Director Of Rationing And Distribution vs The Corporation Of Calcutta And Others

Rewritten Version Notice: This is a rewritten version of the original judgment.

Court: Supreme Court of India

Case Number: Criminal Appeal No. 158 of 1956

Decision Date: 16 August 1960

Coram: Bhuvneshwar P. Sinha, Syed Jaffer Imam, A.K. Sarkar, K.N. Wanchoo, J.C. Shah

In this matter, the Supreme Court of India disposed of an appeal filed on 16 August 1960 by the Director of Rationing and Distribution against the Corporation of Calcutta and other respondents. The case was reported as 1960 AIR 1355 and 1961 SCR (1) 158. The bench that heard the appeal comprised Chief Justice Bhuvneshwar P. Sinha, together with Justices Syed Jaffer Imam, A. K. Sarkar, K. N. Wanchoo and J. C. Shah. The citation record also includes references such as RF 1961 SC 112 (80), RF 1961 SC 221 (25,33), R 1963 SC 1241 (68,65), D 1963 SC 1681 (15), R 1964 SC 669 (12,13,14), R 1964 SC 1781 (9), R 1965 SC 1061 (17), O 1967 SC 997 (1,2,6,22,24,27,34,44,51,54,56), E 1968 SC 360 (2,4), RF 1976 SC 1207 (162,182) and RF 1988 SC 1003 (2). The statutory provision at issue was section 386(1)(a) of the Calcutta Municipal Act, 1923, and the interpretation of whether a “person” in that provision included the State, in light of Article 372 of the Constitution of India.

The factual backdrop, as set out in the headnote, was that the appellant, acting on behalf of the Government, employed certain premises in Calcutta for the storage of rice flour and other materials without obtaining a licence required under section 386(1)(a) of the Calcutta Municipal Act, 1923. The respondent corporation filed a complaint alleging a contravention of that provision. At the trial stage, the magistrate acquitted the appellant, holding that the language of section 386(1)(a) did not, either expressly or by necessary implication, bind the Government represented by the appellant. On revision, the High Court reversed that view, concluding that the Government was subject to a statutory provision unless the legislature had expressly or by necessary implication excluded it. The High Court also declined to follow the Privy Council decision reported in L. R. 73 I. A. 271, which had applied a general English principle to Indian legislation.

The Supreme Court, delivering the opinion of Chief Justice Sinha, Justices Imam and Shah, examined the pre‑Constitution legal position as laid down by the Privy Council in L. R. 73 I. A. 271. The Court observed that the Constitution had not altered that position; rather, Article 372 made clear that laws in force before 26 January 1950 would continue to be valid except where they conflicted with express constitutional provisions. Accordingly, the rule of statutory interpretation that the State is not bound by a statute unless the statute expressly says so or it is necessary to imply such binding remained good law. The Court reiterated the authority of Province of Bombay v. Municipal Corporation of the City of Bombay (1946) L. R. 73 I. A. 271, while noting that Bell v. The Municipal Commissioners for the City of Madras (1901) I.L.R. 25 Mad. 457 had been disapproved. The Court also referenced the earlier decision of the Corporation of Calcutta v. Sub‑Postmaster, Dharmatala Post Office (1948) 54 C.W. N. 429.

Applying this rule, the Court held that the State was not bound by the provisions of section 386(1)(a) of the Calcutta Municipal Act, 1923, and therefore the appellant could not be prosecuted for a violation of that section. The decision affirmed that the principle that a “person” does not automatically include the State in statutory language, unless the statute expressly or by necessary implication provides otherwise, continues to govern statutory interpretation in India.

In this case the Court noted that the authorities cited included United States of America v. 159 United Mine Workers of America (1947) 91 L. Ed. 884, United States of America v. Reginald P. Wittek (1949) 93 L. Ed. 1406, Larson v. Domestic and Foreign Commerce Corporation (1949) 93 L. Ed. 1628 and Roberts v. Abern (1904) I.C.L.R. 406. The Court observed that the Act contained no provision indicating that the State was bound by it through necessary implication, nor was there any indication that the effectiveness of the law would be lost or its operation hindered if section 386 were not held to apply to the State. Justice Sarkar explained that the rule that the Crown is not bound by the provisions of any statute unless the statute expressly or by necessary implication binds the Crown is fundamentally a rule of statutory construction, not a doctrine dependent on royal prerogatives. He added that Indian courts had applied this rule before the Constitution and there was no reason to discontinue its application after the Constitution came into force. The Court then listed several authorities supporting this view, including Attorney General v. Donaldson (1842) 10 M. & W. 117, Coomber v. Justices of Berks (1883) 9 App. Cas. 61, Roberts v. Ahern (1904) I.C.L.R. 406, United States v. United Mine Workers of America (1947) 91 L. Ed. 884, United States v. State of California (1936) 80 L. Ed. 567, Bell v. Municipal Commissioners for the City of Madras (1901) I.L.R. 25 Mad. 457, Mersey Docks v. Cameron (1865) 11 H.L.C. 443, Coomber v. Justice of Berks (1884) 9 App. Cas. 61, Greig v. University of Edinburgh (1868) L.R. I H.L. (S.C.) 348 and Cooper v. Hawkin (1904) 2 K.B. 164. The Court held that section 386(1)(a) does not bind the Government by necessary implication; the fact that some provisions of the Act expressly exempt the Government does not create a necessary implication that the Government is bound. Moreover, the purposes of the Act would not be defeated if the Government were not bound by it, as reinforced by references to Hornsey Urban Council v. Hennel (1902) 2 K.B. 73 and Province of Bombay v. Municipal Corporation, Bombay (1946) L.R. 73 I.A. 271. Justice Wanchoo expressed a differing view, stating that the rule of construction based on the royal prerogative, inherited from English common law, could not be applied in India where there is no Crown and English common law is not applicable. He argued that the proper rule of construction now is that the State is bound by a statute unless the statute expressly exempts the State or does so by necessary implication, and therefore the Province of Bombay case should not be applied. He reiterated the earlier cited authorities, including United States of America v. United Mine Workers of America (1947) 91 L. Ed. 384, United States of America v. Reginald P. Wittek (1949) 93 L. Ed. 1406 and Larson v. Domestic and Foreign Commerce Corporation (1949) 93 L. Ed. 1628.

The Court noted that the authorities cited included L. Ed. 1628, H. Snowden Marshall v. People of the State of New York (192O) 65 L. Ed. 315 and Guaranty Trust Company of New York v. United States of America (1938) 82 L. Ed. 1224. It then observed that the Calcutta Municipal Act of 1923 does not contain a specific provision exempting the State from the operation of its provisions. Because the State cannot be subjected to a term of imprisonment, the Court held that the State is exempt by necessary implication from every penal provision that provides for a sentence of imprisonment or death. The Court further explained that when a statute imposes a fine and the fine is payable to the State, the State is likewise exempt by necessary implication, since it cannot be the intention of the legislature to institute a criminal prosecution against the State for a fine that would ultimately be paid to it. The present prosecution was instituted under section 488 of the Act, which provides for a fine in cases of breach of section 386, and the fine, if imposed and collected, would be paid to the State. Accordingly, the Court concluded that, by necessary implication, the State is exempt from the penal provisions of section 488 of the Calcutta Municipal Act.

The judgment was recorded as a criminal appellate jurisdiction matter, Criminal Appeal No. 158 of 1956, filed by special leave from the judgment and order dated 9 February 1955 of the Calcutta High Court in Criminal Revision No. 282 of 1954, which arose from the judgment and order dated 15 December 1953 of the Second Municipal Magistrate, Calcutta, in Case No. 2629C of 1952. The dates of the hearing were 8, 9 and 10 February 1960. Counsel for the appellant included the Advocate‑General for the State of West Bengal and other counsel. The Court identified three questions for determination: first, whether the State qualifies as a “person” within the meaning of section 386 of the Calcutta Municipal Act, 1923; second, whether the Constitution effects any change in the common‑law principle of prerogative; and third, whether Article 372 of the Constitution preserves the existing law as declared in L. R. 73 1 A. 271, which stated that the Crown is not bound by any statute unless the statute expressly names it or includes it by necessary implication. The Court reiterated that the word “person” had been held not to include the State in several authorities, namely A.I.R. 1954 Punj. 49; A.I.R. 57 Punj. 150; A.I.R. 53 Nag. 35; A.I.R. 1955 Nag. 177; I.L.R. 1953 1 Cal. 355; and 62 C.W.N. 561, while noting that 33 Pat. 603 took the contrary view. The Court observed that if “person” were to include the State, Article 300 of the Constitution would be unnecessary. The extent to which the Crown is bound by a statute that does not specifically name it was laid down by the Privy Council in L. R. 73 I.A. 271. The Court rejected the view of the Madras High Court, expressed in I.L.R. 25 Mad. 457, which was not cited before the Privy Council and was based on the mistaken assumption that common law changed with legislative amendment. Finally, the Court affirmed that the coming into force of the Constitution does not alter the law as articulated in L. R. 73 I.A. 271.

In this matter the Court considered the relevance of several authorities, namely 73 I.A. 271, I.L.R. 1958 Mad. 801 and I.L.R. 58 Bom. 635. It noted that Article 372 of the Constitution incorporates the common law of the land and that this common law continues to apply after the Constitution came into force, as affirmed in I.L.R. 1956 Cal. 26 and I.L.R. 1955 Bom. 654. The Court observed that the common‑law doctrine that the Crown enjoys immunity from statutes that do not expressly name it or refer to it by necessary implication is also recognized in the United States, citing 52 L. Ed. 82; 65 L. Ed. 315; 82 L. Ed. 1224. Counsel for intervener No. 1, appearing on behalf of the Attorney‑General for India, advanced the question whether the ancient English common‑law rule, declared applicable to India by the Privy Council, should govern the construction of section 386 and required an examination of the rule’s position before and after the Constitution. The Court recorded that the High Court had held that, even prior to the Constitution, the principle did not apply despite the Privy Council decision, and that the 1923 statute must be interpreted according to the rule of construction prevailing in 1923, noting that the drafters of that statute did not intend the word “person” to include the State.

The Court affirmed that the Privy Council decision remained binding law unless displaced by subsequent legislation that expressly abrogated or altered its effect. It emphasized that Article 372 actually continues the law as articulated in L.R. 73 I.A. 271, using the phrase “of the law in force in India” rather than “existing law,” a formulation also employed in section 292 of the Government of India Act and interpreted in [1940] F.C.R. 110. The Court found no constitutional provision removing the rule’s applicability, nor any inherent conflict between the rule and any Constitution provision. It referenced illustrations of the rule in 152 E.R. 406 and I C.L.R. 406, and noted that the rule applies to all forms of government, being rooted in public policy rather than mere prerogative, as supported by 91 L. Ed. 884 and 93 L. Ed. 1628. Counsel for intervener No. 4 and counsel for intervener No. 5 urged that the word “person” should be given its ordinary meaning, which does not encompass the Crown or the State, unless the statute would be meaningless without such inclusion, as explained in L.R. 73 I.A. 271 and I C.L.R. 406. “Necessary implication” was defined to mean that, without including the Crown or the State, the beneficial purpose of the statute would be wholly frustrated. The Court observed that the consensus of Bombay judicial opinion aligns with L.R. 73 I.A. 271, and concluded that the rule has no connection with specific forms of government.

In this case the Court observed that the rule concerning the definition of “person” applied to every form of Government, as noted in the reported authority at 93 L. Ed. 1406. The Court stated that Indian case law had uniformly adopted this view, citing several decisions including 5 Bom. H.C.R. 23, I.L.R. I Bom. 7, I.L.R. 14 Bom. 213, 36 Bom. L.R. 820, 37 Bom. L.R. 499 and I.L.R. 2 All. 196. The Court further referred to I.L.R. 25 Mad. 457, which accepted the rule but expressly held that it did not extend to taxation, describing that limitation as an unjust curtailment of the prerogative and referencing Halsbury, Vol. 7, p. 469, para 98. The Court then noted that judgments of the Privy Council issued before 26 January 1950 were binding on all Indian courts except the Supreme Court and remained binding until the Supreme Court adopted a different view, as reflected in A.I.R. 1953 Cal. 524, A.I.R. 1955 Nag. 293 and 56 Bom. L.R. 1084. The Court pointed out that Section 212 of the Government of India Act provided that the judgments of the Federal Court and of the Privy Council were to be binding and followed.

The Court recorded the submissions of the Advocate‑General of Punjab and counsel for intervener No. 2. It explained that in statutes enacted before the Constitution the word “person” could include the Crown, but ordinarily it did not. In I.L.R. 1958 Punj. 201 the Court had held that “person” included the State of Punjab and the Union of India. The Court asserted that the rule laid down by the Privy Council was equally applicable to a Republic, citing authorities at 25 L. Ed. 194, 65 L. Ed. 315, 24 L. Ed. 192 and 85 L. Ed. 1071. It further referenced A.I.R. 1956 Pat. 91 where the State had been declared a “person”. Counsel for intervener No. 3 adopted arguments previously advanced by the Advocate‑General of West Bengal and the Attorney‑General of India. Counsel for intervener No. 6 adopted the arguments of the Advocate‑General of Bengal and the Attorney‑General of India. Counsel for respondents were also recorded.

The Court described Section 386 as a provision intended to maintain a healthy condition and to safeguard public health by regulating the control of storage houses and ensuring equality among stores. It held that the financial aspect, such as recovery of licence fees or fines, was inconsequential to the purpose of the provision. The Court explained that the prerogative of immunity from statutes was available only when the State acted in its sovereign capacity, not when it engaged in trade or business. It affirmed that the State is a “person”, citing Salmond’s 11th Edition, p. 35, which defines a person as an entity capable of rights and duties, able to hold and acquire property and capable of suing and being sued, with reference to Article 300 of the Constitution and 60 Punj. L. R. 546. The Court stated that the correct rule of interpretation required an express statutory exclusion to exempt the State from a law, referring to Friedman in Modern Law Review, vol. 13, p. 24. It further observed that the fact that the State cannot be imprisoned did not mean it was not a person, and that a corporation is also a person. Finally, the Court concluded that the stigma of a conviction, rather than any injury to the State, was the relevant consideration.

The Court noted that a corporation can be prosecuted even in cases where the question of mens rea or the mental state of the accused is relevant, referring to the authority in Paton on Jurisprudence, 2nd Edition, page 279. It further held that the sanctions of criminal law must be available against the State when the State is enforcing the law, relying on the authorities reported in 72 C. L. R. 409 and Willis' Constitution Law, page 37. The Court affirmed that the State is a person, as indicated in the citations 78 L. Ed. 1307 and I. L. R. (1951) 1 All. 269. Accordingly, when the State engages in trade or commerce, it must be treated in the same manner as ordinary citizens, a proposition supported by the decisions reported in A. 1. R. 1955 Nag. 177 and A. 1. R. 1956 Pat. 91. The Court clarified that the State is not a person only for the purposes of Article 14, and that the doctrine of immunity of States from the operation of its own laws cannot be invoked in the present constitutional framework. It explained that this doctrine is based on the royal prerogative, as discussed in 1 C. L. R. 406 and Willis page 54, and that the rule originates from the prerogative that the King can do no wrong, a principle found in (1920) 2 A. C. 5081. The Court observed that there is no contemporary equivalent to the King in India and therefore that prerogative no longer survives. It described law as a scheme of social control and a command of a superior, and stated that if the State claims immunity, such immunity must be granted by express legislation; it cannot be inferred or implied. The Court pointed out that there has been a progressive restriction on State immunity, citing 78 L. Ed. 1307 and 90 L. Ed. 326, and it referred to I. L. R. 25 Mad. 457 as laying down the correct law. After the Constitution came into force, the Court held that the High Courts are not bound by judgments of the Privy Council, that all powers derive from the Constitution, and that no immunities may be implied. Even if an immunity were to be implied, the Court said it could not be invoked in respect of any trading or commercial activity, as supported by 5 Bom. H. C. R. Appendix 1 at page 13, 78 L. Ed. 1307 and 90 L. Ed. 326. The Court characterized the activity undertaken by the State in storing food grains and distributing them as a trading activity rather than an exercise of governmental function, and it held that the State is bound by the necessary implication of the provisions of the Calcutta Municipal Act, 1923. It observed that the Act contains provisions that expressly exempt the State from their operation, referring to section 126. In response, the Court noted that common law can be amended by legislation, citing section 4 of the Hindu Succession Act (30 of 1956) and the Hindu Adoptions and Maintenance Act (78 of 1956). The Court distinguished between civil and criminal liability, referring to 72 C. L. R. 406 at pages 409, 424 and 425. It further observed that the State is not carrying on any trading activity but is acting in the exercise of essential governmental functions, as reported in (1955) 1 S. C. R. 707. The Court reminded that the common law of England was introduced into the Presidency towns by statutes, referring to Ormond's Rules of Court and 1 L. R. 61 Cal. 841. Finally, the Court reiterated the settled rule that when a word is not a technical term of art, its ordinary meaning must be adopted, and not a technical construction.

In this case, the Court cited several authorities, including the passages reported in the law reports at volume 74 of the C.L.R., at page 1; volume 90 of the Law Ed. at page 396; and in Halsbury’s Statutes, volume 7, page 221. The Court also noted that S. M. Sikri, with the Court’s permission, referred to Holdsworth’s History of English Law, volume 10, page 354, and that the court record contained a note indicating “Cur. adv. vult” dated August 16, 1960. The judgment of Sinha, Chief Justice, together with the judgments of Imam and Shah, Justices, was delivered by Sinha, Chief Justice, while Justices Sarkar and Wanchoo each delivered separate judgments.

Chief Justice Sinha explained that the present appeal, granted by special leave, challenged the judgment and order of the Calcutta High Court dated 9 February 1955. In that earlier order, the High Court, exercising its revisional jurisdiction, set aside an acquittal dated 15 December 1953 that had been rendered by the Municipal Magistrate of Calcutta. The acquittal concerned a prosecution initiated by the Corporation of Calcutta, the respondent before this Court, against the appellant, who was the Director of Rationing and Distribution representing the Food Department of the Government of West Bengal.

The factual background presented to the Court stated that on 1 July 1952 the Corporation of Calcutta filed an application for summons under section 488 of the Bengal Act III of 1923, an enactment later replaced by the West Bengal Act XXXIII of 1951. The summons was directed against the Director of Rationing and Distribution. The alleged offence was the use, or permitting the use, of premises numbered 259, Upper Chitpur Road, for the purpose of storing rice and similar commodities, contrary to the Bengal Rationing Order of 1943, and without a licence required under section 386 for the fiscal year 1951‑52, which corresponded to section 437 of the Calcutta Municipal Corporation Act, 1951. Section 386(1)(a) of the Calcutta Municipal Act was quoted in full, specifying that no person shall use or permit any premises for the purposes listed in Schedule XIX, Item 8—namely storing, packing, pressing, cleansing, preparing, or manufacturing any articles, including rice and flour, unless such use is authorized by a licence granted by the Corporation.

The prosecution’s factual allegations were not contested by the Department, which stood in the position of the accused. Instead, the Department raised a preliminary objection, contending that the prosecution was not maintainable as a matter of law. After hearing the arguments of both sides, the learned trial magistrate issued an order acquitting the accused. The magistrate based the acquittal on the precedent set by the Calcutta High Court in the case of The Corporation of Calcutta v. Sub‑Postmaster, Dharamtala Post Office (1), where the High Court had held that the provisions of section 386 of the Municipal Act, either in their literal wording or by necessary implication, did not bind the Government.

Unsatisfied with that decision, the respondent filed a criminal revision—Criminal Revision No. 282 of 1954—before the Calcutta High Court, invoking its revisional jurisdiction. The revision was heard by a Division Bench comprising Justices J. P. Mitter and S. N. Guha Ray. Justice Guha Ray delivered the judgment of the Court, with Justice Mitter concurring. The Bench held that the earlier decision of the same High Court in The Corporation of Calcutta v. Sub‑Postmaster, Dharamtala Post Office (1) was clearly …

The Court observed that the earlier judgment of the High Court was distinguishable because the prior decision had relied upon the Judicial Committee of the Privy Council’s ruling in Province of Bombay v. Municipal Corporation of the City of Bombay, which was rendered before the Constitution came into force. Since the present matter arose after the Constitution had become operative, the High Court felt it was not bound by that Privy Council precedent and therefore re‑examined the legal issue anew. In its fresh examination, the High Court concluded that the Indian Legislature, when enacting statutes, generally presumed that the Government would be bound by the provisions of a law unless the statute expressly excluded the Government or implied such exclusion by necessary implication. The Court contrasted this presumption with the opposite view, which would assume that the Government was not bound unless the Legislature expressly or implicitly provided otherwise. The High Court held that the earlier decision of the Madras High Court in Bell v. The Municipal Commissioners for the City of Madras was more consistent with Indian law than the contrary view expressed in the Privy Council judgment. The Court noted that, even before the Constitution and at the time the Government of India Act, 1935 was passed, the prevailing rule in India was that the Government was bound by a statute unless the statute expressly or necessarily implied an exemption. Accordingly, the High Court observed that it was unnecessary to decide whether the Privy Council decision remained good law under Article 372 of the Constitution, but, had that question arisen, the Court was inclined to think that the Privy Council rule was not continued by any constitutional provision. In effect, the High Court affirmed the principle that the State is bound by a statute unless the statute expressly or necessarily excludes the State from its operation. Applying that principle, the High Court held that section 386 of the Act bound the appellant, set aside the trial magistrate’s order of acquittal, and remitted the case to the magistrate for disposal in accordance with law. The appellant then applied for special leave to appeal from that judgment and order, and special leave was granted in September 1955. Consequently, the matter had been pending before this Court for approximately five years. The Court noted that if it were to accept the High Court’s view, the case would have to be tried on its merits, meaning that trial would commence more than eight years after the original complaint was filed. However, the Court indicated that the prosecution was fundamentally misconceived, so that the prolonged pendency had not caused any substantive injury, and that the prosecution now needed to be brought to an end.

The Court observed that the only point to be decided on this appeal was whether the appellant had actually committed any offence as alleged against him. The Court explained that if the appellant was required by the Act to obtain a licence by paying the prescribed fees, then a failure to do so would constitute a breach of the statutory provisions.

The learned Advocate‑General of Bengal, appearing for the appellant, contended that the decision of the Privy Council previously cited remained good law and that the contrary judgment of the Division Bench of the Madras High Court (1) had adopted an incorrect view of the legal position. He further argued that at the time the Privy Council decision was rendered it was certainly binding on all Indian courts, being the highest judicial authority, and that the Constitution had not altered that judicial determination. It was submitted that even after the Constitution came into force, the law of India continued to follow English law with respect to the Crown’s prerogatives. The appellant’s counsel pointed out that the Act under consideration contained no express provision binding the Government, nor any necessary implication to that effect, and that the Act could function effectively without being held to be binding on the Government. He also noted that the High Court had failed to consider that it itself had interpreted the Calcutta Municipal Act of 1923 – which was later replaced by the present Act of 1951 – on the basis of the Privy Council’s view that the Government was not bound. Since the 1951 Act did not expressly repeal that view, the appellant’s counsel argued that the High Court should have been bound by its own earlier construction and therefore erred in taking the opposite position. Further, his submission emphasized that the State was not a “person” within the meaning of the penal provision used for the prosecution, and that common law could not be implicitly overridden by legislative action. He maintained that common law continued to apply in India after the Constitution, not because of any surviving monarch, but because it remained the law of the land. In other words, the prerogative once belonging to the sovereign had become part of the law regarding the State’s sovereignty. Consequently, the English law that originated as the Crown’s prerogative was, under Article 372 of the Constitution and subject to its reservations, the common law of the land. The Attorney‑General for India and the Advocate‑Generals of Madras and Bombay supported the same contention on behalf of the appellant.

Mr N C Chatterjee, appearing for the respondent, argued that Article 300 of the Constitution recognises the State as a legal person capable of both rights and obligations, and therefore, unless the Legislature expressly excludes the State, the Act in question must apply to the State just as it applies to any other person. He further contended that the Constitution removes any notion of a King, and consequently there can be no question of a sovereign prerogative that would exempt the State from statutory operation; any exemption, he said, must be found in an express provision of law rather than be implied. He proceeded to assert that a prerogative belonging to the State would be fundamentally inconsistent with the entire scheme of the Constitution, and that any legal position that existed before the Constitution came into force should not be permitted to survive after the Constitution’s adoption. Another line of argument presented by Mr Chatterjee was that when the State engages in a commercial activity, it does so not in its sovereign capacity but as a legal person, thereby subjecting itself to the same rights and liabilities that attach to any private individual. On that basis he maintained that the State falls within the meaning of section 386 of the Act, that the doctrine of immunity of States from the operation of their own laws cannot be invoked after the Constitution came into effect, and, alternatively, that even if such immunity existed as a sovereign power, it would not extend to the State when it is undertaking a commercial venture; in any event, the State is bound by the law through the rule of necessary implication derived from the provisions of the Act.

The facts of the present dispute show that it is the Government of West Bengal that is sought to be prosecuted through one of its officers, specifically the Director of a named Department of the Government, rather than a named individual. The person who occupied the position of Director during the relevant year of 1951‑52 may not be the same individual who held that description at the time the prosecution was instituted, meaning that the charge in effect is directed against the Government itself rather than against a particular person. Accordingly, the Government of West Bengal must answer the charge levelled by the respondent, the Corporation of Calcutta. The Court noted that the question of whether a prosecution may be maintained against an indeterminate person has not been raised by the parties and therefore need not be considered. The principal issue before the Court was whether the penal provision invoked in this case applies to the Government. The Court agreed with the submissions that the provisions of the penal section, neither by their express terms nor by necessary implication, are intended to be applied to the Government. The Court further observed that, if the decision of the Judicial Committee of the Privy Council remains good law, it fully covers the present situation, although the High Court’s decision now under examination has taken a different view.

In this case, the Court observed that the Division Bench of the Madras High Court had held the correct law, and not the earlier Privy Council decision. Consequently the Court needed to determine which of the two authorities accurately reflected the legal position on the date the prosecution was instituted. The Court noted that English common law traditionally recognises the Crown’s prerogative, which is expressed through the principle that the sovereign is not automatically subject to a statute that binds ordinary subjects. This principle is reinforced by the rule that the Crown is bound by a statute only when the sovereign is expressly named, when the statute necessarily implies the Crown’s inclusion, or when the legislation serves a public purpose so essential that excluding the Crown would be absurd. The Court cited Blackstone’s Commentaries, volume I, pages 261‑262, summarising that the King is not bound by any parliamentary act unless the act specifically names the King or contains language that would unavoidably affect the Crown’s rights, because allowing the executive power to be limited without the Crown’s explicit consent would be detrimental to the public. However, the Court added that when an act is expressly enacted for the preservation of public rights and the suppression of public wrongs, and does not interfere with the Crown’s established rights, such an act is deemed binding on the King as well as on subjects, and the King may also enjoy the benefits of any act even if not specifically named. The Court further explained that the Crown’s prerogative is created and limited by common law, and the sovereign may claim no prerogative beyond that which the law permits. Referring to Halsbury’s Laws of England, volume 7, third edition, paragraph 464, the Court affirmed that the Crown’s prerogative is defined and restricted by common law. In the same work, paragraph 980, the Court reiterated that the Crown is not bound by any statute that would divest or abridge a prerogative right, title, or interest unless the statute expressly names the Crown or clearly implies its inclusion. Consequently, property owned or occupied by the Crown is exempt from taxation unless a statute expressly imposes liability or does so by necessary implication. Moreover, an express exemption for particular classes of Crown property does not automatically imply that only those classes are exempt, as such clauses are inserted merely as a precaution. The Court concluded that this legal position also applied to India.

The Court noted that the principle had been authoritatively established by the Privy Council in the case earlier referred to, and that the Calcutta High Court had correctly applied that decision, as previously mentioned. That authority represented the legal position up to the commencement of the Constitution. The Court then posed the natural question of whether the Constitution had altered that position. It observed that no provision of the Constitution could be cited to support the view that the position had changed after the republican form of government was embodied in the Constitution. The respondent argued that the very existence of such a prerogative was denied by the new constitutional arrangement, contending that a republican form of government could not coexist with any such prerogative. The Court expressed the opinion that there was no warrant for that contention. It explained that the immunity of the Government from the operation of certain statutes, particularly statutes creating offences, rests on the fundamental concept that the Government or its officers cannot be parties to a crime, analogous to the traditional doctrine that the sovereign can do no wrong. The Court observed that, irrespective of the historical reasons for the rule, it has been adopted in the country on public‑policy grounds as a rule of statutory interpretation. The Court further stated that this rule is not confined to a monarchical system, citing the decision of the United States Supreme Court in United States of America v. United Mine Workers of America, in which it was held that statutory restrictions on injunctions in labour disputes do not apply to the United States Government as an employer and that statutes imposing restrictions will not bind the sovereign without express words. Similarly, the Court referred to United States of America v. Reginald P. Wittek, where the Supreme Court reversed the Municipal Court of Appeals, holding that the District of Columbia Emergency Rent Act did not apply to government‑owned defence housing because the United States Government was not a “landlord” within the meaning of the Act. That decision was based on the rule that a general statute imposing restrictions does not impose them upon the Government absent a clear expression or necessary implication. Another illustration was given from Jess Larson v. Domestic and Foreign Commerce Corporation, where a suit against the Government was dismissed because the sovereign enjoyed immunity not granted to citizens. The Court concluded that these authorities demonstrate that the rule of governmental immunity from statutes operates independently of the form of government.

In the case of Assets Administration, the district court dismissed the injunction suit on the ground that it lacked jurisdiction because the action was brought against the United States. The United States Supreme Court, by a majority, held that such a suit must fail because, under the laws of the country, the sovereign enjoys an immunity that ordinary citizens do not. The decision in Roberts v. Ahern provides another illustration of the same principle. The High Court of Australia ruled that the executive government of the Commonwealth or a State is not bound by a statute unless the intention to bind it is clear either expressly or by necessary implication. Article 372 of the Constitution, however, expressly provides that, subject to other constitutional provisions, all laws that were in force in this country immediately before the commencement of the Constitution shall continue to be effective until they are altered, repealed or amended by a competent legislature or other competent authority. The term “law in force” is meant in a very broad sense, as can be seen from sub‑clauses (a) and (b) of clause (3) of Article 13. When the definition of “existing law” in Article 366(10) is compared with the concept of “laws in force”, it is clear that the latter includes not only statutes but also customs or usages that have the force of law, and therefore it embraces the English common law that was adopted as this country’s law before the Constitution came into effect. Consequently, the Constitution does not alter the legal position; rather, it confirms that pre‑existing laws remain valid in the new constitutional order, except to the extent that they conflict with express constitutional provisions. No such conflicting provision has been identified in the present matter. Accordingly, the Court is of the opinion that the rule of statutory interpretation that the State is not bound by a statute unless the statute expressly or by necessary implication provides for such binding remains good law. Mr. Chatterjee, however, advanced an alternative contention that even if the sovereign enjoys immunity, it should lose that immunity when it engages in a business activity and thus become subject to the penal provisions of the statute in the same way as ordinary citizens. This issue was not raised before the lower court and was not examined by the High Court. Moreover, the record does not show that the Food Department of the Government of West Bengal, which performed rationing and distribution of food, had undertaken any trade or business. In the absence of any indication to the contrary, the Department appears to have been exercising the sovereign function of ensuring proper and equitable distribution of foodstuffs to maintain peace and good government. Therefore, Mr. Chatterjee’s alternative argument lacks factual foundation. The Court therefore limited its consideration to the other alternative argument concerning implied binding, for which no specific statutory provision supporting the claim has been presented.

In examining the nature of the activity carried out by the Food Department of the Government of West Bengal, the Court noted that the Department was engaged in the rationing and distribution of food on a rational basis and had not embarked upon any trade or commercial enterprise. Because there was no indication in the record that the Department had pursued a business motive, it was inferred that the Department was performing the elementary sovereign duty of ensuring that the available food‑stuffs were distributed in a proper and equitable manner, a duty aimed at preserving public peace and good government. Accordingly, the alternative contention put forward by counsel Mr. Chatterjee, which alleged that the Department had entered into trade, was found to have no factual foundation. The Court then proceeded to consider the second line of argument, which suggested that even if the State were not expressly bound by the penal provision of the statute under consideration, it should be deemed bound by necessary implication. However, the Court observed that the parties had not identified any specific clause within the statute that would support the implication of such binding, nor had they demonstrated that the omission of the Government from the statutory burden would render the law ineffective or impede its operation in any manner. In the absence of such supporting material, the Court concluded that this contention likewise lacked any substantive merit.

The appeal was consequently allowed, the judgment under appeal was set aside, and the acquittal of the appellant was confirmed. The appellant in this matter was an officer of the Government of West Bengal who had been prosecuted before a Municipal Magistrate of Calcutta for storing a quantity of rice in certain premises without first obtaining a licence required for that purpose from the respondent, the Corporation of Calcutta, as mandated by section 386 of the Calcutta Municipal Act, 1923. The Act in question had been enacted by the legislature of the former Province of Bengal and, for the purposes of the present controversy, could be treated as having been enacted by the legislature of the State of West Bengal. The appellant stored the rice while acting in his official capacity and in furtherance of the West Bengal Government’s rationing scheme. The Magistrate, after considering the arguments, acquitted the appellant on the basis that the Act did not bind the Government because it was neither expressly nor by necessary implication made applicable to the State. Consequently, the appellant, who was effectively representing the Government, could not be held liable for failure to comply with the statutory licensing requirement.

When the matter was taken on revision, the High Court at Calcutta adopted the view that the English rule stating that a statute does not bind the Crown unless the statute expressly or by necessary implication imposes a binding obligation does not apply to statutes in India. Accordingly, the High Court held that the Government of West Bengal would be liable for any breach of the provisions of the Calcutta Municipal Act, and it set aside the magistrate’s order of acquittal. The case was then remitted to the Magistrate for disposal on its merits. The present appeal arises from that order of the High Court and was entertained by this Court pursuant to a grant of special leave. The central issue for determination was whether the English rule that the Crown is not bound by the provisions of any statute unless the statute expressly or necessarily implies such binding continues to have application in the Indian legal system.

The Court observed that the rule which excludes the Crown from the operation of a statute unless the statute expressly or by necessary implication includes the Crown was originally founded on English Crown prerogatives. The Court noted that after the adoption of the Constitution, India had become a republic and therefore the concept of royal prerogatives could no longer arise. It was also pointed out that the prosecution in the present case had been instituted after the Constitution had come into force, and consequently the government could no longer rely on the English rule as a defence. Nevertheless, the Court held that the rule continued to apply in India even after the Constitution. In the Court’s view, the rule in modern times was not a matter of royal prerogatives but a rule of construction of statutes based on the presumed intention of the legislature. The Court indicated that this approach was reflected in recent authorities, some of which it proceeded to cite.

The Court referred to Craies on Statutes (5th Ed.) page 392, which described the rule as “analogous, if not equivalent, to the rule already stated that the common law is not presumed to be altered by statute,” thereby characterising it as a legislative‑intent construction rule. It then quoted Attorney‑General v Donaldson, observing that “it is a well‑established rule…that the King is not included unless there are words to that effect; for it is inferred prima facie that the law made by the Crown with the assent of the Lords and Commons is made for subjects and not for the Crown.” The Court also cited Comber v Justices of Berks, noting that the principle was expressed in Rex v Cook, 3 T.R. 519 as an exemption of the Crown in statutes imposing charges. In the Australian decision Roberts v Ahern, the Court remarked that the rule had often been based on the Royal prerogative but that, “perhaps, having regard to modern developments of constitutional law, a more satisfactory basis is to be found in the words of Alderson, B.” The Court then turned to American jurisprudence, citing United States v United Mine Workers of America, which stated that “there is an old and well‑known rule that statutes which in general terms divest pre‑existing rights or privileges will not be applied to the sovereign without express words to that effect,” and that the rule functioned as a rule of construction even where there was no King. It further referenced United States v State of California, which described the presumption as “an aid to consistent construction of statutes of the enacting sovereign when their purpose is in doubt.” Finally, the Court examined the Indian case Bell v The Municipal Commissioners for the City of Madras, noting that the judgment affirmed that the rule was founded upon general principles of construction and applied equally to Indian enactments, and that the rule itself could not be regarded as a Crown prerogative.

In this case, the Court noted that the principle previously described as a rule of construction was applied to limit the operation of restrictive statutes, and it emphasized that this principle was regarded solely as a rule of construction. The Court then referred to the same principle as articulated in United States v. State of California (2), observing that the presumption served as a tool to promote consistent interpretation of statutes enacted by the sovereign when the purpose of such statutes was uncertain. Turning to Indian jurisprudence, the Court cited Bell v. The Municipal Commissioners for the City of Madras (3), a decision heavily relied upon by the respondent, which after examining several English authorities on the rule, declared that the forceful statement of the rule being based on general principles of construction applied equally to Indian enactments as it did to colonial or imperial statutes. The same page of that judgment further asserted that the rule of construction could not be characterized as a prerogative of the Crown. The Court added that, according to English law, the rule shields not only what might be strictly described as Crown prerogatives or the remnants thereof, but also all of the Crown’s rights, title and interest, as reflected in Halsbury’s Laws of England (3rd Ed.) Vol. VII, p. 465. In the thirty‑first volume of the second edition of the same treatise, it was explained that “the Crown for this purpose means not only the King personally, but also the officers of State and servants of the Crown when acting within the scope of their authority on behalf of the Crown in the discharge of executive duties.” The Court then quoted Lord Cranworth in the Mersey Docks case, noting that the rule had been invoked to exempt buildings occupied for governmental purposes from rates and other impositions, and that these decisions rested on the sound ground that such premises could be treated as occupied by the servants of the Crown, thereby extending the Crown’s shield to what might more aptly be described as the public government of the country. Subsequently, the Court referred to Lord Blackburn’s remarks in Coomber v. Justices of Berks (2), where, after citing Lord Westbury’s observations in the Mersey Docks case, he stated that the public purposes warranting an exemption must be those created and required by the government of the country, and therefore should be regarded as part of the use and service of the Crown. Finally, the Court quoted the language used in Greig v. University of Edinburgh (3), which clearly expressed the view that property occupied by the servants of the Crown, and, according to constitutional theory, property occupied for the purposes of the administration of the government of the country, becomes exempt from liability to the poor‑rate.

In that case the Court observed that property occupied for the purposes of the government of the country becomes exempt from liability to the poor‑rate. The decision further held that land on which buildings had been erected and which were being used by county justices or for police purposes was not subject to liability for income‑tax. In the earlier authority Cooper v. Hawkins the Court ruled that an engine‑driver who was employed by the Crown and who operated a steam locomotive on Crown service at a speed that exceeded the limit prescribed by regulations made under a statute was not liable for the breach, because the statute did not bind the Crown in the absence of express words to that effect. The Court then referred to Roberts v. Ahern, a case in which a person acting on the orders of the Government of the Commonwealth of Australia was prosecuted for removing nightsoil from a Post Office without first obtaining a licence and without providing the security that the State of Victoria required by its enactment. The Court held that the accused could not be convicted, citing the authorities (1865) 11 H.L.C. 443, 508; 11 E.R. 1405; (1883) 9 App. Cas. 61, 65; (1868) L.R.I H.L, (SC.) 348; [1904] 2 K.B. 164; and (1904) 1 C.L.R. 406, 417. The modern formulation of the rule, as expressed on page 418, states that the executive government of a State is not bound by statutes unless the legislature’s intention to bind it is clear. The same page also noted that the doctrine is well settled in the United States of America. The Court emphasized that it is unnecessary to multiply examples of executive actions that have been protected by the rule. This discussion, the Court concluded, makes it unequivocal that the rule is fundamentally a rule of statutory construction. It has been widely employed to exempt executive governments from the operation of statutes, independent of any protection of the prerogative rights of the British Crown. The presumption that legislatures intend that executive governments are not bound by statutes unless expressly or necessarily implied remains reasonable and, the Court observed, would be equally applicable in the present constitutional framework of India.

In relation to the Constitution, the Court observed that the rule of statutory construction which excludes the Government from the operation of a statute unless the legislature expressly states otherwise has been applied in every case except the singular instance of Bell’s case (1) referred to earlier. Accordingly, the Court held that the legislatures of this country have proceeded on the assumption that this rule governs the enactments they pass. Since the rule is a matter of construction, there is no justification for refusing its application to Indian statutes enacted after the Constitution came into force. The republican form of government adopted by the nation does not warrant a departure from the long‑established rule of construction. The Court further noted that an earlier argument based on the legislative history of India, which claimed that even before the Constitution the rule was not intended to apply to Indian statutes, rested on Bell’s case (1). The Court considered that case to have been decided on an unsound basis.

Examining certain Indian statutes, the earlier view had observed that, as a general rule, the Government is specially excluded whenever the Legislature decides that particular provisions should not bind it. From that observation it was inferred that “according to the uniform course of Indian legislation, statutes imposing duties or taxes bind the Government as much as they bind its subjects, unless the very nature of the duty or tax is such as to be inapplicable to the Government.” The Court found this reasoning to overlook the consistent line of decisions by Indian courts that have applied the rule in construing Indian statutes. It was held that the legislature must have been aware of those judicial decisions and, had it wished to depart from their effect, would have enacted a statute expressly producing the desired result. No such statute was ever passed. Consequently, the Court affirmed that, in the absence of a clear statutory departure, legislatures are deemed to have proceeded on the basis that the decisions were correct and that the rule should be applied to statutes they enact. The Court therefore rejected the contention that the legislative record would be relevant to determine the rule’s applicability. Instances where the Government was expressly excluded are to be treated as specific exemptions ex majori cautela, as illustrated in Hornsey Urban Council v. Hennel (2). Moreover, the Court considered a comparison of the number of statutes that specially exclude the Government with the number that are silent on the matter to be an unsafe guide for deciding whether the rule applies to Indian enactments. Accordingly, the Court dissented from the view expressed in Bell’s case (1) that the rule does not apply in India. The Court then turned to the facts of the present case, observing that in storing rice the Government of West Bengal was performing one of its governmental functions. It was storing rice for the purpose of rationing, that is, making food‑stuff available to citizens in times of scarcity. That activity was thus a legitimate exercise of governmental duty.

In the present matter the Court observed that the storage of rice by the Government of West Bengal was unquestionably a part of the Government’s ordinary functions, being undertaken to make food supplies available to the public during scarcity. Consequently, the conduct for which the appellant had been prosecuted was an act performed by the West Bengal Government in the discharge of its regular governmental duties, and the rule under consideration therefore barred the application of the statute to render the Government liable for a breach. The respondent argued that, by necessary implication, the Act bound the Government, pointing to certain provisions of the Act that expressly exempted the Government from its operation. The Court was unable to accept that this implication arose. It referred to the statement in the second edition of Halsbury’s Laws of England, volume XXXI, page 523, which explained that a general prerogative of the Crown is not deemed to have been abandoned by implication merely because a statute specifically exempts a class of Crown servants from complying with that prerogative, nor because the Crown has curtailed its rights elsewhere in the same statute. The Court also recalled the earlier Hornsey Urban Council case, noting that these observations undermined the respondent’s contention.

Finally, the respondent contended that the purpose of the Act was to prevent the adulteration of food‑stuffs and that this purpose would be wholly frustrated unless the Government were bound by the Act. While it was acknowledged that such a purpose, if established, might justify holding the Government bound, the Court referred to the decision in Province of Bombay v. Municipal Corporation of Bombay and concluded that the purpose of the Act would not be wholly defeated if the Government were not bound. The Court explained that section 386 of the Act, which formed the basis of the complaint, dealt with the use of premises and was unrelated to the prevention of adulteration, which was addressed in a separate part of the statute. There was no evidence that the overall purpose of the Act would be defeated by the mere use of premises contrary to its terms. Accordingly, the Court held that the Act did not bind the Government and that a prosecution for an act performed in the discharge of governmental duties could not be sustained. The appeal was therefore allowed, the order of the High Court was set aside, and the order of the Magistrate was restored. Justice Wanchoo, having considered the judgments of the Chief Justice and Justice Sarkar, agreed with their conclusion, albeit on different grounds, and proceeded to set out his reasons for reaching the same outcome.

The judge indicated that his reasons for reaching the same conclusion would be set out, noting that the factual background had already been detailed in the Chief Justice’s judgment and would not be repeated. He summarized that the Corporation of Calcutta brought a prosecution, essentially against the State of West Bengal, through its Director of Rationing and Distribution invoking section 488 of the Calcutta Municipal Act, No 111 of 1923 (now equivalent to section 537 of the Calcutta Municipal Act, No XXXIII of 1951). The allegation concerned the use or permission to use certain premises for storing rice and other supplies under the Bengal Rationing Order of 1943, without possessing a licence required by section 386 of Act III of 1923 (now equivalent to section 437 of Act XXXIII of 1951). The State did not dispute these facts but contended that the prosecution could not be maintained in law. The Magistrate held that the provisions of section 386 of the 1923 Act did not apply to the State either expressly or by necessary implication and therefore ordered an acquittal. The Corporation appealed the acquittal by filing a revision before the High Court. The High Court distinguished an earlier High Court decision relied upon by the Magistrate and observed that, since India became a democratic republic on 26 January 1950, it was no longer bound by the Privy Council decision in Province of Bombay v. Municipal Corporation of the City of Bombay. Consequently, the High Court held that the rule of construction based on the royal prerogative—that the Crown is not bound by a statute unless expressly named or necessarily implied—did not apply in India after that date. The Court further held that the true rule of construction adopted by Indian legislatures was that the State is bound by law unless expressly excluded or excluded by necessary implication. Accordingly, the High Court concluded that section 488 of the 1923 Act read together with section 386 bound the State, set aside the Magistrate’s order of acquittal, and remitted the matter back to the Magistrate for disposal according to law.

The judge identified the central question as whether the rule of construction derived from the English royal prerogative could still be said to apply in India after 26 January 1950. He explained that, if that historic rule no longer applied, the ordinary rule of construction would follow, namely that the State, like any other person, is bound by law unless it is expressly excluded or excluded by necessary implication. He traced the origin of the royal‑prerogative rule to the medieval doctrine of the divine right of kings, which held that the sovereign was absolute and perfect. From this doctrine, English common law developed the maxim that “the King can do no”. Over time, however, the royal prerogative in England was recognised as created and limited by common law, subject to statutes, Magna Carta, and the liberties of the subject, and the courts acquired jurisdiction to examine the existence or extent of any alleged prerogative. The judge therefore concluded that, after the establishment of the Republic, the Indian legal system no longer accepts the royal‑prerogative rule of construction, and the State is bound by statutes unless there is an express or necessarily implied exclusion.

In the course of legal history the royal prerogative in England came to be understood as a power created and limited by the common law, so that the sovereign could claim no prerogatives except those expressly allowed by law and those that did not conflict with Magna Carta, any other statute, or the liberties of the subjects. The courts possessed authority to examine whether a claimed prerogative existed and to determine the extent of that prerogative in the same manner as they decided any other question of law. When a prerogative was clearly established, the courts could take judicial notice of it just as they would of any other rule of law, as explained in Halsbury’s Laws of England, third edition, volume 7, paragraph 464. This issue was again examined in the case of Attorney‑General v. De Keyser’s Royal Hotel Limited, where the court held that even a recognized prerogative could be curtailed by a statute if the legislation dealt with a matter that the prerogative could affect, because the Crown was deemed a party to every Act of Parliament. Consequently, in modern times the royal prerogative is regarded as the residual discretionary or arbitrary authority that remains legally vested in the Crown and is acknowledged under English common law. Two essential elements emerge from this contemporary view: first, there must be a Crown or King to whom the prerogative attaches; second, the prerogative must be part of English common law. Both conditions were present when the Privy Council rendered its decision in Province of Bombay v. Municipal Corporation of the City of Bombay in October 1946, a time when the King still existed and the Council affirmed that the English common‑law rule of construction applied to Indian legislation just as it did to English statutes. Nevertheless, English scholars have criticised the rule. Glanville L. Williams, in his treatise “Crown Proceedings,” observes on page 53 that the rule originated in the Middle Ages and survives today mainly through inertia. On page 54 he argues that, given the extensive activities of the modern State, the numerous servants it employs, and the contemporary notion—expressed in the Crown Proceedings Act and comparable to Article 300 of our Constitution—that the State should be broadly accountable to law, the presumption ought to be that a statute binds the Crown rather than the opposite. After 26 January 1950, when the nation became a democratic republic and the King ceased to exist, the concept of a royal prerogative lost its practical relevance.

In this case the Court observed that it is largely unnecessary to discuss the royal prerogative. The Court also noted that English common law, as a body of law, was never generally applied in India, except in the limited areas that fell under the original jurisdiction of the three chartered High Courts—Calcutta, Bombay and Madras—as illustrated in Kahirodebihari Datta v. Mangobinda Panda. The Court further explained that, on occasion, Indian courts have invoked principles of English common law when doing so served the purposes of justice, equity or good conscience. The Court then expressed the view that to interpret Indian statutes by reference to the royal prerogative as understood in English common law is inappropriate today because India no longer has a Crown and because English common law was, save for a very narrow segment, not applicable to the country. To adopt such a construction, the Court said, would contravene the ordinary rule of statutory interpretation, which holds that a person or entity is bound by a statute unless the statute expressly exempts them or unless a necessary implication establishes an exemption. The Court affirmed that the rule of law governs the nation and that the Constitution, particularly the provisions of Part III and other sections, guarantees this principle, as recognized in Virendra Singh and others v. State of Uttar Pradesh. According to the Court, the rule of law inherently requires that the State, like every citizen, be subject to the laws of the land. Since the King, who once embodied all executive, legislative and judicial authority, has disappeared, and since sovereign power in the republican Constitution is distributed among several organs, the Court found no justification for retaining a construction rule based on the royal prerogative. The Court addressed the argument that sovereignty continues after the abolition of the King and that the former royal prerogative therefore passes to the sovereign. The Court considered this a misunderstanding. While the Constitution requires the existence of sovereignty, the Court held that there is no single sovereign person or institution in India, unlike England where the King represents the sovereign. Consequently, it is impossible to identify a single entity that can be described as the sovereign under the Indian Constitution. The Court further contemplated whether a State Government could be deemed sovereign in the same sense as the English King, noting that even if a State possesses plenary powers within constitutional limits, this does not convert it into a sovereign. Because there is no King or sovereign in the present constitutional order, the Court concluded that a rule of construction based on the royal prerogative cannot be invoked. The submissions relied upon foreign authorities from Australia, Canada and the United States were therefore considered inapplicable.

The Court observed that the authorities from Australia and Canada offered little assistance for the present argument because the Crown continues to exist in those jurisdictions. Moreover, in Canada and in most of its provinces as well as in New Zealand, the Interpretation Acts expressly provide that no provision or enactment in any statute shall affect the rights of His Majesty, his heirs or successors in any way unless the statute expressly states that His Majesty is bound thereby. The Court cited the commentary in Street on Governmental Liability at page 152 to illustrate this statutory safeguard.

Turning to the United States, the Court noted that it was doubtful whether any American decision relied on the royal prerogative as a source of legal principles. In United States of America v. United Mine Workers of America, etc. (1) (1947) 330 U.S. 258 : 91 L.Ed. 884, the Supreme Court mentioned an old and well‑known rule that statutes which in general terms divest pre‑existing rights and privileges do not apply to the sovereign without express words to that effect. However, the judgment did not discuss the royal prerogative itself and described the rule merely as a well‑established rule of construction. The Court then examined the language of the statutes in question and held that, on a proper construction, the United States was not bound by them.

In United States of America v. Reginald P. Wittek (1) (1949) 337 U.S. 346 : 93 L.Ed. 1406, the Supreme Court again affirmed that a general statute imposing restrictions does not impose those restrictions upon the government itself without a clear expression or implication to that effect. The decision was grounded chiefly in the terms of the particular state statute under consideration, the surrounding circumstances, and the legislative history of that statute.

The Court also referred to Jess Larson v. Domestic and Foreign Commerce Corporation (2) (1949) 337 U.S. 682 : 93 L.Ed. 1628, where a suit was brought against an officer of the United States and was treated as a suit against the sovereign government. The Court held that, absent the government’s consent, the judiciary had no jurisdiction over such a suit. This case made no discussion of any continuing royal prerogative in the United States; the ruling turned on a domestic principle that a suit against the government cannot be tried without consent.

To illustrate the declining influence of the royal prerogative in the United States, the Court cited H. Snowden Marshall v. People of the State of New York (3) (1920) 254 U.S. 380 : 65 L.Ed. 315. In that case, when determining the priority of a State over unsecured creditors in the payment of debts from the debtor’s assets, the Supreme Court held that whether the priority was a prerogative right or merely a right of administration was a matter of local law. The decision further explained that the determination of the highest State court on the existence of the right and its incidents would be accepted by the Federal Supreme Court as conclusive. This, the Court observed, indicated that even where certain immunities formerly claimed as royal prerogatives persisted in the United States, they survived on grounds unrelated to any royal authority.

In the discussion, it was observed that if the State asserts the existence of a right and its accompanying incidents, such a claim would be taken as conclusive by the Federal Supreme Court. The Court further referred to Guaranty Trust Company of New York v. United States of America (4), noting that the Supreme Court in that case held that the sovereign’s immunity from the operation of statutes of limitation, although originally derived from a royal prerogative, had come to rest upon the public policy of protecting State citizens from the loss of their public rights and revenues caused by the negligence of State officers. The judgment cited several authorities to support this view: (1) (1949) 337 U.S. 346 93 L. Ed. 1406; (2) (1949) 337 U.S. 682 93 L. Ed. 1628; (3) (1920) 254 U.S. 380 65 L. Ed. 315; and (4) (1938) 304 U.S. 126: 82 L. Ed. 1224. These citations illustrated that certain immunities once claimed in England as royal prerogatives were preserved in the United States, not because of the prerogative itself but for reasons related to public policy. The Court also reminded that, although the Crown no longer existed in the United States after independence, the American colonies had been settled by English colonists who brought the English common law with them. Consequently, the first constitutions of several States, such as New York, expressly provided that the common law of England, together with the statutes that had formed the law of the colony before independence, should continue to be the law of the State, subject only to amendments that the State legislature might later enact (see H. Snowden Marshall v. People of the State of New York, at p. 317). This historical background explained why the United States recognized some prerogative rights that had been in force in England, although the basis for that recognition was now more rooted in law or public policy than in any lingering royal prerogative. In contrast, the situation in India was described as different: although the King once reigned, English common law did not, as previously indicated, apply generally in the country. With the abolition of the monarchy, there appeared to be no justification for retaining royal prerogatives after 26 January 1950. Moreover, it was observed that the royal prerogative concerning substantive Crown rights, for example the priority of Crown debts over similar private debts, occupied a distinct position from the prerogative advanced in the present matter, which was essentially a rule of statutory construction applied to Acts of Parliament. Where a substantive royal prerogative had been accepted by Indian courts, it became a law that would continue under Article 372(1) of the Constitution. However, (1) (1920) 254 U.S. 380; 65 L. Ed. 315, where the royal prerogative is merely a rule of construction of

The Court observed that statutes which were historically based on the existence of the Crown in England should not be interpreted in a democratic republic to create a special exemption for the State. It held that the ordinary rule of statutory construction requires that no person or entity is exempt from the operation of a statute unless the statute expressly provides such an exemption or the exemption can be inferred by necessary implication. Consequently, the Court expressed the view that, after 26 January 1950, the proper rule of construction in India is that the State—whether the Union or a State government—is bound by statutes unless there is a clear, express exemption in favour of the State or an exemption can be logically implied. The Court endorsed the approach taken by the Calcutta High Court and rejected the earlier view of the Privy Council in Province of Bombay v. Municipal Corporation of the City of Bombay as the appropriate rule for construing statutes enacted by Indian legislatures. Applying this rule, the Court then examined whether the prosecution in the present matter could proceed. It noted that neither the 1923 Act nor the 1951 Act contains any provision that specifically exempts the State from the provisions of the Calcutta Municipal Act. The State was being tried under section 488, now renumbered as section 537, which imposes a fine for a breach of section 386, now section 437. Because the provision is penal in nature, the Court asked whether the State, apart from its individual officers, could be liable to criminal prosecution or whether the State must be exempted by necessary implication. The Court explained that criminal proceedings ordinarily end with punishment that may be imprisonment, a fine, or both. It observed that the State cannot be sentenced to imprisonment, as there is no practicable means of incarcerating the State; therefore, by necessary implication, the State is exempt from penal statutes that provide for imprisonment or death. The Court then turned to penal provisions that impose only a fine. It observed that, ordinarily, fines collected by courts are paid into the State’s treasury. Accordingly, if the State were prosecuted under a penal provision that imposed a fine, the result would be that the Court would order the State to pay a fine to the State itself. The Court deemed that such an outcome would defeat the purpose of a criminal prosecution, because the accused would ultimately receive the benefit of the fine. Consequently, the Court concluded that, by necessary implication, the law does not intend the State to be prosecuted under such a penal provision.

In this case the Court observed that it would be unreasonable to commence a prosecution when the only penalty that could be imposed was a fine which, by its very nature, would be paid to the State itself. Consequently, the Court held that because the fine would ultimately be received by the State, the statute must be read as implicitly excluding the State from liability for such an offence. Applying this principle to the facts before it, the Court examined section 81 of the Act of 1923, which corresponds to section 115 of the Act of 1951, and concluded that any fine ordered by the Magistrate under those provisions would not be paid to the Corporation of Calcutta but would, in the ordinary course, be paid to the State. The Court further considered that, although other mechanisms might exist for enforcing the obligations created by section 386 (now section 437), the legislature could not have intended to enforce those obligations by imposing a monetary penalty that would be received by the same entity that is alleged to be in breach. On that basis, the Court determined that, by necessary implication, the State was exempt from the penal provision contained in section 488 (now section 537). Accordingly, the Court allowed the appeal, set aside the decision of the High Court, and reinstated the Magistrate’s order of acquittal. The appeal was therefore allowed.