Sant some time  before the date on which the merger became  effective. The Ruler of the State passed a Tharao (which is  translated as ’Order) on March 12, 1948 in the following terms:-               "S. Ta.  Mu Outward Register No. 371.               The   Jivak,   Patavat,   Inami,   Chakariyat,               Dharmada  villages  in Sant  State  are  being               given  (granted) to Jagirdars and the  holders               of the said villages are not given rights over               forests.    Hence   after   considering    the               complaints of certain Jagirs, they, 585               are being given full rights and authority over               the  forests  in  the  villages  under   their               vahivat.   So, they should manage the  vahivat               of  the  forest according to  the  policy  and               administration  of the State.  Orders in  this               regard to be issued." Taking  advantage  of the Tharao several  Jagirdars  entered into contracts pertaining to the exploitation of the forests in their Jagirs.  The respondents in these appeals are  some of  the forest contractors.  The Government of the  Province of Bombay through the officers of its Forest Department  did not allow the respondents to exercise their rights under the contracts  entered  into with them by the Jagirdars  on  the ground  that the grant of forest rights by the former  Ruler to  the  Jagirdars  was  not  binding  upon  the   successor Government.  Thus being deprived of their right to work  the forests  the various respondents instituted suits after  the coming  into  force  of the Constitution  of  India.   Their claims  were  opposed by the State of Bombay mainly  on  the ground  that  in  the absence  of  recognition,  express  or implied,  by the successor State of rights conferred by  the former-  Ruler  on the Jagirdars the respondents  could  not enforce  them  in the municipal courts.  The  suits  of  the respondents  were dismissed by the court of  first  instance and  appeals preferred therefrom by them were  dismissed  by

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the District Court.  In second appeal, however, the  appeals were allowed by the High Court by a common judgment in which reliance is placed largely upon what has been held and  said by this Court in Virendra Singh’s case(1) though a reference has also been made to two other decisions of this Court  and some decisions of the Privy Council. In  the  arguments before us it has never been  in  question that  the acquisition of the territory of Sant State by  the Dominion  of  India  in  pursuance  of  the  Instrument   of Accession  and  Merger Agreement was an act of  State.   The respondents’ contentions were, however, that (1) in point of fact  the Government of Bombay, acting through the  officers of  the  forest  department had  recognised  the  Jagirdar’s rights by permitting the contractors to carry on the work of cutting timber; (2) that though the Government of" (1)  [1955] 1 S.C.R. 415. 586 Bombay  subsequently repudiated the Jagirdars’  rights  that repudiation was of no avail; (3) that the letter sent to the Ruler  of Sant State by the Secretary to the States  Depart- ment, Mr. V. P. Menon, in October, 1948 amounted to a waiver by the Dominion of India of the right of repudiation of  the rights of Jagirdars; (4) that after the Jagirdars became the citizens  of the Dominion of India there could be no act  of State  against  them; (5) that the doctrine evolved  by  the Privy  Council in its decisions starting from  Secretary  of State  for India v. Kamachee Boye Sahiba(1) and  going  upto Asrar Ahmed v. Durgah Committee, Ajmer(2) was opposed to the present  view  on the effect of conquest  and  cession  upon private  rights  as exemplified in the decisions  in  United States   v.  Percheman(3)  and  that  this   Court   should, therefore,  discard the Privy Council’s view and  adopt  the modem  view inasmuch as the latter is considered  by  common consent  to  be  just  and fair and  finally  (6)  that  the Jagirdars  could  not  be  deprived  of  the  forest  rights deprived  by  them from the Ruler of Sant State  before  the Constitution,  without ,complying with the provisions of  s. 299  of  the Government of India Act, 1935,  and  after  the coming into force of the Constitution without complying with the provisions of Art. 31 of the Constitution. I agree with my brother Ayyangar J., that the fact that some officers   of  the  forest  department  had  permitted   the respondents to carry on operations in the forests leased out to  them by the Jagirdars does not amount to recognition  of the  right conferred upon the latter by the Tharao of  March 12,  1948.   In  the first place, it was  not  open  to  the officers  of the forest department to grant  recognition  to the  Jagirdars’ rights for the simple reason that the  right of  granting  recognition  could be exercised  only  by  the Government acting through its appropriate agency.   Moreover the  permission  which was accorded to the  respondents  was only  tentative and expressly subject to the final  decision of  the Government on the question of their right under  the leases granted by the Jagirdars. (1) (1859) 13 Moore P.C. 22.   (2) A-1 R 1947 P. C I. (3) (1883) 32 U. S. 51. 587 The  second contention of the respondents is based  upon  -a misapprehension of the legal position flowing from the  long series  of  decisions of the Privy Council which  have  been accepted  by this Court in several of its decisions  and  in particular Dalmia Dadri, Cement Co. Ltd. v. The Commissioner of  Income-tax(1); State of Saurashtra v. Memon Haji  Ismail (2) ; Promod Chandra Deb and Ors. v. The State of Orissa and Ors.(3); State of Saurashtra v. Jamadar Mahamad Abdulla  and

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Ors.(4). The one decision in which the Privy Council’s  view is criticised is that of Virendra Singh’s case(5).  The view of  the Privy Council has been expressed by Lord Dunedin  in Vajesinghji  v.  Secretary  of State  for  India(6)  in  the following  passage which has been ,quoted with  approval  in several judgments.               "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 if in a  treaty  of               cession   it   is  stipulated   that   certain               inhabitants should enjoy certain rights,  that               does not give a title to, those inhabitants to               enforce  those stipulations in  the  municipal               courts.   The right to enforce,  remains  only               with the high contracting parties." Thus  what is clear beyond doubt is that the rights  derived by the inhabitants of the conquered and ceded territory from its former rulers cannot be enforced by them against the new (1) [1959] S.C.R. 729.(2) [19601 1 S.C.R. 537. (3) [1962] Supp. 1. S.C.R. 405.(4) [19621 3 S.C.R. 970. (5) [1955] 1 S C.R. 415.(6) 51 T.A. 357. 588 sovereign  in the courts of that sovereign unless they  have been recognized by the sovereign.  The only basis upon which rights  of  this kind can be enforced in a  municipal  court would  be the fact of its recognition by the new  sovereign. A  right  which  cannot -on its  own  strength  be  enforced against a sovereign in the courts of that sovereign must  be deemed to have ceased to exist.  It follows therefore that a right   which  has,  ceased  to  exist  does   not   require repudiation. As  regards the argument that the Government has waived  its right to withold recognition, I agree with all that has been said by my brother Ayyangar J. Indeed, if the inhabitants of a  ceded territory have ceased to have a right  against  the new  sovereign there is nothing for the sovereign to  waive. I  also agree with my learned brother that if the letter  of the  Secretary to the States Department wpon which  reliance is  placed  by the respondents is regarded as  part  of  the agreement  of merger the municipal courts are  precluded  by Art.  363  of  the Constitution from  enforcing  any  rights arising thereunder. The  argument that there can be no Act of State against  its citizens  is  based  upon the supposition  that  the  rights claimed  by the Jagirdars from their former Ruler  would  be available to them against the new sovereign unless they were repudiated   and  that  here,  as  the  resolution  of   the Government  of  Bombay dated February 6, 1953  stating  that Jagirdars’ rights have already been repudiated amounts to an Act  of State against persons who had long before this  date become  the  citizens  of  the  Republic  of  India  it  was incompetent.   As already pointed out, the municipal  courts cannot  take  notice of a right such as this unless  it  had been  recognized  expressly  or by implication  by  the  new

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sovereign.  doubt,  the  Government  resolution  speaks   of repudiation.   That  in my opinion is only a  loose  way  of conveying  that  the rights of the Jagirdars have  not  been recognized.   That resolution does no more than set out  the final decision of Government not to give recognition to  the Tharao  of March 12, 1948 by which the former Ruler of  Sant State  ad conferred certain forest rights on the  Jagirdars. Indeed, it is clear from paragraph 3 of that resolution that the  Government  had  expressly  borne  in  mind  the  legal position 589 that  rights claimed under the Tharao gave no title  to  the inhabitants  of  Sant State to enforce them in  a  municipal ,court and that the right to enforce them remained only with the high contracting parties. Now as to the argument that this Court should discard the  view taken by the Privy Council in Secretary of State for   India v. Kamchee Boye Sahiba(1); Secretary of State for India   v. Bai  Rajbai(2);  Vajesinghji  v.  Secretary  of  State   for India(3);  Secretary of State v. Sardar Rustom  Khan(4)  and Asrar  Ahmed’s  case(5) and adopt the view taken  by  ,Chief Justice Marshall in Percheman’s case(6).  I agree with  much which  my learned brother has said but would,add one  thing. It  is  this.   The  courts  in  England  have  applied  the principles  of international law upon the view that what  is by the common consent of all civilized nations held to be an ,appropriate  rule  governing international  relations  must also  be deemed to be a part of the common law  of  England. Thus   English  courts  have  given  effect  to   rules   of international   law   by   resorting   to   a   process   of incorporation(7).   The  English courts also  recognise  the principle that since the British Parliament is paramount the rules  of  international  law are subject to  the  right  of Parliament  to  modify  or abrogate any  of  its  rules.   A municipal  court  can only enforce the law in force  in  the State.   Therefore,  if  a  rule  of  international  law  is abrogated  by  Parliament  it  cannot  be  enforced  by  the municipal  courts of the State and where it is  modified  by Parliament  it  can  be enforced  by  the  municipal  courts subject   to  the  modification.   Would  the  position   be different  where a particular rule of international law  has been  incorporated  into  the common law  by  decisions  ,of courts?   So far as the municipal courts are concerned  that would  be the law of the land which alone it has  the  power and  the duty to enforce.  Where Parliament does not  modify or  abrogate  a rule of international law which  has  become part of the common law, is it open to a municipal (1) (1859) 13  Moore P.C. 22(2) 42 I.A. 229. (3) 51 I.A. 357.    (4) 68 I.A. 109. (5) A.I.R. 1947 P.C. I.(6) (1833) 32 U. S. 51. (7) See International Law-a Text 1962 by Jacobini, p. 32  et seq 590 court to abrogate it or to enforce it in a modified form  on the  ground  that  the  opinion  of  civilized  States   has undergone  a change and instead of the old rule a more  just and fair rule has been accepted ? Surely the law of a  State can only be modified or repealed by a competent  legislature of theState and not by international opinion however weighty that  Opinion may be.  Now, a rule of international  law  on which  the several Privy Council decisions as to the  effect of  conquest  or  cession  on  the  private  rights  of  the inhabitants. of the conquered or ceded territory is  founded has  become a part of the common law of this country.   This is  ’law  in  force  and  is  saved  by  Art.  372  of   the

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Constitution.  The courts in India are, therefore, bound  to enforce  that  rule  and not a  rule  of  international  law governing the same matter based upon the principle of  state succession which had received the approval of Marshall  C.J. and  which has also received the approval of  several  text- book  writers,  including  Hyde(1).  It  is  true  that  the International  Court of Justice has also stated the  law  on the  point  to  be  the same but that  does  not  alter  the position  so far as the municipal courts are concerned.   If in the light of this our law is regarded as inequitous or  a survival of an imperialistic system the remedy lies not with us  but  with  the  legislature  or  with  the   appropriate Government by granting recognition to the private rights  of the inhabitants of a newly acquired territory. Thus while according to one view there is a State succession in  so far as private rights are concerned according to  the other which we might say is reflected in our laws, it is not so.   Two  concepts  underlie  our law :  One  is  that  the inhabitants  of  acquired  territories bring  with  them  no rights enforceable against the new sovereign.  The other  is that  the municipal courts have no jurisdiction  to  enforce any rights claimed by them, even by virtue of the provisions of a treaty or other transaction internationally binding  on the new sovereign unless their rights have been recognized (1)  See Hyde international Law Vol. 1, 2nd ed. p. 431, and Wesley  L.  Gould-An introduction to International  Law  pp. 422-427. 591 by  the  new  sovereign.   Municipal  courts  derive,  their jurisdiction from the municipal law and not from the laws of nations and a change in the laws of nations brought about by the consent of the nations of the world cannot confer upon a municipal  court  a jurisdiction which it does  -.lot  enjoy under the municipal law. Apart  from  that the rule cannot be regarded  merely  as  a device  of colonial powers for enriching themselves  at  the expense  of  the inhabitants of conquered  territories  and, therefore,  an  anachronism.  It would neither be  just  nor reasonable  to  bind  the  new  sovereign,  by  duties   and obligations in favour of private parties created by the  ex- sovereign  from  political  motives or for  the  purpose  of robbing  the  new  sovereign  of  the  full  fruits  of  his acquisition.   No doubt, International Law does not  prevent legislation by the new sovereign for the purpose of  freeing itself from Such duties and obligations but that would be  a long and laborious process and may be rendered onerous or by reason of constitutional provisions such as those  contained in Part III of our Constitution, even impossible.  It  would also not be reasonable to regard the new sovereign as  being bound by duties and obligations created by the  ex-sovereign till  such time as the new sovereign was able to  show  that they  were  incurred by the ex-sovereign mala fide.   It  is apparently  for  such reasons that the law as found  by  the Privy  Council deprives the grantees under the former  ruler completely  of  their rights as against a new  sovereign  by making those rights unenforceable in a municipal court.  It, however,  also envisages the recognition of those rights  by the  new  sovereign.  This means that the new  sovereign  is expected to examine all the grants and find out for  himself whether any of the grants are vitiated by mala fides or were against  his  legitimate  interests  so  that  he  can  give recognition to those grants only which were not vitiated  by mala  fides or which were not against his  interests.   That this  is how the rule was applied would be clear  from  what happened  in  this country when time and  again  territories

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were   ceded  by  former  Indian  Rulers  to   the   British Government.   As  an  instance of this there  was  the  Inam Enquiry  in  the middle of the last century as a  result  of which a very large number of Inams were ultimately 592 recognised  by the British Government.  That  while  dealing with the claims of the former grantees in ceded  territories used  to  be examined meticulously would be clear  from  the facts in Bai Rajbai’s case(1).  Such being the actual  posi- tion I do not think that the rule which has been applied  in this  country  can be regarded to be anachronism  or  to  be iniquitous In  so  far as the argument is based on  the  provisions  of s.299  of the Government of India Act, 1935 and Art.  31  of the  Constitution  is concerned I would reiterate  the  view which my brother Sarkar J. and myself have taken in  Jamadar Mahamad  Abdulla’s case(3) and Promod Chandra Deb’s  case(4) which  is the same as that expressed by my brother  Ayyangar J., and with which my brother Hidayatullah J., has agreed. , Adverting  to a similar argument advanced by Mr. Pathak  ’in the  former  case we quoted the following passage  from  the judgment  of  Venkatarama Aiyar J., in Dalmia  Dadri  Cement Co’s case(4):-               ",It is also well established that in the  new               set up these residents do not carry with  them               the rights which they possessed as subjects of               the  ex-sovereign and that as subjects of  the               new  sovereign, they have only such rights  as               are granted or recognised by him."               and  a  passage  from  the  judgment  in   Bai               Rajbai’s case(5), and then observed :               "Any  right  to  property which  in  its  very               nature is not legally enforceable was  clearly               incapable of being protected by that section."               (pp. 1001-2).               That  was  a  reference to s.  299(1)  of  the               Government  of India Act, 1935.  In the  other               case we have observed at p. 499:-               "In our opinion s. 299(1) of the  Constitution               Act  of  1935 did not help grantees  from  the               former                (1) 42 I.A. 229. (2) (1962] 3 S.C.R. 970.               (3)  [1962]  Supp. 1 S.C.R. 405.   (4)  [1959]               S.C.R. 729.   (5)    42 I. A. 229. 593               rulers whose rights had not been recognized by               his   new   sovereign   in   the   matter   of               establishing  their  rights in  the  municipal               courts  of  the  new  sovereign  because  that               provision  only protected such rights  as  the               new citizen had at the moment of his  becoming               a citizen of the Indian Dominion.  It did  not               enlarge  his  rights  nor  did  it  cure   any               infirmity      in      the      rights      of               thecitizen:.............." The  other point raised in these appeals was as  to  whether the  Tharao  relied upon by the respondents was a  law  and, therefore,  could be said to have been kept in force by  the provisions  of the Application of Laws Order, 1949  made  by the Province of Bombay.  My brother Ayyangar J., has largely on  the  basis  of the decision of this  Court  in  Madhorao Phalke  v. The State of Madhya Pradesh (1) held that  it  is law.  On the other hand my brother Hidayatullah J., has come to  the opposite conclusion.  My brother Shah J.,  has  also held  that the Tharao is not a law.  I agreed with the  view

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taken  by my brother Hidayatullah J., and brother  Shah  J., that  it  is  not a law and that the  decision  in  Madhorao Phalke’s case(1) does not justify the conclusion that it  is ’law’.  I do not think it necessary for the purpose of  this case  to  examine further the question as to  what  are  the indicia of a law. For  these  reasons  I would allow the  appeals  with  costs throughout.                            ORDER SINHA  C.J.--In accordance with the opinion of the  majority the  appeals are allowed with costs throughout--one  set  of hearing fees. (1) [1961] 1 S.C.R. 957. 134-154 S.C.-38. 594