M.C. Chagla, C.J.
1. When Mr. Justice M.C. Shah and Mr. Justice Baxi of the Saurashtra High Court heard First Appeal No. 12 of 1952, certain important questions of law arose before them and they thought it necessary to refer those questions to a Full Bench. This matter has now come before us.
2. In order to understand the question that we have to decide, a few facts must be stated. The plaintiff is the second son of the ex-Ruler of Sayla and on July 21, 1945, the Thakore Saheb of Sayla, the then Ruler, agreed to give to the plaintiff a sum of Rs. 30,000 in lieu of residence and this caine to be given under the following circumstances. The Thakore Saheb was the karta of an impartible estate and both under the custom and the rule of Hindu law the impartible estate would go to his eldest son, but the younger sons have a right of maintenance and residence. Certain provision was made with regard to the maintenance of the plaintiff, but with regard to the residence, that claim was commuted for the amount of Rs. 30,000. Pursuant to this arrangement two sums of Rs. 6,000 each were paid in 1946 and 1947. It may be stated that the order of the Thakore Saheb provided that the sum of Rs. 30,000 was to be paid by five instalments. On March 15, 1948, the United States of Kathiawar came into existence, the State of Sayla having merged in these United States on March 7, 1948. The United States of Kathiawar ultimately gave place to the State of Saurashtra and under the States Reorganization Act of 1956 the State of Saurashtra became a part of the Bombay State, and the plaintiff filed the suit against the State of Saurashtra on February 2, 1950, claiming the balance of Rs. 18,000. The trial Court, which gave its judgment on November 20, 1951, held in favour of the plaintiff on all points, but came to the conclusion, by reason of certain provisions of law to which we will presently make reference, that the suit had abated and dismissed the suit. An appeal was carried to the High Court of Saurashtra and a Division Bench of that High Court, as just pointed out, made this reference to the Full Bench on July 1, 1954.
3. The first question is whether the suit filed by the plaintiff has abated. In order to understand this contention and also the second contention which arises out of certain provisions of the Constitution, let us try and clearly understand what the nature of the suit was which the plaintiff had filed. He was enforcing against a State a contractual obligation undertaken by the Ruler of Sayla. It was an agreement arrived at between the Thakore Saheb of Sayla and the plaintiff that in lieu of the plaintiff's right to residence, which it has been found by the trial Court existed under both Hindu law and custom prevalent in the State, he should be given Rs. 30,000 by the Ruler of Sayla. Therefore, the Thakore Saheb of Sayla had undertaken a contractual obligation in consideration of the plaintiff giving up his right of residence to pay this sum of Rs. 30,000. Whatever form the plaint might have taken, in substance this was the suit that the plaintiff filed., He contended that he had been paid Rs. 12,000 and the balance of Rs. 18,000 remained to be paid under this contract.
4. The first piece of legislation we have got to look at is Saurashtra Ordinance No. 72 of 1949 and Section 3 of that Ordinance provides:
(1) Notwithstanding anything contained in any law or instrument for the time being in force, but subject to the provisions of Section 4, all suits or proceedings of any description, whether civil or political, which were, before the date of the coming into force of this Ordinance triable by Special Courts constituted or established by, or under the authority of, the Government of India, as then constituted, or the Crown Representative, or the Rulers of the Covenanting States, or the Talukdars or Estate-holders of Agreeing Talukas or Estates shall be tried and disposed of by civil Courts.
This Ordinance, as the marginal note to Section 3 and the preamble makes it clear, relates to certain suits which were triable by Special Courts and these Special Courts are Courts set up in the Western India and Gujarat States region. There is no clear evidence on the record which goes to show that the suit of the plaintiff, with which we are dealing, was a suit which would have been cognizable by a Special Court if the merger of States had not taken place. But for the purpose of this argument we will assume that the Ordinance applies and that the suit which the plaintiff filed, if the State of Sayla had not joined the Saurashtra State, would have been tried by the Special Court mentioned in the Ordinance. Therefore, what Section 3(1) provides is that all these suits shall be tried and disposed of by civil Courts. In other words, the Special Courts are done away with and the jurisdiction of civil Courts is restored. But there is an exception to this provision and that exception is contained in Section 4, and we are concerned with Clause (2):
Nothing contained in Section 3 shall apply to any suit against the Government in. respect of-(i) the enforcement of any right or remedy in respect of anything done or omitted to be done by or under the authority of any Ruler of any Covenanting State or any Talukdar or Estate-holder of any Agreeing Taluka or Estate before April 15, 1948.
This Ordinance was followed by Act IV of 1951 and Sub-section (2) of Section 3 provides:
(1) All suits of the nature described in Clause (i) of Section 4 of the Saurashtra Adjudication of (Special Courts) Suits Ordinance, 1949 (No. LXXII of 1949) (hereinafter referred to as the said Ordinance), pending in any Court or before any authority on the date of the coming into force of this Act shall abate.
5. The narrow question that arises for our decision on this head of argument is whether this particular suit falls within the ambit of Section 4(2) of the Ordinance. If it does, then the suit abates by reason of the provision in Act IV of 1951 and the trial Court was right in holding that the suit had abated. Now, what is the nature of the suits contemplated by Section 4(2) 1 It is a suit against the Government in respect of the enforcement of any right or remedy in respect of anything done or omitted to be done by or under the authority of any Ruler of any Covenanting State. It is clear on a plain construction of this provision that the suits contemplated by this sub-section are suits where the plaintiff makes a grievance of anything done or omitted to be done by or under the authority of any Ruler and in respect of that grievance he seeks to enforce some right or remedy. Therefore, the complaint must be that the Ruler has done something which is wrong or erroneous or has omitted to do which he was bound to do. Now, this suit, far from making any such complaint or ventilating any such grievance, stands by the decision taken by the Ruler and wishes that decision to be enforced. The complaint of the plaintiff is not that the Ruler has done anything wrong or has omitted to do anything which he should have done. On the contrary, his complaint is that the successor State has failed to honour and observe the terms of the contract entered into by the Ruler and the grievance is against the successor State and not against the Ruler of the Covenanting State.
6. The Government Pleader says that the plaintiff is seeking a right or remedy in respect of an order passed by the Ruler and we must hold that a suit of that nature would fall within the expression 'any right or remedy in respect of anything done by the Ruler,' and the Government Pleader urges that the Ruler has done something, which is passing the order, that the right of the plaintiff flows from that order, and therefore he is enforcing that right. In our opinion, that suggested construction is entirely untenable. The expression 'anything done or omitted' clearly means anything done or omitted unilaterally. There is no act or omission on the part of the Ruler which is unilateral in respect of which any right or remedy is sought. What is done by the Ruler is to enter into a contract with the plaintiff. So the act is a bilateral one which has resulted in a contract, and the enforcement is not of any right or remedy in respect of anything done or omitted to be done, but the suit is for the enforcement of a contract entered into between the plaintiff and the Ruler. Therefore, it is clear that really what was contemplated by Section 4(2) were suits which sound in tort and not suits in contract, and the present suit, as already pointed out, is a suit in contract and not a suit which sounds in tort. Therefore, as far as the first question is concerned, we are of the opinion that the suit does not abate by reason of the provisions of Ordinance 72 of 1949 and Act IV of 1951.
7. The next question is the proper interpretation of Article 363 of the Constitution. That article, as the marginal note correctly indicates, constitutes a bar against civil Courts with regard to disputes arising out of treaties, agreements and covenants entered into before the commencement of the Constitution by the Ruler of an Indian State with the Government of the Dominion of India or any of its predecessor Governments, and what is urged on behalf of the State is that what the plaintiff is seeking to enforce is a liability undertaken by the State under the Covenant, and in order that the plaintiff should succeed not only the Covenant will have to be construed but the question that the Court will have to consider is a question with regard to a dispute arising out of this Covenant.
8. Now, certain legislative history is necessary to be considered in order to appreciate this point. The first Constitutional document is the Covenant entered into between the various merging States to constitute the United States of Kathiawar and that Covenant was signed on April 15, 1948, and Article VI (1)(c) of that Covenant provides:
all the assets and liabilities of the Covenanting State shall be the assets and liabilities of the United States of Kathiawar.
We have then Ordinance I of 1948 which Ordinance gave the name of Saurashtra to the United States of Kathiawar which set out Article VI of the Covenant and provided by Clause 3(1) :
When in pursuance of paragraph 1 of Article VI of the Covenant, the administration of any Covenanting State has been taken over by the Raj Pramukh, the fact shall be notified in the Saurashtra Government Gazette and thereupon the provisions of Clauses (a), (b) and (c) of paragraph 1 of Article VI shall immediately come into force.
This Ordinance was published in the Gazette on March 1, 1948, and the Sayla State was taken over on March 7, 1948. Therefore, on that date, as far as the Sayla State is concerned, Clause (c) of Article VI(1) with which we are concerned came into force, viz., that all the assets and liabilities of the Covenanting State, which in this case is Sayla, became the assets and liabilities of the State of Saurashfea. A proclamation was also issued on April 1, 1948, which was publshed in the Saurashtra Government Gazette on April 5, 1948, and this proclamation also mentions that all the assets and liabilities of the said States and Talukas have become the assets and liabilities of the State of Saurashtra. On January 26, 1950, India became a Republic and the Constitution came into force and Article 295(2) provided:
Subject as aforesaid, the Government of each State specified in Part B of the First Schedule shall, as from the commencement of this Constitution, be the successor of the Government of the corresponding Indian State as regards all property and assets and all rights, liabilities and obligations, whether arising out of any contract or otherwise, other than those referred to in Clause (1).
And Saurashtra was shown as one of the States in Part B of the First Schedule. Therefore, Saurashtra became the successor State to the corresponding Indian State both with regard to assets and liabilities, and the corresponding-Indian State to Saurashtra mentioned in Part B was the State of Saurashtra which was brought into existence in 1948 by the Proclamation and Ordinance I of 1948. Then we have the reorganization of the States as recently as 1956 and Section 91 of the States Reorganization Act provided:
The benefit or burden of any assets or liabilities of an existing State not dealt with in the foregoing provisions of this Part shall-(a) if there be only one successor State, pass to that State.
So we have a clear chain carrying forward the assets and liabilities of the original State in Kathiawar to the present reconstituted State of Bombay. We start with the liability of the State of Sayla incurred under this document which conferred upon the plaintiff certain contractual rights. That liability was taken over by the covenant by the United State of Kathiawar, it was re-emphasised by the Ordinance referred to further emphasised by the Proclamation, and provision was made with regard to it by the Constitution, and ultimately we have the States Reorganization Act which saves the rights and liabilities of the original existing State.
9. In view of this history, can it be said that the question that has got to be considered in this suit is a question which relates to any dispute arising out of any provision of a treaty, agreement, covenant, engagement or other similar instrument which was entered into or executed before the commencement of this Constitution by any Ruler of an Indian State and to which the Government of the Dominion of India or any of its predecessor Governments was a party? We will consider this question from two aspects. The first aspect is this. If the matter had stood merely at the covenant entered into between the different States to set up the United State of Kathiawar, what is urged by the Government Pleader is that the liability undertaken by the new State was a liability under the covenant, the plaintiff was not a party to that covenant, and it is well-settled that the rights arising out of the covenant must be adjudicated as between the high contracting parties to the Covenant, and a stranger to the Covenant has no right to claim any benefit conferred under the Covenant. So what is urged is that although the United State of Kathiawar may have undertaken the liabilities of the Sayla State, inasmuch as the plaintiff was not a party to the Covenant, he cannot claim the benefit of that Covenant. Now, in the first place, it is not quite true to say that the plaintiff is seeking to enforce a right which arises under the Covenant. His right, in the first instance, arises under the Hindu law or Hindu custom, and secondly it arises out of the contract which commutes his right of residence under Hindu law for a fixed sum of Rs. 30,000. Therefore, what he is seeking to enforce is his rights under private law, and it is a difficult proposition to accept that when a citizen seeks to enforce his contractual right or his rights under the ordinary law of the land, merely because he is asserting those rights against the State, the State can' rely on the provisions of Article 363 for contending that because the liability was taken over under the original covenant the right of the plaintiff cannot be adjudicated in a civil Court as provided by Article 363.
10. But the matter is no longer now a matter of controversy because the Supreme Court has taken the view in Bholanath J. Thaker v. State of Saurashtra : (1955)ILLJ355SC that the Covenant itself may be looked upon as a waiver by the Covenanting State of its rights to ignore private rights of the citizen of the State of which it is the successor. It is true that under international law when there is a cession or a succession or a conquest, the State which benefits by the cession or succession or conquest is not bound to recognize the rights of the citizens of the State which it has absorbed. The recognition must be either by law or by proclamation. But as the Court of Appeal pointed out in West Band Central Gold Mining Co. v. Rex  2 K.B. 391 that the law as laid down by the Privy Council was that the new sovereign State may choose to waive its rights and recognize titles and rights as they existed at the date of cession, and, it is in the light of this observation of the Privy Council that Mr. Justice Bhagwati in the case just referred to has stated (p. 682) :
There was in fact no such legislation and therefore his rights remained and the Municipal Courts would be entitled to examine the contract and apply the Dhara No. 29 of St. 2004 and enforce whatever rights the appellant had under that Dhara and his contract of service.... The Covenant 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. The terms of the Covenant showed that the existing laws were to continue and whatever the rights of the appellant were under the existing laws were available for enforcement to the appellant and there was no bar to the Municipal Courts entertaining a suit to enforce such rights.
In this view of the matter Article 363 of the Constitution could not be invoked by the respondent. There was no dispute arising out of the Covenant and what the appellant was doing was merely to enforce his rights under the existing laws which continued in force until they were repealed by appropriate legislation. This ground therefore could not avail the respondent.
As a matter of fact, in our case the position is much stronger. The observations of Mr. Justice Bhagwati, with respect, would apply even if the matter rested at the covenant and nothing more had happened. But here we have an Ordinance passed by the new State which is the law of that State and under that law the liabilities of the merged State are taken over. Therefore, what the plaintiff is seeking to enforce is not any right under the covenant. He is seeking to enforce a right conferred upon him by the law of the Saurashtra State constituted by the Ordinance just referred to. Therefore, it is difficult to understand how in any view of the case Article 363 comes into question. The Saurashtra State went far beyond the stage of the covenant. It gave its imprimatur to the covenant and recognised the rights of the subjects of the merged States and assumed the liabilities in respect of those States by passing an Ordinance which incorporated in it relevant provisions of the covenant.
11. The Government Pleader wanted to argue that even assuming the suit was maintainable and had not abated and even assuming that the Court had jurisdiction and the jurisdiction had not been ousted by Article 363, even so this was not a liability which the State had taken over under the provisions of the Covenant and the Ordinance. We have prevented the Government Pleader from going into that matter because it is clear on the record that that contention was never raised either in the trial Court or in the Court of appeal of the Saurashtra High Court. All that the State contended was that the suit was not maintainable by reason of the fact that it had abated and also by reason of the fact that the jurisdiction of the civil Court had been ousted by Article 363 of the Constitution. If the State failed in these two contentions it was not its further contention that not with sanding the fact that the suit was maintainable it was not liable to discharge this liability on any construction of the Ordinance or on any principle of international law.
12. It is unnecessary to consider another question that was referred to us by the Division Bench of the Saurashtra High Court as to whether Section 4 of the Ordinance applies to suits pending on the date of the Ordinance as well as to suits filed subsequently. As we have held that the suit does not fall at all within Section 4, this question does not arise.
13. We must send this matter back to the Division Bench to dispose of the appeal on merits in the light of this judgment. But we would like to say this and we have said this to the Government Pleader, that the plaintiff has been seeking to establish his right since 1950, we are now in 1958, and as far as one can gather from the judgment of the trial Court and even of the High Court, there is very little on merits to justify the State in resisting the claim of the plaintiffs. This is not one of those cases Where an order in favour of a son of a Prince was passed on the eve of the merger. The order was passed as far back as 1945, it is based on a right under Hindu law which was honoured by the State itself by paying two instalments of Rs. 6,000 each, and we do feel that this is a case where the State will sympathetically consider the claim of the plaintiff and not insist upon having this appeal argued on merits before the Division Bench.