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PETITIONER: THE STATE OF SAURASHTRA

       Vs.

RESPONDENT: MEMON HAJI ISMAIL HAJI

DATE OF JUDGMENT: 04/08/1959

BENCH: HIDAYATULLAH, M. BENCH: HIDAYATULLAH, M. DAS, SUDHI RANJAN (CJ) BHAGWATI, NATWARLAL H.

CITATION:  1959 AIR 1383            1960 SCR  (1) 537

ACT:        Act   of  State--Taking over of administration  of  Junagadh        State   by  Dominon  of  lndia-Resumption  of  Property   by        Administrator  before  completion of such act-If an  act  of        State not justiciable in municipal Courts.

HEADNOTE: The  suit,  out of which the present appeal arose,  was  one originally  brought by the respondent against the  State  of junagadh,  later on substituted by the State of  Saurashtra, for  a  declaration  that the  Administrator’s  order  dated October  i, 1948, resuming the immoveable property  in  suit was  illegal,  unjust  and against  all  canons  of  natural justice.   The suit was decreed by the Civil judge  and  the decree  was affirmed by the High Court in appeal.  The  only point  for determination in this appeal was whether the  act of  Resumption  by  the Administrator was an  act  of  State performed on behalf of the Government of India and  involved an   alien  outside  the  State  and  was  not,   therefore, justiciable  in the municipal Courts.  With the  passing  of the  Indian Independence Act 1947, and lapse of  paramountcy by  -reason  Of S. 7 thereof, the Nawab of  junagadh  became sovereign,  but instead of acceding to the new  Dominion  he left  for  Pakistan.  It appeared from the  White  Paper  on Indian  States  that the Government of India took  over  the administration  of  the State on November 9,  1947,  at  the request  of the Nawab’s Council, but did not formally  annex it  till  January  2o,  1949, and  during  that  period  the Administrator  maintained law and order and carried  on  the administration. Held,  that  there could be no, doubt that the  act  of  the Dominion of India in assuming the administration of junagadh State was an act of State pure and simple and the resumption in 538 question  having been made by the Administrator before  that act was completed and at a time when the people of junagadh, including the respondent, were aliens outside the State, the act of resumption, however arbitrary, was an act of State on behalf  of the Government of India and was  not,  therefore, justiciable in the municipal Courts.

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The  test  in such cases must be whether the  State  or  its agents  purported to act " catastrophically " or subject  to the ordinary course of law. Salaman v. Secretary of State for India, (1906) i K.B.  6I3, Johnstone  v. Pedlar, (192I) 2 A.C. 262, Secretary of  State in  Council  for India v. Kamachee Boye  Sahaba,  (1859)  13 Moore  P.C.  22,  Vaje  Singh Ji joravar  Singh  &  Ors.  v. Secretary  of  State  for India, (1924) L.R.  51  I.A.  357, Dalmia  Dadri  Cement  Co. v.  Commissioner  of  Income-tax, [1959] S.C.R. 729, relied on. Forester and Others v. Secretary of State for India, 18 W.R. 349 P.C., considered. The essence of an act of State was the arbitrary exercise of sovereign  power, on principles other than or  paramount  to the  municipal law.  Although the sovereign might allow  the inhabitants  to retain their old laws and customs, it  could not itself be bound by them until it purported to act within them, thus bringing to an end the act of State. Campbell  v.  Hall, 1 Comp. 204; 98 E.R.  1045,  Ruding  v. Smith,  2 Hag.  Con. 384; 161 E.R. 774 and E.I. Co. v.  Syed Ali, 7 M.I.A. 555, referred to.

JUDGMENT:        CIVIL APPELLATE JURISDICTION : Civil Appeal No. 185 of 1955.        Appeal  from the judgment and decree dated the February  19,        1953,  of  the former Saurashtra High Court in  Civil  First        Appeal  No.  16  of 1952, arising out of  the  judgment  and        decree  dated December 15, 1951, of the Civil Judge,  Senior        Division, Junagadh in Civil Suit No. 470 of 1950.        G.   K. Daphtary, Solicitor -General of India, B.  Ganapathy        lyer and D. Gupta for the appellant.        I.   N. Shroff, for the respondent.        H.   J. Umrigar and K. L. Hathi, for the Interveners.        1959.  August 4. The Judgment of the Court was delivered by        HIDAYATULLAH  J.-This  appeal with a  certificate  from  the        former  High  Court  of  Saurashtra  under  Art.133  of  the        Constitution read with Ss. 109 and 110 of        539        the  Code of Civil Procedure, has been brought  against  the        judgment  of  that Court dated February 19, 1953,  in  Civil        First Appeal No. 16 of 1952.        The  appellant  is  the State  of  Saurashtra,  which  stood        substituted  for  the State of Junagadh, against  which  the        suit  was  originally  filed.  The  respondent,  Memon  Haji        Ismail  Haji Valimahomed of Junagadh, (hereinafter  referred        to  as the respondent, brought this suit originally  against        two  defendants, the State of Junagadh and one  Jamadar  Abu        Umar  Bin  Abdulla Abu Panch (hereafter referred to  as  Abu        Panch),  for  a declaration that the Secretariat  Order  No.        2/3289  dated  October 1, 1948, was "  illegal,  unjust  and        against  all canons of natural justice ". He also asked  for        an alternative relief that the second defendant do return to        him  a  sum  of  Rs. 30,000  plus  Rs.  541-2-0,  being  the        consideration  and  expenses  of  a  transfer  of  immovable        property resumed under the said Order.  The suit was decreed        by  the Civil Judge, to whom after integration the case  was        transferred, and the decree was confirmed by the High  Court        by  the judgment under appeal.  It may be pointed  out  that        during  the course of this suit, a third defendant,  namely,        the  Mamlatdar,  Viswadar was also  impleaded,  because  the        property of Abu Panch had passed into the management of  the        Saurashtra Government under what is described in the case as        the Gharkhod Ordinance.  It may further be pointed out  that

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      the  two defendants other than the State of Saurashtra  were        discharged from the suit, and it proceeded only against  the        State  of  Saurashtra for the relief  of  declaration  above        described.        The  facts  of  the case areas  follows:  One  Ameer  Ismail        Khokhar  Kayam Khokhar purchased a plot of land in  Junagadh        town from the State of Junagadh, and built a house on it.  A        Rukka  was  issued  to him on December  2,  1939,  which  is        plaintiff s Exhibit No. 34.  In the year 1941, the Nawab  of        Junagadh  purchased  the property from Khokhar,  though  the        document  by  which this purchase took place  has  not  been        produced  in the case.  On November 17,1941, the Nawab  gave        this property by gift to Abu Panch.  Abu        540        Panch in his turn sold on November 24, 1943 the property  to        the  respondent for Rs. 30,000.  In the original  gift  deed        (described in plaintiff’s Exhibit dated May 18, 1942)  there        does  not  appear  to have been any mention of  a  power  to        transfer the property.  Indeed, in the said document of  May        18,  1942, it was stated that the house was given for the  "        use and enjoyment " of Abu Panch.  Subsequently, on February        12, 1944, the Nawab ordered certain amendments in the Palace        Order by making it possible for Abu Panch to sell the house.        It was stated as follows:        " ... you are hereby granted from the date of gift i.e.  17-        11-41  the title to sell the house as defined in this  Rukka        and as per directions received."        It appears that this additional Shera was issued to validate        the  sale  which  had been effected by  Abu  Panch  earlier.        However, the matters stood thus when after Independence  the        affairs  of  Junagadh State fell into a chaos,  and  at  the        invitation  of  the State Council the  Government  of  India        ordered the Regional Commissioner, Western India and Gujerat        States Region to assume charge of the administration of  the        State  on behalf of the Government of India.   The  Regional        Commissioner  on  November 9, 1947,  issued  a  Proclamation        which was published in the Destural Amal Sarkar Junagadh  of        November 10, 1947, stating that he had assumed charge of the        administration  of the Junagadh State at 18-00  hours  under        the  orders  of the Government of India.   The  Proclamation        which is brief, may be quoted here:        "  1, N. M. Buch, Barrister-at-law O.B.E., I.C.S.,  Regional        Commissioner,  Western India & Gujarat States  Region,  have        this  day  assumed  charge  of  the  administration  of  the        Junagadh  State  at  18.00 Hours under  the  orders  of  the        Government  of India, at the request of the  Junagadh  State        Council  supported by the people of Junagadh in view of  the        complete  breakdown of administration resulting  in  chaotic        condition  in  the State.  The first task of myself  and  my        officers  will  be  to  ensure  complete  peace  and   order        throughout  Junagadh  State  territory,  and  to  give  even        justice to all communities.  The majority                             541        community of the State has a special responsibility for  the        protection  of  the  minorities.   All  the  Junagadh  State        Officials  and  subjects are, therefore,  invited  to  offer        unconditional  and loyal support and cooperation to the  new        Administration.   Any act of non-cooperation and  disloyalty        must in the interest of the people and for the  preservation        of " peace and order " be dealt with and shall be dealt with        firmly.             Junagadh,                    N. M. Buch,             9th November, 1947.         Regional Commissioner,                                         Western India & Gujarat                                         States Region."

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      On   November  14,  1947,the  Regional  Commissioner  by   a        Notification   (No.  6  of  1947),  appointed  Shri  S.   W.        Shiveshwarkar  as  Administrator of  Junagadh  State.   That        Notification was as follows:        "  Mr. S. W. Shiveshwarkar M.B.E., I.C.S. on being  relieved        as Secretary to the Regional Commissioner, Western India and        Gujarat  States  Region, is appointed Administrator  of  the        Junagadh  State  vice Rao Saheb T. L. Shah,  B.A.  Under  my        general guidance and supervision the Administrator will have        full  authority  to pass all orders and to take  all  action        necessary to carry on the affairs of the Junagadh      State.             Junagadh,                   N. M. Buch,             14th November, 1947.       Regional Commissioner,                                        Western India & Gujarat                                        States Region."        On  October 13, 1948,Shri Shiveshwarkar  passed  Secretariat        Order  No. R/3289 of 1948, which was impugned in  the  suit.        It reads:        "Land  measuring  Sq.   Yds. 1,846-9-12  with  the  building        thereon, situated outside Majevdi Gate opposite workshop was        given  as a gift by way of Inam to Abu Umar Bin Abdulla  Abu        Panch of Junagadh under Private Secretary’s Office No.  P158        dated  17th November, 1941.  The donee had no right to  sell        the  said  land and building under Rukka No. 32/98  and  the        vendor Sheth Haji Ismail Haji        69        542        Valimahomed  had purchased the same with the full  knowledge        of the contents hereof.        The.  grant being a wanton and unauthorised gift  of  Public        property  the  above-said order is hereby cancelled  and  as        the-subsequent  purchaser does not get any right,  title  or        interest  higher than that possessed by the donee,  Mr.  Abu        Panch,   it  is  ordered  that  the  said  land   with   the        superstructures  thereon should be resumed forthwith by  the        State as State property.        Sd. S. W. Shiveshwarkar        Administrator        President’s Executive        Council, Junagadh State."        It  appears  that immediately afterwards  the  Administrator        took  this  property in his possession, and  the  plaintiff-        respondent  after  serving  a notice under  s.  423  of  the        Junagadh State Civil Procedure Code (corresponding to s.  80        of  the Civil Procedure Code, 1908) filed the suit  for  the        above  declaration  in  the High Court  of  the  State.   As        pointed out above, the suit was transferred subsequently  to        the  Civil Judge, Senior Division, Junagadh, who decreed  it        granting the declaration on December 15, 1951.  He held that        the  Administrator’s order was illegal and  inoperative  and        also against " all canons of natural justice." An appeal was        filed b the State of Saurashtra pleading, as was done in the        suit itself, that the action of Shri Shiveshwarkar who was a        de-legate of the Government of India appointed under s. 3(2)        of   the  Extra-Provincial.   Jurisdiction  Act,   was   not        justiciable  being an act of State, that the  Civil  Court’s        jurisdiction  was barred under s. 5 of the Extra  Provincial        Jurisdiction Act and s. 4(2) of Ordinance No. 72 of 1949 and        that  the grant was always resumable by the Ruler  and  Shri        Shiveshwarkar as the successor could also resume the same.        The High Court of Saurashtra referred in detail to a  minute        prepared  by  Sir  Raymond West in  Col.   Webb’s  Political        Practice,  wherein the author had stated what the rights  of        Rulers  were to- resume grants made by them and stated  that        such  resumption was not possible by the Rulers.   The  High

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      Court also        548        stated  that this action could not be regarded as an act  of        State  and further that the jurisdiction of the  Courts  was        neither barred by s. 5 of the Extra-Provincial  Jurisdiction        Act nor by s. 4(2) of Ordinance No. 72 of 1949.        In  this appeal, the learned Solicitor-General on behalf  of        the  State of Saurashtra abandoned three of the  contentions        which  were  raised in the Courts below.  He said  that  the        State  was not relying upon the power of Shri  Shiveshwarkar        as  successor  to  the  Ruler of  Junagadh  to  resume  this        property, and no reference to Sir Raymond West’s minute  was        therefore necessary.  He also said that the State Government        did  not  seek to justify the resumption  nor  question  the        jurisdiction of the Court under the Extra-Provincial  Juris-        diction  Act and the above-mentioned Ordinance.  He  pleaded        that  the action of Shri Shiveshwarkar was an act  of  State        performed  on  behalf of the Government of  India,  and  was        therefore not justiciable in Municipal Courts.        The  term  ’act of State’ has many uses  and  meanings.   In        France and some Continental countries the acts of the  State        and  its officers acting in their official capacity are  not        cognizable  by the ordinary courts nor are they  subject  to        the  ordinary  law of the land.  The reason of the  rule  is        stated  to be that the State as the fount of all law  cannot        be  subordinate  to  it.   In our system  of  law  which  is        inherited  from English Jurisprudence this is  not  accepted        and  save  some acts of a special kind, all  other  official        acts  must  be justified as having a legal  foundation.   In        this sense act of State’ means not all governmental acts  as        it does in the French and Continental Systems but only  some        of them.  The term is next used to designate immunities  and        prohibitions  sometimes  created by statutes.  The  term  is        also  extended to include certain prerogatives  and  special        immunities  enjoyed by the sovereign and its agents  in  the        business  of internal government.  The term is even used  to        indicate  all  acts  into which, by  reason  that  they  are        official  in  character, the Courts may not inquire,  or  in        respect  of which an official declaration is binding on  the        Courts.        544        We  are  not concerned With these and such  other  meanings.        The defence is founded on an act of State involving an alien        outside  the State.  Such an act of State was  described  in        elegant  phrase  by Fletcher Moulton, L. J.,  in  Salman  v.        Secretary  of State for India (1) as ’a catastrophic  change        constituting  a new departure.’ It is a sovereign act  which        is neither grounded in   law  nor does it pretend to be  so.        Examples  of such ’catastrophic changes’ are to be found  in        declarations   of  war,  treaties,  dealings  with   foreign        countries and aliens outside the State.  On the desirability        or  the justice of such actions the Municipal Courts  cannot        form  any judgment.  In Civil commotion, or even in  war  or        peace,  the State cannot act catastrophically’  outside  the        ordinary law and there is legal remedy for its wrongful acts        against its own subjects or even a friendly alien within the        State.  See Johnstone v. Pedlar (2).  But there is  immunity        from  courts’  interference in respect of acts done  by  the        State against an alien outside the State. The question  thus        is  always:  Did  the State or its  agents  purport  to  act        ’catastrophically’ or subject to the ordinary course of  the        law?   This  question  was posed in Secretary  of  State  in        Council  for  India  v. Kamachee Boye  Sahaba  (3)  by  Lord        Kingsdown in these words:-        " What was the real character of the act done in this  case?

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      Was  it a seizure by arbitrary power on behalf of the  Crown        of  Great  Britain,  of  the dominions  and  property  of  a        neighbouring  State, an act not affecting to justify  itself        on  grounds  of Municipal Law ? Or was it, in, whole  or  in        part, a possession taken by the Crown under colour of  legal        title of the property of the late Raja of Tanjore, in  trust        for those who, by law, might be entitled to it on the  death        of  the last possessor?  If it were the latter, the  defence        set up, of course, has no foundation."        In that case the Supreme Court of Madras was moved by a bill        to  claim  certain properties seized on the  death  of  Raja        Sivaji of Tanjore without heirs.  The        (1) (1906) i K.B. 6I3 at 640.    (2) (192I) 2 A.C. 262.        (1859) 13 Moore P. C. 22.        545        claim  was accepted by the Supreme Court of Madras  but  was        rejected  by the Privy Council.  Lord Kingsdown observed  in        the case:-        " The general principle of law could not, with any colour of        reason, be disputed.  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 make."        After  deciding  that  there  was  an  act  of  State,  Lord        Kingsdown further observed:        " of the propriety or justice of that act, neither the Court        below nor the Judicial Committee have the means of  forming,        or the right of expressing if they had formed, any  opinion.        It  may  have  been just or unjust,  politic  or  impolitic,        beneficial  or injurious, taken as a whole, to  those  whose        interests are affected.  These are considerations into which        their Lordships cannot enter.  It is sufficient to say that,        even  if a wrong-has been done, it is a wrong for  which  no        Municipal Court of justice can afford a remedy."        Similar  view  was expressed also in Raja of Coory  v.  East        India  Company (1), Raja Saligram v. Secretary of State  for        India in Council (2) ; and Sardar Bhagwan Singh v. Secretary        of State (3 ), and Secretary of State v. Sardar Rustam  Khan        (4).  The principle of these cases has been extended to  all        new territories whether acquired by conquest, or  annexation        or  cession  or  otherwise and also  to  rights,  contracts,        concessions,  immunities  and  privileges  erected  by   the        previous paramount power.  These are held to be not  binding        on the succeeding power even though before annexation it was        agreed   between  the  two  powers,  that  they  ’would   be        respected.   Lord Dunedin in Vaje Singh Ji Joravar  Singh  &        Others v. Secretary of State for India (5) summed up the law        in these words:-        " When a territory is acquired by a sovereign. State for the        first time that is an act of State.  It        (1)  (1860) 29 Beav. 300.        (2)  (1872) L.R. Ind.  App. Suppl.  Vol. 119.        (3)  (1874) L.R. 2 A.I. Cas. 38.        (4)  (1941) L.R. 68 I.A. 109.        (5)  (1924) L.R. 511 I.A. 357, 360.        546        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  municipal  courts established by the new  sovereign  any        such  rights, as that sovereign has, through  his  officers,        recognized.   Such  rights  as  he had  under  the  rule  of

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      predecessors  avail  him nothing.  May 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."        These  cases  and others like Cook v. Sprigg (1),  Hoani  Te        Heuheu  Tukino v. Aotea District Maori Land Board  (9)  were        approved  and applied by this Court in Dalmia  Dadri  Cement        Co. v. Commissioner of Income-tax (3) in which an  agreement        with the ex-Ruler of Jhind for tax concessions was held  not        binding upon the Income-tax authorities after the merger  of        the State with the Union of India and the defence of an  act        of State was upheld.  Venkatarama Aiyar, J., then observed:-        " When the sovereign of a State-meaning by that  expression,        the  authority  in  which the sovereignty of  the  State  is        vested,  enacts a law which creates, declares or  recognizes        rights in the subjects, any infraction of those rights would        be  actionable  in the courts of that State  even  when  the        infraction is by the State acting through its officers.   It        would  be no defence to that action that the act  complained        ,of is an act of State, because as between the sovereign and        his subjects there is no such thing as an act of State,  and        it  is incumbent on his officers to show that  their  action        which  is under challenge is within the authority  conferred        on  them by law.  Altogether different considerations  arise        when  the  act  of the sovereign has reference  not  to  the        rights        (1) (1899) A.C. 572.          (2) (1941) A.C. 308.        (3)  [1959] S.C.R. 729, 740-41.                547        of his subjects but to acquisition of territories  belonging        to another sovereign.  That is a matter between  independent        sovereigns,  and  any  dispute  arising  therefrom  must  be        settled by recourse not to municipal law of either State but        to  diplomatic action, and that failing, to force.  That  is        an  act of State pure and simple, and that is its  character        until the process of acquisition is completed by conquest or        cession.    Now,  the  status  of  the  residents   of   the        territories   which   are  thus  acquired  is   that   until        acquisition is completed as aforesaid they are the  subjects        of the ex-sovereign of those territories and thereafter they        become  the subjects of the new sovereign.  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; vide Secretary of State for India v.  Bai        Rajbai  (1),  Vajesingji  Joravar  Singhji  and  Others   v.        Secretary of State (2), Secretary of State v. Sardar  Rustam        Khan (3) and Asrar Ahmed v. Durgah Committee, Ajmer (4).  In        law,   therefore,   the  process  of  acquisition   of   new        territories  is one continuous act of State  terminating  on        the assumption of sovereign powers de jure over them by  the        new  sovereign and it is only thereafter that rights  accrue        to  the residents of those territories as subjects  of  that        sovereign.   In  other words, as regards  the  residents  of        territories  which  come  under  the  dominion  of  a,   new        sovereign,  the right of citizenship commences when the  act        of State terminates and the two, therefore, cannot co-exist.        It follows from this that no act done or declaration made by        the  new  sovereign  prior to his  assumption  of  sovereign        powers over acquired territories can quoad the residents  of        those  territories be regarded as having the character of  a        law  conferring on them rights such as could be agitated  in

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      his courts."        (1) L.R. 42 I.A. 229.      (3) (1941) L.R 68 I.A. 109.        (2)(1924) L.R. 51 I.A. 357, 360.        (4) (1947) A.I.R. 1947 P.C. I.        548        It is, however, otherwise if the act of the new sovereign is        meant  to be within the law and is not a concomitant  of  an        act  of  State.  One such case was Forester  and  Others  v.        Secretary  of State for India (1).  In that case one of  the        questions  was whether there was an act of State at  all,--a        question which the Courts can legitimately consider.  It was        held  that  the Begum, whose estate was seized by  the  East        India Company after her death, was not a sovereign  princess        but a mere Jaidadar and the resumption of her jagir upon her        death was not an act of State but an act done under a  legal        title.  It was observed :-        " The act of Government in this case was not the seizure  by        arbitrary  power  of territories which upto  that  time  had        belonged  to another sovereign State; it was the  resumption        of  lands  previously  held  from  the  government  under  a        particular  tenure, upon the alleged determination  of  that        tenure.   The  possession was taken under  colour  of  legal        title, that title being the undoubted right of the sovereign        power to resume, and retain or assess to the public revenue,        all  lands within its territories upon the determination  of        the  tenure,  under which they may have  been  exceptionally        held  rent  free.   If by means of the  continuance  of  the        tenure or for other cause, a right be claimed in  derogation        of this title of the government, that claim, like any  other        arising between the government and its subjects would  prima        facie be cognizable by the Municipal Courts of India."        From  these cases it is manifest that an act of State is  an        exercise  of  sovereign power against an alien  and  neither        intended nor purporting to be legally founded.  A defence of        this kind does not seek to justify the action with reference        to the law but questions the very jurisdiction of the Courts        to pronounce upon the legality or justice of the action.        We  have  now  to consider whether the  necessary  facts  to        support  the plea in defence existed in this case.  We  must        determine what was the status of the respondent on the  date        the impugned Order was passed against him.  The position  of        the ex-Rulers of the former Indian States has, on more  than        one occasion,        (1)  18 W.R. 349 P.C.        549        been analysed by this Court and need not detain us for long.        After  the  lapse of paramountcy by reason of s.  7  of  the        Indian Independence Act. 1947, the Nawab of Junagadh  became        a  sovereign  but he did not accede to the new  Dominion  by        executing an Instrument of Accession as did the other Rulers        in  Saurashtra.   He  left the  country.   The  position  of        Junagadh  was thus unique and what subsequently happened  is        described  in the White Paper on Indian States which it  has        become customary to rely upon as a constitutional  document,        without proof.        "  After  the  Nawab  of Junagadh had  left  the  State  for        Pakistan, the administration of this State was taken over by        the  Government of India on November 9, 1947 at the  request        of the Nawab’s Council.  Obviously, the action taken by  the        Government  of India had the fullest approval of the  people        of  Junagadh in that the results of the referendum  held  in        Junagadh and the adjoining smaller States in February  1948,        showed  that  voting  in favour of accession  to  India  was        virtually  unanimous.  During the period the  Government  of        India  held charge of the State, an Administrator  appointed

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      by  the  Government of India assisted by three  popular  re-        presentatives conducted the administration of the State.  In        December 1948, the elected representatives of the people  of        Junagadh  resolved that the administration of the  State  be        made  over  to  the Government of Saurashtra  and  that  the        representatives of Junagadh be enabled to participate in the        Constituent  Assembly  of Saurashtra State with  a  view  to        framing  a  common  Constitution  for  Saurashtra  and   the        Junagadh  State.   Similar resolutions were adopted  by  the        representatives  of Manavadar, Mangrol,  Bantwa,  Babariawad        and  Sardargarh.   Accordingly,  a  Supplementary   Covenant        (Appendix  XXXVI)  was executed by the Rulers  of  Kathiawar        States  with a view to giving effect to  the  aforementioned        resolutions.  The administration of Junagadh was taken  over        by  the Saurashtra Government on January 20, 1949,. .. ..  .        Accordingly  the  Constitution  treats  Junagadh  and  these        States as part of Saurashtra,"        70        550        It would appear from this that between November 9, 1947  and        January  20,  1949, there was no formal  annexation  of  the        State   by  the  Dominion  of  India,  though  the   Central        Government through its Regional Commissioner, Western  India        and  Gujrat States Region was maintaining law and order  and        carrying  on the administration.  On November 16, 1947,  the        following Notification was issued by the Administrator:-        "NOTIFICATION        No. 9 of 1947.        It  is hereby ordered that the Junagadh State Order No.  568        of 1944 is cancelled.  The State Council created by the said        order is hereby dissolved.        Any  reference,  required by any Enactment,  Rules,  Orders,        Convention,  Usage  etc.  to be made to  the  Council  shall        henceforth be made to the Administrator, Junagadh State,  in        whom all the powers so far exercised by the Council and  its        Members shall henceforth vest.             Junagadh,               S. W. Shiveshwarkar,             16th November,         1947   Administrator, Junagadh                                          State."        From that date the administration of the Junagadh State  was        centered  in the Administrator as the agent of the  Dominion        of  India.   The  people  of  Junagadh  did  not,   strictly        speaking,  become  the citizens of the  Dominion  till  much        later.   During  the interval they were aliens  even  though        they  desired union with India and had expressed  themselves        almost unanimously in the Referendum.        The act of the Dominion in thus assuming the  administration        of  the Junagadh State was an act of State pure  and  simple        and the action of the Administrator was taken before the act        of State was over.        The respondent contended before us that the theory of an act        of  State did not apply to this case.  According to him  the        State Council was in existence and had invited the  Dominion        of  India  to  step in and all the  local  laws  were  still        applicable.   He  pointed  out  that  the  Saurashtra  Civil        Procedure  Code was amended by a notification on  7th  July,        1948, and that also proved        551        that the local laws were in force and the Administrator  was        subject to them in his dealings with private property, under        the  general superintendence of the  Regional  Commissioner.        All  this is beside the point and does not  truly  interpret        the  act of State which had taken place.  The essence of  an        act of State is the exercise. of sovereign power and that is        done arbitrarily, on principles either outside or  paramount

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      to  the municipal law.  The fact that the  sovereign  allows        the  inhabitants to retain their old laws and  customs  does        not make the sovereign subject to them and all rights  under        those laws are held at the pleasure of the sovereign.  It is        only when the sovereign can be said to have purported to act        within  the  laws that-the act of State ceases to  afford  a        plea  in defence.  Before that stage is reached,  government        may  be  influenced  by the existing  laws  and  rights  and        obligations  but  is  not governed or bound  by  them.   See        Campbell  v.  Hall  (1), Ruding v. Smith (2)  two  cases  of        conquest  and  E.  1. Co. v. Syed Ali (3).  See  also  Mayne        Criminal  Law of India (4th Edition) II pp. 119,  120  where        the law is summarised.  There is nothing to prove that,  the        Dominion  had expressly or even tacitly recognized the  ,old        rights, the burden of proving which lay upon the  respondent        Secretary  of  State  for  India  v.  Bai  Rajbai  (4)   and        Vajesingh’s case (5) (op. cit.).        In this view of the matter it is not necessary to  determine        whether the Nawab could or did confer title on the donee  in        respect  of  this property.  Equally fruitless  will  be  an        inquiry into the powers of the Nawab - to resume or derogate        from,  his  grants and whether similar or  identical  powers        were  inherited  by the Dominion Government or  its  agents.        The action of the Dominion Government being an act of State,        the  act  of the Administrator, however arbitrary,  was  not        justiciable  in  the municipal courts and the suit  was  not        well founded.        The  appeal is, therefore, allowed.  The  respondent’s  suit        shall be dismissed with costs. throughout.                                            Appeal allowed.        (1)  I COMP. 204; 98 E.R. 1045.        (2)  2 Hag.  Con. 384; 161 E.R. 774.        (3)  7 M.I.A. 555 at 578.        (4)  L.R. 42 I.A. 229.        (5) (1924) L.R. 51 J.A. 357, 360.        552