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P.K. Basak and anr. Vs. Union of India (Uoi) Representing Eastern Railways and anr. - Court Judgment

LegalCrystal Citation
SubjectConstitution
CourtKolkata High Court
Decided On
Case NumberFull Bench Reference No. 3 of 1955
Judge
Reported inAIR1963Cal87
ActsIndian Independence (Rights, Property and Liabilities) Order, 1947 - Article 8(1)
AppellantP.K. Basak and anr.
RespondentUnion of India (Uoi) Representing Eastern Railways and anr.
Appellant AdvocateManash Ranjan Chakravartty, Adv.
Respondent AdvocateBhabesh Narayan Bose, Adv.
DispositionAppeal dismissed
Cases ReferredState of West Bengal v. Serajuddin Baitley
Excerpt:
- bachawat, j.1. i adhere to the view expressed in the order of reference. the majority of my lords take the opposite view and i will therefore say a few words in addition to what i have already said in the order of reference.2. the reason for an article such as article 8(1) of the indian independence (rights, property and liabilities) order, 1947 is obvious. up to the 15th august, 1947 there was one central government for the whole of undivided india, and hence all contracts made on behalf of the governor general in council before that day were for purposes of the central government of undivided india. all such contracts were made in exercise of the executive authority of the governor general in council see section 175(3) read with section 313(3) of the government of india act, 1935. with.....
Judgment:

Bachawat, J.

1. I adhere to the view expressed in the order of reference. The majority of my Lords take the opposite view and I will therefore say a few words in addition to what I have already said in the Order of reference.

2. The reason for an article such as Article 8(1) of the Indian Independence (Rights, Property and Liabilities) Order, 1947 is obvious. Up to the 15th August, 1947 there was one Central Government for the whole of undivided India, and hence all contracts made on behalf of the Governor General in Council before that day were for purposes of the Central Government of undivided India. All such contracts were made in exercise of the executive authority of the Governor General in Council see Section 175(3) read with Section 313(3) of the Government of India Act, 1935. With the passing of the Indian Independence Act, 1947 the territorial integrity of British India was broken, and its territories were divided between the Dominion of India and the Dominion of Pakistan. This division necessitated a division of the totality of the rights, property and liabilities of the Central Government of undivided India between the two Dominions. The initial distribution of, the rights and liabilities under contracts made on behalf of the Central Government of undivided India was effected by Article 8(1) of the Indian Independence (Rights, Property and Liabilities) Order, 1947. The test to be applied is whether the contract was for purposes which as from the appointed day are exclusively purposes of the Dominion of Pakistan. In other words the test is whether the contract would have been exclusively for purposes of the Dominion of Pakistan if that Dominion were in existence when the contract was entered into. If the contract satisfies this test but not otherwise the Dominion of Pakistan is substituted as the party to the contract and all rights and liabilities which may have accrued or may accrue under the contract will devolve on that Dominion.

3. The purposes of the Dominion of Pakistan as from the appointed day are to be understood in the context of the Government of India Act, 1935 as adapted by the Pakistan (Provisional Constitution) Order, 1947 by which that Dominion became governed as from that day in view of Section 8(2) of the Indian Independence Act, 1947. Railways became one of its central subjects and purposes in view of Sections 100(1) and 316 of the Government of India Act, 1935 read with Item 20 of list I of the seventh schedule to it. Now if a contract were made by the Central Government of the Dominion of Pakistan after the appointed day for purposes of carriage of goods by Railways, such a contract would be for purposes of that Dominion, since Railways were one of its central subjects. This conclusion is supported by the decision of the Federal Court in In the matter of Reference under Section 213, Government of India Act 1935 (17-18) in which a canal used for irrigation purposes of the Province of Delhi was held to be used for purposes of the Central Government of Undivided India within the meaning of Section 173 of the Government of India Act, 1935 since irrigation in the Province of Delhi which was a centrally administered area was ineffect a central subject. In this connection Gwyer, C. J. observed,

'That part of the canal which was, immediately before the commencement of the Act, still used for irrigation purposes in the Province of Delhi must, we think, be held to have been used at that date for purposes which thereafter became Central Government purposes since irrigation and canals are a provincial subject, and the Central Government has all the powers of a Province in the centrally administered areas (Sections 8(1) and 100(4) X'

4. Now in what cases a contract made by the Central Government of undivided India before the appointed day for carriage of goods by Railways be said as from that day to be made exclusively for the purposes of the Dominion of Pakistan? As from the appointed day the Railways in the territory of India became subject exclusively to the Central Legislative power and executive authority of the Dominion of India and the Railways in the territory of Pakistan became subject exclusively to Central Legislative power and executive authority of the Dominion of Pakistan, see Sections 8(1)(a), 99(1), 100(1), 313(2)(a) and (3), 316 and Item 20 of List I of the seventh schedule of the Government of India. Act, 1935 read with Section 8(2) of the Indian Independence Act, 1947. In this context a contract made by the Central Government of Undivided India before the appointed day for carriage of goods by Railways which fell wholly within the territory of Pakistan may well be said as from that day to be a contract exclusively for the purposes of the Dominion of Pakistan and be deemed to have been made on its behalf, since Railways in Pakistan were subject solely to the central power and authority of that Dominion to the exclusion of the Dominion of India. But where, as in this case, the contract was for carriage of goods by Railways which fell partly within India & partly within Pakistan, it is impossible to say that the contract is for purposes which from the appointed day are exclusively the purposes of the Dominion of Pakistan and should as from that day be deemed to have been made on its behalf. I fail to understand how the purposes of the contract can be said to be exclusively the purposes of the Dominion of Pakistan by reason of the fact that the place of destination of the goods was some place in the territory of Pakistan. The goods which were to be carried under that contract did not become the property of the Dominion of Pakistan as from the appointed day. On being carried to the place of destination in Pakistan the goods might come under the control of the Dominion of Pakistan, but they might never reach that Dominion, and in any case the test of their ultimate control is totally irrelevant. The purposes of the Dominion are Railways, and not the destination of the goods. With respect to the very eminent Judges who hold the opposite view, I venture to dissent from the decision in Krishna Ranjan Basu Ray v. Union of India : AIR1954Cal623 , and the cases which followed it, viz. the decision in Hari Trading Co. v. Dominion of India, 99 Cal LJ 62 and P. C. Mahanti v. Union of India : AIR1960Cal403 , as also the unreported decision in Civil Revn. Case No. 3478 of 1953. Amulya Mohan Ganguly v. Union of India, decided by Chunder, J. on the 27th May, 1954. The caseof Union of India v. Chamanlal Loona and Co. : [1957]1SCR1039 , is easily distinguishable. The contract there, was for supply of fodder to military farms, Lahore Cantonment. As from the appointed day the contract was exclusively for purposes of the Dominion of Pakistan since as from that day the farms were on the military establishment of that Dominion and were exclusively its subjects. The devolution of rights and liabilities under a contract of carriage of goods by Railways was not in issue in that case. The Supreme Court approved of the decision in : AIR1954Cal623 only in so far as it decided that Article 8(1) covers contracts in which the consideration has been executed by one party.

5. In my opinion the contract in this case cannot be said to be a contract for purposes which from the appointed day became exclusively purposes of the Dominion of Pakistan. Accordingly under Article 8(1)(b) of the Indian Independence (Rights, Property and Liabilities) Order, 1947, the liability under the contract devolved upon the Dominion of India. The finding of the Division Bench on the other points has not been challenged before the Full Bench. The Trial court has found that the amount of the claim is not excessive. In my opinion the appeal should be allowed, the judgments and decrees passed by the Trial court and the first appellate court should be set aside and the suit should be decreed with costs in all the courts.

6. In my opinion the questions referred to the Full Bench should be answered as follows:

Q.(1) -- No.

Q.(2) -- Yes.

Q.(3) -- The two cases were incorrectly decided in so far as they held that the first question should be answered in the affirmative and the second question in the negative.

Sinha, J.

7. In this appeal the facts are briefly as follows: In August 1946, certain ready-made clothes were consigned by P. K. Basak from Sealdah Station of the Bengal and Assam Railway, to Pabna out agency. The said P. K. Basack was acting as the agent for the plaintiff No. 2, Sahadul and Sons and the consignment was made under Railway Receipt No. 263876 dated the 15th August, 1946. Sealdah is now within the Union of India and Pabna out agency is now in Pakistan. It is said that the goods were not delivered to the consignee. Thereupon, notice under Section 77 was given to the Chief Commercial Manager of the said State Railway and notice under Section 80, C.P.C. was given to the Governor General in Council, Railway Administration, New Delhi and a suit for the recovery of compensation was instituted in the Court of the First Subordinate Judge at Pabna in July, 1947 After partition, the cause-title of the plaint was amended and the Dominion of India was substituted in the place of the Governor-General-in-Council. The suit was decreed ex parte in 1949 and it does not appear that the Dominion of India appeared in the suit at all. As is well-known, from the 15th August, 1947 two independent Dominions came into existence, known as the Dominian of India and the Dominion of Pakistan, set up under the Indian Independence Act, 1947. By virtue of the powers conferred on the Governor-General of India under Section 9 of the Indian Independence Act 1947, theIndian Independence (Legal Proceedings) Order 1947, was passed by the Governor General, By virtue of Article 4 of that Order, the Money Suit No. 9 of 1947 then pending in the Court of the First Subordinate Judge, Pabna was continued as if the Act had not been passed and effect had to be given between the territories of either of the two Dominions, to the decree dated the 17th May, 1949 as if it has been passed by a Court of competent jurisdiction within that Dominion. The decree was not realised. In the meantime, the Dominion of India became a Republic on the 26th January, 1950. On or about the 16th May, 1950 a suit was filed in the Alipore Court, out of which this appeal arises. In the plaint in that suit, the plaintiffs based their claims on the original cause-of-action for nondelivery under the contract as also under the decree dated the 17th May, 1949, passed in suit No. 9 of 1947 by the First Subordinate Judge, Pabna. The first defendant in the suit is the Union of India and the second defendant is the General Manager, E.I. Railway. Various issues were framed by the learned trial Judge, including the question of limitation and non-service of notices under Section 77 of the Railways Act and Section 80 of the Code of Civil Procedure. During the pendency of the suit, the Indian Independence Pakistan Courts (Pending Proceedings) Ordinance, 1951 (No. VI of 1951) came into force. Under this Ordinance, the plaintiffs could no longer base their cause-of-action upon the decree passed at Pabna, now in Pakistan. The plaintiffs would have to succeed on the basis of the original cause-of-action namely, non-delivery of goods under the Railway Receipt, dated the 15th August, 1946. This Ordinance was followed by the Indian Independence Pakistan Courts Act (Act IX of 1952). Before the learned Subordinate Judge, the suit was dismissed inter alia on the ground that notices under Section 77 of the Railways Act and Section 80 of the C.P.Code had not been served. An appeal was preferred against the same and it was dismissed by the learned Additional District Judge, Alipore, on the 23rd February, 1953. From that, a further appeal was preferred to the High Court. This appeal came up for hearing before a Division Bench presided over by Bachawat, J. Before their Lordships, many of the points e.g. the point of limitation and service of notices under Sections 77 and 80, were either conceded or not pressed. The main point that was argued was that the liabilities under the contract dated the 15th August, 1946 did not devolve upon the Dominion of India by virtue of sub-paragraph (1) of paragraph 8 of the Indian Independence (Rights, Property and Liabilities) Order, 1947. It was contended that inasmuch as the contract was for the carriage of goods to a place which upon the partition of India, fell within the Dominion of Pakistan, the contract was for a purpose which, from the 15th August, 1947 must be deemed to be exclusively the purposes of the Dominion of Pakistan. This was a contention which in the present form had not been taken either in the trial court or the lower appellate Court. However, the parties agreed that it was not desired to call or adduce any evidence on the question but to treat it as a pure question of law, to be decided on the admitted or proved facts on the record. On this point there is a judgment of a Division Benchof this Court presided over by K.C. Das Gupta, J. : AIR1954Cal623 . In that case, it was held that a contract for the carriage of goods from Sealdah to a station which fell within the Dominion of Pakistan was not a contract which, as from the appointed date, was exclusively for the purposes of India, although the goods were carried over the Bengal and Assam Railway, part of which fell within the Indian territory and part in Pakistan. In that case, the goods were despatched from Sealdah to Barisal, and while Sealdah remained within Indian territory, Barisal became a part of Pakistan. A suit was brought in the Barisal Court against the Governor-General-in-Council and a decree was obtained, but it was hit by the provisions of the Indian Independence Pakistan Courts Act (Act IX of 1952) and the plaintiffs brought a fresh suit against the Union of India in the Court of Small Causes, Sealdah. The contention raised in that case was that the purpose of the Contract would not be exclusively a purpose of the Dominion of Pakistan inasmuch as the purpose of the contract was earning profits by the Railway, which cannot be said to be exclusively a purpose of the Dominion of Pakistan. In other words, what was argued was this: The object of the contract was the carriage of goods from one place to another over the railway and, if part of the carriage was in India and part in Pakistan, it could not be said that the purpose of the contract was exclusively that of either Pakistan or India. This argument was not accepted by Das Gupta, J. He said as follows:

'In my judgment, it is wrong to consider the earning of profits as the purpose of the contract. The purpose of the contract was the carriage of the goods and where the destination was some point in Pakistan it seems to be reasonable to hold that the purpose was the purpose of the Dominion of Pakistan. Where on the contrary the carriage was to a point which remained in the Indian Dominion it would be a purpose of the Dominion of India. The fact that the Bengal and Assam Railway was actuated by the motive of earning profit and not by the question whether Pakistan would be benefited or not is not germane to the question of the purpose of the contract as used in Section 8.

It is interesting to notice in this connection that while the section speaks of the purpose of the Dominion of Pakistan and the purpose of the Dominion of India, it makes no reference to the purpose of the other contracting party. It seems to me that the profit-earning motive of either party to the contract is not the criterion by which the 'purpose' within the meaning of Section 8 is to be judged.'

8. In other words, the learned Judge held that where the goods are carried from the point of destination to the point of discharge, the purpose of the contract is to be determined by the point of discharge. Thus, if the point of origin was in India and goods were to be carried to a point in Pakistan, the purpose of the contract would be exclusively for the purposes of Pakistan. This was a proposition which the referring Bench presided over by Bachawat, J. found difficult to accept. The view of the referring court has been summarised as follows:

'Now viewing the contract in that light it will appear that as from the appointed day a part ofthe Railways over which the goods were to be carried fell within the Dominion of India and the other part fell within the Dominion of Pakistan. As from the appointed day the part of the Bengal and Assam Railway which fell within the Dominion of India became owned and administered by the Dominion of India and the other part which fell within the Dominion of Pakistan became owned and administered by that Dominion.

Assume that instead of entering into one contract for the carriage of goods from Sealdah to Pabna out-agency the Governor-General-in-Council had in fact entered into two contracts, namely, one contract for the carriage of goods from Sealdah to the border between the two Dominions and another contract for the carriage of the goods from that border to the Pabna out-agency. We are clearly of the opinion that in such a case the first contract, namely, the contract for the carriage of the goods from Sealdah to the Indian border would be as from the appointed day a contract exclusively for the purposes of India within the meaning of paragraph 8 of the Indian Independence (Rights, Property and Liabilities) Order, 1947, and the second contract, namely, the contract for carriage of the goods from that border to the Pabna out-agency would as from the appointed day be for purposes which are exclusively the purposes of Pakistan.

In our opinion, however, one entire contract for the carriage of goods from Sealdah to Pabna out agency cannot be deemed under that paragraph to be a contract for purposes which as from the appointed day are exclusively purposes of the Dominion of Pakistan.

The contract is for carriage of goods overcertain Railways, part of which is situated in the Dominion of India and the other part of which issituated within the Dominion of Pakistan. Thepurposes of carriage over that part of the Railwaywhich fell within the Dominion of India are notpurposes of the Dominion of Pakistan as from theappointed day.'

9. As this conclusion was diametrically opposite to the conclusion arrived at by a Division Bench in : AIR1954Cal623 (supra) the learned Judges referred the matter to a Full Bench. Three points for decision were formulated, although the whole case was referred. The three points for decision are enumerated in the order of reference at page 6 and are as follows:

'(1) Whether a contract made by the Governor-General of India in Council before the 15th August, 1947, for carriage of goods over Railways belonging to the Central Government from a place which on the partition of India fell within the Dominion of India to another place which on such partition fell within the Dominion of Pakistan is a contract for purposes which as from the 15th August, 1947, are exclusively purposes of the Dominion of Pakistan.

(2) Whether such a contract shall as from the 15th August, 1947, be deemed to be made on behalf of the Dominion of India.

(3) Are the cases : AIR1954Cal623 and Civil Revn. Case No. 3478 of 1953 correctly decided?

10. The above-mentioned case Amulya Mohan Ganguly v. Union of India is an unreported case, being Civil Revision Case No. 3478 of 1953 decided on the 27th May, 1954 where Chunder, J. came to the same conclusion as the learned Judges in : AIR1954Cal623 (supra). Briefly speaking, the conflict which we are asked to resolve is as follows: The goods are despatched from one station to another. As a result of the dismemberment of India, the despatching station remains in India but the station of destination has fallen in Pakistan. Part of the railway must, therefore, be deemed to be in India and part in Pakistan. The question is as to whether the contract evidenced by the railway receipt for the transportation of goods from one point to another, in such a case, is to be considered as being a purpose exclusively for Pakistan or for a purpose partly of India and partly of Pakistan in which case it will not be exclusively for the purposes of Pakistan. If it is for the exclusive purposes of Pakistan, then the Government of Pakistan will be liable, otherwise the liability will be that of the Union of India. So far as this suit is concerned, if it is not a liability of India then the suit will fail. According to the Division Bench judgment of : AIR1954Cal623 , the liability in such a case will be exclusively for the purposes of Pakistan. According to the referring Judges, it should be partly for the purpose of India and partly for the purpose of Pakistan. In other words, it will not be exclusively for the purposes of Pakistan. I have already enumerated the reasonings of the learned Judges in coming to their respective conclusions. I do not say that there is nothing to be said for the view put forward by the referring Bench. It may be said that the 'purpose' of the contract can be looked at from two points of view, namely, one from the point of view of the consignor and consignee and the other from the point of view of the carrier. Looked at from the point of view of the carrier, the profit motive is not entirely irrelevant Looked at from the point of view of the consignor and consignee, the profit motive of the carrier is irrelevant and the object is the carriage of the goods to a particular destination. The question is as to what we are to take into consideration when we are speaking of the 'purpose', as that expression is used in paragraph 8(1) of the Indian Independence (Rights, Property and Liabilities) Order 1947. I find that the preponderance of authority is in favour of the view expressed in : AIR1954Cal623 (supra) and against the view put forward by the referring Bench. According to Das Gupta, J., in : AIR1954Cal623 (supra), the earning of profit cannot be the purpose of the contract. The purpose of the contract was the carriage of goods and where the destination is some point in Pakistan, the purpose was the exclusive purpose of the Dominion of Pakistan. It follows that where the destination was a point in the Indian Dominion, it would be the exclusive purpose of the Dominion of India. The decision of Das Gupta, J., was approved by the Supreme Court in : [1957]1SCR1039 . In that case however, this precise aspect of the question was not canvassed. The facts were as follows: In 1945, the respondent entered into a contract for the supply of 'Bhoosa'(fodder) to the military department of the then undivided India, through the Manager Military Farms, Lahore Cantonment. The learned Subordinate Judge held that the liability was that of Pakistan. On appeal the High Court upset this decision. It was held that the fodder was supplied to a Military Farm and therefore, constituted Military Stores. Military Stores at the relevant time were kept joint and under the exclusive control of the Joint Defence Council who had the power of allocating these stores among the two Dominions and for transferring them from one place to another. Therefore, fodder lying in the Military Farm. Lahore, was not, on the' 15th August 1947, the exclusive property of the Dominion of Pakistan but was under the exclusive control of the Joint Defence Council who could transfer it to a farm in India, in which case it would become the property of the Dominion of India. The High Court concluded that under the circumstances it could not be said that the contract for the supply of fodder to the Military Farm, Lahore, was a contract exclusively for the purposes of the Dominion of Pakistan. This view of the High Court was not accepted by the Supreme Court. S. K. Das, J., said as follows:

'The learned Judges of the High Court thought that the Defence Order, 1947, made a difference in the legal position in so far as the purpose of the contract was concerned. They realised and said that ordinarily the purpose of supplying fodder to the Military Farms at Lahore was a purpose exclusively for the Dominion of Pakistan; but they thought that on the assumption that 'bhoosa' was military store, the Joint Defence Council had powers of control over it and could send it wherever they wanted it to be sent; therefore, they said that the purpose of the contract was not a purpose exclusively for the Dominion of Pakistan.

We say this with great respect, but this line of reasoning appears to us to be due to a lack of proper appreciation of the distinction between the 'purpose of the contract' and the 'ultimate disposal of the goods' supplied under the contract The purpose of the contract is not determined nor modified by the ultimate disposal of the goods supplied under the contract, nor even by the powers of control exercised over the goods after the contract had been performed by the respondent. Wherever the goods might be ultimately sent, the purpose of the contract remained what it was, that is, to supply fodder to the Manager, Military Farms, Lahore, which on the test laid down by us, was clearly a purpose exclusively for the Dominion of Pakistan.'

11. Thus, the Supreme Court did not deal with the precise point in question. This exact point, however, has been considered in other cases. It came to be considered by another Division Bench of this High Court presided over by P. B. Mukharji, J. : AIR1960Cal403 . On or about the 15th September, 1944 certain goods were entrusted to the then Bengal and Assam Railway for carriage from Sealdah to Parbatipur station. On partition of India in 1947, Parbatipur became a part of Pakistan. The rest of the facts are identical to the present case. A suit was filed at Dinajpur in Pakistan against the Governor-General-in-Council and the Bengal and Assam Railway and a decree waspassed. While the decree remained unsatisfied, the Government of India promulgated an Ordinance known as the Indian Independence Pakistan Courts (Pending Proceedings) Ordinance in October, 1951 whereby certain decrees passed by Pakistan Courts imposing liability or obligation on the Governor-General in Council Were rendered ineffective, but it conferred a right on the holder of such a decree to institute a fresh suit and other legal proceedings in respect of the original cause of action. In India the Ordinance was subsequently replaced by an Act known as the Indian Independence Pakistan Courts (Pending Proceedings) Act, 1952 which came into force on the 23rd February, 1952. In January, 1953 the appellant filed a suit in India. One of the points raised was as to whether the contract was for the exclusive purpose of the Dominion of Pakistan within the meaning of Article 8 of the Indian Independence (Rights, Property and Liabilities) Order 1947. It was held that in a case of a contract for carriage of goods, it is the control over the goods and the delivery of the goods at the destination station, which is the real purpose of the contract within the meaning of Article 8 of the Indian Independence (Rights, Property and Liabilities) Order 1947. Where, therefore, certain goods were entrusted to the then Bengal and Assam Railway for carriage from Calcutta to Parbatipur and subsequently on partition of India in 1947, Parbatipur became a part of Pakistan, the purpose of the contract was an exclusive purpose of the Dominion of Pakistan and the circumstance that the goods had to travel partly over Indian territory could not make the purpose otherwise. The learned Judge followed the case of : AIR1954Cal623 (supra) as also a Bench decision of the Punjab High Court Union of India v. Raj Kumar Piarelal Jain . The facts in the latter case were in the converse. Certain goods were booked on the 28th July, 1947 for carriage by the North Western Rail way from Gujranwala to Jagadhri. After partition. Gujranwala fell in Pakistan and Jagadhri in India, Actually the goods never reached the destination. Fahhaw, J. said as follows:

'I do not think it can possibly be contended that a contract for the carriage of goods over a journey, less than onefourth of which was over what became the Pakistan Railway system, to a place in India, was a contract exclusively for the purposes of Pakistan. In fact I would go so far as to say that even if the contract had been for the delivery of goods at Amritsar, the nearest large city to the border, the contract would still not have been one exclusively for the purposes of Pakistan, and I do not consider that the proportion of the journey to be performed over what became Pakistan Railways and what became Indian Railways is even relevant as long as the goods were to be delivered at a place which was within the boundaries of India after the 15th August, 1947.

It must accordingly be held that the rights and liabilities which accrued under the contracts in suit became the liabilities of the Dominion of India after the 15th of August, 1947 to the extent to which they would have been rights or liabilities of the Governor-General-in-Council before that date, and the liability for damages for non-delivery must be held to be one of these liabilities.'

12. In other words, this decision confirms the conclusion arrived at in the cases cited above, where it has been held that in the case of the carriage of goods from one station to another, the 'purpose' is to be determined by the destination of the goods. The question as to whether the goods were carried over a railway system existing in one Dominion or the other is not a relevant consideration. In my opinion, therefore : AIR1954Cal623 and Civil Revn. Case No. 3478 of 1953 were correctly decided and the view of the referring court upon this point cannot be maintained. Therefore, it follows that the contract made by the Governor-General of India in Council before the 15th August, 1947, for the carriage of goods over railways belonging to the Central Government from a place, which on the partition of India fell within the Dominion of India to another place which on such partition fell within the Dominion of Pakistan, is a contract for a purpose which, as from the 15th August, 1947 is exclusively the purpose of Pakistan. This answers Point No. 1. So far as point No. 2 is concerned,there was no separate argument advanced before us, and the answer must be in the negative. Article 8(1) of the Indian Independence (Rights, Property and Liabilities) Order 1947 has been construed by the Supreme Court in (S) : [1957]1SCR1039 (supra). The Supreme Court has approved of my decision in Elahi Bux v. Union of India : AIR1952Cal471 and has disapproved of the view expressed by Roxburgh, J., in Union of India v. Loke Nath Saha : AIR1952Cal140 . It has been laid down that the first part of Article 8(1) creates a legal fiction. The contract may be made before August 15, 1947 'the appointed date', but as from that date the contract shall be deemed to have been made on behalf of the Dominion of Pakistan, if the contract is for a purpose which, as from that date, is for the exclusive purpose of the Dominion of Pakistan, and in any other case it shall be deemed to have been made on behalf of the Dominion of India.

13. The questions raised in the Lower Court with regard to the service of notices under Section 77 of the Indian Railways Act or Section 80 of the Code of Civil Procedure, were dealt with by the referring Court and their conclusions have not been challenged before us. Nor have their conclusions on several other points appearing in their order of reference challenged. I must however notice two rather faint arguments which were advanced before us, but which arc of no substance. The first argument was that the foreign judgment could constitute an original cause-of-action. In my opinion, this argument is meaningless, because the decree in this particular case obtained in Pakistan became ineffective as a result of the Ordinance of 1951 mentioned above, followed by the Indian Independence Pakistan Courts (Pending Proceedings) Act, 1952 (Act IX of 1952) which has retrospective operation, in the sense that it nullifies the effects of a decree that has been passed already. It was argued that the present suit was filed on the 17th May, 1950 while the Ordinance of 1951 was promulgated on the 29th October, 3951 and the Act came into force on the 23rd February 1952. As I said, these provisions are really retrospective in the sense that they haverendered ineffective decrees already passed in Pakistan. Under the said Ordinance and the said Act, a foreign decree passed in Pakistan would be ineffective, but liberty is given to the party to file a suit on the original cause-of-action. It is therefore no good arguing that under the ordinary law a suit could be filed on a foreign judgment, or that the present suit was filed before the Ordinance or the Act came into operation. After they came into operation, a decree passed in Pakistan, can no longer be enforced in India.

14. The questions formulated should be answered as follows: Q.1-- affirmative. Q.2-- negative. Q.3-- affirmative.

15. The result is that the appeal fails and should be dismissed. There will be no order as to costs.

P.N. Mookerjee, J.

16. This Second Appeal is now before us on a reference, made by my Lords, Bachawat and Mallick, JJ., where the points for decision under the reference have been put as follows:

'1. Whether a contract, made by the Governor-General of India in Council, before the 15th August 1947, for carriage of goods over Railways, belonging to the Central Government, from a place, which on the Partition of India, fell within the Dominion of India, to another place which, on such Partition, fell within the Dominion of Pakistan, is a contract for purposes, which, as from the 15th August 1947, are exclusively purposes of the Dominion of Pakistan.

(2) Whether such a contract shall, as from the 15th August, 1947, be deemed to be made on behalf of the Dominion of India.

(3) Are the cases : AIR1954Cal623 , and Civil Revn. Case No. 347S of 1953 correctly decided?'

17. The Reference arose under the following circumstances:

The appellants were, in effect, consignees in respect of certain ready-made clothes, booked from Sealdah to Pabna Out-Agency. The booking was made on 15th August, 1946, with the then Bengal and Assam Railways administration, for carriage of the goods from Sealdah to the Pabna Out-Agency.

18. The goods were not delivered to the consignees and, eventually, on 8th July, 1947, they, as plaintiffs, instituted Money Suit No. 9 of 1947 in the Court of the First Subordinte Judge, Pabna, against the Governor-General of India in Council for recovery of compensation.

19. Then came the partition of India on 15th August, 1947.

20. On 17th May, 1949, the suit was decreed ex parte against the Dominion of India, which had, meanwhile when the suit was pending, been substituted in place of the original defendant, the Governor General of India in Council.

21. On 16th May, 1950, the present suit was instituted by the plaintiffs on the original cause of action for non-delivery under the contract for carriage and, alternatively, for enforcing the afore-said decree of the Pabna (Pakistan) Court, dated 17th May, 1949. This dual course of making alternative forms, was adopted notwithstanding the Indian independence (Legal Proceedings) Order, 1947, under Article 4 whereof, effect had to be given, within the territories of either of the two Dominions, to the above decree, dated 17th May, 1949, as if it had been passed by a Court of competent jurisdiction within that Dominion. The action, however, found its justification in the Indian Independence Pakistan Courts (Pending Proceedings) Ordinance, 1951 (No. VI of 1951), which came into force during the pendency of the above suit, as, under the provisions of Section 3 of that said Ordinance, read with Section 2 thereof, duly incorporated in Sections 3 and 2 of the Indian Independence Pakistan Courts (Pending Proceedings) Act, 1952 (Act IX of 1952), the above decree, against the Dominion (Government) of India could not be given effect to in this country and the plaintiffs were left only with their claim, on the original cause of action, on which the present suit is saved and protected by Section 3 of the above Ordinance of 1951, later enacted as Section 4 of the above Indian Independence Pakistan Courts (Pending Proceedings) Act, 1952 (Act IX of 1952).

22. In the trial court, the suit failed for want of a proper notice under Section 77 of the Indian Railways Act and Section 80 of the Code of Civil Procedure and the lower appellate court affirmed the said decree of dismissal, though only upon the ground of absence of a proper notice under Section 80 of the Code of Civil Procedure. Neither of the two courts below considered the plaintiff's claim on the merits.

23. Before this Court in second appeal, the points of notice were given up by the defendant and, accordingly, it became necessary to consider the validity of the original cause of action, on which the suit was founded, and the validity of the plaintiff's claim thereupon against the Dominion, now Union, of India.

24. On this point, which the parties chose and agreed to argue, as a pure point of law, on the construction of the relevant Article or Paragraph 8(1) of the Indian Independence (Rights, Property and Liabilities) Order 1947, the Referring Bench differed from a previous Bench of this Court (Das Gupta and Debabrata Mookerjee, JJ. in : AIR1954Cal623 and, accordingly, the instant Reference was made under Rule 2, Chapter VII, of the Appellate Side Rules, staling the points of dispute or difference, as set out hereinbefore, and referring the whole second appeal to the Full Bench as required by the said Rule. In the Order of Reference, mention is to be found of one other decision of this Court (Per Chunder, J.), dated 27th May, 1954, in the unreported case in Civil Revn. Case No. 3478 of 1953, which took the same view as : AIR1954Cal623 (supra), but, besides the above, there are two more reported decisions of this Court in 99 Cal LJ 62, and : AIR1960Cal403 , to the same or a similar effect and directly on the point.

25. The point involved is short but, undoubtedly, difficult, and this difficulty is particularly manifest in our judgments on the instant occasion, which have disclosed a sharp cleavage of judicial opinion.

26. On the question of construction, this particular Article or Paragraph of the above Order, which is set out hereinbelow, namely,--

'8. (1) Any contract made on behalf of the Governor General in Council before the appointed day (15th August, 1947 -- vide article or paragraph 2(1) ) shall, as from that day,--

(a) if the contract is for purposes which as from that day are exclusively purposes of the Dominion of Pakistan, be deemed to have been made on behalf of the Dominion of Pakistan instead of the Governor General in Council: and

(b) in any other case, be deemed to have been made on behalf of the Dominion of India instead of the Governor-General in Council:

and all rights and liabilities which have accrued or may accrue under any such contract shall, to the extent to which they would have been rights and liabilities of the Governor-General in Council, be rights or liabilities of the Dominion of Pakistan or the Dominion of India, as the case may be.'

went to the Supreme Court in (S) : [1957]1SCR1039 , but there the present aspect was not directly in issue. There are, however, some observations of their Lordships in the said case cited, which throw sufficient light on the question, now before us, and aid us considerably in answering the same. The Supreme Court in the said case cited was directly concerned, so far as this Article goes, with the two questions as to (1) whether the Article envisaged and applied to all contracts, executed or executory, and (2) as to how to hold that a particular contract was exclusively for purposes of the Dominion of Pakistan, when that Dominion was, admittedly, not in existence on the date of the contract. Their Lordships answered the first of the above two questions by holding that all contracts, executed or executory, were within the purview of the above Article and, on the second question, they held that the proper test to be applied for determining the same was an artificial one and it might be either of the two following, namely, (1) 'if the contract had been entered into on 15th August, 1947, whether it would have been a contract for the purposes of the Dominion of Pakistan' and (2) 'if the Dominion of Pakistan had been in existence, when the contract was entered into, whether it would have been a contract for the purposes of the said Dominion' (Vide p. 656). In the course of their judgment, however, they also went on to observe, 'in relation to the particular contract before them (which was for the supply of 'bhoosa' (fodder) to the military department of the then undivided India through the Manager. Military Farms, Lahore Cantonment' (Vide p. 653)) that, as the purpose of the contract was to supply fodder to the Manager, Military Farms, Lahore Cantonment, which farms were in Pakistan on the 'appointed day', 'the contract was exclusively for the purposes of the Dominion of Pakistan as from the appointed day' (Vide p. 656). Thus, in the above case, for determining whether the contract was exclusively for purposes of the Dominion of Pakistan on the appointed day, stress was laid -- at any rate, recommended,-- by their Lordships in the above passage, particularly, on the location of the farms, to which the fodder in question was to be supplied, in Pakis-tan on the appointed day. Then followed a discussion on the relevancy or effect of the ultimate disposal of the goods or of the power of control, exercised over the goods after the contract had been performed, upon the determination of the purpose of the Contract. And, in the course of the discussion their Lordships made further significant observations as follows:

'The purpose of the contract is not determined nor modified by the ultimate disposal of the goods supplied under the contract, nor, even by the powers of control, exercised over the goods after the contract had been performed.........Wherever the goodsmight ultimately be seat, the purpose of the contract remained what it was, that is, to supply fodder to the Manager, Military Farms, Lahore, which, on the test laid down by us, was dearly a purpose exclusively for the Dominion of Pakistan (Vide the same page 656).'

27. The test, so laid down, emphasised, as I have said above, the location of the farms, to which the supply was to be made, in Pakistan on the appointed day. In other words, the test was the location of the place, where, under the contract, the goods were to be sent or, in other words, the destination of the goods under the contract. It may be that, under a particular contract, the goods may have to be sent to various places or, to more than one place. In such a case, all the several places, would correspond to the destination under the contract. They have to be distinguished however, from the places of passage of the goods or the various places, through which the goods would have to travel in the course of fair journey to the several places of destination under the contract, for reaching or being taken to the said several ultimate destinations or places of destination. The term 'destination' involves the idea of end. The term 'purpose' also corresponds to 'end, aim or object,' involving a similar conception (Vide definition of 'purpose' in Murray's Oxford Dictionary which, in its relevant part, runs as follows:

'(1) that which one sets before oneself as a thing to be done or attained; the object which one has in view.

* * * *

* * * *

(3) the object for which anything is done or made or for which it exists, the result or effect intended or sought: end, aim.'

28. In the instant case, the contract was for carriage of the goods in question from Sealdah to Pabna Out-Agency, which, admittedly, fell and was included within the Dominion of Pakistan on the appointed day. The destination under this contract was, therefore, a place in Pakistan and so, on the above test, the contract would be exclusively for purposes of Pakistan and, accordingly, should not be deemed to have been made on behalf of the Dominion of India. I would only add here that to hold as above would be doing no violence either to the letter or to the spirit of the relevant Article.

29. I would, therefore, hold that the decisions of this Court, reported in Krishna Ranjan Basu Ray v. Union of India representing Eastern Railway and others : AIR1954Cal623 , and in the unreported case of Civil Revn. Case No. 3478of 1953 (supra), were correct, although some of the observations therein or the reason or reasons given in some of them, may not be wholly correct. I would also with respect differ on the point from the learned referring Judge, although I am free to confess that the point was one of difficulty and the reasons, given by them in the Order of Reference in support of their contrary opinion, cannot be dismissed summarily or straightway. I may add further that the decision of the Federal Court in 'Reference under Section 213 of the Government of India Act , does not really assist us in the decision of this Reference, and, as I read it, it does not appear to be of much relevance here. That case was concerned inter alia, to quote its nearest pan, with the rival claims of the Centre and the Province under the Government of India Act, 1935, and such claims had to be determined with reference to the purpose of user of the particular property at the relevant time. In that connection, their Lordships laid down that user for the purpose of the Central Government may include not only user for purposes (subjects), mentioned in the Central List, but also user for purposes (subjects), mentioned in the Provincial List, where the property was situate in a Centrally administered area, as, in regard to such areas or territories, the Central Government had, in the context and under the Act, all the powers of a Province or Provincial Government. I do not see how that decision can have any bearing on the point, now before us, and how and in what manner it can aid us in its determination or mould the same. Any way, it seems to me,-- and I say this, again, with the utmost respect,-- that any argument, based on it, to support the contrary view, namely, of the learned referring Judges here, would, in essence, be opposed to the decision of the Supreme Court, cited hereinbefore, and will be carrying too far the authority and analogy of the above Federal Court decision.

30. In the premises, I would agree with my Lord Sinha, J. in answering points Nos. 1 and 3 under Reference in the affirmative and point No. 2 in the negative and in answering this Reference by dismissing the instant second appeal and the plaintiff's suit without costs at any stage.

G.K. Mitter, J.

31. The questions for decision by the Full Bench in this case are:

1. Whether a contract made by the Governor-General of India in Council before the 15th August, 1947, for carriage of goods over Railways belonging to the Central Government from a place which on the partition of India fell within the dominion of India to another place which on such partition fell within the dominion of Pakistan is a contract for purposes which as from the 15th August, 1947, are exclusively purposes of the dominion of Pakistan.

2. Whether such a contract shall as from the 15th August, 1947, be deemed to be made on behalf of the dominion of India.

3. Are the cases : AIR1954Cal623 and Civil Revision Case No. 3478 of 1953 correctly decided?

32. The facts are very simple. A consignment of ready-made clothes was booked by Rail fromSealdah Station to Pabna out-agency by a railway receipt numbering 263876 dated August 15, 1946. The first plaintiff P.K. Basack was the agent for the second plaintiff Shahadul and Sons who were the owners of the goods. The goods were never delivered to the first plaintiff who was also the consignee. The plaintiffs instituted Money Suit No. 9 of 1947 in the Court of the First Subordinate Judge, Pabna, against the Governor-General of India in Council for recovery of compensation. Pending the hearing of the suit the two new dominions of India and Pakistan came into existence, and the dominion of India was substituted as defendant in the place of the Governor-General of India in Council. The suit was decreed ex parte for a sum of Rs. 2051/- besides costs on May 17, 1949. Being unable to obtain payment of the decretal amount the plaintiffs instituted Money Suit No. 35 of 1950 in the Court of the Subordinate Judge of 24-Paraganas basing their claim on the original-cause of action for non-delivery of goods covered by the railway receipt. The suit was dismissed with costs inter alia on the grounds of non-service of notices under Section 77 of the Railways Act and Section 80 of the Code of Civil Procedure and an appeal therefrom was dismissed by the Additional District Judge of Alipore.

33. During the pendency of the suit at Alipore, Ordinance No. VI of 1951 i.e. Indian Independence Pakistan Courts (Pending Proceedings) Ordinance came into force. By Section 2 of this Ordinance a decree referred to in Clause (3) of Article 4 of the Indian Independence (Legal Proceedings) Order, 1947, was a decree to which the Ordinance applied. Section 3 of the Ordinance directed that such a decree should not be given effect to by any Court in India in so far as it imposed a liability on the Union of India. In the result the plaintiffs could after the passing of the Ordinance only succeed on the basis of the original cause of action, namely, non-delivery of goods under the railway receipt dated the 15th August, 1946. Section 4 of the Ordinance allowed the plaintiffs to institute a suit within one year from the commencement thereof if the claim on the original cause of action had been barred.

34. On a further appeal preferred to this Court Bachawat and Mallick, JJ. who referred it to a Full Bench, recorded that the point as to non-service of notice under Section 77 of the Railways Act was not being pressed on behalf of the Union of India. With regard to the service of notice under Section 80 of the Code of Civil Procedure the said Bench admitted in evidence a written acknowledgment of the receipt of a notice under Section 80 of the Code of Civil Procedure not filed in the trial Court. By consent that receipt was tendered and formal proof was dispensed with. Thereupon the said Bench held that due notice under Section 80 of the Code of Civil Procedure had been served. On behalf of the Union of India a point which had not been taken either in the trial Court or in the appeal therefrom to the District Judge at Alipore was raised for the first time. It was contended on behalf of the Union of India that the liability under the contract dated August 15. 1946 did not devolve upon the dominion of India by virtue of sub-paragraph (1) of paragraph 8 of the Indian Independence (Rights, Property and Liabilities) Order,1947. It was argued that the contract, was for the carriage of goods to a place which on the partition of India fell within the dominion of Pakistan and as such the contract was for purposes which from August 15, 1947 were exclusively the purposes of the dominion of Pakistan.

35. Section 8 of the Indian Independence (Rights, Property and Liabilities) Order 1947 provides as follows:

Section 8(1): Any contract made on behalf of the Governor-General in Council before the appointed day shall, as from that day,--

(a) if the contract is for purposes which as from that day are exclusively purposes of the dominion of Pakistan be deemed to have been made on behalf of the dominion of Pakistan instead of the Governor General in Council, and

(b) in any other case, be deemed to have been made on behalf of the dominion of India instead of the Governor General in Council:)

and all rights and liabilities which have accrued or may accrue under any such contract shall, to the extent to which they would have been rights or liabilities of the Governor General in Council, be rights or liabilities of the dominion of Pakistan or the dominion of India, as the case may be.

36. 'The appointed day' was the 15th August, 1947. Before that day neither of the dominions of India or Pakistan was in existence. In order therefore to apply Section 8 one must imagine (a) that both the dominions were in existence on the day on which the contract was entered into and then find out whether the purpose of the contract was exclusive to the dominion of Pakistan in which case all rights and liabilities which have accrued or may accrue under the contract shall, to the extent to which they would have been rights or liabilities of the Governor General in Council, be rights or liabilities of the dominion of Pakistan, or (b) that the contract had been entered into on the 15th August, 1947 and then find out whether the purpose of the contract was exclusive to Pakistan or not when consequences mentioned above would follow.

37. In my opinion, the purpose of a contract is not the consideration for it. According to me the purpose of the contract is the thing to be achieved by its execution. Thus when A engages B to erect a house for him the purpose of the contract is the erection of the house and not payment to B for the work done or the labour supplied. Again when A engages B as a Manager of his factory the purpose of the contract is not the payment of remuneration to B but the supervision of the factory in an efficient manner. Similarly when A and B enter into a contract that the latter will transport goods belonging to A from a place X to another place Y the purpose of the contract is that the goods should be carried to and made available at the place Y. If in the above illustration we treat the plaintiffs in this case as A and the Governor General of India in Council as B we have a parallel to the case before us. The purpose of the contract in the instant case is that the goods should be made available at Pabna in the dominion of Pakistan. Putting either of the two tests mentioned above the question arises whether the making of the goods available at Pabna is exclusively a purpose of the dominion of Pakistan or not. In my view, making the goods available at Pakistan, no matter what may be the use to which they may be ultimately put, is a purpose exclusive to the dominion of Pakistan so far as the contract of carriage is concerned. I cannot see how the purpose of such a contract concerns the dominion of India unless it be said that the latter dominion was interested in getting rid of something which was in India. Normally this cannot be said of an ordinary contract of carriage of goods by rail.

38. Proceeding to examine the decisions on this point it will be found that in : AIR1954Cal623 a Division Bench of this Court held in a case where the goods were consigned from Sealdah to some place in Barisal that

'the purpose of the contract was the carriage of goods and where the destination was some point in Pakistan, it seems to be reasonable to hold that the purpose was the purpose of the dominion of India. * * * * The fact that the Bengal and Assam Railway was actuated by the motive of earning profit and not by the question whether Pakistan would be benefited or not is not germane to the question of the purpose of the contract as used in Section 8.'

39. The decision in Civil Revn. Case No. 3478 of 1953 is to the same effect.

40. In : AIR1960Cal403 where the goods were consigned from Sealdah to Parbatipur, Bose, J. (as he then was) said

'the real purpose of the contract of carriage in the present ease was that the goods had to be carried upto Parbatipur and delivered there. If the goods had been carried, say, half-way and delivered there while the goods were still on the portion of the railway which is in the territory of the Union of India, the purpose of the contract could not be said to have been carried out or fulfilled. It was the delivery of the goods at the destination station which was the real purpose of the contract. So, the purpose of the contract being delivery at Parbatipur, as soon as the goods would be delivered at the destination station, it is the dominion of Pakistas alone who would ultimately get control or custody of the goods and it is the Government of this dominion alone which would be in a position to deal with these goods as they liked.'

The Appeal bench upheld the decision of the trial court.

41. To the same effect I myself came to the same conclusion in 99 Cal LJ 62.

42. A contrary view was taken by Roxburgh, J. in : AIR1952Cal140 . There both the stations from which the goods were consigned and to which they were sent were in Pakistan the despatch having taken place in March 1947. With all respect it seems to me that the learned Judge failed to appreciate the point in issue. Referring to Section 8(1)(a) of the Indian Independence (Rights, Property and Liabilities) Order, 1947, he said

'I am quite unable to see how it can be said that the contract for carriage of goods in March, 1947, before the dominion of Pakistan was ever thought of, can be held as from the appointed day to be one that is for purposes which from that dayare exclusively the purposes of the dominion of Pakistan.'

He went on to add

'the division of rights and liabilities made by the order is provided for according to different categones in Articles 8, 9, 10 and 11, a different system being followed for each category according to its particular nature. It is not possible, in my opinion, to discover any basic principle behind the particular system adopted in each case from which it might be argued that the exact wording, for example, of Article b(1)(a) might not be taken to be precisely what it appears to be on a plain reading. On a plain reading of the article, as I have said, it seems to me clear that Article 8(1)(a) does not cover the particular contract in question in this suit. Therefore, the liability on the contract must be as provided in the residual provision Article 8(1)(b), namely, the liability of the dominion of India.'

In my view, the learned Judge failed to realise that Article 8 was aimed at dividing rights and liabilities under contracts entered into before the appointedday which necessarily referred to a point of time when neither of the two dominions was in existence. Hundreds of contracts had been entered into before the appointed day and rights and liabilities in regard thereto were still outstanding. Faced with the question as to the distribution of rights and liabilities of contracts which were still to be performed or contracts which had already been broken the legislature adopted a rough and ready method for the same, namely, to allocate them to the dominion of Pakistan only when it could be said that the purpose of the contract was exclusive to that dominion by an artificial test and to allocate the rest to the dominion of India. According to the judgment of Roxburgh, J. Section 8(1)(a) could never come into play -- a proposition which has only got to be stated to be rejected.

43. In where the goods were consigned from Gujranwala in Pakistan toJagadhri in India a Division Bench of the Punjab High Court held that the contract was not for a purpose exclusive to Pakistan. Falshaw, J. observed:

'I do not consider that the proportion of the journey to be performed over what became Pakistan railways and what became Indian Railways is even relevant as long as the goods were to be delivered at a place which was within the boundaries of India after the 15th August, 1947.'

44. In Kishanlal Malhotra v. Union of India , where the goods were to be sent to Lahore it was held that the contract had been made exclusively for the purposes of Pakistan.

45. In (S) : [1957]1SCR1039 , there was a contract entered into between the respondents and the military department of undivided India through the manager military farms Lahore Cantonment in the year 1945 by which the respondents engaged to supply fodder to the said military department at Lahore. The respondents supplied fodder in November 1945. A dispute therefore arose as to the refund of the security deposit and the price of certain bundles of wire coils supplied for the purpose of tying the fodder. Considering the question of the applicability of Article 8 of the Indian Independence Order, 1947 the Supreme Court observed

'the purpose of the contract was to supply fodder to the manager military farms Lahore Cantonment, which farms were in Pakistan on the appointed day. A contract was therefore exclusively for the purpose of the dominion of Pakistan as from the appointed day.'

46. This view supports the line of reasoning which has been adopted in the cases cited with the exception of the judgment of Roxburgh, J.

47. In view of the above the answers to the questions must be:

Question No. 1-- yes.

Question No. 2-- no.

Question No. 3-- yes.

48. The appeal should therefore fail.

Laik, J.

49. This reference involves the determination of the question as to the liability of the Union of India. The facts are simple. Certain clothes were consigned to the plaintifff appellant No. 1. The goods were booked by the Bengal and Assam Railway Administration for carriage, from the Sealdah Station to the Pabna Out-agency. The goods were, however, not delivered to the consignee. All these happened before the partition of India, that is, before August 15, 1947.

50. By the Indian Independence Act, 1947, (hereinafter referred to as the Act) India was divided and two Dominions, namely, the Dominions of India and Pakistan were set up from August, 15, 1947, the appointed day. Provisions had to be-made for dividing between the two Dominions, the rights, property, assets and liabilities.

51. Section 9 of the Act inter alia provides that the Governor General of India in Council shall, by order make such provision as appears to him to be necessary or expedient 'for dividing between the new Dominions and between the new Provinces to be constituted under this Act, the powers, rights, property, duties and liabilities of the Governor General in Council or, as the case may be, of the relevant Provinces which, under this Act, are to cease to exist.'

52. In exercise of the powers under Section 9 of the Act, the Governor General of India in Council, passed an order, namely, Indian Independence (Rights, Property and Liabilities) Order, 1947, (hereinafter referred to as the Order). Article 8(1) of the order with which we are concerned is in the following terms:

8(1) 'Any contract made on behalf of the Governor-General in Council before the appointed day shall, as from that day,--

(a) if the contract is for purposes which as from that day are exclusively purposes of the Dominion of Pakistan, be deemed to have been made on behalf of the Dominion of Pakistan instead of the Governor-General in Council; and

(b) in any other case, be deemed to have been made on behalf of the Dominion of India instead of the Governor-General in Council:

and all rights and liabilities which have accrued or may accrue under any such contract shall, to the extent to which they would have been rights or liabilities of the Governor-General in Council, therights or liabilities of the Dominon of Pakistan or the Dominion of India, as the case may be.'

53. The learned Subordinate Judge at Alipore dismissed the plaintiff's suit claiming compensation against the Union of India, for the non-delivery of the goods. An appeal by the plaintiffs to the Court of Appeal below was also dismissed. The plaintiffs have come to this Court in second appeal which was heard by Bachawat and Mallick, JJ. and they have made this reference for the decision of the appeal including the following points:

(1) Whether a contract made by the Governor General of India in Council before the 15th August, 1947, for carriage of goods over Railways belonging to the Central Government from a place which on the Partition of India fell within the Dominion of India to another place which on such Partition fell within the Dominion of Pakistan is a contract for purposes which as from the 15th August, 1947, are exclusively purposes of the Dominion of Pakistan.

(2) Whether such a contract shall as from the 15th August, 1947, be deemed to be made on behalf of the Dominion of India.

(3) Are the cases (Krishna Ranjan Basu Ray v. Union of India representing Eastern Railway) : AIR1954Cal623 and (Amulya Mohan Ganguly v. The Union of India, as owner of the Eastern Railway), Civil Revision Case No; 3478 of 1953 (Cal), correctly decided?

54. It is admitted that there is a contract entered into by the Governor General of India in Council with the plaintiffs for the carriage of goods from Sealdah Station to Pabna Outagency and on and from the appointed day, Sealdah Station fell within the Dominion of India and Pabna out-agency fell within the Dominion of Pakistan.

55. Now, the question is, which of the two Dominions is liable for the plaintiffs' claim for compensation for the non-delivery of the goods. Article 8(1) of the Order deals with contracts which were entered into on behalf of the Governor General of India in Council before the appointed day. Under the provisions of this Article, if the contract is for purposes which, as from the appointed day, are exclusively purposes of the Dominion of Pakistan, the contract shall be deemed to have been made on behalf of the Dominion of Pakistan and in any other case, the contract shall be deemed to have been made on behalf of the Dominion of India. In order to find out the liability of either of the two Dominions, an artificial test has to be applied, namely, if the contract had been entered into before the appointed day, whether it would be a contract for the exclusive purpose of the Dominion of Pakistan. As soon as it is found that the contract was for purposes which were not exclusively purposes of the Dominion of Pakistan, it must be held that the Dominion of India is liable for the breach of that contract. In my view it need not be further considered, whether the contract was for exclusive purposes of the Dominion of India which consideration has created some confusion. Therefore, it has to be found out, whether the contract for the carriage of the plaintiffs' goods from a place in India to another place in Pakistan,was for purposes which were exclusively purposes of the Dominion of Pakistan.

56. The most important question is, what is meant by the words, 'a contract for the exclusive purpose of the Dominion of Pakistan'. Before that, let us see what was the purpose of the contract. In a contract for the carriage of goods, there are two purposes, namely, one for the carnage of goods and the other, for receiving freights. So far as the carriage of the goods is concerned, it is the purpose of both the Dominions. The Dominion of India has to carry the goods upto the border of the Dominion of Pakistan. Similarly, the Dominion of Pakistan has to carry the goods within its territories and reach the goods to the destination station. So far as the other purpose, namely, receiving freights, is concerned, it is obvious that both the Dominions would receive freights for the carriage of the goods within their respective territories, it the contract is deemed to have been entered into before the appointed day. The Dominion of India would realise charges for the carriage of the goods within the territories and similarly the Dominion of Pakistan would realise charges for the carriage of the goods within its territories. So, if the contract is viewed by legal fiction to have been made on the appointed day, it cannot but be held that the purposes of the contract were purposes of both the Dominions. It cannot be said in my view that the contract was for purposes which were exclusively purposes of the Dominion of Pakistan.

57. There remains to be considered another incident of a contract for carnage of goods entered into on behalf of the Governor General of India in Council. That is the place where the goods were to be delivered. In the instant case, the goods were to be delivered to Pabna out-agency, a place within the Dominion of Pakistan. It has been contended on behalf of the Union of India, that in a case where the place of delivery of the goods falls within the Dominion of Pakistan, in that case, it would be reasonable to hold that the contract was for the exclusive purpose of the Dominion of Pakistan. In other words, it was contended, that the purpose of the contract was the carriage of the goods to its destination and if the destination station is within the Dominion of Pakistan, it must be said that the contract was for the exclusive purpose of the Dominion of Pakistan. That contention, however, finds support from two Bench decisions of this Court. In : AIR1954Cal623 , Das Gupta, J. (as his Lordship then was) observed as follows:

'The purpose of the contract was the carriage of the goods and where the destination was some point in Pakistan it seems to be reasonable to hold that the purpose was the purpose of the Dominion of Pakistan. Where on the contrary the carriage was a point which remained in the Indian Dominion, it would be a purpose of the Dominion of India.'

With great respect, I am unable to agree with the above observation of Das Gupta. J. (as his Lordship then was). In my opinion, destination of the goods has no bearing whatsoever on the purpose of the contract. Even assuming that it has, it cannot, in my opinion, be said that, that purpose wasexclusive to the Dominion of Pakistan, as from the appointed day. The provisions of Article 8(1) of the Order are not to this effect, that if the purposes of the contract are for the Dominion of Pakistan then the liability would be of the Dominion of Pakistan as from the appointed day, and it the purposes of the contract are for the Dominion of India, then the liability would be of the Dominion of India as from the appointed day. Had the provisions of Article 8(1) of the Order been like that, then it would have been necessary to find out the dominant purpose and for that, the place where the goods were to be delivered might have been of some importance in finding out the said purpose. In that case it might have been reasonable to hold that where the destination was some place in the Dominion of Pakistan, the purpose was the purpose of the Dominion of Pakistan and where the carriage was to a place in the Dominion of India, it would be a purpose of the Dominion of India. But the provisions of Article 8(1) of the Order are otherwise. The provisions of that Article lay down one and only one test, namely, whether the contract was for exclusive purposes of the Dominion of Pakistan as from the appointed day. For the reasons stated above, I am unable to hold that where the contract was for carriage of goods to a place in the Dominion of Pakistan, the contact shall be deemed to be for the exclusive purpose of the Dominion of Pakistan as from the appointed day.

58. I may refer to another Bench decision of this Court, namely, the decision in : AIR1960Cal403 . In that case P. B. Mukharji, J. and Bose, J. (as his Lordship then was) followed the decision of Krishna Rajan Basu Roy : AIR1954Cal623 (supra), and came to the same conclusion, namely, that where the goods were to be delivered at a place within the Dominion of Pakistan, the purpose of the contract was the exclusive purpose of the Dominion of Pakistan. In delivering the judgment on the point, Bose, J. (as his Lordship then was) observed as follows:

'It was the delivery of the goods at the destination station which was the real purpose of the contract. So, the purpose of the contract being delivery at Parbatipur, as soon as the goods would be delivered at the destination station, it is the Dominion of Pakistan alone who would ultimately get control or custody of the goods and it is the Government of this Dominion alone which would be in a position to deal with these goods as they liked. They might make over the goods to the consignee or might not as they chose to do, and if they did not deliver the goods, the liability would be of that Dominion. The Union of India would have no control over such goods, the moment the goods passed into the territory of the Dominion of Pakistan. So, tested in this light, it can be reasonably said that the purpose of the contract of carriage in the present case was an exclusive purpose of the Dominion of Pakistan.'

59. With great respect, I am unable to agree with the reasons given by his Lordship in coming to the conclusion that the contract was for the exclusive purpose of the Dominion of Pakistan. The main reason which weighed with his Lordship appears to be that when the goods would be delivered to the destination station, it is the Dominion of Pakistan alone who would ultimately get control or custody of the goods and it is the Government of that Dominion alone which would be in a position to deal with the goods as they liked. True, that the Dominion of Pakistan would get control or custody of the goods. But that control or custody would be for the tune being, that is, so long as the owner of the goods would not take delivery of the same from the Government of the Dominion of Pakistan. In my opinion, such a temporary control or custody would not do. The control or custody must be of that type that an owner has over goods belonging to him. Even then, the purpose of the contract cannot be said to be the exclusive purpose of the Dominion of Pakistan, for, the purpose is not one but more than one, namely, for carriage of goods and for receiving freights. Even assuming that the carriage of goods to the destination station is another purpose of the contract and that purpose is the purpose of the Dominion of Pakistan, still it cannot be said that the contract was for purposes exclusive to the Dominion of Pakistan, for, the other purposes, as I have already said, are for both the Dominions.

60. For the reasons stated above, most respectfully, I beg to differ with the view of Chunder, J. in Civil Revn, Case No. 3478 of 1953 decided on May 27, 1954 and of my learned brother G. K. Mitter, J. in 99 Cal LJ 62.

61. Another decision which requires to be considered is which is a decision of a Division Bench of the Punjab High Court. In that case, the goods were to be carried from a station in the Dominion of Pakistan to another station in the Dominion of India. Falsbaw, J. who delivered the judgment of the Division Bench came to the conclusion that the contract was for the exclusive purpose of the Dominion of India. With great respect, I am unable to follow the said decision.

62. All the aforesaid decisions relate to contracts for carriage of goods. But our attention has been drawn to some other decisions which, however, do not relate to contracts for carriage of goods. But in those decisions, the interpretation of the provisions of Article 8(1) was involved. Those decisions are: (1) Province of West Bengal v. Midnapore Zamindary Co. Ltd. : AIR1950Cal159 ; (2) Iswar Madan Gopal Jiu v. Province of West Bengal : AIR1950Cal463 ; (3) State of Punjab v. Mohan Lall, AIR 1951 Punj 382; (4) Union of India v. Chinubhai Jeshingbhai : AIR1953Bom13 , (5) State of West Bengal v. B. K. Mondal : AIR1959Cal168 and (6) Chandra Singh v. Executive Engineer, Assam Rly., AIR 1961 Assam 148. Besides the above decisions, two decisions of the Supreme Court may be referred to. They are--State of West Bengal v. Serajuddin Baitley : [1954]1SCR378 and : [1957]1SCR1039 .

63. I have already said that none of the aforesaid decisions, including the two Supreme Court decisions, relates to the contract for carriage of goods. The said decisions, therefore, are not relevant for the decision of the points at issue be-fore us. I may add that some of the observations made in Chaman Lal Loona's case : [1957]1SCR1039 (supra), do not apply to the facts of the present case and they should not be read shorn of the context.

64. Before I conclude, 1 feel, it is proper for me to consider the views of the learned referring Judges. The judgment whereby the appeal has been referred to the Full Bench for the decision of the points stated hereinabove, was delivered by out learned brother Bachawat, J. (Mallick, J. concurring with him).

65. According to our learned brother, Bachawat, J. the original contract with the Governor General of India in Council should be split up into two contracts as from the appointed day, the first contract, namely, the contract for the carriage of the goods from Sealdah Station to the Indian Border would be, as from the appointed day, a contract exclusively for the purpose of India within the meaning of Article 8(1) of the Order, and the second contract, namely, the contract for carriage of the goods from that border to the Pabna out-agency would, as from the appointed day, be for purposes which are exclusively the purposes of Pakistan. Accordingly, one entire contract for the carriage of goods from Sealdah to Pabna out-agency cannot be deemed under Article 8(1) of the Order, to be a contract for purposes which, as from the appointed day, are exclusively purposes of the Dominion of. Pakistan. In that view of the matter their Lordships Bachawat and Mallick, JJ. differed with the decision : AIR1954Cal623 , referred to above. Most respectfully though I agree with the conclusion of Bachawat and Mallick JJ., namely, that the contract cannot be deemed under Article 8(1) of the Order, to be a contract for purposes which, as from the appointed day, are exclusively purposes of the Dominion of Pakistan, but I cannot agree with the reasons given by my learned brother Bachawat, J. that the contract is split up into two parts according to the area.

66. In my opinion, in the case of a contract entered into with the Governor General of India in Council for carriage of goods from one point in India to another point in Pakistan and vice-versa, the contract cannot be deemed under Article 8(1) of the Order as one the purposes of which, as from the appointed day, are exclusively purposes of the Dominion of Pakistan or Dominion of India respectively. Accordingly, the points referred to the Full Bench should be answered as follows:

(1) -- No.

(2) -- Yes.

(3) -- No.

and the appeal should be allowed without costs.

67. In accordance with themajority opinion, the appeal be and is hereby dismissed. There will be no order as to the costs ofthis Reference and of the Second Appeal.


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