1. This is a suit by a contractor for recovery of Rs. 1,36,670/- from the Dominion of India as the value of certain work done in connection with a military hospital at Dacca in the year 1944. A contract was entered into between the plaintiff and the Governor-General of India in Council in November, 1943, being a lump sum contract for Rs. 14,13,647/-. The contract which is numbered DK/89 was embodied in a tender and conditions of contract as per Drawings and Specifications attached to the tender. To this there was a deviation by an order No. 2027/377/E.2 made in writing by the Garrison Engineer Dacca on 29th May, 1944. The plaintiff completed the work and submitted his final bill on or about the 14th January 1946 and received payment in full thereof. His case as laid in the plaint is that he thereafter discovered that he had made a mistake of fact & that his final bill did not include the cost of surfacing the floor with cement and sand mixed in certain proportions under the said order of the Garrison Engineer. The plaintiff alleges that by a letter dated 21st January, 1946 he communicated to the authorities about the said mistake.
2. The plaintiff filed this suit against the defendant after the partition of India on the 20th November, 1950. His case is that in or about the month of July 1947 the Governor-General in Council invited contractors having claims against the M.E.S. to notify particulars thereof to the Chief Engineer, Eastern Command, Ranchi and D. C. E. Billing Centre, Eastern Command, Port William, Calcutta and pursuant thereto the plaintiff submitted his claim which was investigated into In detail and ultimately accepted by the D. C. E. Billing Centre on or about the 31st March, 1948. The plaintiff relies on a notification alleged to have been published by the defendant on or about the 23rd May 1948 in certain newspapers calling upon contractors to submit to it claims arising whether in areas then in India or in Pakistan in respect of supplies and services rendered to the Government of India up to and inclusive of the 14th August, 1947 by the 1st of July 1948. The plaintiff avers that by the said notification the Government of India undertook to meet the claims of contractors residing in India. According to the plaint the Dominion of India thereafter illegally declined to pay the aforesaid sum of Rs. 1,36,670/- for which acknowledgment had already been made.
3. The defendant has taken various pleas by way of defence and on the pleadings the following Issues were framed for determination:--
1. Is the liability, if any, to pay to the plaintiff that of the Dominion of Pakistan or of the defendant?
2. Was the notice served on the defendant a valid notice under Section 80 of the Code of Civil Procedure?
3. Has any part of the plaintiff's cause of action for this suit arisen within the Jurisdiction of this Court? If not, has this Court jurisdiction to try this suit?
4. Did the D. C. E. Billing Centre at fort William, Calcutta, have the authority to acknowledge liability of the Government of India? If so, did the D. C. E. Billing Centre at Fort William, Calcutta, acknowledge liability of the Government of India in respect of the plaintiff's alleged claim?
4. As the learned counsel for the defendant contended that the liability to meet the plaintiff's claim, if any, could in no circumstances fasten on his client, I directed that the first issue should be tried as a preliminary issue and only if the plaintiff succeeded therein would the other issues be gone into. I heard addresses at length from both sides. No oral evidence was adduced and I can proceed on the basis of the documents which are contained in the Brief of Correspondence handed up. For the purpose of considering the first issue the only relevant document is the notification of the Government of India relied on by the plaintiff.
5. Mr. Mitter, learned counsel for the plaintiff argued that in law the Government of India should be held liable to meet the plaintiff's claim and that even if he did not succeed in showing that the Dominion of India was liable under the Indian Independence (Rights, Property and Liabilities) Order and the Joint Defence Council Order of 1947, he would contend that the defendant had waived its right to set up the provisions of the Indian Independence (Rights Property and Liabilities) Order against the plaintiff's claim and therefore the issue should be answered in the plaintiff's favour.
6. The relevant provision of the Indian Independence (Rights, Property and Liabilities) Order is Article 8 which provides as follows:
'(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.'
7. It is now practically settled that In order to find out whether the contract is for purposes which became exclusively purposes of the Dominion of Pakistan as from 15-8-1947, one or two tests will have to be applied, namely, (a) imagining date when the contract was entered' into, to find out if it would be a contract for the purposes of Pakistan or (b) imagining that the contract was brought about on 15-8-1947 to find out whether its purpose was exclusive to Pakistan. The Dominoin of Pakistan would only be liable if the answer be in the affirmative. Such a test was applied by the late S.B. Sinha, J. in the case of Serajuddin Batley v. Province of West Bengal, suit No. 1502 of 1948 (A) which went up to the supreme Court. The plaintiff's claim for rents due under a lease executed by the Government of Bengal on 22-2-1947 In respect of certain flats of a property in Calcutta to be used as a hostel for medical students was upheld by this Court. Before the Supreme Court it was conceded on behalf of the Province of West Bengal that if Article 8 applied, the Province would be liable, taut it was contended that Article 9 was the proper article to consider but thus contention was negatived by the Supreme Court, The point came up fordiscussion in the case of the Province of West Bengal v. Midnapore Zemindary Co. Ltd. : AIR1950Cal159 and there it was found that the liability for rent of a house used as a hospital situate in the border district of Murshidabad but Within the territory of the Province of West Bengal Was a liability of that province under Article 8 in Elahi Bux v. Union of India : AIR1952Cal471 the point came up before Sinha J. (D.N. Sinha, J.) In this case certain works had been executed in connection with a military hospital situate at Comilla long before the partition of India and Sinha, J. came to the conclusion that applying either of the two tests mentioned the purpose of the contract must be held to be exclusive to Pakistan. In Krishna Ranjan Basu v. Union of India, 59 Cal 'WN 99 (D) a Division Bench of this Court took the view that where goods were booked on the Bengal Assam Railway the destination station being in Pakistan, the contract of carriage was one exclusive-to Pakistan and as such the Union of India could not be held liable in respect thereof. In Union of India v. Chinubhai reported in : AIR1953Bom13 Chagla, C. J. formulated the test in the following words:
'The test that must be applied is an artificial test and the test may be, either, if the contract had been entered into on 15-8-1947, whether it would have been a contract for purposes of the Dominion of Pakistan, or, if the Dominion of Pakistan had been in existence when the contract was entered into, whether it would have been a contract for purposes of Pakistan.'
8. Mr. Mitter contended that on the facts of this case one must consider not only the provisions of the Indian Independence (Rights, Properly: not Liabilities) Order, 1947, but also those of the Joint Defence Council Order of 1947. Both the Joint Defence Council Order and the Indian Independence (Rights, Property and Liabilities) Order were made by the Governor-General of India under the provisions of Section 9 of the Indian Independence Act of 1947, the relevant portion of which reads as follows:
'The Governor-General shall by order make such provision as appears to him to be necessary or expedient, (a) for bringing the provisions of this Act into effective operation; (b) for dividing between the new Dominions and between the new Provinces to be constituted under this Act, all powers, rights, property, duties and liabilities of the Governor-General in Council or, as the case may be of the relevent provinces which, under this Act, are to cease to exist.'
The Rights, Property and Liabilities Order wasmade in order to divide between the two Dominionsthe ''joint assets as also the liabilities which theGovernor-General in Council was under an obligation to meet up to the 14-8-1947. As regards theArmy and the Navy it was felt that it would takecome time to divide the same and it would benecessary to continue the joint control thereoffor some time and to achive this purpose the JointDefence Council Order was made by the Governor-General. The Council was to consist of the Governor-General of India, the Defence Minister ofIndia, the Defence Minister of Pakistan and theSupreme Commander of His Majesty's forces inIndia and Pakistan. By Clause 8 of the Order, theJoint Defence Council was to be in exclusive control of
(a) the division of the Indian forces between the Dominions and their reconstitution as two separate Dominion forces;
(b) the allocation, transfer and movement of Officers and men belonging to the Indian forces for the purpose of such reconstitution;
(c) The allocation, transfer and movement for the purpose of such reconstitution of plant machinery, equipment and stores held by the Governor-General in Council immediately before 15-8-1947, for the purposes of the Indian force;
(d) such naval, military and air force establishments as the Joint Defence Council may specify for such temporary period as that Council may consider necessary or expedient;
(e) the general administration of naval, military and air force law and the maintenance of discipline in the armed forces of each of the two Dominions;
(f) the general arrangements for the payment of food, clothing, medical attendance and equipment of the armed forces of each of the two Dominions;
(g) any armed forces which may be operating, or may hereafter be sent to operate, under Joint command in any such areas near the boundaries between the two Dominions as are for the time being declared by or under a Provincial law to be disturbed areas;
(h) any Indian forces which are for the time being over-seas.
The Provisos to the clause are not relevant for the purpose of this suit.
9. Mr. Mitter drew my attention to a judgment of the Punjab High Court reported in Chamanlal Loona & Co. v. Dominion of India. where both the Indian Independence (Rights. Property and Liabilities) Order and the Joint Defence Council Order were considered by the Punjab High Court. In that case a contractor had supplied fodder to a military firm situate at Lahore in the year 1945 and his claim for the payment thereof remained unpaid even after the partition of India. The Division Bench consisting of Khosla and Harnam Singh JJ. were of opinion that although under the Indian Independence (Rights, Property and Liabilities) Order the liability would be that of Pakistan, but considering that Order along with the Joint Defence Council Order, namely Sub-clause (c) of Clause 8 of the latter Order, the purpose of the contract could not be said to be exclusive to Pakistan. Khosla, J.; was of opinion that the fodder constituted 'military stores' within the meaning of Sub-clause (c) and that it was open to the Joint Defence Council to allocate and transfer the same from Lahore to a place within the Dominion of India and therefore the purpose of the contract could not be said to be exclusive to Pakistan.
10. Mr. Mitter contended that under Sub-clause (f) of clause 8 the position would be the same and that when the Joint Defence Council had to make arrangements for medical attendance of the armed forces it must be found as a corollary thereto that they also had to be in possession or control of all military hospitals including the one in Dacca where the work was executed and as such the purpose could not be said to be exclusive to Pakistan. In the first place, I think that the relevant provision of Clause 8 of the Joint Defence Council Order which applies to this case is not Sub-clause (f) but Sub-clause. (d). A military hospital, in my view, is a 'military establishment' and as such would be covered by the words of Sub-clause (d) and if the Joint Defence Council wanted to remain in control or possession of the military hospital at Dacca it had to specify the same as one of the establishments which was to remain temporarily in its charge for such period as it thought proper. No evidence was adduced before me to show that this military hospital was one of such establishments. To my mind the Governor-General did not intend that the joint Defence Council should have power under Sub-clause (f) to be in possession of military hospitals.
11. The power of the Joint Defence Council to continue in possession of any military hospital being expressly provided for in Sub-clause (d) of Clause 8 there is no necessity to resort to any power which may be implied under Sub-clause (f) of this clause.
12. Tnere is a well-known maxim of law expressed in the words 'Expressio unius est exclusio alterius' or to quote the words of Lord Dunedin In Whiteman v. Sadler 1910 AC 514 (G) 'express enactment shuts the door to further Implication'. 'When military hospitals were expressly provided for in Sub-clause (d) there is no need to refer to Sub-clause (f) for the implication that medical attendance includes the control of military hospitals. Even if Sub-clause (d) was non-existent I would have found it difficult to lean in favour of Mr. Mitter's contention that medical attendance must necessarily involve controlling a hospital. The intention of the Governor-General when laying down Sub-clause (f) of Clause 8 was that the Joint Defence Council should make arrangements for feeding, clothing and paying the personal of the armed forces and care for their general well-being and if they were sick provide for their medical treatment. It did not mean that the Council had to be in possession of hospitals in order to be able to provide medical attendance although it might be economical for the council to run these hospitals where large number of people fell sick.
13. In my view the relevant provision is Sub-clause (d) and not Sub-clause (f) and in the absence of evidence to show that the military hospital at Dacca Was one of the establishments specified by the Joint Defence Council I cannot uphold Mr. Mitter's contention that the Joint Defence Council Older is attracted at all to the facts of the case before me. Thus the only provision of law applicable is Article 8 of the Indian Independence (Rights, Property and Liabilities) Order and under the said Order the purpose of the contract must be held to be exclusive to that of Pakistan.
14. Mr. Mitter next argued that the defendant had waived its rights under the Indian Independence (Rights, Property and Liabilities) Order, In my view there is no room for such contention on the plaint filed herein. The relevant paragraphs of the plaint in this connection are paragraphs 12 to 15. In paragraph 12 the plaintiff refers to the notification dated the 23-5-1948 by the Government of India. In paragraph 13 the presentment of the plaintiff's claim for Rs. 1.36,670/- is pleaded, In paragraph 14 the plaintiff avers that the Dominion of India, the successor-in-interest of the Governor General in Council by a letter dated the 4-2-1949 illegally declined to pay the aforesaid claim. Paragraph 15 of the plaint is worded as follows:
'The Union of India became and is liable by reason of the aforesaid notification acknowledging liability for claims in respect of work up to the 14th August, 1947 and under the Rights, Property & Liabilities Order and by the Constitution of India to satisfy the Plaintiff's claim aforesaid against the Governor-General in Council and / or the Dominion of India.'
This paragraph, therefore, shows that the liability of the Union of India was three-fold first by reason of the notification by which liability was acknowledged, secondly under the Rights, Property and Liabilities Order and thirdly under the Constitution of India.
15. The relevant clauses o'f the Notification Which the plaintiff relied on are as follows:
'The Government of India have been considering for some time the question of arranging for the speedy payment of the outstanding claims in respect of supplies and services rendered to the undivided Government of India up to and before the date of partition.
2. At the time of the partition there was an arrangement between the two dominions that each dominion will pay the claims arising in its area subject to subsequent adjustment, but a large number of claims particularly those relating to the areas now included in Pakistan are still outstanding due partly to disturbances in the Punjab and the large scale movement of populations and partly to the discontinuance of payments by the Pakistan Government from about the middle of last December owing to a difference of opinion between the two Governments about the liability for those payments. In order to avoid hardships to the suppliers and contractors, the Government of India after careful consideration have decided that they should undertake the initial liability for these payments and recover Pakistan's share through the debt settlement. They have, accordingly, decided to prescribe the following procedure for the collection, check and payments of these claims:
All bills and claims in respect of supplies and services rendered to the late Government of India upto and inclusive of August 14, 1947, whether la the areas now in India or in Pakistan, should be submitted to the Government of India by July 1, 1948 at the latest.'
Then follows a schedule showing where claims were to be presented,
16. It will, therefore, be seen that the Government Of India was merely trying to help the contractors by voluntarily paying their claims and' in its turn seeking to recover the same from Pakistan There is no admission anywhere In the Notification that the contract entered into in respect of areas then situate in Pakistan was not for purposes exclusive to Pakistan or, in other words there is no admission that the purpose of the contract was one which could be said to be purposes of the Dominion of India.
17. The Notification referred to does not amount to any agreement between the Dominion of India and the plaintiff or any other contractor. The Dominion of India had, in order to alleviate the suffering of some contractors, graciously offered to pay them their claims after the same were established as a result of the enquiries to be instituted. Any payment in pursuance of the notification unless covered by the Indian Independence (Rights, Property and Liabilities) Order would be unauthorised and unlawful. Certainly there could be no legal consideration to support it.
18. Waiver, as is well-known, belongs to the realm of contract and depends on the conduct of the parties; it may be express or implied. A party may expressly agree to forego its rights under a contract or under the provisions of a statute. It is also open to a party by his conduct to release his right by implication. As pointed out in the case of Dawson's Bank Ltd. v. Nippon Menkwa Kabushiki Kaisa .
'Waiver is contractual and may constitute a cause of action; it is an agreement to release or not to assert a right.'
The plaintiff must, therefore, show that the Dominion of India or the Union of India agreed not to assert its rights under the Indian Independence (Rights, Property and Liabilities) Order.
19. It should be noted that the work was not done for the Dominion of India which came into existence on August 15, 1947. It was done for the former Government of India which ceased to exist after August 14, 1947. The new State, i.e., the Dominion of India, would not be liable to meet the plaintiff's 'claim, unless there was some provision of law transferring the liability of the former Government of India to the new Dominion of India after August 15, 1947.
20. The Indian Independence (Rights, Property and Liabilities) Order is the only provision of law creating obligations of the two States in respect of transactions effected before the 15th of August, 1947, If the Dominion of India is not liable under that Order the plaintiff cannot call upon that Dominion to meet his claim.
21. There is no express waiver of the rights of the Government under the Indian independence (Rights, Property and Liabilities) Order, nor can I hold that as a result of the publication of the said Notification an implication of waiver arises in favour of the plaintiff. The draftsman of the plaint did not consider the question of waiver at all. On the other hand, the plaintiff expressly relies on the Rights, Property and Liabilities Order in support of his contention that the Government of India was liable to meet his claim as a result of the said provision of law.
22. Apart, therefore, from the contention of the learned Counsel for the defendant that there was no mention of any waiver on the part of the defendant in the notice under Section 80 of the Code of Civil Procedure, I do not think that the plaint makes out any case of waiver.
23. The contentions of the learned Counsel for the plaintiff are thus over-ruled and my decision of the first issue is that the contract in this case was for purposes exclusive to the Dominion of Pakistan and the liability, if any, under the contract is that of the Dominion of Pakistan and not of the Dominion of India.
24. The suit will, therefore, be dismissed onthis preliminary ground with costs. Certified fortwo counsel