State Of Gujarat vs Vora Fiddali Badruddin Mithibarwala

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

Court: Supreme Court of India

Case Number: Not extracted

Decision Date: 30 January 1964

Coram: N. Rajagopala Ayyangar, Raghubar Dayal, J.R. Mudholkar, Bhuvneshwar P. Sinha, M. Hidayatullah, J.C. Shah

State of Gujarat versus Vora Fiddali Badruddin Mithibarwala was decided by the Supreme Court of India on the thirtieth day of January, 1964. The judgment was authored by Justice N. Rajagopala Ayyangar and was pronounced by a bench that comprised Justice N. Rajagopala Ayyangar, Justice Raghubar Dayal, Justice J. R. Mudholkar, Justice Bhuvneshwar P. Sinha, Justice M. Hidayatullah and Justice J. C. Shah. In the proceedings the petitioner was the State of Gujarat and the respondent was Vora Fiddali Badruddin Mithibarwala. The official citation of the decision appears as 1964 AIR 1043 and also as 1964 SCR (6) 461. The case is further referenced in several citator entries, namely R 1964 SC 1793 (15), RF 1964 SC 1903 (17), R 1966 SC 442 (4), R 1966 SC 704 (10), R 1967 SC 40 (5), R 1971 SC 530 (129, 322, 364, 365, 370), F 1971 SC 744 (6), R 1971 SC 846 (7, 8, 9), D 1971 SC 910 (6), RF 1971 SC 1594 (8), RF 1975 SC 1518 (33), RF 1981 SC 1946 (18), RF 1986 SC 1272 (75, 76), R 1987 SC 82 (7). The substantive issue involved the Act of State concerning a ruler of a native state who had granted certain forest rights to grantees, the subsequent merger of that native state with the Dominion of India, the Dominion’s refusal to recognise the grant both before and after the Constitution came into force, the characterisation of the refusal as an act of State, the relevance of the Government of India Act 1935, and the application of Article 32 of the Constitution of India.

The headnote of the judgment summarises the factual backdrop. The ruler of the former State of Sant issued a document known as a Tharao on the twelfth day of March, 1948. That Tharao conferred full rights and authority over the forests situated in the respective villages to the jagirdars, who were the grantees. An agreement dated the nineteenth day of March, 1948, effected the merger of the State of Sant with the Dominion of India. Subsequently, on the first day of October, 1948, Shree V. P. Menon, who served as Secretary to the Government of India, wrote a letter addressed to the Maharana of Sant State. In that letter he expressly declared that no order passed or any action taken by the Maharana before the first day of April, 1948, would be subject to questioning. After the merger, forest officers obstructed the respondents when they attempted to cut forest timber, but after a series of correspondences the officers permitted the respondents to continue cutting trees provided that the respondents furnished an undertaking to abide by any decision of the government. The Government of Bombay, after reviewing the implications of the Tharao, concluded that the order was mala fide and proceeded to cancel it on the eighth day of July, 1949. In the interim, the Government of Bombay had stopped the respondents from working the forests. Consequently, the respondents instituted several suits seeking a declaration of their rights in the forests and also seeking a permanent injunction to prevent the State from interfering with those asserted rights. In those suits the respondents asserted that the rights granted to the jagirdars could not be cancelled by the Dominion of India following the merger of the State of Sant in June, 1948, by virtue of executive action, and further alleged that the Government of Bombay lacked the competence to obstruct them in the exercise of those rights. Their claims were opposed by the State of Bombay principally on the ground that in the absence of recognition, either express or implied, by

The Court observed that the successor State had not recognised the rights that had been conferred by the former ruler on the jagirdars, and consequently the respondents could not enforce those rights in the Municipal Courts. The respondents instituted five separate suits against the State of Gujarat. The trial court dismissed all of the suits except one. The district judge, on appellate review, ordered the dismissal of the remaining suit and also dismissed the appeals filed by the plaintiffs in the other suits. The plaintiffs then took the matter to the High Court, which allowed every appeal and decreed in favour of the respondents. The High Court based its decision on a letter written by Shri V. P. Menon, who was the Secretary, and held that the succeeding sovereign had waived or relinquished its right to repudiate the Tharao. The High Court also held that the Tharao was not a legislative action of the ruler of Sant State. The State Government subsequently obtained special leave to appeal to this Court, and the present appeal was therefore instituted.

Justice Hidayatullah, speaking for the majority, set out the principle that an Act of State terminates only when the new sovereign expressly or impliedly recognises the rights of the alien parties. He explained that the mere actions of subordinate officers, who lack authority to bind the new sovereign, cannot bring an Act of State to an end. Until such recognition—whether express or implied—is given by the new sovereign, the Act of State continues to operate. Applying this principle to the case, the Court held that the Act of State could have ended only if the Government had recognised the rights flowing from the Tharao. The Government never gave such recognition; therefore, there was no recognition of the Tharao or any rights derived from it at any time. The Court further noted that the forest department officers had allowed each respondent to cut trees on the condition that the respondent would abide by the Government’s decision, and that this limited permission did not amount to a waiver or relinquishment of the sovereign’s right to repudiate the Tharao. The Court relied upon several authorities, including Secretary of State in Council for India v. Kamachee Boye Sahaba (1859) 13 Moore P.C. 22, Secretary of State v. Sardar Rustom Khan and Others (68 I.A. 109), MIS Dalmia Dadri Cement Co. Ltd. v. Commissioner of Income‑Tax ([1959] S.C.R. 729), State of Saurashtra v. Memon Haji Ismale Haji ([1960] 1 S.C.R. 537), Jagan Nath Agarwala v. State of Orissa ([1962] 1 S.C.R. 205), State of Saurashtra v. Jamadar Mohamed Abdulla and Others ([1961] 3 S.C.R. 970) and Vaje Singhji Jorwar Singh v. Secretary of State for India (1924) L.R. 51 I.A. 357. The Court noted that Virendra Singh and Others v. State of Uttar Pradesh ([1955] 1 S.C.R. 415) was disapproved, while Bhola Nath v. State of Saurashtra (AIR 1954 S.C. 680) and Bhojrajji v. State of Saurashtra (61 Bom. L.R. 20) were referred to for their relevance.

Turning to the second point, the Court held that the Act of State did not cease by operation of Article 299(1) of the Government of India Act 1935, and therefore the respondents could not invoke the protection afforded by that provision. Section 299(1) could affect the parties only after the rights in question had been recognised by the new sovereign, and in the present case such recognition never occurred. Consequently, the statutory protection of Section 299(1) was unavailable to the respondents.

In this case the Court observed that the original Act of State was never recognised by the Government, and therefore it could not be said to have been terminated by operation of Article 299(1) of the Government of India Act, 1935. The Court further explained that the Act of State continued to exist after 26 January 1950 because there was no legal succession of the State on that date with respect to the inhabitants of Sant State. For those people the succession of state authority had already taken place in 1948. Consequently the Act of State that had been created in 1948 was able to continue uninterrupted beyond the adoption of the Constitution and it was not displaced by any new legislation. Accordingly, the rights asserted by the claimants could not be protected under the Constitution, since those rights had never been recognised before 1950. The Court also held that the impugned Tharao could not be characterised as a law because it did not establish any rule of conduct. Rather it was a mere grant made to the jagirdars named in the Tharao. The fact that Maharana’s Tharao was issued to benefit a large group of persons taken together did not convert it into a law if it lacked the essential indicia of legislation. Although the Tharao conferred certain rights upon the grantees, it did not prescribe any conduct that the grantees were required to follow. As a grant, it was within the discretion of the new sovereign to refuse recognition. The Court distinguished the decisions in Madhorao Phalke v. State of Madhya Bharat, [1961] 1 S.C.R. 957, Ameer‑unnissa Begum v. Mahboob Begum, A.I.R. 1955 S.C. 352, and relied on Maharaja Shri Umaid Mills Ltd. v. Union of India, A.I.R. 1963 S.C. 953 and The Bengal Nagpur Cotton Mill Ltd. v. Board of Revenue, Madhya Pradesh, A.I.R. 1964 S.C. 888. The Court further observed that the right claimed by the petitioners was not even a concessionary right that had attracted the support of international writers. Instead it resembled a gratuitous gift from the ruler, made at the State’s expense, and therefore it lacked the bona fides that courts normally require. No treaty was involved, and any guarantee that might have existed was barred from consideration by Article 363 of the Constitution, which excludes the jurisdiction of municipal courts. This limitation distinguishes Indian law from that of the United States, where the Constitution declares treaties to be the supreme law of the land and the Supreme Court may consider them. In India, the position is different because Article 253 permits the Parliament to enact legislation to give effect to international treaties. The Court affirmed that Indian jurisprudence follows the principles laid down by English courts regarding the limited jurisdiction of municipal courts, and it has not adopted the approach of the United States Supreme Court or of international law. While political or ethical considerations might suggest respecting such royal concessions, the Court held that such reasons do not empower municipal courts to intervene. The rule that an Act of State may be challenged in a municipal court has never been accepted, and such matters are considered the exclusive domain of the State’s political departments.

Although it may be desirable that solemn guarantees be honoured, the Court indicated that it could not impose its will upon the State because such intervention lay beyond the Court’s jurisdiction. In the present matter the respondents were neither parties to the merger agreement nor to the letter written by Mr. V. P. Menon, which the Court noted was expressly incorporated as a part of that agreement. Consequently, the respondents could not rely upon clause 7 of the agreement. The Court further observed that even if the respondents had been parties to the agreement, Article 363 of the Constitution would have barred any such plea. The Court relied on the decision in Maharaj Umeg Singh and Others v. The State of Bombay and Others. [1955] 2 S.C.R. 164. It also referred to United States v. Percheman, 32 U. S. 51 at 86, which it disapproved, and to Shapleigh v. Miar, 299 U.S. 468. Additionally, the Court mentioned Salaman v. Secretary of State for India, [1906] 1 K. B. 613, Cook v. Sprigg. [1899] A.C. 572, Foster v. Nielson. (1829) 2 Pet. 253, Birma v. The State, A.I.R. 1951 Rajasthan 1 to 7, Amodutijani v. Secretary Southern Nigeria, [1921] 2 A.C. 399, Clark v. Allen, 331 U.S. 503, West Rand Central Gold Mining Co. v. Regem, [1905] 2 K.B. 391, and Secretary of State v. Bai Raj Bai, (1915) L.R. 42 I.A. 229, all of which were either referred to or relied upon in support of the reasoning.

The Court then explained the rule that the cession of territory by one State to another constitutes an act of State and that subjects of the former State may enforce only those rights in Municipal Courts which the new sovereign chooses to recognise. This principle had been accepted by the Court in cases such as M/s. Dalmia Dadri Cement Co., Ltd. v. Commissioner of Income Tax, [1959] S.C.R. 729, Jagannath Agarwala v. State of Orissa, [1962] 1 S.C.R. 205, Promod Chandra Dev v. State of Orissa, [1962] Suppl. 1 S.C.R. 405 and the State of Saurashtra v. Jamadar Mohd. Abdullah, [1962] 3 S.C.R. 970. The Court also relied upon Secretary of State in Council of India v. Kamachee Boye Sahaba, 7 Moore's I.A. 476, Vajesinghji Joravarsinghji v. Secretary of State for India in Council, L.R. 51 I.A. 357 and Secretary of State v. Sardar Rustam Khan and Others, L.R. 68 I.A. 109. It further noted that the constitutional provisions in the United States differ from those in India. Under the United States Constitution each treaty becomes part of the law of the land, making its provisions justiciable and enforceable by the Courts. In contrast, Indian treaties do not possess the force of law and do not create rights or obligations that Municipal Courts may enforce. Accordingly, by virtue of Article 363 of the Constitution, the respondents could not enforce the covenants of the agreement as set out in the guarantee letter authored by Mr. V. P. Menon in Municipal Courts. The Court also referred to United States v. Parcheman, [1833] 32 U. S. 51 at 86, 87, Cook v. Sprigg. [1899] A.C. 572 and Maharaj Umeg Singh and Others v. The State of Bombay and Others, [1955] 2 S.C.R. 164 in support of this conclusion.

The Court explained that sovereignty over a territory does not arise merely at the moment of acquisition of sovereign rights, and that the new sovereign is not obliged to announce his decision when he assumes or accepts sovereignty over foreign territory concerning the rights created by the former sovereign, lest he be held bound by those rights. Consequently, until the right to property of the subjects of the former Indian State was recognised by the new sovereign, no title existed that could be enforced in the courts of the Dominion or the Union. The Court then observed that the functions of a State, whether it possesses a democratic set‑up or is administered by an autocratic sovereign, fall into three broad categories: executive, legislative and judicial. In an absolute or autocratic form of government the line of demarcation between these functions may be thin and may not be easily discernible. Nevertheless, it is not correct to infer that every act of an autocratic sovereign has legislative content or that every direction issued by him must be regarded as law. Legislative power is the power to make, alter, amend or repeal laws and, within certain definite limits, to delegate that power; it is therefore the power to lay down a binding rule of conduct. Executive power is the power to execute and enforce the laws, and judicial power is the power to ascertain, construe and determine the rights and obligations of parties before a tribunal. Applying this analysis to the present case, the Court noted that the order dated 12 March 1948 was expressly a grant of rights that had not previously been granted and that it neither expressly nor by implication sought to lay down any binding rule of conduct. Accordingly, the impugned order was not a law or an order made under any law within the meaning of clause 4 of the Administration of the Indian States Order, 1948. The Court referred to the authorities Promod Chandra Deb and Others v. The State of Orisa and Others, (1962] Suppl. 1 S.C.R. 405; Ameer‑un‑Nissa Begum and Others v. Mahboob Begwan and Others, A.I.R. (1955) S.C. 352; Director of Endowments, Government of Hyderabad v. Akram Ali, A.I.R. (1956) S.C. 60; Tilkayat Shri Govindlalji Maharaj etc. v. State of Rajasthan and Others, A.I.R. (1963) S.C. 1638; Madhorao Phalke v. The State of Madhya Bharat, [1961] 1 S.C.R. 957; Maharaja Shree Umaid Mills Ltd. v. Union of India, A.I.R. 1963 S.C. 953; and Bengal Nagpur Cotton Mills Ltd. v. The Board of Revenue, Madhya Pradesh and Others, C.A. No. 416 of 1961 decided on 30 July 1963, which were distinguished and discussed. Finally, the Court stated that to attract section 299(1) of the Government of India Act, 1935, a right to property must exist that is sought to be protected. The subjects of the acceding State are entitled only to such rights as the new sovereign chooses to recognise; in the absence of any recognition of the rights of the respondents or their predecessor jagirdars, there was no right to property that could be claimed for protection.

The Court observed that no recognized right to property existed for which protection could be claimed, and therefore, on the reasoning expressed by Sam, the grantees of the former ruler could not invoke the protection afforded by Article 31(1) of the Constitution. Per Justice Mudholkar, the rule of international law that underlies several Privy Council decisions concerning the effect of conquest or cession on the private rights of inhabitants of a conquered or ceded territory has become part of the common law of this country. This rule, being a “law in force” at the commencement of the Constitution, is saved by Article 372, and consequently the Indian courts are bound to enforce that rule rather than the rule of international law as articulated by Marshall C.J., even though the latter has received approval from various textbook authors. The Court further stated that the rule applied in this country is neither inequitable nor anachronistic, and it cited authorities such as Virendra Singh v. State of Uttar Pradesh [1955] SCR 415, United States v. Percheman (1833) 32 U.S. 51 (disapproved), Secretary of State for India v. Kamachee Boye Sahiba (1859) Moore PC 22, Asrar Ahmed v. Durgah Committee, Ajmer AIR 1947 PC 1, Dalmia Dadri Cement Co. Ltd. v. Commissioner of Income‑Tax [1959] SCR 729, State of Saurashtra v. Memon Haji Ismail [1960] SCR 537, State of Saurashtra v. Jamadar Mohamed Abdullah and Ors. [1962] SCR 970, Vajesinghji v. Secretary of State for India [I A] 357, Secretary of State for India v. Bai Rajbai [I A] 229, and Promod Chandra Dev v. State of Orissa [1962] Supp. 1 SCR 405. The Court explained that two concepts underlie the law: first, the inhabitants of territories acquired by cession or conquest bring no rights that are enforceable against the new sovereign; second, municipal courts lack jurisdiction to enforce any rights against the sovereign unless those rights have been recognised by the new sovereign after the cession or conquest. In other words, a right that cannot be enforced against the sovereign in that sovereign’s courts must be deemed to have ceased to exist, and a ceased right does not require repudiation. Municipal courts derive their jurisdiction from municipal law, not from the law of nations, and a change in the law of nations by international consent does not grant municipal courts any jurisdiction they do not already possess under municipal law. Consequently, the grantees of the former ruler could not rely on section 299 of the Government of India Act 1935 or on Article 31 of the Constitution because they possessed no enforceable right to property against the new sovereign. Lastly, the Court held that the impugned Tharao was not law.

In this case, the Court referred to the decision reported in Madhya Pradesh [1961] 1 S.C.R. 957 and noted that the minority opinions of Sinha C.J. and Ayyangar J. formed the basis of their analysis. They explained that the legal theory underlying the earlier Privy Council rulings rests on the premise that when a former sovereign ceases to exist, the rights that its subjects could exercise by virtue of grants from that sovereign also disappear. Consequently, without a new recognition that amounts to a fresh grant by the succeeding sovereign, no enforceable title could arise in the municipal courts of the new sovereign. The Court described the doctrine of “Act of State” as a principle of municipal law developed by English courts, which denies such courts the jurisdiction to examine the consequences of acts that are inseparable from an extension of sovereign power. Nevertheless, the doctrine was not intended to reject any rule of international law. The Court observed that the British practice adopted in this country has not, in practice, produced injustice; rather, it has struck a fair balance between the rights acquired by private individuals and the economic interests of the community, and therefore it contains nothing so contrary to propriety or justice as to merit rejection.

The Court further stated that even in Virendra Singh the Court had not expressed a decisive view endorsing the observations in Percheman’s case as applicable by Indian municipal courts. Subsequent decisions of this Court have followed the Privy Council precedents, while the view of the United States Supreme Court has not been adopted because the constitutional treatment of treaty recognition differs in the two countries. In the United States a treaty carries the force of law, which is not the case in India; moreover, Article 363 of the Indian Constitution deprives municipal courts of jurisdiction to enforce rights arising from treaties. Accordingly, the Court disapproved Vinrendra Singh v. The State of Uttar Pradesh [1955] 1 S.C.R. 415 and United States v. Percheman 32 U.S. 51, while it relied on Vajesinghji v. Secretary of State for India 51 I.A. 357, Cook v. Sprigg [1899] A.C. 572, Walker v. Baird [1892] A.C. 491, Johnstone v. Pedlar [1921] 2 A.C. 262, and a series of other authorities including M/s Dalmia Dadri Cement Co. Ltd. v. The Commissioner of Income‑Tax [1959] S.C.R. 729, Jagan Nath Agarwala v. The State of Orissa [1962] 1 S.C.R. 205, Promodh Chandra Dev v. The State of Orissa [1962] 1 Supp. S.C.R. 405, The State of Saurashtra v. Jamadar Mohamad Abdulla [1962] 3 S.C.R. 970, Secretary of State for India v. Kanzachee Boye Sahiba [1859] 7 Moore I.A. 476, Secretary of State for India in Council v. Bai Rai Bat 42 I.A. 229, Secretary of State v. Rustom Khan 68 I.A. 109, Amodu Tijani v. Secretary Southern Nigeria [1921] 2 A.C. 399, and West Rand Central Gold Mining Co. v. Rex [1905] 2 K.B. 391. These authorities were cited to support the Court’s position as articulated by Asrar Ahmed.

The Court referred to the decision of the Durgha Committee in Ajmer reported in A.I.R. 1947 P.C. 1 and also mentioned the case Attorney‑General of Canada v. Attorney‑General of Ontario, [1937] A.C. 326. It observed that when a newly sovereign power assumes jurisdiction and performs an act that is ambiguous as to whether it signifies recognition of a pre‑existing right, the relevant covenant and treaty must be examined to determine the intention and purpose of that equivocal act. However, the Court emphasized that the covenant and treaty cannot, by themselves, be treated as a simple recognition of the right, nor can they be construed as a waiver of the right to repudiate the pre‑existing entitlement. The Court noted that the enforceability of any right against the succeeding sovereign arises only upon that sovereign’s explicit recognition; consequently, there is no question of a waiver or a right to repudiate arising by default. Applying this principle, the Court held that the High Court was wrong in concluding, based on clause 7 of the letter of Shri V. P. Menon, that the Government had waived its right to repudiate the grant made by the former ruler, distinguishing the earlier decision in Bhola Nath v. The State of Saurashtra, A.I.R. (1954) S.C. 680. The Court further observed that before the Constitution came into force the grantee possessed no enforceable property right against the State, and the Constitution’s commencement could not alter this fact because the Constitution does not create property rights but merely protects rights that already exist. Regarding the “Tharao” dated 12 March 1918, the Court explained that it was not a grant to any individual but applied to holders of five specified tenures in the State, effectively modifying those tenures by extending beneficial enjoyment to forest lands within village boundaries already granted to them. Accordingly, the “Tharao” was not an administrative order but possessed the character of legislation that altered the scope and content of the tenures. The Court held that the “Tharao” satisfied the definition of “law” under Article 366(10) of the Constitution, rendering the subsequent executive orders of the Government of Bombay that sought to deny the plaintiffs’ forest rights illegal and void. Moreover, the Court said that the “Tharao” continued in effect under Article 372 of the Constitution and could be revoked only by legislative authority, not by an executive act, relying on Madhorao Phalke v. The State of Madhya Bharat, [1961] 1 S.C.R. 957, Ameer‑un‑Nissa Begum v. Mahboob Begum, A.I.R. 1955 Suppl. 4 SC 352, and Director of Endowments, Government of Hyderabad Akram Ali, A.I.R. 1956 S.C. 60. Per Justice Subha Rao, the decision in Virendra Singh’s case is not only correct but also aligns with the progressive trend of modern international law.

In the passage that follows, the Court observed that none of the decisions rendered after the judgment in Vires dra Singh’s case had raised any doubt about the correctness of that earlier decision. The Court explained that an act of State is essentially an arbitrary exercise of power that is not grounded in law but rather reflects the modern notion of “might is right.” Such an act, the Court noted, lies outside the legal system. The Court further observed that two distinct approaches have been taken in the world: one by imperialist nations and another by countries that are not imperialist. This divergence, the Court said, has been reflected in the jurisprudence of both English and American courts. All jurists of international law, the Court added, recognise the continuity of title to immovable property belonging to the former citizens of a ceding state even after sovereignty passes to an absorbing state. Accordingly, the Court held that, with respect to title to immovable property, the doctrine of international law has become crystallised, and the change of sovereignty does not affect the title of the erstwhile citizens of the ceding state over their property. The Court noted that in the United States this principle of international law has been accepted without any qualification. The Court then referred to a number of authorities that discuss and distinguish this principle, namely M/S Dalmia Dadri Cement Co. Ltd. v. The Commissioner of Income‑tax [1959] S.C.R. 729; Jagannath Agarwala v. The State of Orissa [1962] 1 S.C.R. 205; Pramod Chandra Dev. v. The State of Orissa [1962] Supp. 1 S.C.R. 405; State of Saurashtra v. Jamadar Mohmed Abdulla [1962] 3 S.C.R. 970; United States v. Percheman (1833) 32 U.S. 51; Foster v. Neilson (1829) 2 P.E.T. 253; The American Insurance Co. and the Ocean Insurance Co. v. Bales of Cotton (1828) 7 L.Ed. 511; Charles Dehault v. United States (1835) 9 Ed. 117; and Vajeenngli Joravarsingji v. Secretary of State for India in Council (1951) I.A. 357.

The Court then turned to the law of England, stating that English municipal courts are unable to enforce the acquired rights of former citizens of a ceding state against the absorbing state unless that state has expressly recognised or acknowledged the title. The Court affirmed that Indian jurisprudence has accepted the English doctrine of the act of State in a series of decisions. It explained that the word “recognise” means to admit or acknowledge something that existed beforehand. By recognising a title, the absorbing state does not create a new title but merely confirms a pre‑existing one. Conversely, the Court said, non‑recognition by the absorbing state does not divest the title; it only makes the title unenforceable against the state in its municipal courts. The Court cited Pramod Chandra Dev. v. The State of Orissa [1962] Supp. 1 S.C.R. 503 in support of this proposition. Finally, the Court affirmed that the doctrine of acquired rights, particularly in relation to immovable property, has become crystallised in international law. Under this doctrine, the title of a citizen of a ceding state is preserved and is not lost by the act of cession, and a change of sovereignty does not affect that title. The Court observed that municipal laws of different countries vary regarding the enforceability of such titles against the state. Nonetheless, because the title continues to exist, the Court concluded that even in jurisdictions that accept the doctrine of the act of State and the sovereign’s right to repudiate the title, the underlying title remains valid against all parties except the State itself.

In the factual context, the title to immovable property that existed in the former Sant State continued to be valid against all parties except the State itself. Prior to the coming into force of the Constitution of India, the State had not repudiated that title. When the Constitution became operative, the respondent and other persons who were similarly situated and who possessed title to land in the Sant State retained that title and were actually in possession of the property. Their claim to the land was enforceable against all persons except the State, and, at a minimum, they possessed a possessory right in the land. Article 31(1) of the Constitution declares that no person shall be deprived of his property except by authority of law. Accordingly, the Constitution recognised the title of the citizens of the erstwhile Sant State and imposed an injunction on the sovereign created by the Constitution, prohibiting interference with that right unless it was done in accordance with law. A recognition by the supreme law of the land must outrank any contrary action taken by an executive authority of a conquering State. The Court therefore held that the title to the respondent’s immovable property was affirmed by the Constitution itself and, consequently, the sovereign was bound by that recognition. In the present matter, a letter dated 1 October 1948 issued by the Government of India expressly affirmed the respondents’ title to their properties. Paragraphs 5 and 7 of that letter guaranteed the enjoyment of jagirs, grants and similar rights that existed on 1 April 1948 and provided that any order or action taken by the former ruler before that date would not be questioned. This letter constitutes a clear acknowledgment of the property rights of the respondents and others in the same position. The Court relied on the decision in Virendra Singh v. State of Uttar Pradesh, [1955] 1 S.C.R. 415, and distinguished the authorities M/S Dalmia Dadri Cement Co. Ltd. v. Commissioner of Income‑Tax [1959] S.C.R. 729, Jagan Nath Agarwala v. State of Orissa [1962] 1 S.C.R. 205, Pramod Chandra Dev v. State of Orissa [1962] Supp. 1 S.C.R. 405 and State of Saurashtra v. Jamadar Mohamed Abdullah [1962] 3 S.C.R. 970, which were discussed and distinguished in reaching the conclusion.

The appeals before the Court were Civil Appeals Nos. 182‑186 of 1963, filed by special leave against the judgment and order dated January 1961 of the Gujarat High Court in Second Appeals Nos. 105, 106, 107, 112 and 193 of 1960. Counsel for the appellant appeared, and counsel for the respondents also appeared on behalf of all the appeals. The judgment was delivered on 30 January 1964. Justice Hidayatullah, Justice Shah and Justice Mudholkar each delivered separate judgments allowing the appeals. Justice Raghubar Dayal agreed with the order proposed by Justice Hidayatullah. The dissenting opinion of the Chief Justice and Justice Rajagopala Ayyangar was delivered by Justice Ayyangar, while Justice Subba Rao also delivered a separate dissent. Justice Ayyangar, in his judgment, noted that the principal issue for determination in this group of five analogous appeals, taken by special leave, was whether the rights claimed by the respondents could be enforced by the municipal courts, that is, whether the doctrine of “Act of State” pleaded by the State of Gujarat provided a satisfactory defence to the respondents’ claims over the forest lands that were the subject of the underlying suits.

The Court considered the central issue of whether the rights that were disputed in the lower tribunals could be enforced by municipal courts, and, in other words, whether the defence of “Act of State” advanced by the State of Gujarat effectively countered the claims made by each respondent to ownership or exploitation rights over specific forest areas. The respondent named Vora Fiddali Badruddin Mithibarwala stood as the opposing party in Civil Appeals Nos. 182 and 184 of 1963. In Civil Appeal No. 183 of 1963, the respondent was Vora Hakimuddin Tayabali Amthaniwala. Civil Appeal No. 185 of 1963 named Mehta Kantilal Chandulal as respondent, and Civil Appeal No. 186 of 1963 listed Pathan Abbaskhan Ahmedkhan as respondent. In every one of these appeals the State of Gujarat acted as the appellant. The procedural history of the underlying litigations could be outlined as follows. The respondent in Civil Appeal No. 182 of 1963 was the assignee of the rights originally held by Vora Hatimbhai Badruddin. He was entered as plaintiff while the trial was pending before the Civil Judge (Senior Division) at Godhra in Civil Suit No. 115 of 1950. The suit sought an injunction and related reliefs to prevent the appellant and its officials from interfering with the plaintiff’s purported authority to fell and remove timber from the Gotimada jungle. This claim was founded on a contract dated 21 August 1948 that granted the plaintiff a three‑year right in return for a payment of Rs 9,501 to the Jagirdar of the village, Thakore Sardar Singh Gajesingh. A second suit, Civil Suit No. 134 of 1950, which gave rise to Civil Appeal No. 184 of 1963, was filed by the same plaintiff. It asserted, by virtue of an assignment, a comparable right under a similar contract concerning a forest in the village of Nanirath for a four‑year term, for a cash consideration of Rs 9,501. A third suit, Civil Suit No. 106 of 1951, which led to Civil Appeal No. 183 of 1963, was instituted by Vora Hakimuddin Tayabali Amthaniwala. His claim relied on an agreement with the Jagirdar dated 7 December 1948, granting him a four‑year right to harvest timber in the forest of the village of Rathda for a payment of Rs 6,501. All three suits, which pleaded essentially identical reliefs, were tried together and were disposed of by a single judgment of the trial court dated 3 January 1956. The trial court dismissed each suit, holding that the alleged rights of the plaintiffs could not be enforced by the courts.

Civil Appeal No. 185 of 1963 arose from Suit No. 80 of 1953, which had been filed by Mehta Kantilal Chandulal. The plaintiff owned the Inami villages of Lalekapur and Narsingpur and asserted that he had entered into a contract dated 29 May 1948, whereby he agreed to permit the cutting of trees in his villages for a consideration of Rs 11,000, the contract being valid for a period of four years. He claimed that the State had prevented his transferee from exercising the contractual rights and consequently sought an injunction similar to those claimed in the earlier suits. This suit was also dismissed by the trial court in a judgment dated 23 March 1956. The final suit, Suit No. 90 of 1955, which gave rise to Civil Appeal No. 186 of 1963, involved a plaintiff who alleged that he had obtained a right to fell trees in the forest belonging to the Jagirdar of Mayalapad on 16 August 1948 for Rs 1,191, the right being limited to three years. The trial court decreed in favour of the plaintiff on 6 August 1956. The dissatisfied plaintiffs then filed four appeals (Appeals Nos. 17, 18, 19 and 48 of 1956) before the District Judge, Panch Mahals, at Godhra. All four appeals were heard together and were dismissed by a common judgment dated 28 February 1957, which affirmed the trial court’s decision. The State filed a fifth appeal, Appeal No. 74 of 1956, which was allowed by a separate judgment dated 30 September 1957, resulting in the dismissal of the appeals filed by the private plaintiffs.

The transferee claimed that the State had prevented him from exercising the forest‑cutting rights that he had obtained. He also sought an injunction similar to those requested in the other suits. The trial court dismissed this suit by a judgment dated 23 March 1956. The final suit in the series was Suit No. 90 of 1955, which gave rise to Civil Appeal 186 of 1963. In that suit the plaintiff asserted that he had secured a right to fell trees in the forest belonging to the Jagirdar of Mayalapad on 16 August 1948 for a consideration of Rs 1,191, the right being valid for three years. The trial court decreed this suit by a judgment dated 6 August 1956.

Following the decree, the unsuccessful plaintiffs filed four appeals before the District Judge at Panch Mahals, Godra, identified as Appeals Nos. 17, 18, 19 and 48 of 1956. All four appeals were heard together and, by a common judgment dated 28 February 1957, were dismissed, thereby confirming the trial court’s decision. The State filed a fifth appeal, Appeal No. 74 of 1956, which was allowed by a separate judgment dated 30 September 1957, resulting in the dismissal of the suit. The plaintiffs‑respondents then lodged five second appeals—Second Appeals Nos. 105, 106, 107, 112 and 193 of 1960—in the High Court of Gujarat. These appeals were heard together and were allowed on 24 January 1961, whereby the suits were decreed and the State was restrained by an injunction from interfering with the plaintiffs’ enjoyment of the forest rights they claimed. Because the State failed to obtain a required certificate of fitness from the High Court, it approached this Court and obtained special leave to appeal. Consequently, these appeals reached the Supreme Court.

The matter was initially heard by a bench of five judges, who directed that it be placed before a larger bench, noting that the decision in Virendra Singh v. State of Uttar Pradesh required reconsideration. Accordingly, the appeals were set before a special bench. Before addressing the substantive questions raised by the appeals, it was deemed necessary to outline the sequence of events that gave rise to the suits. The villages whose forest rights were disputed formed part of the former State of Sant. The transition of that State, ruled by a Maharana, into an integral part of the Union of India followed the typical pattern. With the lapse of British paramountcy upon the enactment of the Indian Independence Act, the ruler achieved full sovereignty. Shortly thereafter, the ruler executed an instrument of accession, causing the State to accede to the Dominion of India and vest the latter with the relevant powers of governance.

The matters involved the subjects of Defence, External Affairs and Communications. On 19 March 1948 the ruler of the State of Sant executed a merger agreement with the Governor‑General of India. The agreement stated that, with the objective of integrating the territory with the Province of Bombay as early as possible, the ruler would cede the full and exclusive authority and powers relating to the administration of the State to the Dominion Government. The parties agreed that the agreement would become effective on 10 June 1948. The judgment set out two of the articles contained in that agreement. Article 1 read as follows: “1. The Maharana of Sant hereby cedes to the Dominion Government full exclusive authority, jurisdiction and powers for and in relation to the governance of the State and agrees to transfer the administration of the State to the Dominion Government on the 10th day of June, 1948 (hereinafter referred to as ‘the said day’). And from the said day the Dominion Government will be competent to exercise the said powers … authority and jurisdiction in such manner and through such agency as it may think fit.” [1955] 1 S.C.R. 415. Article 3 required the ruler to provide, before 1 October 1948, a list of all his private properties that he would retain full ownership and enjoyment of under the terms of the agreement. After the agreement became operative on 10 June 1948, the Central Government exercised its delegated authority by transferring its functions to the Bombay Government pursuant to the powers conferred by the Extra‑Provincial Jurisdiction Act, 1947. Subsequently, the Secretary of the Ministry of State, Shri V. P. Menon, addressed a letter to the Maharana of Sant dated 1 October 1948 (Exhibit 194). That correspondence, titled “Letter of Guarantee,” was intended to act as a supplement to the merger agreement dated 19 March 1948. Among other provisions, clause 7 of the letter declared: “No order passed or action taken by you before the date of making over the administration to the Dominion Government will be questioned unless the order was passed or action taken after the 1st day of April, 1948, and it is considered by the Government of India to be palpably unjust or unreasonable. The decision of the Government of India in their respect will be final.” In anticipation of the impending integration of the territories of the Indian States into the Dominion of India, the Government of India Act, 1935, was amended by inserting section 290‑A. Exercising the powers granted by that provision, the Governor‑General of India issued the States Merger (Governor Provinces) Order, 1949 on 27 July 1949, with effect from 1 August 1949. That order completed the integration of the Indian States, including the State of Sant, with the Province of Bombay as of that date, 1 August 1949. Meanwhile, the ruler of Sant had issued a resolution, referred to as a “Tharao,” on 12 March 1948, the terms of which would later give rise to the present series of litigations.

In this matter, the Court examined a document identified as Exhibit 192, which the Court referred to in neutral terms as a “Tharao.” The Tharao was an order issued by the Maharana of the former Sant State. Under the terms of that order, certain individuals who held specific tenures in the State were granted rights to exploit forest resources. Those tenure‑holders subsequently entered into a series of agreements with third parties, whereby they transferred their rights to harvest timber and other forest produce in exchange for cash payments. The Court noted that it was unnecessary to reproduce each agreement in full; however, a representative example was cited. The agreement dated 21 August 1948 (Exhibit 175) showed that the tenure‑holder conveyed to Vohra Hatimbhai Badruddin Mithiborwala the authority to cut and remove timber and firewood from the forest of Mouja Gothimada, receiving a consideration of Rs 9,501 for a period of three years. While the written contract contained numerous clauses, the Court deemed the details of those clauses irrelevant for the present dispute.

Following the issuance of the forest‑rights grants, a series of correspondences arose between the grantors, the grantees, and the State Forest Department. When the District Forest Officer became aware of the transactions and the grantees applied for permission to remove timber, the Forest Authorities responded by prohibiting any export of forest produce outside the State pending receipt of official orders from the Government. The authorities further required each purchaser to provide an undertaking affirming compliance with any Government decisions and orders. Accordingly, the grantor, Thakur Sardar Singh Gaje Singh, executed an undertaking to obey the decisions and orders of the Government of Bombay concerning the Gothimada forests, rights which he claimed had been conferred upon him by the Santrampur State Government through Resolution No. G.371 dated 12 March 1948.

Subsequently, the Divisional Forest Officer issued an order on 10 January 1949, invoking Rule 4 of the Rules made under Section 41 of the Indian Forest Act, thereby authorising the grantee to remove forest produce such as timber, firewood and charcoal from the Gothimada forest. This authorization was later reinforced by a memorandum from the Conservator of Forests, North Western Circle, Bombay State, directing all Divisional Forest Officers to continue issuing authorisations to contractors of Jagirdars who had obtained rights under the Maharana’s Tharao of 12 March 1948. The Conservator, however, cautioned that until the Government definitively resolved the question of the grantees’ rights over private forests, an undertaking should be secured from the concerned parties affirming their willingness to abide by any Government orders. The Court observed that such an undertaking had already been obtained by the District Officers at an earlier stage.

In this matter, the Government of Bombay, on 8 July 1949, issued an order declaring that the decree issued by the ruler of the Sant State under his No 371 dated 12 March 1948, which had transferred forest rights to all the Jagirdars of the Jagir villages, was made in bad faith and should therefore be cancelled. Although this order was never formally communicated to the jagirdars or their contractors, the forest authorities acted on it by halting all further timber felling. Subsequently, the respondents served notices under section 80 of the Civil Procedure Code upon the Government of Bombay, demanding that their rights under the March 1948 Tharao be respected; after a two‑month period they instituted the suits that now give rise to these appeals. In the written statements filed by the Government of Bombay, the principal defence advanced was that the ruler’s act of issuing the Tharao did not bind the successor state, and that, exercising its sovereign authority, the Government had unreasonably and in bad faith cancelled the concession by means of its order dated 8 July 1949. It should be noted that, while the suit was pending before the trial judge, the Government of Bombay adopted a formal resolution that was published on 6 February 1953, in which it set out its legal position that the rights acquired under the Tharao could not be enforced against the Bombay Government as the successor state unless those rights were expressly recognised, and that, having been specifically repudiated, the jagirdars and their contractors possessed no title enforceable against the Government. The procedural history of the litigation has already been outlined, and at this juncture the Court finds it appropriate to summarize the grounds upon which the learned judges of the High Court upheld the plaintiffs’ claims, who are the respondents in the present appeals. Two principal arguments were advanced before the High Court on behalf of the plaintiffs. The first argument contended that the Tharao of 12 March 1948 constituted, in truth and substance, a law—a legislative act of the ruler of Sant—that continued to have effect under Article 372 of the Constitution, and consequently the rights conferred by that instrument could not be nullified by a mere executive order such as the Government’s February 1953 resolution. The High Court rejected this submission, holding that the Tharao was merely a grant originating from an administrative or executive order of the ruler. The second contention asserted that the agreement of merger, by which the Sant State was integrated into the Dominion of India, constituted an “act of state,” and that therefore no rights based upon the merger agreement dated 19 March 1948, or the supplementary letter dated 1 October 1948, could be asserted or enforced in the municipal courts of the successor state unless the Government explicitly recognised them. This latter argument was accepted by the High Court, and on that basis the learned judges dismissed the suits of the various plaintiffs. The correctness of these two conclusions is now before this Court, the first being challenged by the respondent and the second by the appellant State.

In this case the Court recorded that the earlier judges had accepted two principal submissions. The first submission held that the letter of Shri V. P. Menon dated 1 October 1948 could be invoked to infer that the Government had waived any right to repudiate the grant made by the ruler, and that, consequently, the plaintiffs’ suits were correctly decreed. The second submission concerned the applicability of the two conclusions that were being contested before the Court: the first challenge was raised by the respondent, and the second by the appellant State. The Court noted that, arising from the learned Attorney‑General’s arguments, it was necessary to examine the legal effect of the accession, integration and merger of the Sant State into the Indian Union on the rights acquired by the plaintiffs under the Tharao dated 12 March 1948, and also to determine whether sections of the Government of India Act, 1935, or provisions of Part III of the Constitution altered the nature or enforceability of those rights. The Court listed the specific questions to be considered under the first head: (a) whether rights obtained under the former ruler could be enforced against the Union and State Governments without recognition by the appropriate Government; (b) what effect the Government of India’s letter of 1 October 1948 had on the Government’s power to refuse recognition of a grant under the Tharao; and (c) what effect the Government’s communication to the Chief Conservator of Forests dated 8 July 1949 and the resolution of February 1953 had on those rights. Under the second head, the Court identified the need to consider, besides the constitutional guarantees of property rights contained in the Government of India Act and the Constitution, the initial effect of section 5 of the Government of India Act, 1935, on the accession of the States to the Dominion of India and the subsequent manner in which the Constitution was framed. Another issue for consideration was whether the Tharao of 12 March 1948 was merely an executive‑order grant or a law continued in operation by article 372 of the Constitution. The Court referred to the decision in Virendra Singh’s case, where it had been held that, even if the merger of the Indian States and the treaties effecting that merger were acts of State, the Constitution’s provisions—particularly those protecting citizens’ property rights—prevented the arbitrary annulment or abrogation of the acquired rights of the former rulers by later executive action of the Union or State Governments.

In this matter, the Court observed that the learned judges had correctly taken the rule of public international law, which had been set out by the Privy Council in a number of decisions arising from appeals from the Indian High Courts, as applicable. For the purpose of appreciating the issues presently before the Court, it was considered helpful to begin the discussion by briefly stating the principles underlying those Privy Council decisions, while leaving a detailed examination of those principles for a later stage of the analysis. Those principles had been succinctly summarised and the ratio of the rule had been explained by Lord Dunedin in the case of Vajesinghji v. Secretary of State for India etc.(1). The passage in that judgment had been frequently quoted in later authorities, and the Court found it sufficient to reproduce the passage in full. Lord Dunedin had said: “When a territory is acquired by a sovereign state for the first time that is an act of State. It matters not how the acquisition has been brought about. It may be by conquest, it may be by cession following on treaty, it may be by occupation of territory hitherto unoccupied by a recognised ruler. In all cases the result is the same. Any inhabitant of the territory can make good in the municipal courts established by the new sovereign only such rights as that sovereign has through his officers, recognised. Such rights as he had under the rule of predecessors avail him nothing. Nay more, even if in a treaty of cession it is stipulated that certain inhabitants could enjoy certain rights, that does not give a title to those inhabitants to enforce these stipulations in the municipal courts. The right to enforce remains only with the high contracting parties.” (italics ours). The Court noted that this formulation had been accepted as expressing the constitutional law of the United Kingdom and had been applied not only to claims or titles that were sought to be enforced against the Government of India but also in other parts of the British Empire, as illustrated in Cook v. Spring(2). That body of law had been the rule laid down and given effect to by the Privy Council up to the moment India attained independence. The Court then turned to the decision in Virendra Singh v. State of Uttar Pradesh (1), which had taken a different approach, particularly with respect to the propositions set out in italics in Lord Dunedin’s exposition. The Court summarized the facts of that case as follows: on 5 January 1948 the ruler of Sarila had granted the village of Rigwara to the petitioners, and on 28 January 1948 the ruler of Charkari had granted certain other villages to the same petitioners. When the Government of Uttar Pradesh issued an order that sought to nullify the petitioners’ rights, the petitioners filed a petition under Article 32 of the Constitution, praying that the order of the Government of

The petitioners asked that the order issued by the Government of Uttar Pradesh, which revoked the land grants made in their favour, be declared void and that they be awarded appropriate consequential relief. To understand the issues that arose in the earlier judgment of Virendra Singh’s case, it was necessary to set out additional facts concerning the constitutional history of the two former princely states. After the grants were made, the thirty‑five princely states situated in the Bundelkhand and Bhagalkhand regions, including the states of Charkari and Sarila, decided to merge and form a single political entity known as the United State of Vindhya Pradesh. While this Union existed, some officials of the United State interfered with the petitioners’ rights; however, the government of the United State subsequently issued orders instructing those officers to refrain from any further interference. Later, the rulers of the thirty‑five states dissolved the Union and transferred all their powers and jurisdiction to the Government of the Indian Dominion. The Dominion then organized the territory as a Chief Commissioner’s province for administrative purposes. Nevertheless, the four villages that had been granted to the petitioners were not retained within the centrally administered area; instead, they were detached from that administration and incorporated into the state of Uttar Pradesh. On 29 August 1952, the Governor of Uttar Pradesh issued an order revoking the original grants that had been made to the petitioners. The principal question presented to the Court was whether this revocation order, which originated from actions of the former rulers, was amenable to judicial review and, if it was reviewable, whether the order was legally valid.

The judgment in this matter was delivered by Justice Bose. He began by articulating the issue for determination as follows: whether the Union Government possessed the authority and power to revoke the grants as an act of State. He observed that legal scholars were divided on this point. At one extreme, he referred to the position expressed by the Privy Council in a series of cases, summarising the effect of those decisions by quoting the passage previously extracted from Lord Dunedin’s judgment. At the opposite extreme, he cited the opinion of Chief Justice Marshall, expressed in United States v. Percheman, and reproduced the relevant quotation. In that passage, Chief Justice Marshall warned that, even in cases of conquest, it is highly unusual for a conqueror to do more than replace the sovereign and assume dominion over the territory, and that the modern law of nations, which embodies a sense of justice recognised by the civilized world, would be violated if private property were broadly confiscated and private rights annulled. He further explained that when a people change allegiance, their relationship to the former sovereign is dissolved, but their mutual relations and property rights remain undisturbed. He argued that this modern rule, applicable even in conquest, should likewise apply to an amicable cession of territory, noting that a cession is never understood to include the transfer of private property belonging to the inhabitants.

The learned Judge explained that when a sovereign cedes territory, the cession applies only to the land itself and not to the private property of the inhabitants. He stated that a king may transfer only that which he personally owned; lands that he had previously granted to private individuals could not be surrendered by him. Consequently, neither the ceding sovereign nor the acquiring sovereign could be deemed to be committing an injustice against private persons, an injustice that would be condemned by the customs of the civilized world. He further observed that a cession identified by the name of the territory conveys the combined notion of surrendering both the land and the people who reside upon it, but that this surrender is understood to convey only sovereignty, not to disturb existing private property rights. He cited a United States report, noting that the passage appears at page 86‑87 of volume 32 of the United States reports. After referring to several English decisions, the learned Judge remarked that he would not discuss those cases because, in his view, none of them bore upon the present problem, namely the effect of the Constitution on the peoples and territories that joined the Indian Union and thereby gave rise to the Constitution.

He then affirmed that the accession of the princely states and their acceptance by the Dominion of India were acts of State that lie beyond the competence of any municipal court to inquire into, and that no court in India, after the Constitution came into force, could claim jurisdiction to resolve disputes arising from those acts because of Article 363 and the proviso to Article 131. The only function available to such courts was to record the fact of accession. The Judge continued by noting that, whether the view expressed by the Privy Council is correct or whether the broader view articulated by Chief Justice Marshall is more appropriate, all authorities agree that the new sovereign has the competence to acknowledge existing rights in territories that have been conquered or ceded, and that it may, by legislation or other means, apply its own laws to those territories. Those laws may, and indeed must, be examined and interpreted by the municipal courts of the absorbing State when circumstances require.

Turning to the specific facts of the petition, the learned Judge pointed out that the petitioners’ title to the disputed villages had not been repudiated up to 26 January 1950. Because the right to repudiate had not been exercised by that date, the petitioners were, in fact, in de facto possession of the villages. He observed that such possessory rights could have been asserted and enforced against all persons except the rulers who had originally granted the lands, and possibly except the succeeding State. He deemed it unnecessary to decide whether those rights could be enforced against the former rulers as well as against the Dominion of India, the succeeding sovereign. Since those rights existed factually at the moment the Constitution came into force, and because by that time the subjects of the rulers of Charkari and Sarila had become subjects of the Union, the Judge concluded that there was no basis for the Union Government to claim an “act of State” that would deprive the petitioners of their property. In reaching this conclusion, he relied on the well‑known decisions in Walker v. Baird and Johnstone v. Pedlar.

The Court further explained that the Constitution, by virtue of authority derived from and conferred by the peoples of the land, eliminated in a single sweeping movement all remnants of arbitrary and despotic power within the territories of India, over its citizens and its lands, and expressly prohibited the very acts of arbitrary power that the State now attempted to uphold. The excerpt quoted and, indeed, the whole judgment are filled with a vivid description of the poetic evolution of India’s constitutional framework as a unified State during the most momentous period of its history, beginning with the Declaration of Independence on 15 August 1947 and culminating in the coming into force of the Constitution on 26 January 1950. The judgment also traces the saga of the former subjects of Indian princes as they transitioned from being subjects of autocratic rulers to becoming full‑fledged citizens in a modern democratic system, employing language that is both picturesque and genuinely eloquent. The Court emphasized that it should not be taken to mean that it diminishes in any way the political significance of the events described, nor that it undervalues their content, importance or meaning, even though it may differ on certain conclusions drawn on issues that are relevant to the points that arise for decision in these appeals. At this stage the Court pointed out that a number of decisions of this Court, rendered after the case of Virendra Singh, are sufficient to illustrate the acceptance of the constitutional doctrine articulated by the Privy Council. These decisions include M/s Dalmia Dadri Cement Co. Ltd. v. The Commissioner of Income Tax, Jagan‑... Agrawala v. State of Orissa, Promod Chandra Deb v. State of Orissa, and State of Saurashtra v. Jamadar Mohamad Abdulla. The Court indicated that it would refer to those cases later, but first it was necessary to set out certain matters that are not contested. It observed that the native Indian rulers were unquestionably sovereign within the territories over which they exercised jurisdiction, and that they relinquished their sovereignty in successive stages: firstly through accession, then through integration, and finally through what the White Paper on Indian States termed “unionisation,” meaning that the territory of each former State became an integral part of the Union of India, which resulted in the complete extinction of their separate existence, individual sovereignty and political status as distinct units. Turning again to the analysis of Virendra Singh’s case, the Court identified the core reasoning of that decision as follows: there were two principal schools of thought concerning the effect of a change in sovereignty on the enforceability of private rights against the succeeding sovereign. The first school, reflected in Privy Council decisions, held that rights enforceable against the former ruler ceased to be enforceable against the new sovereign unless a competent authority of the succeeding sovereign expressly recognised those rights, a view exemplified by Lord Dunedin’s passage in the Vajesingjis case. The second, opposing school, was expressed in United States Supreme Court decisions, notably the classic exposition by Chief Justice Marshall in Percheman’s case, which held that public international law required municipal courts to treat changes in sovereignty as having no effect on the rights of private individuals, and that the succeeding sovereign bore a moral, and possibly legal, obligation to honour those rights.

In the judgment the Court explained that, according to the first school of thought, municipal courts of a succeeding sovereign would not enforce rights that had been enforceable against the previous ruler unless a competent authority or organ of the succeeding sovereign formally recognized those rights. The passage quoted from Lord Dunedin’s opinion in Vajesingjis case (5) 51 I. A. 357 was presented as a typical illustration of that position. By contrast, the Court identified an opposite perspective found in the decisions of the Supreme Court of the United States, where the classic exposition by Chief Justice Marshall in Percheman's case (1) 32 U. S. 51 at pp. 86‑87 embodied the view that changes in sovereignty over a territory should not affect the rights of private individuals, even with respect to the enforceability of their claims against the State. The United States view held that the succeeding sovereign had a moral, and perhaps legal, obligation to honor rights previously acquired from the former sovereign. After setting out these divergent doctrines, the learned judges in Virendra Singh’s case (2) [1955] 1 S.C.R. 415 declared that it was unnecessary to pronounce on the correctness of either approach. Instead, they proceeded on the assumption that the constitutional doctrine as articulated by the Privy Council applied to the facts before them.

Starting from the factual premise that the petitioners had obtained a good title to certain villages granted to them by the rulers of Sarila and Charkari, the Court examined the nature of the title that the petitioners held under those grants. The examination led the Court to conclude that, even when relying on the Privy Council decisions, the petitioners’ title was only voidable at the option of the succeeding sovereign. The Court recognized that the constitutional changes affecting the State of Charkari and the State of Sarila inevitably brought about a change in sovereignty over those territories. The Court characterized the constitutional transition, including the treaties that marked the change, as “Acts of State” and held that the interpretation or enforcement of rights arising under those treaties lay outside the jurisdiction of municipal courts. Consequently, the petitioners could not derive any benefit by invoking any provision in the treaty that purported to safeguard their rights, because, apart from the treaties being Acts of State, they represented engagements between two sovereign States and were enforceable only between the high contracting parties through diplomatic channels, not through recourse to municipal courts. Moreover, the petitioners were not parties to those treaties and therefore could not claim any right to enforce them. In this context, the Court referred to the terms of Article 363 of the Constitution, which contain an explicit embargo on the enforcement of treaty provisions by municipal courts, reinforcing the conclusion that the petitioners’ claims could not be pursued in that forum.

The Court observed that municipal courts were expressly barred from enforcing the provisions of the treaties, a point that had been reiterated in earlier discussion. If the guarantees contained in those treaties were ignored, the Court considered whether the post‑Constitution governments could set aside the titles obtained by the petitioners from the former ruler. The Court rejected that possibility for four specific reasons. First, the Constitution resulted from the combined effort of the subjects of the former Indian princes and the people of former British India. Consequently, its enactment did not arise from conquest or cession, and therefore the doctrines of public international law concerning rights arising from such changes in sovereignty did not apply. Second, when the Constitution came into force, the former subjects of the Indian rulers automatically became Indian citizens, and a sovereign Indian government could not exercise an Act of State against its own citizens. Third, even assuming that the previous rulers possessed autocratic authority to revoke grants, the Union and State governments operated under a constitutional framework containing fundamental rights. Consequently, they could not invoke such arbitrary powers because the Constitution guarantees protection of property against arbitrary executive action. Fourth, at the commencement of the Constitution the petitioners possessed a possessory title to the property granted to them. They retained the right to remain in possession until that title, which was voidable, was extinguished by a repudiation by a governments created under the Constitution. These proprietary rights were protected by Articles 19(1)(g) and 31(1) of the Constitution, so the petitioners could be deprived of them only by competent legislation enacted after the Constitution’s commencement. The Court then indicated that it would examine the reasoning of the learned Judges in detail. While reserving for later consideration the divergent opinions of judges, jurists and writers on the public international law question of enforceability of rights derived from previous sovereigns, the Court chose to follow the approach taken in Virendra Singh’s case. It therefore adopted the line of reasoning set out in Virendra Singh’s case. The Court stressed that it was necessary first to understand the precise scope and implications of the Privy Council decisions that formed the basis of that rule. The earliest decision commonly referred to in this context was Secretary of State for India v. Kamachee Boye Sahiba. That case addressed the justiciability in municipal courts of a seizure by the East India Company of not only the Raj but also private property. The Privy Council held, through Lord Kingston, that because the seizure was executed by the Company as a sovereign power, municipal courts had no means to form any opinion on the propriety of that act. Likewise, they could not express any view on the justice of the act. The Court noted that this aspect of an Act of State differed from the question that arose in the present appeals. The Privy Council decision was later approved in Secretary of State for India in Council v. Bai Rajbai. In that case the controversy was similar to the present appeals and concerned whether the respondent was entitled to continued ownership and possession of a village called Charodi in Gujarat. The respondent's title to the village was ultimately based on rights claimed to have been.

In this case, the Court examined earlier decisions of the Privy Council concerning the effect of a sovereign’s seizure of property and the doctrine of act of state. The Privy Council, in a judgment delivered by Lord Kingston, considered the seizure of property by the East India Company as an act performed by a sovereign power. The Court observed that, because the seizure was carried out by the Company in its sovereign capacity, the municipal courts “had no means of forming or the right of expressing if they had formed any opinion of the propriety or the justice of that act.” The Court noted that this observation relates to the doctrine of act of state, but it is not directly applicable to the facts before the present Court. The Court then referred to another Privy Council decision that had been approved in a case known as Secretary of State for India in Council v. Bai Rajbai(1). In that case, the issue was similar to the issues raised in the present appeals. The Privy Council was asked to determine whether the respondent was entitled to continue owning and possessing a village called Charodi located in the province of Gujarat. The respondent claimed title to the village based on grants allegedly made by the Gaekwar of Baroda. The land on which Charodi stood had been ceded by the Gaekwar to the British Government in 1817. After the cession, the Indian Government refused to recognise the respondent’s claim to full ownership and treated the respondent as having only a leasehold interest. The Court recounted the reasoning of Lord Atkinson, who delivered the judgment of the Board. Lord Atkinson emphasized that it was essential to ascertain the exact relationship that the respondents, described as the kasbatis, had with the Bombay Government at the moment the cession became effective, and to identify the legal rights that could be enforced in the tribunals of the new sovereign. He asserted that the relationship and rights the respondents enjoyed under their former native sovereigns were, except for one aspect, entirely irrelevant after the cession. The respondents could not carry into the new regime any legal rights, if any, that they might have possessed under the former sovereign. The only enforceable rights they could claim against the new sovereign were those rights that the new sovereign, either by express or implied agreement or by legislation, chose to grant them. Lord Atkinson added that such implied agreement could be inferred from circumstantial evidence, such as the manner in which the new sovereign dealt with the respondents, any recognition of their former rights, and any express or implied election by the new sovereign to respect and be bound by those rights. Consequently, the Court explained that the purpose of examining the matter was to determine whether, and to what extent, the new sovereign had recognised the ante‑cession rights of the kasbatis and had agreed or elected to be bound by them.

In this case the Court considered that determining whether the rights claimed by the parties existed, and if so what their nature and scope were, was a question that required examination. The principle that such a question is relevant is firmly established in law, although the lower courts appearing before this Court did not appear to keep it continuously before them. To illustrate the principle, the Court referred to two earlier decisions that set out the rule. The first was Secretary of State for India v. Kamachee Boye Sahiba, reported in (1859) 7 Moo. I.A. (476), decided in the year 1859. The second was Cook v. Sprigg, reported in A.C. 572, decided in the year 1899. Those authorities indicate that when sovereignty over a territory changes, the rights that were enforceable against the former ruler do not merely become voidable at the discretion of the new sovereign; rather, those rights are completely extinguished unless the new sovereign, either by explicit recognition or by legislation, chooses to confer them on the former holder. A similar issue arose in the case known as Bai Rajbai’s case (1) and was later considered in Vajesingji’s case (2), where the legal position explained by Lord Atkinson was affirmed, and Lord Dunedin reiterated the same view by stating that an inhabitant of the newly sovereign territory can assert before the municipal courts only those rights that the new sovereign, through his officers, has recognised. Any rights that the inhabitant possessed under the former sovereign’s rule no longer provide any benefit. This passage, like the statement of Lord Atkinson, contradicts the theory that a person living in a territory whose sovereignty has changed retains a title to property that persists until the new sovereign positively divests him of that title. More recently, the Court cited the decision in Secretary of State v. Rustam Khan (1), which dealt with the enforceability of a claim to land that the respondent said had been acquired from the Khan of Kalat, after the Khan ceded the territory that contained those villages to the British Government. The appellant relied on the defence of ‘Act of State’ and quoted the earlier decisions in Bai Rajbai’s case (2) and Vajesingji’s case (3). In the submissions made to the Board on behalf of the respondent, two arguments of particular relevance were highlighted. The first argument asserted that a simple change in sovereignty should not be presumed to disturb the rights of private owners, and that the terms of the cession, which transferred full sovereignty, should be interpreted as only transferring public property, relying on the proposition set out in Amodu Tijani v. Secretary Southern Nigeria (4). The second argument contended that the effect of a change in sovereignty on a land title that had been perfected under a previous sovereign differed from the effect on personal obligations.

In this appeal the Court examined the proposition that a change in sovereignty affected personal obligations differently from rights in land. Support for this view was sought from the observations of Lord Alverstone, C.J., in West Rand Central Gold Mining Co. v. Rex (1905) 2 K.B. 391, where he stated that “It must not be forgotten that the obligation of conquering States with regard to private property and private individuals, particularly land to which title had already been perfected before the conqueror annexation are altogether different from the obligations which arise in respect of personal rights by contract.” The Court noted that these arguments and the cited decisions were frequently invoked to suggest that, even from the British point of view, the rights of private individuals in land continued to be enforceable despite a change in sovereignty. The judgment of the Board, delivered by Lord Atkinson, was then considered. Lord Atkinson pointed out that the cession of the territory by the Khan effected a complete transfer of all sovereignty to the British Government and observed that “On the legal position that arises in such circumstances there is a wealth of weighty authority.” The Board subsequently referred in detail to earlier decisions of the Board in Kamachee Boye (1), Cook v. Sprigg (2), Bai Rai Bai (2) and Vijayesingji (4), applied those precedents to the facts of the present case, and held that the title asserted by the respondents had not been recognised by the British Government. Accordingly, the Board allowed the appeal and directed the dismissal of the respondents’ suit. The Court further observed that if the Privy Council decisions correctly laid down the law, the character of the claim as land or immovable property made no difference to the application of the principle. The last decision examined by the Court was Asrar Ahmed v. Durgah Committee, Ajmer (5), in which Lord Simonds declared that “From this it follows that the rights, which the inhabitants of that State enjoyed against its former rulers, availed them nothing against the British Government and could not be asserted in the Courts established by that Government except so far as they had been recognised by the new sovereign power. Recognition may be by legislation or by agreement express or implied.” The Court emphasized that this well‑established rule of law, for which reference may be made to 42 I.A. 229 at p. 237 and 51 I.A. 357 at p. 360, appeared particularly applicable to offices where material benefits pertained to the sovereign and had consistently been regarded as within the disposition of the sovereign power. As previously indicated, these Privy Council decisions had been repeatedly referred to and followed by this Court.

By referring to the decision of this Court in Dalmia Dadri Cement Co. (1) and to the other authorities previously mentioned, the Court observed that the legal position articulated in Virendra’s case (2) was inaccurate. In that earlier case it had been held that, if the doctrine of public international law as set out by the Privy Council were applied, the petitioners possessed a voidable title that continued to exist even after the change of sovereignty. The present Court rejected that view. It explained that, should the Privy Council’s approach be adopted, it would inevitably follow that grantees who obtained rights from former rulers did not, upon the transfer of sovereignty, retain any nascent rights against the new sovereign merely by virtue of being subjects of the successor state. Rather, any right enforceable against the new sovereign would arise only when the competent authorities of the successor government expressly or impliedly recognised such rights, or when the appropriate legislation was enacted. The Court paused to note that the earlier judges had erred in interpreting the ratio of the Privy Council judgments, a mistake that led them to assume that the petitioners before them continued to enjoy certain rights after the sovereign change, rights that were purportedly protected by the guarantees in Articles 19 and 31 of the Constitution. The reasoning of the learned judges then proceeded on the basis that the Constitution had been framed not solely by the inhabitants of the provinces of India, but also by the collective action of those inhabitants together with the subjects of the former Indian rulers. From this premise they inferred that the rules of public international law which acknowledge a successor state’s right to repudiate obligations incurred by a predecessor state were inapplicable to the change of sovereignty that occurred when the Union of India was constituted. Their theory rested on the notion that the said doctrine required a cession or transfer of territory from one ruler to another, and that when the people of the entire sub‑continent jointly created a new sovereign state, no such territorial transfer between sovereigns took place, thereby precluding the application of the rule of public international law. With due respect to the earlier judges, the Court expressed a contrary view, holding that a new sovereign unquestionably emerged from the merger or absorption of the Indian States with the provinces of British India, and that this process necessarily extinguished the sovereignty of the former princely rulers. The Court clarified that its consideration was not concerned with whether India, as an international person, had altered its relations with other states or international organisations, but was limited to the domestic implications of the sovereignty transition.

In this case the Court observed that the territories ruled by the former Indian princes unquestionably passed from one sovereign authority to another when, as a result of the “unionisation” carried out by the Government of India, those territories were first incorporated into the Dominion of India and subsequently into the Union of India. The Court explained that a transfer of territory from one sovereign to another may occur through various mechanisms such as conquest, annexation, cession by treaty whether following a war or not, revolution, emancipation of subject peoples, or territorial resettlements. All of these methods share a single essential feature: one sovereign ceases to exercise authority over a territory and a different sovereign assumes that authority. For the purpose of applying the legal rules that have been developed to address problems arising from such succession, the Court noted that British constitutional law does not attach significance to the particular manner in which the change of sovereignty was accomplished, nor does it distinguish between a partial or a total absorption that would imply a complete extinction of the earlier sovereignty leaving no trace after the merger. The Court further remarked that, in many instances, the rulers of the Indian States themselves resisted the merger, yet they participated, either personally or through representatives, in the deliberations that resulted in the formation of the Constitution and the legal‑political unity of India. Consequently, the Court held that if the absorption of the Indian States resulted in a situation of state succession, the consequences of that succession must be assessed by applying the same tests and principles that govern state succession arising from other modes of transfer. The Court could not accept the argument that the particular way in which the Indian States ceased to exist or the manner in which the Constitution brought about complete political unification of the Indian territory negated the applicability of the rules that govern the enforceability of rights against a succeeding sovereign in cases of state succession. The next point the Court considered was whether the fact that, after the Constitution came into force, the former subjects of the Indian princes became citizens and subjects of the Indian Union precluded the Government of India from refusing to recognise titles that those persons might have sought to enforce against their previous rulers, relying on the well‑established principle that “there can be no act of State against its own subjects.” The Court indicated that the application of this principle, as illustrated in the classic authorities Walker v. Baird (1) and Johnstone v. Pedlar (2), is closely connected to the precise nature of the act performed by a succeeding State when it declines to acknowledge a right that was enforceable against the predecessor. The Court posed a hypothetical: if the true position in law required a positive action by the succeeding sovereign before it could interfere with the pre‑existing rights of the former ruler’s subjects, then the rule that a State cannot act against its own subjects might have some bearing. However, if the correct theory were that the extinction of the previous ruler’s sovereignty automatically extinguished the rights enforceable against that State, and that a new right could only arise upon recognition by the succeeding sovereign, then the refusal by the succeeding sovereign to recognise pre‑existing rights could not be characterised as an act of State. The Court concluded that such refusal, while an exercise of sovereign power, does not annihilate or affect any enforceable right that its subjects previously possessed against the former sovereign. If the true position in law were that a positive action is necessary to be taken by the succeeding sovereign before it interferes with the pre‑existing rights of the subjects of the former ruler

The Court observed that if the act taken by the new sovereign is interpreted as a mere continuation of the act of the former sovereign that transferred the territory to the new sovereign, then the principle that a State cannot act against its own subjects might still be relevant. In that view the transfer of the territory would be seen as an ongoing action of the former State, and the rule articulated in Walker v. Baird (1) [1892] A.C. 491 and Johnstone v. Pedlar (2) [1921] 2 A.C. 262 could conceivably have some application. Conversely, the Court noted that if the correct theory were that, upon the extinction of the previous sovereign’s authority over the ceded or surrendered territory, the rights enforceable against that sovereign also extinguished ipso jure, then a new right would arise only upon the recognition of the succeeding sovereign. Under that theory the refusal of the succeeding sovereign to recognise pre‑existing rights would not constitute an act of State at all. The Court clarified that while such refusal is an exercise of sovereign power, it does not destroy or affect any enforceable right that the subjects of the former sovereign possessed against the former sovereign. Consequently, the Court held that if the doctrine of public international law set out by the Privy Council were applied to the termination of rights arising from the change of sovereignty in India, as the learned judges had done in Virendra Singh’s case (1) [1955] 1 S.C.R. 415, the present power of the Government of India to refuse recognition of titles that originated in executive grants made by former Indian rulers could not be negated by reliance on the rule of law established in Walker v. Baird (2) and Johnstone v. Pedlar (3).

The Court then turned to the second proposition of law underlying the decision in Virendra Singh’s case (1). It stated that the arbitrary and absolute powers once possessed by the former Indian rulers to revoke their own grants did not survive the constitutional change in sovereignty. With the establishment of a democratic polity grounded in justice and the rule of law, the right to exercise any such arbitrary power was abandoned and could no longer be used to revoke the former rulers’ grants. The Court explained that if the public‑international‑law theory articulated by the Privy Council rested on the premise that the succeeding sovereign’s power to recognise or reject the predecessor’s grants derived from the predecessor’s right to revoke them, then that argument would carry considerable weight. The juristic basis of the Privy Council decisions is that, with the extinction of the previous sovereign, the rights previously exercisable by that sovereign’s subjects were likewise extinguished, and that without a fresh recognition—effectively a new grant—by the new sovereign, no title could become enforceable in the municipal courts of the succeeding sovereign.

If the juristic approach described above is correct, and that approach is precisely what the Privy Council decisions articulate as shown by the extracts from the relevant passages in Bai Rajbai’s case (1) and Vajeysinghji’s case (2), then it is irrelevant whether the original grant originated from an absolute ruler who possessed the power to revoke the grant, from a ruler of a different category who lacked such power, or even from a ruler who, although capable of revocation, had voluntarily surrendered that power by unilateral executive action. In either circumstance, when the issue for determination is whether the right arising from the grant can be enforced against the succeeding sovereign in its courts, the analysis does not hinge on the former ruler’s authority to alter or withdraw the grant. The succeeding sovereign does not claim the right to refuse recognition of the earlier rights or grants on the basis of any authority derived from the previous sovereign; rather, the refusal is exercised as an incident of the succeeding sovereign’s own inherent sovereignty and sovereign power. Consequently, the presence of arbitrary powers exercised by the native Indian rulers and the absence of such powers in the governments established under the Constitution are immaterial, as is the fact that those arbitrary powers were neither inherited nor devolved upon the Governments of the Union and the States functioning under the Constitution. The final step in the reasoning underlying Virendra Singh’s case (1) proceeds on the premise that the petitioners transferred to the Indian Union certain rights in the property granted to them by their former rulers, rights that were enforceable against the Government and for which the petitioners claimed protection under Articles 19 and 31 of the Constitution. This question must be examined from two perspectives that correspond to the two stages through which the territories of the former Indian rulers became part of India under the Constitution. The first stage concerns the legal effect of the changes that occurred when the princely States acceded to the Dominion of India and subsequently entered into merger agreements executed by the rulers, all of which were governed by the provisions of the Government of India Act, the Indian Independence Act of 1947, and the Government of India Act, 1935 as amended from time to time (see Government of India (42 I.A. 229), Government of India (51 I.A. 357), and [1955] 1 S.C.R. 415). The second stage involves the complete “unionisation” of these territories, whereby they became an integral part of a unified polity, the Union of India. Regarding the first stage, there was a clear transfer of sovereignty over the territories formerly ruled by native princes to the Government of India, enabling the latter to exercise plenary powers of administration over those territories. To facilitate this administration, Sections 290A and 290B were inserted into the Government of India Act, thereby authorising the Dominion Government to administer the territories of the acceding States, which, under section 5 of that Act, had become part of the Dominion of India. At this point, the powers of the Government of India for the

The administration of the territories that acceded to the Dominion was carried out under the Extra Provincial Jurisdiction Act, Act XLVII of 1947. That Act described the territories as “areas outside Provinces which were acquired by the Central Government by treaty, agreement, grant, usage, sufferance or other lawful means”. It may be noted that orders issued under the powers of that Act continued all laws then in force within the administered territories. Subsequently, an order made under section 290A of the Government of India Act, commonly called the States Merger Order of 1949, provided that the laws operating in the merged States would remain effective. Those laws would continue until they were expressly repealed or modified. In that context, the Privy Council principle held that rights acquired against the successor State could be enforced only if the new sovereign recognised them. Accordingly, any grant based solely on executive action could become enforceable against the Government of India or its agents only when the new sovereign gave it recognition. This situation represented a true case of state succession, where one sovereign transferred territory to another, without the complications that arose from the involvement of rulers or peoples in the constitutional making process. The Court explained that accepting the Privy Council view on the effect of a change in sovereignty inevitably leads to the conclusion that no fragment of the former ruler’s rights survives the extinction of that sovereignty. It further held that any new right could arise only by an express or implied act of the new sovereign. If that principle were applied, the grantee would acquire no property right that could be asserted against the new ruler. His right would be limited to retaining possession against private trespassers, which is not the issue before the Court. The Court noted that section 299 of the Government of India Act, 1935, dealt exclusively with the inference of proprietary rights by the State. It added that Articles 19 and 31 of the Constitution concerned only the protection of rights that already existed and were unrelated to any inter‑citizen dispute. Consequently, if the Court’s understanding of the Privy Council decisions is correct, the guarantee against deprivation of property contained in section 299 could not aid the grantee. This is because the succeeding sovereign refused to recognise the rights obtained from the previous sovereign.

The Court observed that the provisions of the Government of India Act, 1935 afforded the grantee no benefit, because when the new sovereign declined to recognise the rights that the grantee had obtained from the previous sovereign, the grantee suffered no loss of property. The reason, the Court explained, was that the grantee did not carry any enforceable rights from the former ruler that could be asserted against the new sovereign. Consequently, the situation could be summarised as follows: prior to the commencement of the Constitution, the grantee possessed no property right that could be enforced against the State, and therefore could not rely on the protection of Articles 19 and 31 of the Constitution. The advent of the Constitution, the Court held, could not alter this position, because the Constitution does not create new property rights; it merely safeguards rights that already exist.

The Court added that, had the learned judges in Virendra Singh’s case(1) correctly understood the Privy Council decision to mean that a grantee under a former ruler held a voidable title that he could continue to possess and enjoy until the succeeding ruler revoked or repudiated it, then those judges might also have been right in concluding that such a title could not be extinguished by executive action of the Union or State Governments on the basis of the guarantee of the right to property contained in Articles 19 and 31. However, the Court stressed that, as it had shown, the decisions of the Privy Council do not support that view, and therefore the conclusion in Virendra Singh’s case(1) on this particular point could not be sustained.

The discussion then turned to the submission made by counsel for the petitioner, who urged the Court to reject the doctrine of public international law that underlies the Privy Council decisions and to adopt instead the “American view” articulated by Chief Justice Marshall in United States v. Percheman(2) and later endorsed by the United States Supreme Court. Counsel contended that the Court was not bound by the Privy Council’s precedents and could embrace the more rational, just and humanitarian doctrine reflected in those American rulings. He further argued that the Privy Council’s doctrines were shaped by Britain’s status as an imperial and expansionist power at the time they were formulated, making them suitable for a colonial regime but inappropriate for the present constitutional order of this country.

After careful consideration, the Court concluded that there was no justification for discarding the British perspective on the jurisdiction of municipal courts to enforce rights against succeeding sovereigns. The Court therefore rejected the call to replace the established Privy Council doctrine with the American approach and affirmed the continued relevance of the British view in this context.

In this matter the Court examined the question of jurisdiction that arises when sovereignty changes. The Court first referred to the United States case of Percheman (2), which required the courts to interpret the treaty by which Spain surrendered Florida to the United States. That treaty, known as the Florida Treaty, was dated 22 February 1819, and the case citation appears at 32 U.S. 51, pages 86‑87. The respondent in that case alleged that his title to the land he claimed had been recognized and confirmed under the treaty.

The Court noted that, although the role of a treaty in United States constitutional law would be discussed later, the Florida Treaty was subsequently supplemented by an Act of Congress passed in 1828. That Act, titled “An Act supplementary to the several Acts providing for the settlement of confirmation of private land claims in Florida,” created a system of commissioners tasked with investigating private land claims. Where a commissioner rejected a claim, the Act expressly allowed the claimant to seek relief from the courts. Consequently, the Court observed that there was no room to invoke the British principle that municipal courts lack jurisdiction over unrecognized property titles, even if that principle were applicable. The sole issue for determination was the interpretation of the treaty clauses concerning titles that had already been recognized. Under any legal view, if both the treaty and the 1828 Act confirmed the respondent’s title, that title could be enforced in United States municipal courts.

The Court then turned to the contrast between United States constitutional law and Indian constitutional law regarding the effect of treaties. Article VI, clause (2) of the United States Constitution states: “All treaties made, or which shall be made, under the authority of the United States, shall be the supreme law of the land; and the Judges in every State shall be bound thereby, anything in the Constitution or laws of any State to the contrary notwithstanding.” Willoughby explained that the purpose of this provision was to guarantee the supremacy of treaties over state statutes or constitutional provisions. He further observed that, from the beginning, self‑executory treaties have operated in the United States by virtue of this constitutional clause to create municipal law that courts must recognize and apply.

In contrast, the Court explained, British and Indian jurisprudence treat a treaty merely as a contract between sovereigns. A treaty does not become part of domestic law unless it is incorporated by a legislative act. This difference underlies the divergent approaches to the jurisdiction of municipal courts in the two jurisdictions.

In this jurisdiction a treaty by itself does not create rights or obligations between the State and its citizens, nor does it create rights between private individuals. Such rights may arise only when the Legislature passes a law. Lord Atkin explained this principle in Attorney‑General of Canada v. Attorney‑General of Ontario, observing that, unlike in some other countries, the provisions of a treaty that has been duly ratified do not acquire the force of law within the Empire merely by virtue of the treaty. Recognising this constitutional position, section 106 of the Government of India Act, 1935 was enacted. The substance of that provision was later incorporated into article 253 of the Constitution, which provides that, notwithstanding any other provision of this Chapter, Parliament may make any law for the whole or any part of the territory of India to implement any treaty, agreement, convention with any foreign country, or any decision made at an international conference, association or other body. To reinforce this scheme, article 363 was inserted, which bars municipal courts from exercising jurisdiction to enforce rights that arise from certain treaties.

Because the constitutional treatment of treaties in this country differs from that in the United States, the rule of law articulated by the American Supreme Court cannot be automatically applied here. In the case known as Percheman’s case, the Court was interpreting the specific provisions of the treaty with Spain, which formed part of domestic law, and would have enforced those provisions even if they differed from other treaty terms. The present observation is not intended to diminish the significance of the doctrine of public international law as expounded by Chief Justice Marshall, but rather to stress that the decision must be understood in the context of the Spanish treaty provisions and the relevant articles of the American Constitution.

The Court further noted that, apart from the constitutional status of treaties in the United States, Marshall C.J. was articulating a doctrine of public international law that obliges successor States to respect rights acquired by private individuals under former sovereigns. The Court now turns to the question of whether the rule set out in the decisions of the Privy Council should be discarded in favour of the rule formulated in Percheman’s case. Several reasons prevent the Court from accepting Chief Justice Marshall’s exposition in Percheman’s case as a rule that municipal courts in this country must enforce. Firstly, it cannot be said that the broad formulation by Marshall C.J., which declares that every private right derived from a predecessor sovereign should remain enforceable against a successor, is appropriate in this jurisdiction.

The principle that a change in sovereignty does not affect the enforceability of private rights, whether against other individuals or against the succeeding State, has been accepted in that absolute form by jurists and writers on public international law. Even in treaties that give the widest possible scope to the enforceability of acquired rights against a successor State, two limitations have always been recognised. First, the origin of the right must be bona fide and not intended to injure the economic interests of the successor State. Second, the right must not be a political concession. Jurists and even the Permanent Court of International Justice have drawn a clear distinction between the theoretical law governing such rights and the manner in which municipal courts enforce them. C.C. Hyde, in his treatise on public international law (see Vol. 433), after referring to the decision in Percheman’s case, added the observation: “Acknowledgement of the principle that a change of sovereignty does not in itself serve to impair rights of private property validly acquired in areas subjected to a change does not, of course, touch the question whether the new sovereign is obliged to respect those rights when vested in the nationals of foreign States, such as those of its predecessor.” Similarly, George Schwarzenberger, in his work on international law (see Vol. 1 p. 83), after referring to a passage in the Permanent Court’s decision in the case of German Settlers in Poland, stated that “private rights acquired under existing law do not cease on a change of sovereignty. No one denies that the German civil law, both substantive and adjective, has continued without interruption to operate in the territory in question. It can hardly be maintained that, although the law survives, private rights acquired under it have perished. Such a contention is based on no principle and would be contrary to an almost universal opinion and practice.” He further noted that although the Permanent Court negatively affirmed that private rights do not cease on a change of sovereignty, it did not expressly rule on whether, in the absence of contrary legislation by Poland, international law bound Poland to consider German civil law valid in the ceded territories. The doctrine of act of state, evolved by English courts, is a rule of municipal law that denies such courts jurisdiction to inquire into the consequences of acts that are inseparable from an extension of sovereign authority; this doctrine, however, was not intended to deny any rule of international law. The analysis now turns to the juristic concept underlying the American view, setting aside for the moment what might be termed authority, as indicated in the citation (1) 32 U. S. 51 at pp. 86‑87.

In scholarly writings on public international law, there was once a school of thought that described the process of state succession as equivalent to a transmission of sovereignty, using the analogy of an heir in private law who would inherit, in totality, all rights and obligations concerning every inhabitant without any exception or alteration. This theory has now been abandoned because it became clear that no proper analogy exists between individuals and states, and because the theory could not be sustained in light of the factual practice that actually underpins the rules of public international law. It is unnecessary to add that this abandonment creates no conflict with the comity of nations. Moreover, the theory could not be justified as just, since it would impose upon the successor state obligations that may have originated from political considerations of the predecessor state, considerations that would not survive after the predecessor’s demise. It must also be remembered that when a successor state exercises its sovereignty over territory that has passed to it from a former ruler, it does so not as a representative or delegate of that former ruler—as an heir would act in private law—but as an independent sovereign whose authority derives from its own constitution and institutional framework. Public international law may indeed impose duties on the successor state concerning the newly acquired territory and the rights of its inhabitants, but any such duties must be compatible with the successor’s undisputed sovereignty. In practice, successor states therefore give effect to laws that regulate rights among the subjects that previously applied, except where their own constitution or legislation provides otherwise. The present discussion, however, is limited to rights that individuals possessed in the predecessor’s territory and that were enforceable against the former sovereign. Even in this limited field we are concerned only with a narrow category of rights—specifically those arising from grants of immovable property or concessions relating to such property and that are enforceable against the predecessor state. The Court made this reservation because, in the Dalmia Dadri Cement case(1), which dealt with the continued enforceability of a concession concerning the levy of income‑tax, Justice Bose agreed that such rights did not survive, and in a separate judgment the Court confined the operation of the principle articulated in Virendra Singh’s case(2) to rights in immovable property. If the notion that rights and duties, or the entire bundle of them, automatically pass ipso jure from the predecessor to the successor state is rejected, while at the same time it is recognized that international law and the underlying notion of justice may impose some obligations that the successor state ought to respect, two questions emerge. First, what are the specific obligations that international law might impose on a successor state? Second, are those obligations, which arise outside municipal law, capable of giving rise to claims that can be enforced in municipal courts?

The Court observed that the creations of municipal law might generate claims that could be pursued in municipal courts. It stated that it was impossible to formulate precise rules defining the interests that were protected by a general consensus as acquired rights. However, it clarified that for an interest to obtain the protection of International Law, the interest had to be properly vested; that is, it must not have been voidable at the hands of the predecessor State, it had to be bona‑fide, and it had to have been acquired lawfully. The Court further noted that neither the comity of nations nor any rule of International Law could be invoked to stop a sovereign State from protecting its national economy or from taking measures designed to guard that economy against abuse. On one side, the principles of acquired rights required that the private individual’s interest should not be extinguished, whereas on the other side the public interest of the successor State also had to be taken into account. The Court explained that this tension between public and private considerations made it difficult to lay down rigid, inflexible rules.

Referencing O’Connell’s Treatise on the Law of State Succession, the Court remarked that the problems created by State succession in International Law were notably different in character from those arising in municipal law, even though both operated on distinct planes. Nevertheless, the Court asserted that there was no compelling reason why the international system could not draw on doctrines or concepts that had proved adequate within municipal law. It cited two authorities, namely (1) [1959] 729 and (2) [1955] 1 S.C.R. 415, to support this observation. The Court described the principle of universal succession, which was derived by analogy from civil law, as essentially juristic in nature, but observed that the analogy was incorrect and that State practice did not conform to the theoretical model. The rejection of that doctrine, the Court said, led to the view that solutions should be based solely on experience. It noted that writers’ selection of an appropriate theory was often influenced by their own standpoint and legal experience. Consequently, the Court argued that, in theory, both past experience and present necessities must be considered; while the law should not be overly restrictive, it also must not become so doctrinaire that it deprives the State of the ability to refuse recognition of even fraudulent transactions. From this perspective, the Court held that the British practice that had prevailed in the country had not resulted in injustice; rather, it had achieved a fair balance between the acquired rights of private individuals and the economic interests of the community. Therefore, the Court found nothing in that practice that was so contrary to propriety or justice as to warrant its rejection. The Court affirmed that the British doctrine formed part of the jurisprudence and constitutional practice that existed in pre‑Constitution India, and it noted that the British Parliament, when it enacted the Government of India Act as the constitutional framework for the country, could not have contemplated any alternative scheme.

In this case the Court observed that the Constitution did not contain a specific rule that dictated how the rights of persons who were newly incorporated into the Indian political framework, because of the accession of other territories, should be treated. The Court said that, given this historical background, it would not be an unreasonable assumption to hold that the makers of the Constitution must have accepted the prevailing doctrine and the existing state of the law, unless the Constitution itself contained a provision or clear indication that contradicted the continuation of that doctrine. The Court reiterated that, as previously noted, the relationship between international treaties and domestic law had not been altered by the Constitution. However, by virtue of Article 363, a clear prohibition was placed upon the jurisdiction of municipal courts to give effect to treaty provisions that involved the rulers of the former Indian States. The Court interpreted this provision as a direct sign that the Constitution‑framers did not intend to depart from the constitutional doctrine that had previously been recognized as law. The Court added that a different result would arise only if the terms of a treaty were incorporated into later legislation; in such a circumstance the treaty provisions would become part of the law of the land and would be enforceable. The Court further cautioned against assuming that the Constitution‑makers were unaware of the need for legal continuity when the Indian States were merged and sovereignty changed. Article 372 of the Constitution expressly provided that all laws which were in force in those States, and likewise in British India, would continue to operate until they were either altered or repealed by a competent legislative act. The Court pointed out that, during the interval between the merger of the States and the commencement of the Constitution, other statutory provisions—previously mentioned by the Court—had already ensured that the existing laws in those territories remained effective until Article 372 could take effect. Consequently, no legal vacuum or hiatus arose with respect to the continuation of statutes. The Court explained that the only difficulty arose where a claimed right was not created by the law of the former sovereign but existed solely because of an administrative order. If the definition of “law” in Article 366(10) were to be read in the same way as in Article 12, thereby encompassing executive orders, then every such right would have persisted. The Constitution‑makers, however, chose to limit the continuation to statutes, distinguishing them from mere administrative orders. The Court then noted that the doctrine articulated in earlier Privy Council decisions had been accepted as correct and had been applied in post‑Constitution India in a series of judgments beginning with Dalmia Dadri Cement Co.(1). The Court held that, absent compelling reasons to deem those decisions erroneous, it would be inappropriate and not within its power to depart from those precedents, and it observed that there were no such reasons. Finally, the Court remarked that, as already observed in the case of Virendra Singh(2), even though jurists had expressed differing opinions on the question of public international law, the Court was not bound to adopt the observations of the Privy Council case cited in Percheman's case(1) for application by municipal courts in India.

In this case the Court observed that the earlier judgments of the Privy Council reported in Law were set (1) (1959] S.C.R. 729 and (2) [1955] 1 S.C.R. 415 had not been decisively endorsed by the Court as being applicable to municipal courts in India, particularly the observations made in Percheman's case (1). The Court therefore held that, given these circumstances, it would not be justified to depart from the decisions of the Privy Council that had been accepted and applied by this Court. The Court further explained that both the Privy Council decisions and the earlier Indian decisions had been examined and their principles had been summarised by this Court in the case of Promod Chandra Deb and Ors. v. The State of Orissa and Ors. (2). In that summary the Court laid down several propositions. First, an “Act of State” was defined as the assumption of sovereign power by a State over territory that had not previously formed part of its territory, whether by conquest, treaty, cession or any other mode, and the act could be said to have occurred on a definite date if a proclamation or other public declaration was made (1) 32 U.S. at pp. 86‑87. Second, the Court noted that the acquisition of full sovereign powers might unfold over a period of years as part of a historical process. Third, the Court stated that sovereign power, including the authority to legislate for and administer a territory, could be obtained without the territory itself being merged into the new State, as illustrated in Dattatraya Krishna Rao Kane v. Secretary of State for India in Council [(1930) L.R. 57 I.A. 318]. Fourth, where the territory had not become part of the State, the necessary authority to legislate for that territory could be derived from a statute such as the Foreign Jurisdiction Act. Fifth, because an Act of State derived its authority from ultra‑legal or supra‑legal sources rather than municipal law, municipal courts possessed no power to examine the propriety or legality of an act that fell within the scope of an Act of State (1) [1962] 1 Supp. S.C.R. 405. Sixth, the Court explained that whether the Act of State concerned public or private rights, the result was the same: municipal courts were beyond jurisdiction to investigate the merits of the transaction or to enforce any decision arising from it, and they could not enforce such decisions even if they existed. Seventh, the Court observed that although it might be presumed that the pre‑existing laws of a newly acquired territory continued and that, under ordinary principles of international law, the private property of the former inhabitants was to be respected by the new sovereign, municipal courts still lacked jurisdiction to give effect to those international obligations. Eighth, the Court added that even if a treaty acquiring the new territory stipulated that the pre‑cession rights of the former inhabitants were to be respected, individual citizens could not enforce those stipulations because they were not parties to the treaty.

Municipal courts that were recognised by the newly established sovereign possessed authority only to investigate and determine rights that the sovereign had deliberately chosen to recognise or acknowledge through legislation, an agreement, or any other means. Such recognition could be expressed explicitly or could be inferred from the circumstances and the manner in which the sovereign dealt with the rights in question. Accordingly, the municipal courts held jurisdiction to ascertain whether the sovereign had, either expressly or by implication, recognised the specific rights asserted. In any dispute concerning the existence of a claimed right against the sovereign, the responsibility to prove that the sovereign had recognised or acknowledged that right rested with the claimant.

The Court regarded this principle as a concise statement of the rule applicable in India regarding the enforceability against the Government of private rights that originated in executive or administrative orders of former Indian rulers. The next issue examined concerned the correctness of the High Court’s view that, although the treaty constituted an act of state and the merger agreement signed by the ruler was a document on which municipal courts could not base enforceable rights, clause (7) of the letter dated 1 October 1948 from Shri V. P. Menon could nevertheless be invoked to argue that the Government had waived its right to repudiate the grant made by the previous ruler. The Attorney‑General submitted that the learned judges were mistaken in this respect, and the Court found that submission well‑founded. The Court noted that if the treaty or its provisions could not be examined to articulate any right—as the learned judges themselves admitted—then employing clause (7) to contend that the Government would not re‑examine grants made before 1 April 1948 amounted to the same argument, merely expressed under a different label. No sensible distinction existed between relying on the treaty to demonstrate governmental recognition of the claimed rights and relying on it to show a waiver of the Government’s right not to recognise those rights; substantively they were identical despite differing terminology. The learned judges had supported this distinction by referring to the approach taken in Virendra Singh’s case, a matter already fully discussed earlier in the judgment. They also relied on the decision in Bholanath v. State of Saurashtra and certain observations therein. The Court did not agree that those observations, although broadly worded, could be interpreted in the manner adopted by the learned judges.

In the case previously referred to, the issue that arose concerned whether the conditions of service that applied to an individual who had originally been appointed as an officer of one State continued to apply after that State had been merged into the Government of Saurashtra. The specific condition that was disputed related to the age at which an officer was required to retire on superannuation. The question that arose in the case was whether the condition of service of a person (1) [1955] 1 S.C.R. 415 (2) A. I. R. 1954 S. C. 680 originally employed as an officer of one State continued to govern his services after that State became merged in the Government of Saurashtra. Under an enactment issued by the ruler of Wadhwan State, the retirement age for officers such as the appellant before this Court had been fixed at sixty years. The Government of Saurashtra subsequently issued an order that retired the appellant when he attained the age of fifty‑five, contrary to his wishes. That order gave rise to the suit that is now before this Court. The lower courts had expressed disagreement about whether the law that embodied the service conditions had been validly enacted by the Wadhwan State. However, that contention was not pursued before this Court. This Court recorded a finding that the appellant’s terms of service were governed by a law that had been validly enacted by Wadhwan State and that the same law had been continued in the Saurashtra State by virtue of Article 372 of the Constitution. On the basis of that finding, there could be no defence to the appellant’s claim.

The Court’s decision in favour of the appellant was founded on the principle that the law of Wadhwan State had been expressly continued, first by statutes of the Saurashtra State and again by Article 372 when the latter merged into the Dominion of India. Consequently, the Court held that, absent a valid legislative change, the appellant’s rights could not be lawfully restricted. While expressing this view, the Court quoted the following observation: “The Covenant (between the ruler of the Wadhwan State and the State of Saurashtra) could be looked at to see whether the new sovereign had waived his rights to ignore rights given under the laws of the former sovereign.” The Court clarified that it did not interpret that passage to mean that the covenant, which under Article 363 could not itself be relied upon to create a right, could be used indirectly to infer recognition of rights without further basis.

The Court explained that when a new sovereign assumes jurisdiction and performs an act that is ambiguous as to whether it signifies recognition of a pre‑existing right, the covenant and any treaty may be examined to determine the intention behind that act. However, the Court emphasized that the covenant and treaty cannot, by themselves, constitute a simple recognition of the right, nor can they operate as a waiver of the right to repudiate the pre‑existing rights, as the High Court had suggested. It was needless to point out that the enforceability of rights against the succeeding sovereign arose only after that sovereign expressly recognized those rights.

In this case the Court observed that because the enforceability of any right against a succeeding sovereign arises only when that sovereign recognises the right, there can be no notion of a waiver of a “right to repudiate.” The expression “right to repudiate” was described as a misnomer, and the Court held that a waiver of such a non‑existent right could not arise. However, the Court noted that this observation did not settle the entire dispute, for the remaining issue was whether the grant made by the ruler of the Sant State, which was embodied in a resolution, should be characterised as a law or simply as an executive or administrative order. Counsel for the respondent argued that the grant recorded in Tharav No 371 dated 12 March 1948 was not a mere exercise of executive power but was, in substance, a law. The respondent contended that this law had been continued under article 372 of the Constitution and therefore could be altered or repealed only by a competent legislative enactment, not by an executive fiat as had occurred in the present proceedings. To support this position, the respondent relied heavily on the Supreme Court’s decisions in Madhaorao Phalke v. State of Madhya Bharat and Promod Chandra Deb and Ors. v. State of Orissa and Ors. The Court noted that both the trial court and the High Court had proceeded on the premise that the ruler of the Sant State functioned as an absolute monarch without any constitutional restraints on his authority. No suggestion was made that this premise was erroneous. The Court explained that, under that premise, the ruler acted both as the supreme legislature and as the supreme head of the executive, so that any order he issued—regardless of the form it took—would be effective and would regulate the affairs of the State, including the rights of its citizens. The Court referred to the authorities Ameer‑un‑Nissa Begum v. Mahboob Begum and Director of Endowments, Government of Hyderabad v. Akram Ali to illustrate this principle. Nevertheless, the Court emphasized that even in the context of an absolute monarch, a critical distinction exists between administrative actions taken under executive authority and statutes enacted by the monarch in his capacity as the supreme legislature. While both types of measures might have possessed the same practical effect at the time they were issued, the distinction is of vital importance for determining whether they continue to have force after the Constitution came into operation. Article 372 of the Constitution provides that “all the law in force in the territory of India immediately before the commencement of this Constitution shall continue in force therein until altered or repealed or amended by a competent Legislature or other competent authority.” The Court then examined the definition of “existing law” contained in article 366(10), which states: “Existing law means any law, Ordinance, Order, bye‑law, rule or regulation passed or made before the commencement of this Constitution by any legislature, authority or person having power to make such a law, Ordinance, Order, bye‑law, rule or regulation.” The Court pointed out that this definition encompasses only those measures that were enacted by a competent legislative authority or that were rules, bye‑laws or regulations made under statutory power. Consequently, measures that are merely administrative orders, which derive their force solely from executive authority and are issued for administrative convenience or individual benefit, do not fall within the ambit of “existing law” as contemplated by article 366(10).

In this case the Court explained that Article 372 of the Constitution continued only those statutes that could be traced to the exercise of legislative authority. Administrative orders that derived their force solely from executive power and were issued for administrative convenience or for the benefit of individuals were excluded, even though the same absolute ruler possessed both legislative and executive powers. Consequently, the provisions that survived the Constitution were those that originated from genuine legislative action. The Court noted that distinguishing a true law from a mere executive order was a difficult task. In some states the distinction was easy because rules prescribed specific forms for laws or because laws were issued under a clear nomenclature that set them apart from executive directives. However, the Court observed that the cases before it showed that such clarity was not universal. Regarding the Sant State, which was the subject of the present dispute, no particular formality, process, or naming convention had been established to differentiate laws from administrative orders. Therefore, the Court had to determine, by examining the nature, content, and general effect of the instrument known as the “Tharav” dated 12 March 1948, whether it qualified as a law within the meaning of Article 366(10) and thus continued under Article 372, or whether it was merely an executive grant or administrative order that could confer rights but, without recognition by the Union or State Government, could not be enforced in the municipal courts of India. To carry out this analysis, the Court set out the full text of the Tharav. It was headed “Tharav Order” by the Maharana of Santrampur State, dated 12 March 1948, and the term “Tharav” was explained to mean a resolution. The resolution declared that the villages of Jivak, Patavat, Inami, Chakariyat, and Dharmada in the Sant State were being granted to Jagirdars and that the holders of those villages were not entitled to forest rights. After considering complaints from certain Jagirs, the resolution granted full rights and authority over the forests in those villages to the holders, directing them to manage the forest according to the State’s policy and administration, with orders to be issued accordingly. The document was signed in English by the Maharana of Santrampur State. The Court identified several points that required attention: first, the instrument did not grant rights to any individual person but to the holders of the five specified tenures in the State; second, the forest rights were conferred in response to representations made by the Jagirdars concerning the villages; and third, the tenure‑holders were instructed to administer the forest in accordance with the State’s policy. The Court therefore resolved to examine whether the Tharav, based on its form, content, and effect, was a law that survived the Constitution or merely an administrative order lacking enforceability.

In the order dated 12 March 1948, the State declared that the provisions applied not to individual persons taken separately, but to the holders of five specific tenures in the State – namely the Jivak, Patavat, Inami, Chakariyat and Dharmada villages. The order further provided that the forest rights in those villages were to be granted to the various tenure‑holders as a response to the representations made by the Jagirdars concerning the villages that they possessed and enjoyed. Finally, the order directed that the tenure‑holders must manage and administer the forests in accordance with the policy and administration of the State.

The learned Judges of the High Court treated the “Tharav” as merely an administrative order, interpreting it as if it consisted of a separate grant of forest rights to each individual tenure‑holder. This interpretation was vigorously advanced by the learned Attorney‑General. The Court, however, was not persuaded by that argument. No evidence was produced to show that the several tenures mentioned in the Tharav were created in a manner that would allow a conclusion that each of them originated from an original grant. While a translation of the grant of the village of Gothimada dated 1867 appears on the record, that document does not demonstrate that every grant covered by the five specified tenures followed that same pattern.

The Court considered that the substance of the Tharav is more consistent with a law that altered the tenures of the five classes of Jagirdars by extending the beneficial enjoyment of the forests lying within the boundaries of the villages that had already been granted to them. In that view, the Tharav cannot be described as an administrative order; rather, it possesses the character of legislation because it effected a change in the scope and content of the tenures concerned. This interpretation is reinforced by the reference to the complaints of the tenure‑holders, whose grievance was that although villages had been granted to them for enjoyment under the various tenures, they were denied any rights in the forests within those villages. Thus, the order was not a grant to isolated individuals but a response by the ruler to the claims of a large group of Jagirdars who sought an extension of their rights.

Moreover, the order specified that the manner of enjoyment must conform to the State’s policy and administration, implying the existence of rules having the force of law governing forest administration. Consequently, the Jagirdars’ enjoyment of forest rights was made subject to those legal rules. The Court therefore concluded that the Tharav dated 12 March 1948 satisfies the definition of a “law” under Article 366(10). As a result, the executive orders issued by the Government of Bombay that attempted to deny the plaintiffs’ forest rights were illegal and void. Accordingly, the Court agreed with the learned Judges that the plaintiffs were entitled to succeed.

The Court held that the plaintiffs were entitled to succeed, each for his own reasons, and consequently ordered that the appeals be dismissed. In addition, the Court directed that the appellant should bear the costs of the respondents, limiting the liability to one set of hearing fees.

Justice Subba Rao explained that he had examined the judgment written by his colleague, Justice Rajagopala Ayyangar, and fully agreed with the finding that Exhibit 192 constituted law and that it remained in force after the Constitution came into effect. He noted that this conclusion alone would have been sufficient to resolve the appeals. However, Justice Rajagopala Ayyangar had also expressed disagreement with the unanimous view expressed by this Court in the case of Virendra Singh v. The State of Uttar Pradesh. Justice Subba Rao confessed that he could not share that dissenting view and set out the reasons why he concurred with the decision in the Virendra Singh case. Because the question involved was common to all the appeals, Justice Subba Rao limited his detailed discussion to Civil Appeal No. 182 of 1963. He then summarized the factual background relevant to that appeal. In 1947 the ruler of the former Sant State granted the village of Gotimada to the predecessor‑in‑interest of Thakor Sardarsingh Gajesing. India attained independence on 15 August 1947, and under section 7 of the Indian Independence Act, 1947 the British Crown’s suzerainty over the Indian States ceased, rendering the Sant State a fully sovereign entity. On 12 March 1948 the Maharana of Sant State issued an order conferring complete forest rights upon the holders of villages within the State, a grant that expressly included the village of Gotimada. Subsequently, on 19 March 1948, the Maharana entered into a Merger Agreement with the Dominion Government of India, under which he ceded exclusive authority, jurisdiction and power over the governance of the Sant State to the Dominion Government and consented to the transfer of administration on 10 June 1948. The agreement preserved certain personal rights and privileges of the Maharana. After the merger, section 3 of the Extra‑Provincial Jurisdiction Act, 1947 delegated the administration of the Sant State to the State of Bombay. From 10 June 1948 until 1 October 1949 the Bombay State acted as a delegate of the Dominion Government in administering the Sant State, and on 1 October 1949, pursuant to the States’ Merger (Governor’s Provinces) Order 1949, the territory of the Sant State was formally merged into the State of Bombay.

The Court observed that, as a result of the merger, the Sant State was incorporated into the Dominion of India on 10 June 1948, and consequently all inhabitants of that former State acquired the status of citizens of the Dominion. It noted that on 21 August 1948 the respondent entered into a contract with Thakor Sardarsing Gajesing for the purpose of felling trees in the forest located in the village of Gotimada. The Court then turned to a letter dated 1 October 1948, written by Shri V. P. Menon, Secretary to the Government of India, Ministry of States, and addressed to the Maharana of the Sant State. In that letter the Secretary expressly declared that any order or action taken by the Maharana prior to the date of transfer of administration to the Dominion would not be subject to challenge, unless such order or action had been issued after 1 April 1948 and was deemed by the Government of India to be manifestly unjust or unreasonable. The letter further guaranteed that, among other matters, “the enjoyment of ownership” of jagirs, grants and similar rights existing as of 1 April 1948 would be respected. By reading the relevant paragraphs together, the Court found that the Dominion of India unambiguously stated that no grants or orders made by the Maharana before 1 April 1948 would be questioned. The Court also highlighted that the final paragraph of the letter indicated that its contents would form part of the Merger Agreement concluded between the Maharana and the Governor‑General of India. It was pointed out that the letter was dispatched several months after the merger and after the citizens of the now‑defunct State had become citizens of the absorbing State, and the Court indicated that the effect of that concluding paragraph would be examined later. The Court then recounted that on 8 July 1949 the Government of Bombay sent a communication to the Commissioner of the Northern Division, stating that it considered the order issued by the ruler of the Sant State on 12 March 1948—an order transferring forest rights to all the jagirdars of the jagir villages—to be fictitious and therefore subject to cancellation. The Bombay Government suggested that the Commissioner should undertake certain preliminary measures before proceeding further. From that correspondence it was clear that the order had not been formally cancelled, that discussions were ongoing, and that the jagirdars had not received any notification of cancellation. The Court noted that forest officials initially obstructed the contractor’s tree‑cutting activities, but after further correspondence the contractor was permitted to continue on the condition that he would comply with any decision subsequently taken by the Government. Finally, the Court recorded that on 6 February 1963 the Government of Bombay adopted a resolution based on a report from a specially appointed Forest Settlement Officer who had investigated the jagirdars’ rights. The resolution declared that the “Tharav” issued by the ruler of the Sant State in 1948 was fraudulent and, consequently, not binding on the Government.

In that order, the government declared that the earlier decree issued by the ruler of Sant State in 1948 was fraudulent and therefore not binding on the Government. After that declaration, the Government examined the forest claims of jagirdars in seventy‑four villages that had been part of the former Sant State and it recognized the jagirdars’ forest rights in several of those villages. Concerning Gotimada village, the Government recorded that the question of forest rights there remained under its consideration and that appropriate orders would be issued in due course. The record showed that up to the year 1953 the Government had not refused to acknowledge the jagirdars’ title to forest land. In fact, even by that date no final order had been issued regarding the forest rights in Gotimada village. On the basis of these facts, the Court considered whether the respondent could rely on a permanent injunction granted by the High Court. The injunction restrained the appellant from interfering with the respondent’s alleged right to cut trees in Gotimada village. The Attorney‑General then presented the argument that was relevant to the issue for determination. He said that after the merger of Sant State with the Dominion of India, a jagirdar possessed no title to forest land against the Dominion unless the Dominion expressly recognized such a title, and that, in the present case, the Government had not recognized any such title. He further added that in the present case the Government had not recognized any such title. Consequently, the jagirdar or any person acquiring his interest could not maintain a suit against the State based on the alleged forest title. The Attorney‑General acknowledged that the High Court had found that the Dominion of India had not repudiated the jagirdar’s forest title until after the Constitution became operative. He said that this finding rendered the earlier decision of this Court in Virendra Singh v. State of Uttar Pradesh (1) unfavorable to his position.

Nevertheless, he contended that the decision in Virendra Singh’s case had been wrongly decided and that its binding effect had been eroded by subsequent judgments of this Court. Because the correctness of the Virendra Singh decision was being challenged, the Court found it necessary to examine the scope of that decision in detail. It also needed to determine whether any later decisions had in any manner diminished its authority. The Court then recounted the factual background of the Virendra Singh case. The petitioners in that case had, in January 1948, received jagirs and muafis from the ruler of Sarila State for one village and from the ruler of Charkhari State for three villages. In March 1948 a Union of thirty‑five states, including Sarila and Charkhari, was constituted as the United States of Vindhya Pradesh. The Vindhya Pradesh Government affirmed those grants in December 1948, although its revenue officers later questioned the validity of the grants. The integration of the states proved problematic, and the same thirty‑five rulers entered into an agreement in December 1949 that dissolved the newly created State effective 1 January 1950. Each ruler acceded to the Government of India all authority and jurisdiction relating to the government of his former State. After the

When the Constitution became operative, the Government of Uttar Pradesh, in consultation with the Government of India, withdrew the grants of Jagirs and Muafis that had been made in four villages. The petitioners responded by filing an application under article 32(2) of the Constitution, and the Court issued a writ directing the State to show cause for its action. The factual record indicated that the grants in question had been executed before the political merger of the princely territories, and the Court concluded that the State possessed no authority to cancel those grants after the Constitution had taken effect. Justice Bose, delivering the opinion of the Court, examined the doctrine of an “Act of State” by reviewing English and American case law as well as the commentary of scholars of international law. He observed that, irrespective of whether the perspective of the Privy Council and the House of Lords or that of Chief Justice Marshall was adopted, the petitioners, who were in factual possession of the disputed lands, held enforceable rights up to 26 January 1950. Those rights could be asserted before the Dominion Courts against all individuals, with the possible exception of the original Rulers who had granted the land and, perhaps, the State itself. The judgment expressly refrained from suggesting that the petitioners would have been barred from enforcing their rights against the Rulers or the Dominion of India, noting that such a detailed controversy need not be pursued for the present purpose. It was sufficient, in the Court’s view, to affirm that the petitioners possessed the rights described. Although the Court did not render a definitive opinion on whether the petitioners could have enforced their title against the Rulers prior to the Constitution’s commencement, it unmistakably held that the petitioners’ title existed against every person except the Rulers. Relying on that finding, Justice Bose turned to the constitutional consequences. He observed that there was no act of conquest or cession involved; the Republic of India was inaugurated on 26 January 1950, and all citizens derived their status from the same source at the same moment, at which time every territory within the nation’s boundaries became part of India. From the perspective of the new State, there existed a unity of possession, interest, title and time. Consequently, he declared that every citizen of India, whether residing in a State or a Province, would enjoy identical fundamental rights and would be entitled to the same legal remedies for enforcing those rights. The decision thus introduced a novel and refreshing approach, urging a departure from imperial precedents and encouraging the adoption of American principles that are harmonious with the realities created by the Constitution.

In the judgment, the Court observed that the realities created by the Constitution required a fresh approach to the doctrine of act of State, aligning it with the modern liberal principles embodied in the Constitution. The Court held that a citizen of a State that had ceded its sovereignty retained a title to his immovable property against all persons except, perhaps, the ruler of the former State. Although the Court was inclined to extend that holding to say that the change of sovereignty did not affect the citizen’s title even against the new sovereign, it refrained from finally deciding that specific question. Instead, it found sufficient justification to sustain the petitioners’ title against the sovereign on the basis of the Constitution. The Court pointed out that the notions of ceding and absorbing States did not exist in the constitutional scheme, and that the people of India, through their elected representatives, had fashioned a Constitution that recognized a citizen’s fundamental right to hold property and to be deprived of it only by authority of law. Accordingly, the Court concluded that the petitioners’ title to their property was protected by the Constitution. This conclusion was the result of a unanimous and considered decision of five judges. The judge who authored the opinion indicated that he would not depart from that view absent compelling reasons, and he found none. Consequently, the judge proceeded to examine whether any later decisions of the Court had cast doubt on two firm propositions previously decided: first, that a citizen of a ceding State does not lose his title to immovable property and continues to have a right against all except possibly the absorbing State; and second, that the adoption of the Constitution rendered that title indefeasible even against the absorbing State.

The Court then reviewed subsequent authority. In the case of Mills Dalmia Dadri Cement Co. Ltd. v. The Commissioner of Income‑Tax, the Court held that when the erstwhile State of Jind merged with the Union of India, the Union was not bound by the former State’s contractual obligations, because the treaty between the two sovereigns was an act of State and its clauses were not enforceable. In Jagannath Agarwala v. State of Orissa, the Court held that after the merger of Mayurbhanj State with the Province of Orissa, the appellant’s two monetary claims against the Maharaja of Mayurbhanj were not enforceable against the State of Orissa, on the ground that the act of State remained effective until the appellant’s claims were finally rejected, and therefore the municipal courts lacked jurisdiction. The Court also noted that where the petitioners possessed Khor Posh grants from the Rulers of Talcher, Bamra and Kalahandi under the respective State laws, the decision in Promod was relevant, indicating that the laws continued to have legal force after the merger of those States with the Union of India.

In the case of Chandra Deb versus the State of Orissa, the Court observed that the statutes of the former State continued to possess legal force after that State merged with the Union of India. The Court also referred to the situation where the Nawab of Junagadh State had granted property rights before he fled the State; the rulings in the cited authorities—(1) [1959] S.C.R. 720, (2) [1962] 1 S.C.R. 205, and (3) [1962] Supp. (1) S.C.R. 405—addressed those grants. In the decision State of Saurashtra versus Jamadar Mohamad Abdullah, the Court held that the Regional Commissioner’s cancellation of those grants represented an act of State, because the Commissioner had taken charge of the administration before the State was merged with the United States of Saurashtra. The specific question now before the Court did not arise for consideration in those earlier cases.

The Court accepted the English doctrine of act of State and applied the principle that a former citizen of a State that had been ceded possessed no enforceable right against the successor State until the successor State expressly recognized that right. The earlier judgments did not examine the scope or extent of a citizen of a ceding State’s title to immovable property, nor did they consider the effect of the Constitution on such rights.

In the case of M/s. Dalimia Dadri Cement Co. Ltd. versus the Commissioner of Income‑tax, the Court recorded observations at paragraph D.741 which may be relevant to the first aspect of the present question. The Court said that it is well‑established that, under the new constitutional arrangement, former residents of the erstwhile sovereign do not retain the rights they possessed as subjects of that sovereign; instead, as subjects of the new sovereign they possess only those rights that are granted or recognized by the new sovereign. That statement was presented in broad terms. However, the Court in that case did not address the distinction between a citizen of a ceding State’s pre‑existing title to his property enforceable against all parties and a title enforceable only against the State. Bose J., writing a dissenting opinion, clarified that the Court’s concern was limited to the contractual obligations of the former sovereign and did not involve the question of citizens’ title to immovable property.

The majority opinion, expressed by Venkatarama Aiyar J., further indicated that the judgment did not touch on the second aspect of the present dispute. At page 749, the judgment observed that the argument presupposed the existence, on the date the Constitution came into force, of rights in the petitioner that could be protected under Art. 19(1)(f). The Court held that, because the concessions under clause (23) of Ex. A ceased to exist when Ordinance No. 1 of 2005 was promulgated, the petitioner possessed no rights at the Constitution’s commencement, and consequently there was no basis for the guarantees in Art. 19(1)(f) to operate. These observations demonstrate that the Court did not overturn the earlier decision.

In the case of Virendra Singh, the Court rejected the argument that relied on an earlier decision, holding that the appellant had lost any rights he might have possessed under a pre‑Constitutional ordinance that was valid at the time. Subsequently, in State of Saurashtra v. Jamadar Mohamad Abdulla, Justice Mudholkar, speaking for himself and for Justice Sarkar, examined the effect of section 299(1) of the Constitution Act of 1935 on the title to immovable property of a citizen of a ceding State. He observed that, before the respondents could invoke the benefit of section 299(1), they were required to demonstrate that on or after 9 November 1947 they possessed legally enforceable rights in the properties in question against the Dominion of India. Such a demonstration could be made only by showing that their pre‑existing rights were recognised by the Dominion. If the respondents failed to establish this fact, the Court held that they did not have any legally enforceable rights against the Dominion, and consequently section 299(1) would afford them no protection. The judgment further explained that section 299(1) did not create new property rights; it merely protected rights that already existed. Any right to property that was not legally enforceable in its very nature could not be protected by that provision. [1955] 1 S.C.R. 415, 433, 4‑37 [1962] 3 S.C.R. 970

The same principle was reaffirmed by the learned judge in Promod Chandra Deb v. State of Orissa. It should be noted that the specific question of whether section 299(1) applied to the respondents did not arise for consideration in either of those two decisions. In the earlier case, the order issued by the ruler of the ceding State was cancelled before the merger of the State with the Dominion, while in the later case the Court held that the statutes under which the grants were made continued to have legal force after the merger of the concerned States with the Dominion of India. It is also significant that Justice Das, in the earlier decision, and Chief Justice Sinha, in the later decision, both of whom delivered the leading judgments, expressly left the question open.

Consequently, it can be stated without contradiction that none of the Supreme Court decisions rendered after Virendra Singh’s case have cast doubt on the correctness of that decision. In the most recent two decisions, the principle was sought to be extended to a situation arising under the Government of India Act, yet the majority of the learned judges left the question unresolved, although two judges on the bench expressed their view against such an extension. On the basis of the findings, the Court accepted that the question does not arise for consideration in the present case and therefore refrained from expressing an opinion on it. The Court then posed the question of whether there is any justification for refusing to follow the decision in Virendra Singh’s case.

Referring to Virendra Singh’s case (1), the Court expressed the view that the decision in that case was not only correct but also aligned with the progressive development of modern international law. The Court explained that an act of state is essentially an arbitrary exercise of power that is not founded on legal principles but reflects a contemporary form of the doctrine “might is right.” It described such acts as occurring outside the realm of law. The Court then illustrated that in primitive societies, when one tribe conquered another, the property of the defeated tribe was left at the complete discretion of the victor; the conquering army would commonly engage in pillage, plunder, arson and even rape. As societies advanced, the doctrine of act of state was formulated, which the Court characterized as a civilised adaptation of those primitive practices of seizing the property of a conquered people. Further civilisational progress, driven by custom and treaty, led to the factual recognition of the pre‑existing rights of the inhabitants of the conquered state. The Court noted that two divergent approaches emerged: one adopted by imperialist powers and another by states that were not imperialist, a divergence reflected in the jurisprudence of English and American courts. All jurists of international law, the Court observed, recognise that the title to immovable property belonging to the former citizens of a ceding state continues unchanged after sovereignty passes to the successor state. The Court cited A Manual of International Law by Georg Schwargenberger, 4th edition, volume 1, page 81, which states: “Private rights acquired under the law of the ceding State are not automatically affected by the cession. They must be respected by the cessionary State.” A more emphatic passage was quoted from The Law of State Succession by O’Connell, under the heading “The Doctrine of Acquired Rights,” where the author, at pages 78‑79, observes that only sovereignty and its incidents expire with the personality of a state, while the relationships among the inhabitants and their property rights remain undisturbed. At page 104, the same author declares that the doctrine of acquired rights is one of the few principles firmly established in the law of state succession and admits the least dispute. The Court further referred to Hyde’s International Law, second revised edition, volume 1, page 433, which reproduces an excerpt from the Sixth Advisory Opinion of 10 September 1923 of the Court of International Justice, stating that private rights acquired under existing law do not cease on a change of sovereignty and that it would be contrary to universal opinion and practice to claim otherwise. Finally, the Court mentioned Oppenheim’s International Law, 8th edition, volume 1, page 571, which restates that, as far as the law of nations is concerned, the principle regarding private rights survives the change of sovereign authority.

The Court observed that when a state subjugated another territory it did not automatically obtain the private property of the former inhabitants of that territory. Although the new sovereign could lawfully impose any burdens it chose upon its new subjects and could even confiscate private property because a sovereign could act at its discretion, the act of subjugation itself, according to International Law, did not alter the ownership of private property. In Starke’s work An Introduction to International Law, fifth edition, page 274, the author noted that rights which had become vested or acquired must be respected by the successor State, especially where the former municipal law of the predecessor continued to operate, thereby guaranteeing the sanctity of those rights. A similar statement of international law appeared in Briggs’ The Law of Nations, second edition. Consequently, the Court held that, with respect to title to immovable property, the doctrine of international law had become crystallised, and a change of sovereignty did not affect the title of the former citizens of the ceding State to their property.

The Court further explained that the same principle had been embraced in the United States without reservation. Chief Justice John Marshall, in United States v. Percheman (1833) 32 U. S. 51 at pages 86‑87, succinctly expressed the American position: “The people change their allegiance; their relation to their ancient sovereign is dissolved; but their relations to each other, and their rights of property, remain undisturbed.” The Court argued that the modern rule, even in cases of conquest, applied equally to an amicable cession of territory. It emphasized that a cession of territory was never intended to be a cession of the property belonging to its inhabitants; the King could cede only what belonged to him, and lands previously granted to subjects were not his to transfer. Neither party to a cession could be understood to be committing a wrong against individuals, a view condemned by the practice of the civilized world. Thus, the transfer of sovereignty conveyed only the political authority, leaving private property untouched. The Court noted that American courts had repeatedly accepted and applied this principle, and that this acceptance was rooted in the constitutional provision that international treaties formed part of the supreme law of the land. Article VI of the United States Constitution declares that all treaties made under the authority of the United States shall be the supreme law of the land, and that judges in every State shall be bound thereby, notwithstanding any contrary provision of a State constitution or law. Chief Justice Marshall’s observations were therefore consistent with the constitutional hierarchy that gave treaties equivalent status to legislative enactments.

In the judgment, the Court referred to the decision in Foster v. Neilson, which stated that the Constitution declares a treaty to be law of the land and therefore, in the absence of any legislative assistance, a treaty must be treated by courts as equivalent to a legislative enactment. The Court noted that, while an American treaty may be considered law of the land, the United States’ approach is not based solely upon treaty law. The Court then cited The American Insurance Co. and the Ocean Insurance Co. v. Bales of Cotton, where the Chief Justice recorded that a transfer of territory has never been held to alter the legal relations among the inhabitants. Further, the Court pointed to the judgment in Charles Dehault v. The United States, in which the learned Chief Justice observed that, independent of any treaty provision, the right of individuals to their property remains sacred; the sovereign who acquires an inhabited territory gains full dominion but does not divest individuals of their vested property rights. The Court suggested that a distinction might be relevant only where a particular treaty expressly obliges the United States to recognise the acquired rights of citizens of the ceding State, and that such a distinction would not arise where the treaty is silent on the matter. Consequently, the Court held that American decisions cannot be set apart on this narrow ground because they have incorporated the doctrine of international law into the fabric of municipal law. Turning to English law, the Court explained that the doctrine of act of State, as defined by Stephen, describes an act injurious to persons or property who are not subjects of Her Majesty at the time, carried out by an authorized representative and either sanctioned or later ratified by Her Majesty. A treaty by which sovereign territory is ceded is therefore an act of State, exercised in the exercise of sovereign power rather than under any private title. The Court asked whether English law has repudiated the well‑settled international‑law principle of acquired rights. Citing Vajesingji Joravarsingji v. Secretary of State for India in Council, the Judicial Committee observed that when a sovereign acquires territory for the first time, it constitutes an act of State and that any inhabitant may invoke before the new sovereign’s municipal courts only those rights that the new sovereign, through its officers, has recognised. Rights derived from previous rulers are of no avail, and even a treaty cession provision granting certain rights does not automatically confer a title enforceable in municipal courts.

The passage quoted earlier explained that the right to enforce treaty stipulations in municipal courts belonged only to the high contracting parties, and that the inhabitants of a ceded territory could not rely on municipal courts to enforce those rights. The Court observed that the wording “such rights as he had under the rule of predecessors avail him nothing” should not be read as a rejection of the international law doctrine of acquired rights. Rather, the sentence dealt solely with the question of whether an acquired right could be enforced in a municipal court. This interpretation has been supported by several English decisions. Consequently, English law holds that municipal courts are powerless to enforce the acquired rights of former citizens of a ceding State against the successor State unless the successor State has formally recognized or acknowledged those rights. The Court noted that it had adopted the English doctrine of act of State in earlier judgments that it had mentioned. The term “recognize” was explained to mean “to admit or acknowledge something that existed beforehand.” By recognizing a right, the absorbing State does not create a new title but merely confirms a pre‑existing one, and until such recognition occurs the title is not binding on that State. A detailed discussion of this principle is available in the decision reported in Promad Chandra Dab’s case. The Court also referred to O’Connell’s commentary in The Law of State Succession, where the author described the act of State doctrine as a rule of English municipal law that bars English courts from examining the consequences of sovereign acts that extend governmental authority. The doctrine, according to O’Connell, does not intend to overturn international law rules. He further stated that the inability to enforce a right in municipal courts does not imply that the right ceases to exist. Lack of recognition by the successor State does not strip a person of title; it merely renders the title unenforceable against the State in its domestic courts. Summarising the discussion, the Court said that the doctrine of acquired rights, especially with respect to immovable property, has become firmly established in international law. Under that law, a citizen of a ceded State retains his title after cession, and a change of sovereignty does not extinguish that title. Different national municipal laws vary regarding the enforceability of such titles against the State, but since the title continues to exist, even jurisdictions that accept the act of State doctrine and permit a sovereign to repudiate a title must still regard the underlying title as valid.

The Court observed that the title to immovable property was valid against every person except the State. Prior to the coming into force of the Constitution of India, the State had not repudiated that title. When the Constitution became operative, the respondent and others in the same position who possessed title to land in the former Sant State continued to hold that title and were in actual possession of the land. Their title remained enforceable against all parties except the State, and they at least possessed a possessory interest. Article 31(1) of the Constitution declares that no person shall be deprived of his property except by authority of law, thereby acknowledging the title of the citizens of the erstwhile Sant State and imposing a constitutional injunction on the sovereign created by the Constitution from interfering with that right except pursuant to law. The Court held that a recognition by the supreme law of the land supersedes the authority of any executive power of a conquering State. Accordingly, the title to the respondent’s immovable property was deemed to be recognized by the Constitution itself and, by implication, by the sovereign bound by that Constitution. On that basis, the Court affirmed that the decision in Virendra Singh’s case (1) had been correctly decided.

The Court further noted that, in addition to constitutional recognition, a letter issued by the Government of India on 1 October 1948 expressly acknowledged the title of persons in the respondent’s situation to their properties. The Attorney General argued that the letter formed part of the merger agreement and therefore could not be relied upon to demonstrate recognition of the respondent’s title or a waiver by the Government of its right to repudiate that title. While the letter stated at its conclusion that its contents would be regarded as part of the merger agreement, the Court observed that the merger itself had already taken effect on 10 June 1948, three months before the letter was written. The letter did not indicate that the Maharana of Sant State, who had ceased to be the ruler except for certain ceremonial privileges, was a party to the agreement. Consequently, the Court concluded that the letter could at best be characterized as an act of the Government of India implementing the terms of the merger agreement, not as a component of the agreement itself. The Court emphasized that a document does not become part of an agreement merely by being labeled as such. When the letter was dispatched, all former citizens of Sant State had already become citizens of India. Paragraphs 5 and 7 of the letter unequivocally guaranteed the enjoyment of ownership of jagirs, grants and other holdings existing on 1 April 1948 and stipulated that any order or action taken by the former ruler before that date would not be questioned, thereby constituting a clear recognition of the property rights of the respondent and similarly situated persons.

The Court considered that the observations applied to the respondent and to others in similar situations. It was therefore necessary to state the view on the question whether, even if the letter under discussion formed part of the merger agreement, any statement contained in that letter could be relied upon as proof that the acquiring State recognised pre‑existing land titles or had waived its sovereign power to deny those titles. The Court noted the citation (1) [1955] 1 S.C.R. 415 in connection with that issue. For the reasons outlined, the Court agreed that the appeal must be dismissed and that costs should be awarded against the appellant. For the same reasons, Civil Appeals numbered 183 to 186 of 1963 were also dismissed with costs.

Hidayatullah J. explained that the appeals filed by the State of Gujarat challenged a common judgment of the Gujarat High Court dated 24 January 1961. The respondents had been plaintiffs in five separate suits seeking declarations of forest rights and permanent injunctions to prevent the State from interfering with those rights. The trial court dismissed all suits except one; the District Judge, on appeal, dismissed the remaining suit and also dismissed the plaintiffs’ appeals in the other suits. The plaintiffs subsequently appealed to the Gujarat High Court, which, by the judgment under review, allowed all their appeals and decreed the suits in their favour. The State Government then obtained special leave to appeal to this Court.

The forests about which the plaintiffs sought declarations and injunctions were located in the former princely State of Santrampur, also known as Sant State. Santrampur was an Indian State whose ruler acquired independence and sovereignty on 15 August 1947 when the British Crown’s paramountcy ended. Initially the ruler ceded his sovereignty over three subjects to the Government of India, and on 19 March 1948 he transferred the entire territory of the State to the Government of India by a merger agreement that became effective on 10 June 1948. By virtue of powers conferred by the Extra‑Provincial Jurisdiction Act, 1947, the Central Government delegated its functions to the Provincial Government of Bombay. Consequently, on 2 June 1948 the Administration of the Indian States Order was enacted and applied to Sant State from 10 June 1948. On 28 July 1948 the Indian States (Application of Laws) Order, 1948 was issued, extending certain Bombay Province statutes to Sant State. Later, under the States’ Merger (Governor’s Provinces) Order, 1949, Sant State was incorporated into the Province of Bombay effective 1 August 1949.

On 1 October 1948, a letter of guarantee addressed to the ruler was written by Mr. V. P. Menon. The letter stated, in clause 7, that no order passed or action taken by the ruler before the transfer of administration to the Dominion Government would be questioned unless such order was issued after 1 April 1948 and was considered by the Government of India to be clearly unjust or unreasonable. The letter further declared that the Government of India’s decision on the matter would be final.

It was stated that the guarantee letter would be considered part of the original merger agreement. One week before he transferred the territory of his State, the ruler of Sant issued a Tharao or Thavan order. The order was recorded as “Order 3 Ta Mu Outward Register No 371. The villages of Jivak, Patayat, Inami, Chakariyat and Dharmada in Sant State are being granted to Jagirdars and the holders of those villages are not being given rights over the forests. Accordingly, after considering complaints of certain Jagirs, full rights and authority over the forests in the villages under their vahivat are being given to them. They must manage the vahivat of the forest in accordance with the policy and administration of the State. Orders in this regard are to be issued. Signed in English by the Maharana, Sant State.” The earlier grants that had been made to the jagirdars and village holders were not produced, but it was suggested that they were similar to the grant made to the village of Gothimada on 1 December 1857. That grant read, in part, “You are to perform the vahivat, that is, the management of the land situated within the permanent boundaries of the village in the four directions. The village is granted for appropriation and enjoyment of its income except in respect of civil and criminal matters. You must conduct yourself in the State in accordance with the custom, usage and practice of other Thakarati villages of the State. If any person of the village is ordered to perform any work or attend to any matter, you shall not interfere in any way but shall produce the person as ordered. You must act according to these clauses, remain of integrity, honesty and loyalty to the State. Dated 1‑12‑1867 A.D.S.Y. 1929 Magsar Sudu 5.” After the Tharao was issued on 12 March 1948, several Thakores executed contracts in favour of the plaintiffs between May 1948 and 1950. Those agreements are part of the record of the appeals. The Thakores together with the contractors then began extracting forest produce, but their activities were halted in April 1949. Consequently, the present five suits were filed; four of them were instituted by the contractors and the fifth by one of the Thakores in his capacity as inamdar. Following the merger, a question arose as to whether those contracts should be ratified. In January 1949, acting on an application made by one of the Thakores, the Divisional Forest Officer issued an order concerning Gothimada village of Santrampur State. The order stated that the owner applied for authorization to be granted to the contractor, expressed no objection to the issuance of such authorization, limited the authorization to the areas of Lunawada and Signally, set the time limit to 31 March 1949, prohibited export outside the area pending receipt of orders from the Government, and required a written undertaking from the purchaser that he would comply with any decision and orders passed by the Government.

The Government directed that after the authorization process was completed the authorization should be handed over and a copy of the order should be sent to the Forest Officer at Lunawada. Similar authorizations were issued for other villages, and the Thakores and the contractors were required to give written undertakings. The Court recorded a representative example of such an undertaking, which read: “UNDERTAKING: I, Thakore Sardarsingh Gajesingh, hereby give an undertaking to abide by the decisions and orders passed by the Government of Bombay in respect of the Gothimada forests, rights over which were conferred on me by the Santrampur State Government on 12‑3‑48 in their resolution No. G. 371 dated 12‑3‑48. The authorization numbers 111 and 112 of 1948‑49, issued in respect of the village in Santrampur State by the Divisional Forest Officer, Integrated States Division, Devgad Baria, in favour of Mr. Hatimbhai Badruddin, are subject to the above undertaking. Dated 1‑2‑49. Signed in Gujarati.” The Conservator of Forests of the North Western Circle also issued a memorandum on 18 January 1949, stating that, in order to protect Government interests, a written undertaking should be obtained from the jagirdars and inamdars concerned, confirming that they would comply with any decision or order of the Bombay Government concerning the private forests once the question of rights over those forests was finally settled. After the undertakings were furnished, the Forest Department issued passes to the contractors. However, in April 1949 the work of all the contractors was halted. Subsequently, on 8 July 1949 the Government sent a communique to the Collector of Panch Mahals repudiating the Tharao dated 12 March 1948. The letter stated: “Reference your memorandum No. ADM(P) 50‑A11 dated 24 May 1949. The Government considers that the order passed by the Ruler of the Sant State under his No. 371 dated 12 March 1948, which transferred forest rights to all the jagirdars of the jagir village, is mala fide and should be cancelled. Before taking further action, please ascertain whether possession of the forests in question remains with the Government or has passed to the jagirdars. If possession is still with the Government, instruct the Forest Department officer to retain it and to refuse to issue passes or any other authorizations to private contractors or purchasers. By order of the Governor of Bombay.” This communication was apparently not conveyed to the contractors of the Thakores. Later, on 29 June 1951, the Government of Bombay passed a resolution declaring that the Maharana’s order would not be given effect. A further resolution, dated 6 February 1953, reiterated that on the eve of the merger of the Sant State into the State of Bombay, the ruler of that state had issued Tharav No. 371 on 12 March 1948, granting full forest rights over the villages to the Jiwai, Patawat, Inami, Chakriat and Dhannada jagirdars and inamdars. After reviewing the implications of that Tharav, the Government of Bombay concluded that the order was mala fide and cancelled it by reference to the Government Letter, Revenue Department No. 2103‑M 49, dated 8 July 1949.

By the time the Government issued its orders dated 8 July 1949, the forest lands that were part of the Jagiri holdings had already been sold by several Jagirdars and the trees on those lands had been cut. After receiving the 8 July 1949 orders, the Forest Department halted any further felling of trees and stopped the export of timber from the disputed area. When a representation was made to the Government requesting permission to release the timber that had already been felled, the Government consented to allow the material to be removed, but only on a temporary basis while the question of forest‑rights settlement was being decided. The Government imposed two conditions: first, the contractor who intended to take the timber had to furnish two solvent sureties for the material removed or, alternatively, deposit with the Divisional Forest Officer a specified sum for each wagon‑load of timber; second, the owner of the timber was required to give a written undertaking that he would comply with whatever final decision the Government later made regarding the forest rights.

The Government further expressed its willingness to examine the individual cases of each Jagirdar and inamdar, regardless of the provisions of the Tharav of 1948, based on the report prepared by the Forest Settlement Officer and on any other relevant considerations. The Government also indicated that the question of forest rights for the villages of Nanirath, Gothimada and Rathada remained pending and that appropriate orders would be issued in due course.

Subsequent to these administrative actions, the plaintiffs filed suits challenging the validity of the merger agreement of March 1948. Their first argument was that the merger agreement could not be treated as an “Act of State” because it was preceded by a surrender of sovereignty by the former ruler in respect of three specific subjects. The High Court rejected this contention and the issue was not raised again before this Court. The plaintiffs then advanced a second contention that the Tharav dated 12 March 1948 was a legislative enactment; since the Indian States (Application of Laws) Order 1948 provided that the existing laws of the State would continue to be in force unless altered by that Order, they argued that the Tharav could be revoked only by a proper legislative authority and not by any executive action. The High Court did not accept this view, holding that the Tharav was not legislation but rather a grant issued by the Ruler.

The third contention relied on a statement made by the Central Government through Mr V. P. Menon, which allegedly undertook not to question any order or action taken before 1 April 1948, thereby creating a bar to the repudiation of the Maharana’s order of 12 March 1948. The High Court again rejected this argument, observing that the letter formed part of an agreement enforceable only by the high‑contracting parties themselves and that no other person, including the municipal courts, possessed authority to enforce it. Relying on Article 363 of the Constitution and its own precedents, the High Court concluded that the letter could not give rise to a legal bar. Nevertheless, the High Court accepted the plaintiffs’ broader contention that a succeeding sovereign possessed the power to waive or relinquish its right to repudiate the actions of the previous ruler and to acknowledge, either expressly or impliedly, the rights that had been conferred on the former ruler’s subjects, and that such a waiver had indeed occurred in the present case.

The Court observed that the successor sovereign could waive or relinquish the actions of the previous ruler and could recognise either expressly or impliedly the rights that had been conferred on the subjects of the former ruler, and that such recognition had been effected in the present case. The Court noted that the plaintiffs had obtained permission from officers of the Forest Department to cut and remove timber, and that the letter issued by Mr. V. P. Menon was treated by the lower court as evidence of a waiver and relinquishment of governmental rights. Relying on the authority of Virendra Singh and Others v. The State of Uttar Pradesh (1) and Bholanath J. Thakar v. State of Saurashtra (2) together with the Bombay High Court judgment in Bhoirajji v. Saurashtra State (3), the Court held that, under those circumstances, the Government must be deemed to have waived or relinquished its right to enforce the Act of State against the plaintiffs. The appellant argued that (a) the Act of State remained in force until the resolutions were passed and that there was no waiver or relinquishment in favour of the appellants, citing the decisions (1) [1955] 1 S.C.R. 415, (2) A.I.R. (1954) S.C. 680 and (3) 61 Bom. L.R. 20; and (b) that the actions of subordinate Forest Department officers did not bind the Government, so that the respondents could not rely on Mr. V. P. Menon’s letter. On the other side, the respondents contended that the Tharao constituted a law that could be repealed only by another law, and that after the Merger, section 299(1) of the Government of India Act, 1935—stating “No person shall be deprived of his property in British India save by authority of law”—shielded the respondents. They further argued that this protection became absolute on 26 January 1950 by operation of Article 31 of the Constitution, and because the resolutions in question were passed after the Constitution commenced, those resolutions could not affect the respondents’ rights under Article 31. The respondents also maintained that, in any event, the Act of State could not operate against citizens of the State to which they became subject upon the Merger or upon the inauguration of the Constitution. Citing a decision of the Permanent Court of International Justice and certain United States Supreme Court cases, the respondents asserted that the Act of State should not interfere with property rights acquired from a former ruler. In response, the appellant submitted that the Act of State continued because contractors and jagirdars had been allowed to work the forests under their furnishing undertakings, and that this permission was withdrawn only in April 1949 when they were ordered to cease work, even though the Government’s final decision on whether to accept the Tharao was not communicated to them until 1953. The appellant argued that the decisive factor was not the Government’s ultimate decision but the actual stoppage of the work.

It was observed that the crucial factor was not the governmental decision itself but the actual cessation of the work. The respondents also contended that section 299(1) failed to shield them from the operation of the Act of State and that, because there was no formal succession of State authority on 26 January 1950, the original Act of State continued unabated. Further, it was highlighted that this Court had declined to adopt the rule of International Law discussed in Virendra Singh’s case (1) and had instead relied upon the doctrine of the Act of State as interpreted by the English courts, as set out in the report of 1955 [1955] 1 S.C.R. 415. The Court indicated that these submissions would be addressed briefly, noting that most of the issues had already been resolved against the respondents by the High Court, which in turn based its decision on earlier pronouncements of this Court. The Court then explained that it has consistently treated the political integration of the Indian princely States with the Dominion of India as an Act of State. Accordingly, it has applied the legal principles governing an Act of State that were formulated by the Privy Council in a long series of decisions, commencing with Secretary of State in Council for India v. Kamachee Boye Saheba (1) and concluding with Secretary of State v. Sardar Rustam Khan and Others (2). While the Court did not feel it necessary to repeat all of those cases, it referred the reader to several authorities, including M/s Dalmia Dadri Cement Co. Ltd. v. Commissioner of Income‑Tax (3), The State of Saurashtra v. Menon Haji Ismali Haji (4), Jaganath Agarwala v. State of Orissa (4) and State of Saurashtra v. Jamadar Mohamed Abdulla and Others (5). In each of those judgments, the Court articulated that the essence of an Act of State consists of an arbitrary exercise of sovereign power based on principles that outrank municipal law, directed against a foreigner, and undertaken without any claim of legal justification. Consequently, a defence that the injury arose from an Act of State does not attempt to legitimize the act by recourse to any legal provision; rather, it challenges the court’s jurisdiction to adjudicate the legality or fairness of the sovereign act. The Court further clarified that an Act of State ceases only when the new sovereign expressly or implicitly acknowledges the rights of the aliens. The Act does not terminate through actions of subordinate officials who lack authority to bind the new sovereign. Until such recognition, whether express or implied, is given by the successor sovereign, the Act of State remains in effect. Applying these criteria—criteria that had been correctly employed by the High Court—the Court concluded that both the Government of Bombay and the Central Government were entitled to withhold recognition of the rights that had been created at the moment of the Merger by the Tharao of the Maharana, to deem those rights unacceptable, and consequently to consider them non‑binding. Such a refusal to recognize, the Court noted, does not constitute a harsh or unfair act, because the municipal courts lack jurisdiction to pass judgment on the legality or justice of the sovereign act unless the rights have been irrevocably recognised beforehand. The citations for the authorities mentioned are as follows: (1) (1859) 13 Moore P.C. 22; (2) (1941) 68 I.A. 109; (3) [1959] S.C.R. 729; (4) [1960] 1 S.C.R. 537; (5) [1962] 1 S.C.R. 205.

In the decision reported in [1962] 3 S.C.R. 970, the Court indicated that although a municipal court might consider an action harsh or unfair, it lacked authority to declare it so because, unless the relevant rights had been irrevocably recognized beforehand, the municipal courts possessed no jurisdiction to assess the legality or fairness of the action. Consequently, the respondents had argued before the High Court that they possessed a waiver or relinquishment of the Act of State in their favor. The same arguments of relinquishment and waiver were presented again before this Court, and the respondents relied upon two specific circumstances to support an inference of such waiver or relinquishment. The first circumstance was clause 7 of the letter drafted by Mr. V. P. Menon, which had been quoted earlier in the judgment. The second circumstance involved the manner in which officers of the Forest Department permitted contractors and jagirdars to work the forests in conformity with the Tharao issued by the Maharana. Clause 7 of a comparable letter of guarantee had been examined by this Court in Maharaj Umeg Singh and Others v. The State of Bombay and Others (1). In that earlier case, the arguments presented were identical to those raised here. It had been contended that the ruler’s agreement with the Government conferred benefits upon the subjects even though the subjects were not parties to the agreement. The Government, however, argued that any such agreement could not be enforced by persons who were not parties to it. The Court observed that it was not required to pronounce on the validity of those contentions because, irrespective of the outcome, the petitioners would be unable to continue in the Court. If the petitioners were deemed parties to the merger agreements and the letters of guarantee, their petitions would be barred by Article 363 of the Constitution, which provides that neither the Supreme Court nor any other Court has jurisdiction over disputes arising out of any treaty, agreement, covenant, engagement, sanad or similar instrument entered into or executed before the commencement of the Constitution by any ruler of an Indian State to which the Government of the Dominion of India was a party. Conversely, if the petitioners were not parties to those instruments, they could not claim to be contracting parties and therefore could not enforce the obligations. Accordingly, the present respondents, who were not parties to the merger agreement nor to the letter written by Mr. Menon that was expressly incorporated into the agreement, could not rely on clause 7; had they been parties, Article 363 would prohibit such a plea. The respondents further contended that the Act of State ceased to operate after the Government of India Act, 1935 was applied to the State, thereby rendering the State a part of the territories of the Government of India.

In this matter, the parties argued that the benefit of section 299(1) of the Government of India Act 1935 should apply to the situation involving the Government of India. The dispute concerned interference with forest rights that were originally conferred by the Tharao and the contracts that were based on that Tharao, an interference that took place in April 1949. It was submitted that, as of 10 June 1948, the subjects of Sant State had become Indian citizens and therefore fell within the protection of section 299(1). The officers of the Forest Department, however, did not give an unconditional licence to work the forests. They informed the contractors and the jagirdars that their activities were provisional and that the Government would later determine the fate of the Tharao and the related contracts. Although the forests were in fact allowed to be worked, each contractor and each jagirdar was required to give an undertaking acknowledging that the work was subject to future Government decision. This requirement demonstrated that the Forest Department officers were not attempting to bind the Government, even though they possibly could have done so. It is acknowledged that the Government’s order to halt the work was not formally communicated to the contractors and jagirdars; nevertheless, the actual cessation of forest work occurred well before such communication, and the learned Attorney‑General correctly observed that this fact was decisive. Subsequently, the Government approved the officers’ actions by deciding that no rights would arise from the Tharao or the contracts. In effect, while the Government was still contemplating the issue, the Forest Department officers permitted limited forest work but did not intend to bring the Act of State to an end. The Act of State could only cease if the Government expressly recognised the rights flowing from the Tharao, and it never did so. Consequently, there was no recognition at any time of the Tharao or any rights that might have derived from it. The Court previously observed in Aggarwala’s case that a Government may take time to consider a matter and that such delay does not defeat the operation of the Act of State; that decision was also rendered after the Constitution had come into force. The Court, agreeing with Vaje Singhji Jorawar Singh v. Secretary of State for India, noted that inquiries may continue for a period without implying a waiver or relinquishment of rights. By contrast, in Bholanath Thaker’s case and in Virendra Singh’s case, a waiver or relinquishment was inferred from the Government’s conduct, but such an inference is only proper where the Government, having accepted the rights, later attempts to retract that acceptance. There must be a clear indication—either express or implied—that the Government has indeed accepted the rights. In the present circumstances, the subordinate Forest Department officers allowed forest work only on the basis that the Government was still considering the issue, and they obtained undertakings from the respondents that they would comply with the Government’s eventual decision. The Government later issued an order refusing to accept the Tharao, an order that was not initially communicated to the respondents but was later reiterated as a resolution that was communicated.

In this case, the government had issued an order refusing to accept the Tharao, but that order had not been sent to the respondents. Later, the same decision was restated as a resolution and that resolution was communicated to the respondents. The respondents argued that, in order to prevent this outcome, they relied on two principal arguments, which formed the core of their appeals. First, they contended that the Tharao constituted a law and that a law could be repealed only by the enactment of another law. To support this contention, they referred to observations made by this Court in Madhaorao Phalke v. The State of Madhya Bharat (5). The Court’s observations in that case were based on several earlier decisions, namely [1962] 1 S.C.R. 205 (1), (1924) L.R. 51 I.A. 357 (2), A.I.R. (1954) S.C. 680 (3), [1955] 1 S.C.R. 415 (4), and [1961] 1 S.C.R. 957 (5), as well as on the earlier case of Ameer‑un‑Nissa Begum and Others v. Mehboob Begum and Others (1). In those cases the Court had noted that when the source of authority was the sovereign, the distinction between legislative, executive and judicial acts of an absolute ruler—such as the Indian rulers—tended to disappear. The respondents sought to apply those observations to the present dispute.

The Court observed that similar reasoning had been invoked on several occasions in the past. It was explained that subjects of a ruler were obligated to obey not only statutes but also any orders issued by the ruler, whether those orders were of an executive or a judicial nature. For such subjects there was no practical difference between the various forms of sovereign will, because each expression of that will demanded equal obedience. However, the Court warned that this principle did not imply that a ruler always acted legislatively and never exercised judicial or executive powers. If the earlier observations were to be read in that restrictive sense, then the decision in Phalke’s case (2) would not have required an independent examination of the character, content and purpose of the declared will in order to determine whether a law bound the succeeding sovereign.

The Court further explained that in Ameer‑un‑Nissa’s case (3) the matter concerned a Firman of the Nizam, which was an accepted mode of law‑making in Hyderabad State. In Phalke’s case (2) the Court had dealt with the Kalambandis, which it held to be laws binding on subsequent governments unless they were expressly repealed or replaced by another law. The Kalambandis were considered laws partly because the Maharana himself had declared that any Kalambandis issued by him were to be treated as law, and partly because those instruments created tenures that included pensions. Although the pensions were grants, the manner in which they could be enjoyed was governed by the tenure rules contained in the Kalambandis, rules that also affected issues of succession and devolution.

Finally, the Court noted that later decisions had distinguished these earlier cases when the same observations were attempted to be extended to matters that were clearly not legislative. The Court referenced Maharaj Shree Umaid Mills Ltd. v. Union of India and Others (3) and other authorities to illustrate that a proper law must be created through a recognized legislative process and must be intended to bind as a rule of conduct, rather than being merely a contract, grant or gift. Viewed from this perspective, the Court concluded that the Tharao was not a law but a grant made to the jagirdars mentioned in the earlier proceedings.

In the decisions of Bengal Nagpur Cotton Ltd. v. Board of Revenue, Madhya Pradesh and Others (4) and the earlier cases cited as (1) A.T.R. 1955 S.C. 352, (2) [1961] 1 S.C.R. 957, 964, (3) A.T.R. 1963 S.C. 953 and (4) A.I.R. 1964 S.C. 888, the Court observed that the principles articulated in Ameer‑un‑Nissa’s case (1) and Phalke’s case (2) could not be interpreted to mean that every statement or order issued by a Maharaja automatically constituted law. In Phalke’s case the Court explained that a valid law must be created either by following the traditional law‑making method recognized in the territory or by adhering to a procedure that had been expressly established for that purpose. The Court further emphasized that law is the product of a legislative process and must be intended to bind people as a rule of conduct; it cannot be, for example, a contract, a grant, or a mere gift. Applying that reasoning, the Court found that the document known as the Tharao could not be classified as law. The Tharao was, in fact, a grant addressed to the jagirdars listed in the document. The petitioners argued that the Tharao applied to persons holding five different tenures and that forest management should be carried out according to the State’s policy and administration. While it is true that the Tharao covered a large class of persons holding diverse tenures, the instrument itself expressly required that individual orders be issued to each holder. The Tharao was promulgated only eight days before the merger of the princely state with the Union, and it was therefore surprising that the Maharaja issued the Tharao at a time when grantees might raise complaints just before the merger. The fact that the Maharana’s Tharao was intended to benefit a broad group of persons in a single instrument does not transform it into law if it lacks the essential characteristics of law. The respondents could not persuade the Court that addressing the instrument to individuals would change its nature from a grant to a law; the Court held that such a distinction does not affect its character. The original document from which the Tharao derived was itself a grant, as demonstrated by a previously quoted grant. The term “Vahivat” appearing in the grant indicates that the purpose was management, but in this historical context the term conveyed more than simple management; it was traditionally used when conferring rights that could be resumed by the State. These grants did convey certain rights to the grantees, yet they did not establish any rule of conduct that would bind the parties as law. The Court also referred to the decision in Umed Singh’s case (3), where it was argued that clause five of a letter, cited as (1) A.I.R. 1955 S.C. 352, (2) [1961] 1 S.C.R. 957, (3) [1955] 2 S.C.R. 164, prevented legislation. The Court held that the grants in that case were not legislative measures of the Maharaja and therefore did not preclude the making of subsequent laws that could nullify the grant. The same principle was applied in the present matter.

In this case, the Court observed that the Tharao that was being disputed could not be treated as a law. The Court explained that the Tharao was a grant, and because it was a grant, the new sovereign had the discretion to decide whether or not to recognise it. The respondents had argued that after the Government of India Act, 1935 came into force, they were protected by section 299(1). That argument had been raised earlier, but the majority in Jamadar’s case (1) had left the point unresolved. In a separate judgment in that case, Justice Sarkar and Justice Mudholkar held that section 299(1) did not give any protection. They clarified that the provision did not create new rights; it merely protected rights that already existed. The Court then considered that, when the territories of the Indian Rulers merged with the Government of India, an Act of State had arisen. As held in the earlier decisions cited, the Government of India retained the authority to decide whether to recognise particular rights arising from that Act of State. Consequently, section 299(1) could not operate until such rights were actually recognised. The Act of State therefore continued because the Government was still deliberating on whether to accept the Tharao. While that deliberation was ongoing, a second change occurred when the present Constitution was enacted.

The respondents further contended that the original Act of State had lapsed because a State succession occurred on 26 January 1950, and that, being before the Resolutions of 1951 and 1953, the respondents were thereby protected. The Court first examined whether a State succession had indeed taken place in 1950. It explained that State succession may happen either in law or in fact. A legal succession occurs when one State is juridically substituted for another. A factual succession occurs through annexation, cession, the fusion of one State into a federal Union, or partition or secession. The Court cited examples such as the annexation of Algiers by France in 1831, the cession of the South African Republic to Great Britain in 1901, the transfer of the Ionian Islands from Britain to Greece in 1864, and the transfer of territory to Poland by Germany. The Court noted that none of these events happened on 26 January 1950, and therefore no factual succession took place on that date. Referring to Oppenheim’s definition, the Court quoted that “a succession of International Persons occurs when one or more International Persons take the place of another International Person in consequence of certain changes in the latter’s position” (International Law, 5th ed., p. 151). Applying that definition, the Court concluded that although the people of India adopted a Constitution, there was no State succession concerning the people of Sant State. For the inhabitants of Sant State, any succession had already been completed before 1950, and no new succession occurred when the Dominion of India later became a sovereign democratic Republic.

In this case, the Court observed that when India became a sovereign democratic republic, it marked a break from the British Crown, which constituted a state succession in a different context. The Court clarified that its focus was not on India’s secession from the Crown but on the succession between Sant State and India. It held that no second succession occurred in 1950, because the relevant events had already taken place in 1948 when Sant State merged with the Dominion of India. The Court explained that the act of state that commenced in 1948 continued without interruption beyond 1950 and was not superseded by any new act of state. While the Constitution guaranteed citizens’ rights after 1950, the Court noted that those rights had already been recognized by the ruler before 1950, and that the Constitution merely affirmed the rights that existed on 26 January 1950.

The Court then turned to the argument presented by Mr Purushotham, which relied on the view expressed by Chief Justice John Marshall of the United States Supreme Court in U.S. v. Percheman (3) and later reiterated by Justice Cardozo in 1937 (1). The Court cited examples such as the fusion of Serbia with Croatia to form Yugoslavia, the annexation of Hawaii into the United States, the division of India and Pakistan, and the United States’ emergence from Britain, referencing 32 U.S. 51 at 86‑87 and Shapleigh v. Mier (1). It was held in those cases that a change in sovereignty did not disturb private ownership, and that a cession of territory was not understood to entail a cession of the inhabitants’ property. The Court further noted that these principles were mentioned in the judgment of Bose J. in Virendra Singh’s case (2), which pointed out that the Sixth Advisory Opinion of 10 September 1923 of the Permanent Court of International Justice reflected the same ideas.

Mr Purushotham also referenced other United States Supreme Court decisions that dealt with obligations created by former Spanish and Mexican treaties, arguing that these authorities represented a modern and progressive view. He urged the Court to revise the entire law of act of state as understood in India over the past century, particularly in the last dozen years. The Court replied that the principle guiding its recent decisions had already been explained earlier in the judgment. It summarized the principle with the words of Fletcher Moulton, L.J., in Salaman v. Secretary of State for India (3): “An act of state is essentially an exercise of sovereign power, and hence cannot be challenged, controlled or interfered with by municipal courts. Its sanction is not that of law, but that of sovereign power, and, whatever it be, municipal courts must accept it, as it is without question. But it may, and often must, be part of their duty to take cognizance of it. For instance, if an act is relied on as being an act of state, and as thus affording an answer to claims made by a subject, the courts must decide whether it was in truth an act of state, and what was its nature and extent.”

The Court noted that the essential issue was whether the subject matter constituted an act of State and, if so, what its nature and extent were. It then referred to the principle articulated by the English courts and summarised in the words of Lord McNair, followed by the citations (1) 299 U.S. 468 at 470, (2) [1955] 1 S.C.R. 415, (3) (1906] 1 K.B. 613, and (4) International Law Opinions (1956) Vol 1 p. 1129; see also O’Connel Y.B. (1950) p. 93. The Court explained that the term “Act of State” is employed not only in its narrow sense as a defence, but also, albeit somewhat loosely, to denote a broader rule that covers those sovereign acts performed under the prerogative in foreign affairs. Such acts include making peace or war, annexing or abandoning territory, recognising a new State or a new government of an existing State, and similar matters. The Court emphasized that none of these acts can give rise to a civil action against the Crown, its agents, or its servants, whether the plaintiff is a British subject, an alien, or a foreign State, before British municipal tribunals. These acts are non‑justiciable in British courts, whether brought by British subjects or by aliens; instead, they may become the subject of political action in Parliament or, when the interests of foreign States or their nationals are implicated, of diplomatic protest or any available international judicial process.

The Court further observed that it was not concerned with obligations created by treaties that some writers claim “run with the land” and bind the territory. It cited other writers, as noted by Lord McNair in his discussion of the law of treaties and by scholars such as Keith in his theory of state succession and Crandall in his treatise on treaties, who hold that on cession treaties are automatically abrogated. The Court pointed to the practice of the United Kingdom and the United States when Algiers was annexed by France, the annexation of South Africa by Great Britain, and the annexation of Korea by Japan in 1910, referencing Mervyn Jones B.Y.B. (1947) p. 360 and Dr C.W. Jenks B.Y.B. (1952) p. 105. Conversely, the Court recognised the view that treaties of the annexing or cessionary State may continue to apply to the newly acquired territories, but clarified that such treaties involve agreements with other States, which is not the situation before it.

The Court concluded that no treaty existed in the present case because the rights conferred by the ruler were not derived from any treaty, nor could the merger agreement be elevated to the status of a treaty. Even assuming, for argument’s sake, that a treaty existed between the ruler and the Central Government, the Court held that Indian municipal courts lack the authority to adjudicate the agreement, as the matter lies outside their jurisdiction by virtue of Article 363 of the Constitution. This limitation distinguishes the Indian courts from the jurisdiction of the United States Supreme Court, which is empowered to consider treaties.

The Constitution itself bars any examination of whether these agreements can be characterised as treaties. Regarding the principles of International Law, the Court noted that the publication of the Transvaal Concessions Commission Report and Professor Keith’s treatise drew worldwide attention to the protection of economic concessions and acquired rights by the annexing or cessionary State. The Court recalled that when the Indian Islands were ceded to Greece, the Law Officers—among whom Sir Robert Phillimore served—advised that, “Both according to the principles of International Law and the practice of all civilised States, ceded territories pass, cum onere, to the new sovereign” (Opinion of 15th August, 1863, F. 0. 83/2287; McNair International Opinions, Vol. 1 p. 156). Similar advice was rendered at the annexation of Peruvian territory by Chile in 1884, of Madagascar by France in 1896, and at the cession of Cuba and the Philippines by Spain in 1898 (McNair ibid pp. 157 et seq.). The Court further observed that during the annexation of the Boer Republics between 1900 and 1909 a domestic controversy arose over Britain’s attitude. The High Commissioner’s legal adviser opined that obligations incurred by the South African Republic and the Orange Free State could be repudiated, whereas the Law Officers in England reported that a Government annexing territory does so, in general, subject to the legal obligations created by the predecessor Government. Those obligations included concessionary contracts, but the Law Officers added a qualification that “the duty to observe such contracts cannot be enforced in a municipal court; it rests merely on the recognition of International Law of what is equitable upon the acquisition of property of the conquered State” (opinion of 30th November, 1900, F. O., quoted by B. Y. B. 1950 at p. 105). The Transvaal Concessions Commission, in its April 1901 report, stated inter alia that after annexation “the people change their allegiance, but their relations to each other and their rights of property remain undisturbed; and property includes rights which lie in contract.” The Commission described concessions of the type under inquiry as examples of mixed public and private rights that probably continue to exist after annexation until expressly abrogated by the annexing State, and noted that, as a matter of contemporary practice, treaties made on cession of territory have often been upheld by agreement. However, the Commission also declared that no rule of International Law compelled such continuation, though the prevailing modern opinion favoured respect for those rights. The Court pointed out the scholarly criticism of the distinction between a rule of law and a rule of ethics, citing Westlake in (1901) 17 Law Quarterly Review p. 395, while noting that Professor Keith supported the view that the rights should be respected. Finally, the Court mentioned that the Commission’s conclusions were significantly influenced by the opinion expressed in Cook v. Sprigg, and that international experts participated in drafting the settlement terms.

In the settlement that concluded the first Balkan War, the parties embraced in 1920 a new formula that treated the acquiring State as being sub‑rogated in every right and every change that previously existed in the ceded territory. The practical effect of that formula was later examined in several matters brought before the Permanent Court of International Justice. One of the earliest references concerned the Jaffa concessions. The Court, for technical reasons, declared that it lacked jurisdiction to render a final decision in that dispute; nevertheless it added that, provided Protocol XII preserved the general principles of sub‑rogation, the Mandatory administration of Palestine was obliged to recognise the Jaffa concessions in accordance with the general principles of international law, as reflected in the cited authority (1) [1899] A.C. 572. Another set of cases dealt with settlers of German origin who found themselves in territory that had been transferred by Germany to Poland, as well as the question of German interests in Upper Silesia, recorded in the PCIJ reports series B No 6 and series A No 7. In those cases the Court accepted the doctrine of “acquired rights” insofar as private rights were concerned. The Court also observed that the expression “acquired rights” had not acquired a single, uniform meaning in international law. It clarified that the term was not identical with the ius quaesitum concept that arose from juristic activity following the social‑contract theory. Rather, international law employed the phrase in a variety of ways. At one extreme, some authorities understood it to mean a grant to an individual of rights under municipal law that touched upon a public interest; at the opposite extreme, others interpreted it to encompass every economic concession. The Court stressed, however, that even under international law there was no notion of a universal succession of rights. The notion of “economic concessions” was explained to require a contract between a State or a public authority on the one hand and a concessionaire on the other, together with an investment of capital by the concessionaire for the construction of public works or for exploitation in the public sector. Illustrative decisions that fell within this category included the Mavrommas case, the Lighthouses case, and the Lighthouses in Crete and Samos case (PCIJ Series A No 5 and Series A B No 62 and 71). By contrast, cases that involved purely private rights without any corresponding public benefit were not regarded as concessions, although two decisions—one of which was the Polish case mentioned earlier—held that such private rights must nonetheless be respected. Most of the jurisprudence therefore concerned concessions that produced reciprocal advantages for the parties. The recognition of these principles remained largely within the diplomatic sphere and had not been translated into binding judicial precedent, except in the United States, where a number of cases—compiled in volumes 2‑12 of Peters—addressed the issue, the leading authority being United States v. Percheman (1). Occasionally English courts also touched upon concessionary rights, though without developing a comprehensive doctrine. In United States v. Percheman (1), Chief Justice John Marshall observed that it was unusual, even in cases of conquest, for the conquering power to do more than merely displace the sovereign and assume dominion over the territory.

The Court observed that the principle recognized by the civilized world is that private property should not be taken away and private rights should not be nullified merely because a people change their allegiance or their ancient sovereign relationship dissolves. While the relationship between the people and their former sovereign ends, their mutual relations and property rights continue undisturbed. The Court noted that if this modern rule applies even in cases of conquest, there is no reason to doubt its application to an amicable cession of territory. The Court explained that a cession of territory is never intended to include the property of its inhabitants. Only that which belongs to the King may be ceded; lands previously granted to subjects are not the King’s to surrender. Consequently, neither party to a cession can claim that it is wrong to the individuals concerned, a view condemned by the practice of the entire civilized world. The Court further explained that when a territory is transferred by name from one sovereign to another, the transfer conveys the surrender of sovereignty alone, without affecting private property. The Court cited the words of Chief Justice John Marshall, stating that these observations have been quoted in legal opinions and have shaped international opinion.

The Court noted that the doctrine in the United States is not without limits. It referred to the limitations highlighted by Chief Justice Marshall in Foster v. Nielson (1) [1829] 2 Pet. 253, a case concerning the effect of a treaty phrase with Spain – “shall be ratified and confirmed to those in possession.” The Chief Justice described this phrase as being in the “language of contract” and requiring legislative implementation before any titles could be recognized. This distinction gave rise to the concept of self‑executing versus non‑self‑executing treaties. Chief Justice Marshall was quoted as saying: “A treaty is in its nature a contract between two nations, not a Legislative Act. It does not generally effect, of itself, the object to be accomplished, especially so far as its operation is infra‑territorial; but is carried into execution by the sovereign powers of the respective parties to the instrument.” The Court added that in the United States, the Constitution declares a treaty to be “the law of the land,” and therefore it is treated as equivalent to a legislative act when it operates without any additional legislative provision. However, when the treaty terms involve a contractual commitment that requires a party to perform a particular act, the treaty addresses the political, not the judicial, department, and the legislature must give effect to the contract before it becomes enforceable in court. The Court contrasted this with the position in India, where Article 253 empowers Parliament to enact legislation to implement international treaties, indicating that in India the treaty must be brought within domestic law through legislative action.

In this case the Court observed that a statute was required to bring an international treaty within the sphere of municipal law. The issue had earlier been examined in Birma v. The State (1), where the High Court held that treaties which form part of international law did not become part of the law of the land unless the legislature expressly incorporated them. That pronouncement agreed with a previous assertion of the Court, but the judgment appeared to suggest that treaties which did not affect private rights also needed legislative implementation. The Court noted that this suggestion was inaccurate because it was not necessary for every treaty to be incorporated into municipal law. The Court concurred with the view expressed by Alexander in “International Law in India” (International and Comparative Law Quarterly 1952, pp. 289‑295). The Court also cited Preuss, who described a rare instance of a treaty that was enforced without legislative sanction, as recorded in the Michigan Law Review (1953, p. 1123, footnote 151). Preuss identified only one other case of a similar nature, namely Re Arrow River and Tributaries Slide and Boom Co. Ltd. (1932) 2 B.L.R. 250, and referred to the discussion in B.Y.B. (1953) 30, pp. 202‑203. The Court explained that the United States precedent could not be relied upon, because the United States Supreme Court had held that, although courts possessed no authority to question the validity of an act of state, they could examine its consequences, as stated in United States v. Percheman (1) at p. 86, and that courts were required to accept the proclamation of treaties, as noted in Clark v. Allen (2). The Court emphasized that both constitutional practice and the Constitution itself limited the powers of courts in treaty matters, preventing them from intervening where only the political branches could act. The Court further observed that the courts’ authority was curtailed when a claim was made against the political exercise of State power. The right asserted in the present matter was not a concessionary right supported by international scholars; rather, it resembled a gratuitous grant by the ruler at the State’s expense and lacked the bona fides normally required. Consequently, there was no treaty involved, and any guarantee that might exist was barred by the Constitution from being examined by municipal courts. Although political or ethical considerations might justify respecting such concessions, the Court held that they did not provide a basis for judicial intervention.

The Court then turned to English jurisprudence to illustrate the limits on municipal courts. It referred to Amodu Tijani v. Secretary, Southern Nigeria (3), wherein the court stated that a mere change in sovereignty should not be presumed to disturb private owners’ rights, and that the general terms of a cession were to be construed prima facie in that manner (see footnote (1) 7 Pet. 61; (2) 331 U.S. 503; (3) [1921] 2 A.C. 399, p. 407). The Court also quoted West Rand Central Gold Mining Co. v. Regem (1), which warned that the obligations of conquering states should not be forgotten. By citing these authorities, the Court underlined that municipal courts could not infer rights from a change of sovereignty unless a clear legislative or treaty provision established such rights, and that political considerations alone could not expand judicial competence.

The Court observed that the rules applicable to private property of individuals, particularly land whose title had already been perfected before a conquest or annexation, are fundamentally different from the obligations that arise concerning personal rights created by contracts. The observations made in Amodu Tijani’s case (2) were cited before the Privy Council in Sardar Rustam Khan’s case (3). After referencing the cases arising from Kamachee Boye Saheba (4), Lord Atkin turned to the observations of Lord Halsbury in Cook v. Sprigg (5). He stated that it is a well‑established principle of law that transactions between independent States are governed by a body of law separate from the laws administered by municipal courts. He further explained that it is not a satisfactory answer to claim, on the basis of ordinary principles of international law, that private property is automatically respected by the sovereign that accepts a cession and assumes the duties and legal obligations of the former sovereign with respect to that private property in the ceded territory. According to the Court, such a statement merely reflects the well‑understood rule of international law that a change of sovereignty by cession should not affect private property, but no municipal tribunal possesses the authority to enforce that international obligation.

Lord Atkin also referred in his judgment to Secretary of State v. Bai Raibai (6) and to Vajje Singh’s case (7) as illustrating the limits of municipal‑court jurisdiction. The cited authorities include (1) (1905) 2 K.B. 391; (2) (1921) 2 A.C. 399; (3) (1941) 68 I.A. 109; (4) (1859) 13 Moore P.C. 22; (5) 1899 A.C. 572; (6) (1915) L.R. 42 I.A. 229; and (7) (1924) L.R. 51 I.A. 357. These cases have been applied in several decisions of this Court, and the view of the United States Supreme Court or the view taken in international law has not been accepted as controlling. The Court noted that English courts have not been immune to the influence of the science of international law. As Westlake observed in Nature and Extension of Title by Conquest, the English authorities appear prepared to pay homage to international law. The Court cited remarks of Vice‑Chancellor Lord Cranworth in King of the Two Sicilies v. Willcox, I.Sim. N.S. 327‑9; Vice‑Chancellor Wood in United States of America v. Prioleau, 2 Ham. 563; and Vice‑Chancellor James in United States of America v. McRae, L.R. 8 Eq. 75, in which it was stated that public universal law dictates that any government that de facto succeeds another—whether by revolution, restoration, conquest or reconquest—succeeds to all public property and to all rights in respect of that public property, regardless of the nature or origin of the title of the displaced power. However, the Court affirmed that the rule allowing the Act of State to be questioned in a municipal court has not been displaced.

The Court observed that the principle that an act of State may be examined by domestic courts had been rejected and that such matters were reserved for the political departments of the State. Referring to the decision in Cook v. Sprigg, the Court quoted the passage that when there exists either an express or an unmistakable agreement between the ceding ruler and the receiving government that private property shall be respected, such an agreement could be enforced against the sovereign only through ordinary diplomatic pressure. Consequently, the Court declined to accept the argument that a revision of this view was required. The Court noted that even Justice Bose, in the case of Virendra Singh, had not based his decision on international law or on the opinion of the United States Supreme Court. In the Court’s view, questions of this nature belonged to the political department of the State. While acknowledging that solemn guarantees ought to be honoured, the Court held that it could not compel the State to act contrary to its own jurisdiction. For these reasons, the Court allowed the appeals, set aside the judgment that had been appealed, and restored the decrees that dismissed the suits, ordering costs throughout.

Justice Shah then turned to the facts concerning the former Sant State. The ruler of that State had granted villages to jagirdars but had not conferred any right to the trees in those villages. On 12 March 1948 the ruler issued an order stating that the village holders did not possess “rights of the forests.” After hearing complaints from certain jagirdars, the ruler subsequently granted them full rights and authority over the forest lands within their villages, directing them to manage the forests in accordance with the policy and administration of the State. The respondents contended on appeal that the rights granted to the forest grantees could not be terminated by the Dominion of India following the merger of the State of Sant in June 1948, and that the Government of Bombay lacked authority to obstruct the exercise of those rights. According to an agreement dated 19 March 1948, effective from 1 June 1948, the State of Sant merged with the Dominion of India, extinguishing the ruler’s sovereignty and converting the subjects of Sant into citizens of the Dominion. The Court reiterated that the accession of one State to another constituted an act of State, and that, as established in numerous decisions of the Judicial Committee and this Court, the former subjects could claim protection only of those rights recognised by the new sovereign as enforceable in its municipal courts (see 1 [1955] 1 S.C.R. 415). The Court also cited The Secretary of State in Council of India v. Kamachee Boye Saheba, noting that Indian courts lacked jurisdiction to adjudicate the validity of the East India Company’s seizure of the Rajah of Tanjore’s territory on the basis that the Raj’s dignity had lapsed due to the absence of a male heir.

In the matter before the Court, the question arose as to whether the authority to determine the propriety of a seizure that had been carried out by the British Government, acting as a sovereign power through its delegate the East India Company, could be exercised by a municipal court. The Judicial Committee answered that the seizure constituted an act of State and therefore a municipal court possessed no jurisdiction to inquire into its propriety. Lord Kingsdown, speaking at page 529, explained that transactions between independent states are regulated by laws different from those administered by municipal courts, adding that such courts lack both the means to decide what is right and the power to enforce any decision they might render.

Similarly, in Vajesingji Joravarsingji v. Secretary of State for India Council(1), the Board observed at page 360 that whenever a sovereign state acquires a territory for the first time, the acquisition is an act of State regardless of the manner in which it is effected—whether by conquest, by cession following a treaty, or by occupation of previously unoccupied land. The Board emphasized that the result in every case is identical: an inhabitant of the newly acquired territory can enforce before the municipal courts only those rights that the new sovereign, through its officers, chooses to recognise. Rights that existed under the predecessor’s rule confer no advantage, and even if a treaty of cession stipulates that certain inhabitants should enjoy particular rights, such stipulations do not create a title for those inhabitants to enforce them in municipal courts. The right to enforce remains solely with the high contracting parties.

In Secretary of State v. Sardar Rustam Khan and Others(1), the Court considered whether the proprietary rights of a grantee in lands previously held by the Khan of Kalat ceased to be enforceable after the Khan entered into an agreement with the Agent to the Governor‑General in Baluchistan. Under that agreement, the Khan granted the British Government a perpetual lease of a portion of the Kalat territory at a quit rent and ceded, in perpetuity, full and exclusive revenue, civil and criminal jurisdiction, and all other forms of administration. Lord Atkin, delivering the judgment of the Board, observed that the Government of India possessed the discretion to recognise or not recognise existing titles to land. In the specific case of the lands in dispute, the Government chose not to recognise the titles, and consequently the plaintiffs had no recourse against the Government in the municipal courts.

The principle that the cession of territory by one state to another constitutes an act of State, and that subjects of the former state may enforce only those rights that the new sovereign elects to recognise, has been affirmed by this Court in several decisions, including M/s. Dalmia Dadri Cement Co. Ltd. v. The Commissioner of Income‑Tax(2), Jagannath Agarwala v. State of Orissa(3), and Promod Chandra Deb and Others v. The State of Orissa and Others(4). These authorities collectively establish the settled rule that the enforcement of rights following a territorial acquisition is limited to those rights acknowledged by the successor sovereign.

In that line of authority, the judgments in M/s Dalmia Dadri Cement Co. Ltd. v. The Commissioner of Income‑tax (2), Jagannath Agarwala v. State of Orissa (3), Promod Chandra Deb and Others v. The State of Orissa and Others (4) and The State of Saurashtra v. Jamadar Mohamad Abdulla and others (5) have been regarded as settled precedents. Counsel for the respondents argued, however, that the rule embodied in those decisions originated from a colonial‑era doctrine that reflected the imperialist and expansionist outlook of British jurisprudence. The counsel submitted that this doctrine is inconsistent with the constitutional framework of India, which is founded on democratic institutions and the rule of law. According to the counsel, in a true democracy the rule advanced by the Judicial Committee of the Privy Council has not been embraced, because it permits arbitrary exercise of executive power and shields it from judicial scrutiny, contrary to the Constitution’s commitment to protect fundamental rights.

The counsel further contended that the appropriate rule should follow the principle recognised by the United States Supreme Court in cases of state accession, namely that the accession of one State to another does not extinguish the private rights of its citizens, and those rights may continue to be enforced in the courts of the successor sovereign. To illustrate this view, counsel relied upon the observations of Chief Justice Marshall in United States v. Percheman (1), where Marshall stated that although peoples may change their allegiance and their relationship with the former sovereign ends, their mutual relations and property rights remain undisturbed. Marshall went on to say that a cession of territory is never understood to include the cession of private property owned by the inhabitants, because the sovereign can only cede what belongs to him. Lands previously granted to private individuals could not be surrendered without the consent of those owners, and no civilized nation would consider such a surrender to be a violation of individual rights. The counsel argued that the mere transfer of sovereignty should affect only the political authority, not the substantive property rights of citizens.

Nevertheless, counsel acknowledged that the enforceability of such rights in the municipal courts of a State depends upon the will of the sovereign. The sovereign, being the source of all laws and justice within the State, determines which rights are recognised and therefore enforceable in its courts. Municipal courts derive their authority from the sovereign and apply the sovereign’s laws; consequently, they cannot enforce rights that the former sovereign recognised but the new sovereign does not. In this view, the right to private property exists only to the extent that the sovereign acknowledges it, and without such recognition the courts lack jurisdiction to enforce the claimed entitlement.

In this passage the Court observed that a right exists only when the sovereign recognises it. The Court then noted that the constitutional framework of the United States differs from the situation under discussion. According to the United States Constitution every treaty entered into by the United States becomes a part of the law of the land, its provisions are justiciable and the covenants contained in the treaty are enforceable by the courts. Consequently, if the sovereign of an acceding State recognises the rights of its citizens and those rights are embodied in a treaty that, under the special rules of the United States, forms part of domestic law, those rights may be enforced by the municipal courts of the State. The Court explained that, under the rule it has adopted, a treaty is essentially a contract between two nations that creates rights and obligations between the contracting states, but there is no judicial tribunal competent to enforce those rights and obligations. The Court cited the authority of Hyde in his work on International Law, which states that treaties do not possess the force of law that would give rise to rights or obligations enforceable by municipal courts, and that acknowledgment of a principle that a change of sovereignty does not in itself impair privately‑acquired property does not answer the question of whether the new sovereign is bound to respect those rights when they belong to nationals of a foreign state. The Court further referenced observations of Marshall C. J., which have been repeatedly recognised in treaties of cession concluded by the United States. In addition, the Court quoted Lord Halsbury’s judgment in Cook v. Sprigg, observing that the transactions between independent states are governed by the laws of those states rather than by the municipal law of the forum, and that it is insufficient to claim that international law obliges a successor sovereign to respect private property because no municipal tribunal has authority to enforce such an obligation. Finally, the Court recorded that it had been urged that clause 7 of the letter of guarantee drafted by Mr. V. P. Menon on behalf of the Government of India on 1 October 1948, and incorporated as part of the merger agreement dated 19 March 1948, expressly provided that the Government of India would accept all orders and actions taken by the former Ruler prior to the transfer of administration to the Dominion Government. The Court indicated that the wording of clause 7 would follow in the subsequent portion of the judgment.

In this matter, the Court examined the specific conditions set out in the letter of guarantee dated 1 October 1948, which provided that “No order passed or action taken by you before the date of making over the administration to the Dominion Government will be questioned unless the order was passed or action taken after the 1st day of April 1948, and it is considered by the Government of India to be palpably unjust or unreasonable. The decision of the Government of India in their respect will be final.” The Court noted that, notwithstanding those contractual stipulations, Article 363 of the Constitution barred the respondents from enforcing the covenants of the agreement before municipal courts. The Court also recorded that it had been submitted that the Government of Bombay, acting as a delegate of the Dominion of India, had recognised the respondents’ right to cut forests, but the Court found that the claim of recognition possessed no legal force. It was acknowledged that certain forest areas had been allowed to be cut by contractors under special conditions while the Government of Bombay considered the pending application. The Conservator of Forests for the North‑Western Circle had communicated that the approval of the agreement dated 12 March 1948 remained under governmental consideration and that written undertakings should be obtained from the jagirdars, inamdars or other concerned parties, obligating them to abide by any future decision or order of the Bombay Government concerning private forests when the rights over those forests were finally resolved. On 9 January 1949, the Divisional Forest Officer, acting upon an application by a jagirdar, agreed to issue a licence to a contractor valid until 31 March 1949, subject to the condition that export of timber was prohibited until a governmental order was received and that the purchaser provided a written undertaking to comply with any decision or order of the Government. Accordingly, the contractors and jagirdars executed such undertakings, acknowledging that the licence was conditional upon future governmental determination. The Forest Officers therefore did not permit unfettered work in the forests; cutting was allowed only under specified terms and the clear understanding that the ultimate question of rights and conditions would be decided by the Government. Subsequently, on 8 July 1949, the Government of Bombay resolved that the order issued by the Ruler of the Sant State on 12 March 1948, which had transferred forest rights to holders of jagirs, was made in bad faith and should be cancelled. However, before taking further steps, the Commissioner was directed to verify whether possession of the forests remained with the Government or with the jagirdars.

The Court examined the question of whether ownership of the forests in dispute remained with the Government or had passed to the jagirdars. The order under consideration directed that if the Government still possessed the forests, the Forest Department Officer should be instructed to retain that possession and to refuse the issuance of any transit passes or similar authorisations to private contractors or purchasers. A copy of this order was sent to the Forest Officers in Santrampur for their information and guidance. The order was annotated to require that no transit passes be issued to the jagirdars who had been granted forest rights in March 1948, and that all cutting of trees in those jagir forests should cease immediately, with compliance to be reported.

Although the Governor’s order had not been directly communicated to the jagirdars or to the contractors, the Court held that reliance on the conduct of the Forest Officers in allowing forest cutting required consideration of several additional elements. These included the orders issued by the Conservator of Forests for the North‑Western Circle, the undertakings previously given by both the contractors and the jagirdars, the Governor of Bombay’s order, and the manner in which that order was enforced by halting further felling. The Court observed that permission to cut trees was granted only up to a certain period in 1949, after which the Revenue Department issued an order that completely stopped all cutting.

The final resolution that cancelled the earlier agreement was passed on 6 February 1953. That resolution recorded that the “Tharav” issued by the Ruler in 1948 had been found by the Government to be mala fide, had already been repudiated, and therefore was not binding on the Government of Bombay either by law or under the integration agreement, notwithstanding any assurance contained in a collateral letter. The resolution further stated: “Since the Tharav has not been recognised by Government but has been specifically repudiated, everything done in pursuance thereof, including the contracts entered into after the passage of the Tharav, is not valid and, therefore, binding on this Government.” In view of the conduct of the officials of the Government of Bombay and the foregoing resolution, the Court held that the argument that the Government of Bombay, as a delegate of the Dominion, had renounced its right to be bound by the Ruler’s order could not be sustained.

The Court then identified the next issue to be resolved: whether the Ruler’s order could be characterised as “law” within the meaning of clause 4 of the Administration of the Indian States Order, 1948. Clause 4(1) provides that any provision, or part of a provision, of any law, or of any notification, order, scheme, rule, form or bye‑law issued, made or prescribed under any law that was in force immediately before the appointed day in any Indian State shall continue in force until it is altered, repealed or amended by an order under the Extra‑Provincial Jurisdiction Act, 1947 (XLVII of 1947), subject to the proviso that the powers that were exercised by the Ruler of an Indian State immediately before the appointed day shall thereafter be exercised by the Provincial Government or by any officer specially empowered by the Provincial Government.

The provision of clause 4(1) of the Administration of the Indian States Order, 1948, provided that “such provisions, or such parts of provisions (a) of any law, or (b) of any notification, order, scheme, rule, form or bye‑law issued, made or prescribed under any law, as were in force immediately before the appointed day in any Indian State shall continue in force until altered, repealed or amended by an order, under the Extra Provincial Jurisdiction Act, 1947 (XLVII of 1947): Provided that the powers that were exercised by the Ruler of an Indian State in respect of or in relation to such Indian State under any such provisions of law immediately before the appointed day, shall be exercised by the Provincial Government or any officer specially empowered in this behalf by the Provincial Government.” The State argued that the order dated 12 March 1948 issued by the Ruler of Sant State qualified either as “law” or as “an order made or prescribed under any law” that was in force immediately before the appointed day, and therefore, by virtue of clause 4, the order should be deemed to have continued in operation. Consequently, any executive action taken in contravention of that order would have been unlawful. The Court observed that no statutory provisions relating to forests in the State of Sant had been placed before it, and the March 12 1948 order did not claim to be issued under any statutory authority. On its face, the order appeared to grant certain forest rights to the jagirdars that had not previously been granted by the Ruler. The State further contended that the Ruler of Sant was an absolute sovereign in whom all legislative, executive and judicial authority was vested, and that any act or direction of the Ruler must be treated as “law” within the meaning of clause 4.

The Court held that the fact that the Ruler of Sant State was an absolute sovereign not limited by constitutional restraints did not automatically convert every exercise of his authority into legislative power. The functions of a State, whether democratic or autocratic, fall into three broad categories: executive, legislative and judicial. While the demarcation of these functions may be thin in an absolute regime and sometimes difficult to discern, it is not correct to infer that every act of an autocratic sovereign possesses a legislative character or that every direction must be regarded as law. The existence of a sovereign whose orders could be enforced without recourse to municipal courts does not, by itself, determine the true nature of the function performed. The mere concentration of executive, legislative and judicial powers in a single person does not erase the conceptual distinction among them. Ultimately, legislative power is the authority to make, amend, alter or repeal laws and to lay down binding rules of conduct within defined limits. Executive power, by contrast, is the authority to implement and enforce those rules. The Court therefore concluded that the Ruler’s order could not be automatically classified as “law” under clause 4 merely because it originated from an absolute sovereign.

In the judgment, the Court explained that executive power consists of the authority to carry out and enforce laws, while judicial power involves the authority to identify, interpret and determine the rights and obligations of parties before a tribunal with respect to any transaction on the basis of the applicable laws. The Court emphasized that even in a regime where a sovereign possesses absolute authority, the distinction between executive, legislative and judicial functions continues to exist. The Court observed that when an order is issued by a sovereign who exercises absolute powers and the order is subsequently enforced or executed so that no further action is required to give effect to it, any analysis of the true nature of that order would be pointless. However, the Court added that in a system where the rule of law operates, it becomes necessary to trace the source of authority of the former autocratic sovereign in order to support actions taken under such an order, especially when the new sovereign has expressly continued the laws of the former State. The Court noted that the order dated 12 March 1948 conveyed to the jagirdars certain rights that had previously been excluded from the grants. The Court held that the form of the order was not decisive, and that a proper test for determining the character of a sovereign’s function is whether the order expressly or by clear implication establishes a rule of conduct that subjects must follow and that is enforceable by sanction. The Court found that the 12 March 1948 order was expressly a grant of rights not previously given and that it neither expressly nor by implication imposed any binding rule of conduct. Consequently, the Court was unable to regard the order issued on 12 March 1948 by the Ruler of Sant State as “law” or as an order made under any law within the meaning of clause 4 of the Administration of the Indian States Order, 1948.

The Court further referred to earlier decisions that dealt with the binding effect of orders issued by the rulers of former Indian States. In the case of Ameer‑un‑Nissa Begum and others v. Mahboob Begum and others, the Court examined the binding character of two “Firmans” dated 24 February 1949 and 7 September 1949, which had been issued by His Exalted Highness the Nizam of Hyderabad. The Court quoted its earlier observation that those “Firmans” represented expressions of the sovereign will of the Nizam and were binding in the same manner as any other law, even to the extent that they would override any other law that conflicted with them. The Court further explained that as long as a particular “Firman” remained in force, it alone governed or regulated the rights of the parties concerned, although it could be annulled or altered by a later “Firman” at any time the Nizam chose. The Court also noted that it had declined to decide whether the “Firmans” were legislative enactments or judicial orders, and it observed that the Nizam was not only the supreme legislature but also the source of justice in his State.

It was observed that the Nizam possessed both legislative authority and the power to dispense justice; thus he could be described as the fountain of justice as well as the legislature. When the Nizam established a new court, that act could, under ordinary understanding, be regarded as an exercise of his legislative power. Likewise, when he upheld or overturned a judicial decision, that act could properly be described as a judicial act. Nevertheless, the Court stressed that a sharp separation between legislative and judicial functions could not be justified by the very nature of the Nizam’s sovereign role, nor was such a division practically possible. The principal issue before the Court was whether certain Firmans issued by the Nizam could be enforced after the cessation of his sovereignty. The Court held that a Firman might possess legislative or judicial characteristics, but it could not be classified as an executive act. Moreover, after the Nizam’s sovereignty ceased, no further action was required to give effect to the Firmans; they had already become operative, and the parties’ titles had been adjusted in accordance with those Firmans during the Nizam’s reign.

In the case of Director of Endowments, Government of Hyderabad v. Akram Ali (1), the Court examined the effect of a Firman dated 30 December 1920, which directed the Ecclesiastical Department to supervise a Dargah within the Nizam’s jurisdiction until the parties’ rights were examined and finally adjudicated by a civil court. The Court determined that Akram Ali, who claimed to be the hereditary Sajjad Nashin and Mutwalli, could not enforce his claim because it was subject to the Nizam’s order that had been issued before Hyderabad merged with the Union of India. The Court further observed that at the time the Constitution came into force, the applicant possessed no enforceable right, and the courts were therefore incompetent to grant any relief until the Constitution itself determined the relevant rights. The Firman’s operation was to deprive the respondent and other claimants of any possession rights pending a thorough enquiry. The judgment clarified that the Firman suspended the Sajjad Nashin and Mutwalli’s rights until a civil court determined the right to possession. The Firman was given effect not because it embodied legislative will, but because it had become operative before the Constitution took effect, thereby suspending the claimant’s rights.

The Court also considered Madhorao Phalke v. State of Madhya Bharat (1), wherein the true nature of certain Kalambandis issued by the Rulers of Gwalior was at issue. The appellant, Madhorao Phalke, had received a hereditary military pension that the Gwalior ruler had granted to his ancestors in recognition of their military service. The entitlement to receive the pension was confirmed by Kalambandis issued in 1912 and 1935. After the Constitution led to the formation of the State of Madhya Bharat, the new State Government issued an executive order that terminated the appellant’s right to the pension. The Court was therefore tasked with determining whether the Kalambandis, although not framed as formal legislative enactments, possessed the character of statutes or regulations that carried the force of law.

The Court observed that the executive order issued by the Government of Madhya Bharat had terminated the appellant’s entitlement to the hereditary pension. It clarified that although the “Kalambandis” were not framed as formal legislative enactments, they were issued for the purpose of administering the department that dealt with the Shiledari units. The Court noted that the substance of the provisions gave them the unmistakable character of statutes or regulations possessing the force of law. The “Kalambandis” recognised and created hereditary rights. They authorised the adoption of a son by the widow of a deceased Silledar, provided such adoption received State approval, and they set aside specific funds for the maintenance of widows. The provisions also contemplated supplying a substitute when a Silledar became aged or otherwise unfit to perform his duties, and they contained detailed rules regarding the alteration of names after a Silledar’s death. Further, the “Kalambandis” stipulated that the Asami, being a right attached to Shiledari service, could not be mortgaged to satisfy a banker’s debt, and that any decree holder seeking execution against an amount payable under the grant had to proceed in accordance with the manner and limitations prescribed therein. The Court emphasized that the “Kalambandis” were not simple administrative orders intended merely to regulate the functioning of an irregular forces department; rather, they must be treated as regulations bearing all the hallmarks of legislative enactments. The Court then turned to the case of Promod Chandra Deb, in which it had to determine the true nature of certain “Khor Posh” grants issued by the rulers of Talcher, Bamara and Kalahandi in a series of petitions seeking enforcement of fundamental rights. Of the four petitions, petition No 167 of 1958 was dismissed because an order under the Extra‑Provincial Jurisdiction Act, 1947, had annulled a grant made by the ruler of Bamra before Bamra merged into the Union of India, thereby extinguishing the right created by that grant. In contrast, the Court found in petitions Nos 168 of 1958 and 4 of 1959 that the maintenance grants given to certain members of the ruler’s family were recognised by the Government of India; the recognised right was put into effect and payments continued for almost eight years after the State’s merger. The Court held that once the State had accepted its obligation to pay the maintenance grants, which were agreed to be granted under statutory law and the State’s custom, such grants could not be set aside by executive action. Finally, in the principal writ petition No 79 of 1957, the Court observed that the grants issued by the ruler of Talcher were made subject to the terms and conditions laid down in Order 31 of the Rules and Regulations of the State of Talcher of 1937, and that those Rules and Regulations of 1937 were regarded as the law of the State.

In this case the Court observed that the ‘Khor Posh’ grants had been made by the Ruler in conformity with the law and that those grants possessed the force of law. The Court noted that the majority judgment, delivered by Sinha C.J., stated that there was no doubt that the grant issued by the ruler of Talcher in favour of the petitioner continued to be effective up to the merger of the State. The nature and conditions of the Khor Posh grant, the Court explained, were determined by the provisions contained in Order 31 of the Rules and Regulations of Talcher, 1937. Accordingly, under the law of Talcher the petitioner had enjoyed his Khor Posh rights until the cash grant, which had been converted in the financial year 1943‑44, was discontinued by the State of Orissa in April 1949. The Court held that, on the facts, the terms and conditions governing the grant were of a legislative character rather than an exercise of executive power. Importantly, the Court clarified that it did not intend to declare that every act of the Ruler—whether executive, legislative or judicial—must be treated, after the merger of the State, as an exercise of the Ruler’s legislative will and therefore as a continuing law. The Court then referred to a more recent decision, Tilkayat Shri Govindlalji Maharaj etc. v. State of Rajasthan and others, in which the Court examined a ‘Firman’ issued by the Udaipur Darbar in 1934 concerning the administration of the Shrinath Ji temple at Nath‑dwara, which had been expressly declared a public temple. The ‘Firman’ addressed the devolution of management rights and several ancillary matters, and it comprised four clauses. The first clause declared, according to Udaipur law, that the Shrinath Ji shrine had always been a religious institution of the Vaishnava Sampradaya, that all immovable and movable property dedicated to or otherwise associated with the deity belonged to the shrine, and that the then‑incumbent Tilkayat Maharaj functioned merely as the custodian, manager and trustee of that property. The second clause prescribed the rule of succession, stating that succession was governed by the law of primogeniture and that the Udaipur Darbar possessed an absolute right to depose any Tilkayat Maharaj deemed unfit. The third clause provided for measures to be taken by the Ruler for managing the shrine during the minority of a Tilkayat Maharaj. The final clause affirmed that, in accordance with Udaipur law, the Maharana had declared Shri Damodarlalji—the then Tilkayat Maharaj—unfit to occupy the Gaddi and had approved the succession of Goswami Govindlalji to that position.

In this case, the Court observed that the Firman relating to the Gaddi of the Tilkayat Maharaj defined the nature of the trust governing the Shrinathji temple, set out the rules of succession, provided for the management of the shrine during the minority of the Tilkayat, and expressly affirmed the State’s authority to remove a Tilkayat and to enforce that authority by declaring a particular Tilkayat unfit to occupy the Gaddi. The Court explained that, although the Firman was not framed as a formal statute, it effectively represented an exercise of the sovereign’s legislative will. Its effect was not limited to the period of enforcement under the Maharana of Udaipur; rather, the devolution of the Gaddi and the declaration of the Ruler’s power over the shrine were intended to regulate the shrine’s administration for all time. The Court further noted that, in paragraph‑32 of the earlier decision, after referring to the judgments in Madhorao Phalke’s case, Ameer‑un‑Nissa Begum’s case and the Director of Endowments, Government of Hyderabad’s case, it was held that “in the case of an absolute Ruler like the Maharana of Udaipur it is difficult to make any distinction between an executive order issued by him or a legislative command issued by him. Any order issued by such a Ruler has the force of law and did govern the rights of the parties affected thereby.” The Court clarified that it could not be said that every order of an absolute Ruler was legislative in character; instead, it was emphasized that while the territory of Udaipur and the shrine remained under the Maharana’s sovereignty, the distinction between legislative and executive commands was merely academic because all such orders had to be obeyed. After the merger of the State with the Union of India, however, the question of whether the Firman was a simple executive order or a legislative enactment acquired crucial significance. The Court explained that if the Firman were merely executive, the rights it created would require recognition by the Dominion of India to have any validity, and without such recognition the rights could not be relied upon in municipal courts. Conversely, if the Firman were legislative, the continuation of the former State’s laws after the merger would give the command lasting force and enforceability. The Court stressed that the earlier statement was not intended to assert that no distinction exists between legislative commands and executive orders after the merger. The Court then referred to authorities that illustrate the difference between legislative commands and executive orders of former Indian State Rulers, citing the decision in Maharaja Shree Umaid Mills Ltd. v. Union of India and Others, where the issue was whether an agreement between the Ruler of Jodhpur and a limited company—under which the Ruler promised exemption or remission of certain duties and assured that the company would not be liable for taxes—constituted “law” within the meaning of Article 372 of the Constitution. The Court noted that the agreement was deemed purely contractual, lacking the characteristics of law, thereby supporting the proposition that not every act or order of an absolute Ruler possesses the force of law.

The Court observed that an agreement in which the Ruler promised to amend the tax laws so that they would be consistent with the agreement and to give the Company an assurance concerning taxes was not “law” as defined by Article 372 of the Constitution. The Court explained that the agreement was based solely on the mutual consent of the parties, was entirely contractual, and possessed none of the attributes of law. It further held that an order issued by an absolute Ruler, who combined all governmental functions in himself, could not be treated as “law” regardless of the order’s nature or character. The Court emphasized a clear distinction: an agreement between two or more parties, even when one party is the sovereign Ruler, rests on the concurrence of minds, whereas law generally expresses the sovereign’s will as a binding rule of conduct. This principle supported the proposition that any act or order issued by an absolute Ruler of an Indian State could not acquire the force of law after the State’s merger with the Union of India, unless it reflected the Ruler’s legislative will. The Court cited the decision reported in A.I.R. (1963) S.C. 953 to illustrate this point.

The Court also referred to another judgment of this Court, namely The Bengal Nagpur Cotton Mills Ltd. v. The Board of Revenue, Madhya Pradesh and Others, reported in A.I.R. 1964 S.C. 888, where the issue was whether an agreement between the Ruler of Rajnandgaon and M/s Shaw Wallace and Company concerning the establishment of a textile factory on concessional terms, including the imposition of octroi duties on imported goods, could be deemed law. The Court in that case observed that an agreement expressed as a contract could not be regarded as law. It explained that a law must follow the customary processes of law‑making and be expressed as a binding rule of conduct. The Court noted that there is an established method for enacting laws, and enacted laws have a distinct form. Not every expression of the Ruler’s will amounts to law; only an expression intended to bind as a rule of conduct and enacted with some formality—whether traditional or specially devised—constitutes law, whereas a contract involving the Ruler and another party does not.

The Court then turned to the order issued by the Ruler of Sant on 12 March 1948. It held that the order was not a legislative enactment and did not seek to prescribe a course of conduct. Instead, the order merely attempted to transmit certain rights, which until that date were vested in the Ruler, to the jagirdars who were the grantees of the villages. The Court found it difficult to regard an order that merely granted forest rights, not issued under any legislative authority but exercised in the sovereign’s capacity, as “law” within the meaning of clause 4 of the Administration of the Indian States Order, 1948. The order was not intended to lay down a binding rule of conduct for the grantees; it only purported to convey rights that had previously been vested in the Ruler.

In this case the Court examined whether an order issued by the ruler of Sant, which transferred certain forest rights to the jagirdars of villages that had previously been granted without forest rights, could be considered a law within the meaning of clause 4 of the Administration of the Indian States Order, 1948. The Court observed that the order was not a legislative enactment (1) A.I.R. 1964 S.C. 888; (2) 134‑154 S.C. 37, and that it did not intend to lay down a binding rule of conduct for the grantees but merely purported to convey rights that until that time were vested in the ruler. The Court then turned to the second question, namely whether the respondents were entitled to the protection of section 299(1) of the Government of India Act, 1935, or article 31(1) of the Constitution. The Court noted that the order which deprived the respondents of the right to cut forest trees – a right they claimed under the grant dated 12 March 1948 issued by the ruler of Sant – was an executive order. Section 299(1) of the Government of India Act, 1935, which the respondents invoked after the merger of the State of Sant with the Dominion of India, provided that “No person shall be deprived of his property in British India save by authority of law.” This clause protected property rights against any executive action not supported by law. However, the Court held that for the clause to apply there must first exist a property right capable of protection. The Court reasoned that, as already decided on the first issue, the subjects of the acceding State were entitled only to those rights that the new sovereign chose to recognize; in the absence of any recognition of the respondents’ rights or the rights of their predecessor jagirdars, no property right existed for which protection could be claimed. The Court then relied on its earlier decision in State of Saurashtra v. Jamadar Mohamad Abdulla and others, which held that orders passed by the Administrator of Junagadh – appointed by the Government of India after the Nawab fled – between 9 November 1947 and 20 January 1949, cancelling grants previously made by the Nawab, were not liable to be challenged in civil suits on the ground that the properties had been taken away without authority of law. The Court explained that those orders arose out of and during an act of State and therefore could not be questioned before municipal tribunals, because the cancellations were effected before the change‑over of de jure sovereignty. The Court rejected the respondents’ assumption that an act of State arises only at the moment sovereignty is assumed, observing that an act of State may be spread over a period and does not arise solely at a fixed point, as illustrated in Promod Chandra Deb’s case (1) (1962] 3 S.C.R. 970.

In this case, the Court explained that an act of State is not limited to a single moment when sovereignty is assumed. Rather, an act of State may extend over a period of time, and it does not arise only at the instant a sovereign right is acquired. The Court referred to the decision in Promod Chandra Deb’s case(1) to illustrate that the existence of an act of State is not confined to a fixed point of time. The Court also observed that a newly sovereign authority is not required to announce its decision at the moment it assumes or accepts sovereignty over foreign territory concerning rights that were created by the former sovereign, nor can it be held bound by those former rights simply because it failed to make such an announcement. The Court cited the judgment in Jagannath Agarwalla’s case(2) as a clear illustration of this principle. The Court described how the State of Mayurbhanj merged with the Province of Orissa on 1 January 1949, yet an order dated 28 June 1952, issued by the Board of Revenue acting on behalf of the State of Orissa, rejected a claim made by an individual who had entered into an agreement with the Maharaja of Mayurbhanj in 1943. The Court held that this order formed part of an act of State because the rejection was made pursuant to an order issued under section 4 of the Extra Provincial Jurisdiction Act, 47 of 1947. Consequently, until the new sovereign recognized the property rights of subjects of the former Indian State, no title could be enforced in the Courts of the Dominion or the Union.

The Court further noted that it had been argued that, after the Constitution came into force, a person could not be deprived of his property by executive action, and that this protection applied equally to rights granted by former Rulers to persons who became citizens of the Dominion of India upon merger, as it did to the property rights of other citizens. The argument, in substance, contended that even if the Dominion Government had not recognised a property right granted by the former sovereign, the Constitution required that such a right could be removed only by legislative command and not by executive action. The Court rejected this view, stating that it was based on a misunderstanding of the fundamental right conferred by Article 31(1) of the Constitution. The Court clarified that Article 31(1) provides a right to claim protection against deprivation of property except by authority of law, as cited in (1) [1962] Suppl. 1 S.C.R. 405 and (2) [1962] 1 S.C.R. 205. While the article unquestionably protects a recognized right to property from deprivation without legal authority, it does not create a new right to property that has not been recognised by the Dominion of India or the Union. Accordingly, even if a property right was recognised by the Indian State to which the claimant belonged, it remained unenforceable in Indian courts unless it was also recognised by the Dominion or the Union. The Court then observed that, on the merger of the State of Sant with the Dominion of India, the respondents inevitably became citizens of the Dominion.

In the present matter the respondents were held to be entitled, in the same manner as any other citizen, to the protection of those rights that the Dominion of India recognised. It was also necessary to recall that the enactment of the Constitution did not constitute a transfer of sovereignty from the Dominion of India to the Union of India; rather, it represented merely a change in the form of government. By operation of the Constitution the authority of the British Crown over the Dominion was extinguished, and the source of sovereignty that had previously been rooted in the Crown passed, from the moment the Constitution came into force, to the people of India. It is true that any vestige of authority that the British Crown might have retained over the Dominion was eliminated by the Indian Independence Act, yet there was no cession, conquest, occupation or formal transfer of territory involved in the constitutional process.

The new governmental arrangement was the final step in a long‑run evolution toward self‑government. The fact that the new authority did not derive from an external agency but was assumed by representatives of the Indian people did not alter the essential character of the sovereignty that now existed. The continued operation of the governmental machinery and the persistence of the laws that had been in force in the Dominion undermine any theory that sovereignty was transmitted to a new entity or that the Dominion’s sovereignty was extinguished and replaced by a fresh sovereign, as suggested in Virendra Singh and Others v. State of Uttar Pradesh, a case that the Court will consider presently. Consequently, if after the merger the respondents, under the Government of India Act, 1935, had not acquired any right to the forests by virtue of any recognition of the Tharav dated 12 March 1948, the promulgation of the Constitution did not bestow upon them any additional rights that would convert their claims to forest rights into property or enable them to enforce, in Indian courts, claims that the State had not recognised as a fundamental right to property. Article 31 protects the right to property against all actions except those taken under the authority of law. However, if no such right to property existed, an executive act refusing to recognise a claim to property could not be said to infringe Article 31 of the Constitution. In the earlier decision in Virendra Singh’s case the Court held that, once the Constitution was in force, grants made by the former rulers, even where such grants were not recognised by the Dominion of India or the Union, could not be disturbed except by a law made with proper authority. In that case the petitioners were grantees of villages from the rulers of the States of Sarila and Charkhari before those States merged with the Dominion of India. Those States initially merged with the Union of Vindhya Pradesh, and the Vindhya Pradesh Government confirmed the grants in December 1948. Subsequently the Union of the States of Vindhya Pradesh was dissolved, and the covenanting States separately acceded to the Dominion of India, surrendering all authority and jurisdiction relating to the governance of the States and executing the appropriate instruments.

The agreement that created Vindhya Pradesh was called “The Vindhya Pradesh Merger Agreement.” Under that agreement the states that had formed Vindhya Pradesh were converted into a Chief Commissioner's Province on 23 January 1950. In August 1952 the Government of Uttar Pradesh, to which the four villages—now enclaves within its territory—had been transferred, issued orders revoking the grants of jagirs and maufis that had been made in favour of the petitioners. The former grantees filed a petition under Article 32 of the Constitution, contending that the revocation orders violated Article 31(1) and Article 19(1)(f). The Court observed that at the time of the original grants the rulers possessed the right of disposition over the villages, and that the grants were absolute in character. Consequently, under any civilized legal system, those grants would convey an absolute and indefeasible title to the grantees. The Court noted that the titles had not been resumed by the former rulers nor were they confiscated by the Dominion of India as an act of State, and that up to 25 January 1950 the right and title of the grantees to remain in possession were valid and undisturbed. The Court therefore held that the Constitution, deriving its authority from the people of India, eliminated all vestiges of arbitrary and despotic power in the territory and among its citizens, and it prohibited the kind of arbitrary action that Uttar Pradesh sought to uphold. The Court further observed that the Dominion of India and the princely states had abandoned their sovereign powers and surrendered them to the people who framed the new Constitution; consequently, no sovereign could exercise an act of State against its own subjects, rendering the revocation orders invalid.

The judgment concluded that the Court’s reasoning was based on two assumptions that were not correct. First, it assumed that the sovereignty of the Dominion of India and the princely states had been surrendered to the people of India, and that the people, in exercising sovereign power, had given themselves the new Constitution as of 26 January 1950. Second, it assumed that the petitioners, who were in de facto possession of the disputed lands, possessed rights enforceable in Dominion courts up to 26 January 1950 against all persons except possibly the State. The judgment held that these assumptions were unsupported by historical facts and by constitutional theory. It rejected the notion that, at the stroke of midnight on 25 January 1950, all pre‑existing political institutions ceased to exist and were instantly replaced by a completely unrelated set of institutions. The judgment noted that the Constituent Assembly, which framed the Constitution, operated for several years under the old regime and established the constitutional machinery on the foundations of the earlier political structure, rather than destroying past institutions.

The Court observed that the Constitution was framed after several years of governance under the former regime and that it established the constitutional machinery upon the foundations of the earlier political structure. The Court stressed that the framers did not intend to demolish the existing institutions; rather, they erected a new edifice upon what already existed. According to the Court, the Constituent Assembly did not create a new source of sovereignty. Instead, it merely gave expression to the aspirations of the people by ending foreign domination and by evolving a fully democratic republican form of government. The Court described this transformation as one of evolution rather than of destruction. For the reasons previously articulated, the Court held that it was impossible to regard claims to property that existed only as such up to 25 January 1950 as enforceable against any party. The Court noted that until the Dominion of India expressly or implicitly recognized a right, there was no property right that Indian courts could enforce. The Court further stated that nothing in the Constitution converted the unrecognised claims that existed before 25 January 1950 into enforceable property rights, nor did it extinguish the Union’s power to refuse to recognise those claims.

The Court held that the order issued in August 1952 that revoked the grants made by the Rulers of Sarila and Charkhari was, in substance, an act of State. The Court accepted that a sovereign cannot commit an act of State against his own subjects; however, the State in this instance was refusing to recognise the claims of the grantees of the former Rulers. The Court explained that the fact that the act of State prejudiced persons who were citizens at the date of the refusal of recognition did not strip the act of its character or its effectiveness. Consequently, the Court concluded that the appeals should be allowed and that the suit filed by the respondents ought to be dismissed with costs awarded throughout.

Justice Raghubar Dayal wrote that he concurred with the observations of Justice Ayyangar on all points except the status of the Tharao dated 12 March 1948 as law. He agreed with Justice Hidayatullah that the Tharao was not law and endorsed the proposed order. Justice Mudholkar noted that the Bench was constituted to examine whether the reasoning in Virendra Singh v. State of Uttar Pradesh, which held that the inhabitants of the Indian States brought with them property rights granted by the former Rulers after those States merged with the Dominion, was correct. He said that Justice Ayyangar’s judgment had carefully examined the decision and its underlying grounds, and that he was generally in agreement, though he held a somewhat different view on certain matters, necessitating a separate judgment. The Court further referenced that the facts had been fully set out in the earlier judgment.

The judgment recorded that, after citing the relevant material from the learned brother’s opinion, only those facts necessary to clarify the issues under consideration would be repeated. It was stated that the former ruler of Sant State had entered into two separate agreements, which resulted in the territory of Sant State being merged into the Dominion of India effective 10 June 1948. Before that date, the State had acceded to the Dominion of India limited to three subjects only. The State, together with other princely states in India, had become an independent sovereign entity in 1947 when the Dominions of India and Pakistan were created. By virtue of the authority granted to the Central Government under the Extra Provincial Jurisdiction Act, 1947, the Central Government delegated its functions to the Government of Bombay. Consequently, the Government of Bombay issued the Indian States (Application of Laws) Order, 1948 on 28 July 1948, which extended certain laws that were in force in the Province of Bombay to the territories that had been merged. Subsequently, under the Indian States (Merger of Governors Provinces) Order, 1949, Sant State was incorporated into the Province of Bombay. The agreement effecting the merger of Sant State into the Dominion of India had been executed by the ruler of Sant sometime prior to the date the merger became operative. On 12 March 1948, the ruler promulgated a Tharao—translated as “order”—which read as follows: “S. Ta. Mu Outward Register No. 371. The Jivak, Patavat, Inami, Chakariyat, Dharmada villages in Sant State are being given (granted) to Jagirdars and the holders of the said villages are not given rights over forests. Hence after considering the complaints of certain Jagirs, they, are being given full rights and authority over the forests in the villages under their vahivat. So, they should manage the vahivat of the forest according to the policy and administration of the State. Orders in this regard to be issued.” Taking advantage of this Tharao, several Jagirdars entered into contracts for the exploitation of forests within their respective Jagirs. The respondents in the present appeals were among the forest contractors who had obtained such contracts from the Jagirdars. The Government of the Province of Bombay, through its Forest Department officers, refused to permit the respondents to exercise the rights created by those contracts, holding that the grant of forest rights made by the former ruler to the Jagirdars did not bind the successor government. Deprived of the ability to work the forests, the respondents instituted suits after the Constitution of India came into force. Their claims were met with opposition from the State of Bombay, which argued that, in the absence of any express or implied recognition by the successor state of the rights conferred by the former ruler, the respondents could not enforce those rights in the municipal courts. The trial court dismissed the respondents’ suits, and the aggrieved parties appealed the decision.

The lower court had dismissed the suits brought by the respondents, but on second appeal the High Court allowed those appeals. The High Court delivered a single judgment that relied heavily on the principles articulated by this Court in Virendra Singh’s case (1), while also referring to two other decisions of this Court and to several Privy Council rulings. In the present arguments before the Court, it was not contested that the acquisition of the territory of Sant State by the Dominion of India, effected through the Instrument of Accession and Merger Agreement, constituted an act of State.

The respondents advanced six principal contentions. First, they asserted that, in fact, the Government of Bombay, through its forest department officers, had recognised the Jagirdars’ rights by allowing the contractors to carry out timber‑cutting operations. Second, they contended that although the Government of Bombay subsequently repudiated the Jagirdars’ rights, such repudiation was ineffective, as indicated in the citation [1955] 1 S.C.R. 415. Third, they claimed that a letter dated October 1948, sent by the Secretary to the States Department, Mr V. P. Menon, to the Ruler of Sant State amounted to a waiver by the Dominion of India of any right to repudiate the Jagirdars’ rights. Fourth, they argued that once the Jagirdars became citizens of the Dominion of India, no act of State could be taken against them. Fifth, they maintained that the doctrine developed by the Privy Council—from Secretary of State for India v. Kamachee Boye Sahiba (1) through Asrar Ahmed v. Durgah Committee, Ajmer (2)—contradicted the current view on the effect of conquest and cession on private rights as exemplified in United States v. Percheman (3), and that this Court should abandon the Privy Council’s position in favour of the modern, widely accepted view of fairness. Sixth, they argued that the Jagirdars could not be divested of the forest rights granted to them by the Ruler of Sant State before the Constitution without compliance with section 299 of the Government of India Act, 1935, and after the Constitution’s commencement without compliance with article 31 of the Constitution.

The Court agreed with the observations of Justice Ayyangar that the fact some forest‑department officers permitted the respondents to work in the forests leased by the Jagirdars does not constitute recognition of the rights conferred by the Tharao dated 12 March 1948. The Court explained that it was not within the authority of forest‑department officers to grant such recognition, because the power to recognise the Jagirdars’ rights could be exercised only by the Government acting through its proper agency. Moreover, the permission given to the respondents was expressly provisional and was expressly subject to the final decision of the Government on the question of their entitlement under the leases granted by the Jagirdars.

The Court noted that the permission given to the respondents was expressly provisional and depended upon the ultimate decision of the Government regarding the respondents’ entitlement under the leases that had originally been granted by the Jagirdars. The Court then cited several authorities, namely (1) (1859) 13 Moore P.C. 22, (2) A‑1 R 1947 P.C.I, and (3) (1883) 32 U.S. 51, to illustrate the legal backdrop. Turning to the second contention raised by the respondents, the Court held that this contention rested on a misunderstanding of the legal position that flows from the extensive series of Privy Council decisions that have been adopted by this Court in various judgments. The Court specifically referred to the decisions in Dalmia Dadri, Cement Co. Ltd. v. The Commissioner of Income‑tax (1), State of Saurashtra v. Memon Haji Ismail (2), Promod Chandra Deb and Ors. v. The State of Orissa and Ors. (3), and State of Saurashtra v. Jamadar Mahamad Abdulla and Ors. (4). The only Privy Council decision that the Court found to have been criticised was the case of Virendra Singh (5). The Court then reproduced the view of the Privy Council as expressed by Lord Dunedin in Vajesinghji v. Secretary of State for India (6), a passage that has been quoted approvingly in several judgments. In that passage it was stated that when a sovereign State acquires a territory for the first time, the acquisition constitutes an Act of State, irrespective of whether the acquisition is by conquest, by treaty cession, or by occupation of previously unoccupied land. In every such case the result is the same: an inhabitant of the newly acquired territory may invoke before the municipal courts established by the new sovereign only those rights that the new sovereign, through its officers, has recognised. Rights that existed under the rule of a predecessor do not aid the inhabitant. Moreover, even if a treaty of cession provides that certain inhabitants should enjoy certain rights, such treaty provisions do not confer a title on those inhabitants to enforce the stipulations in the municipal courts; the right to enforce remains solely with the contracting parties. From this principle the Court concluded, beyond doubt, that rights derived by inhabitants of a conquered or ceded territory from former rulers cannot be enforced against the new sovereign in that sovereign’s courts unless the new sovereign has expressly recognised those rights. The only basis for enforcement of such rights in a municipal court is the recognition by the new sovereign. A right that cannot, by its own force, be enforced against the sovereign in that sovereign’s courts must be considered to have ceased to exist. Consequently, a right that has ceased to exist does not require any act of repudiation. Regarding the argument that the Government had waived its right to withhold recognition, the Court agreed with the observations made by the learned brother, Justice Ayyangar, affirming that if the inhabitants of a ceded territory no longer possess a right against the new sovereign, there is nothing for the sovereign to waive.

In this case, the Court observed that once the inhabitants of a ceded territory no longer possessed any right against the new sovereign, there was nothing for that sovereign to waive. The Court further agreed with the learned colleague that if the letter of the Secretary to the States Department, on which the respondents relied, were to be treated as part of the merger agreement, then, under Article 363 of the Constitution, the municipal courts were barred from enforcing any rights that might arise from that letter. The Court noted that the argument asserting that an Act of State could not be invoked against the sovereign’s own citizens rested on the assumption that the jagirdars’ claims against their former ruler would remain enforceable against the new sovereign unless expressly repudiated. The Court held that the Government of Bombay’s resolution dated 6 February 1953, which declared that the jagirdars’ rights had already been repudiated, could not be characterised as an Act of State against persons who had become citizens of the Republic of India well before that date, and therefore such a characterization was untenable. The Court reiterated that municipal courts could not recognise a right of this nature unless the new sovereign had expressly or implicitly acknowledged it. The Court expressed the view that the Government’s use of the term “repudiation” was merely a loose expression indicating that the jagirdars’ rights had not been recognised. The resolution, the Court explained, merely set out the Government’s final decision not to recognise the Tharao dated 12 March 1948, by which the former ruler of Sant State had conferred certain forest rights upon the jagirdars. The Court pointed out that paragraph 3 of that resolution made it clear that the Government had deliberately kept in mind the legal position that rights claimed under the Tharao did not confer any title on the inhabitants of Sant State that could be enforced in a municipal court, and that the authority to enforce such rights remained solely with the high contracting parties. Turning to the contention that this Court should abandon the precedents of the Privy Council in Secretary of State for India v Kamchee Boye Sahiba (1), Secretary of State for India v Bai Rajbai (2), Vajesinghji v Secretary of State for India (3), Secretary of State v Sardar Rustom Khan (4) and Asrar Ahmed’s case (5), and instead follow the view expressed by Chief Justice Marshall in Percheman’s case (6), the Court concurred with much of the learned brother’s submission but added an additional observation. The Court stated that English courts have applied principles of international law on the basis that a rule, widely accepted by all civilized nations as an appropriate rule governing international relations, is deemed to form part of the common law of England. Consequently, English courts have given effect to rules of international law by incorporating them through judicial decisions. Moreover, the Court recognised that, because the British Parliament is supreme, the rules of international law are subject to Parliament’s authority to amend or repeal any of them.

The Court explained that a municipal court is limited to enforcing only the law that is presently operative within the State. Consequently, when Parliament repeals a rule of international law, that rule cannot be applied by the municipal courts, and when Parliament amends such a rule, the courts may enforce it only to the extent of the parliamentary modification. The Court then asked whether a different result would arise if a particular rule of international law had been incorporated into the common law through judicial decisions. It observed that, for municipal courts, such incorporated rule becomes part of the law of the land, and the courts possess both the authority and the responsibility to enforce it.

The Court further considered the situation where Parliament neither repeals nor amends an international rule that has become part of the common law. It posed the question of whether a municipal court could nevertheless set aside that rule or enforce it in a altered form on the basis that the collective opinion of civilized States has evolved, replacing the former rule with a newer, fairer rule. The Court rejected this notion, emphasizing that a State’s law may be changed or nullified only by a competent legislative body of that State, not by international opinion, however persuasive that opinion might be. The Court then noted that a rule of international law underlying several Privy Council decisions concerning the effect of conquest or cession on the private rights of the inhabitants of the conquered or ceded territory has been incorporated into this country’s common law. That rule, being law in force, is protected by Article 372 of the Constitution, and therefore Indian courts are obliged to enforce that rule rather than an alternative rule of international law based on the principle of state succession. The Court acknowledged that the International Court of Justice has expressed a similar view, but it held that such an international pronouncement does not alter the position of municipal courts.

Finally, the Court stated that if, in light of this doctrine, the existing law appears inequitable or a relic of imperial domination, the appropriate remedy does not lie with the courts but with the legislature or the competent Government, which may grant recognition to the private rights of inhabitants of newly acquired territories. The Court concluded that, although one perspective suggests a doctrine of state succession concerning private rights, the prevailing legal position reflects two underlying concepts: first, that inhabitants of acquired territories do not acquire enforceable rights against the new sovereign, and second, that municipal courts lack jurisdiction to enforce any such rights unless they have been expressly recognised by the new sovereign.

In this passage the Court explained that municipal courts possessed no authority to enforce any rights asserted by private parties, even where those rights derived from a treaty or any other international arrangement that bound the new sovereign, unless the new sovereign had expressly recognized such rights. The Court noted that municipal courts obtained their jurisdiction solely from municipal law and not from the law of nations, and that a modification of international law effected by the consent of the international community could not grant municipal courts jurisdiction that they did not already enjoy under municipal law. The Court further observed that the rule should not be characterized merely as a colonial instrument used to enrich colonisers at the expense of the inhabitants of conquered territories, and therefore it could not be dismissed as an anachronism. It would be neither just nor reasonable to bind the new sovereign by duties and obligations created by the former sovereign for political motives or to deprive the new sovereign of the full benefits of its acquisition. The Court acknowledged that international law did not prohibit the new sovereign from legislating to release itself from such duties and obligations, but it cautioned that such legislation would be a lengthy and arduous process and might be made impossible by constitutional provisions, for example those contained in Part III of the Constitution. Moreover, the Court held that it would be unreasonable to regard the new sovereign as bound by duties and obligations fashioned by the former sovereign until the new sovereign could demonstrate that those duties had been incurred by the former sovereign in bad faith. For these reasons, the Court explained that the law as articulated by the Privy Council stripped grantees of the former ruler of all enforceable rights against a new sovereign by rendering those rights unenforceable in municipal courts. Nevertheless, the same law allowed for the possibility that the new sovereign might recognise those rights. Accordingly, the new sovereign was expected to examine every grant, to determine whether any grant was tainted by bad faith or contrary to its legitimate interests, and to recognise only those grants that were free of bad faith and not opposed to its interests. The Court illustrated that this approach had been applied in India whenever territories were repeatedly ceded by former Indian rulers to the British Government. As an example, the Inam Inquiry conducted in the middle of the last century resulted in a very large number of Inams being ultimately recognised by the British Government. The meticulous examination of the claims of former grantees in ceded territories was further demonstrated by the facts recorded in the case of Bai Rajbai. (1) See Hyde International Law Vol. 1, 2nd ed. p. 431, and Wesley L. Gould – An Introduction to International Law pp. 422‑427.

In this case the Court stated that the rule which has been applied in this country should not be regarded as an anachronism or as unjust. Regarding the argument that relied on section 299 of the Government of India Act, 1935 and Article 31 of the Constitution, the Court reiterated the position that it had previously taken in the judgments of Jamadar Mahamad Abdulla’s case (3) and Promod Chandra Deb’s case (4). That position was the same as that expressed by Justice Ayyangar, and it had also been accepted by Justice Hidayatullah. When addressing a similar contentions raised by counsel for the respondent in the earlier case, the Court quoted a passage from the judgment of Venkatarama Aiyar, J., in Dalmia Dadri Cement Co.’s case (4), which observed that in the new constitutional arrangement the residents did not automatically retain the rights they possessed as subjects of the former sovereign; instead, as subjects of the new sovereign they possessed only those rights that were granted or recognised by the new sovereign. The Court also cited a passage from the judgment in Bai Rajbai’s case (5), adding that any property right which, by its very nature, was not legally enforceable could not be protected by the cited provision. That reference concerned section 299(1) of the Government of India Act, 1935. In another decision the Court had earlier observed at page 499 that section 299(1) of the Constitution Act of 1935 did not assist grantees of the former rulers whose rights had not been recognised by the new sovereign when they sought to establish those rights in the municipal courts of the new sovereign, because that provision protected only those rights which the new citizen possessed at the moment of acquiring citizenship of the Indian Dominion; it neither expanded those rights nor remedied any deficiency in the citizen’s rights. The Court then considered another issue raised in these appeals, namely whether the Tharao relied upon by the respondents constituted a law and therefore could be said to have been kept in force by the Application of Laws Order, 1949 made by the Province of Bombay. Justice Ayyangar, largely based on the decision of this Court in Madhorao Phalke v. The State of Madhya Pradesh (1), held that the Tharao was indeed law. Conversely, Justice Hidayatullah reached the opposite conclusion, and Justice Shah also held that the Tharao was not a law. The Court agreed with the views of Justice Hidayatullah and Justice Shah, concluding that the Tharao did not qualify as law and that the decision in Madhorao Phalke’s case (1) did not support a finding that it was law. The Court further observed that it was unnecessary, for the present case, to examine in detail what constitutes the indicia of a law. Accordingly, the Court allowed the appeals with costs throughout.

The Court expressed that it did not consider it necessary, for the purposes of the present case, to pursue any further examination of the question concerning what constitutes the indicia of a law. In other words, the Court found that a deeper analysis of the characteristics that define a law was not required to resolve the matters before it. Consequently, based on this conclusion and the reasons that had been outlined earlier, the Court decided to allow the appeals and ordered that the costs be awarded throughout the proceedings. The formal order, signed by the Chief Justice Sinha, stated that, in line with the view expressed by the majority of the judges, the appeals were to be allowed with costs throughout and that the parties would be responsible for one set of hearing fees. The Court also recorded the reference to the precedent cited, namely the decision reported in volume one of the 1961 Supreme Court Reports at page 957, and the citation of the relevant pages from the Supreme Court reports, namely pages 134 to 154 of the cited volume. This citation was included to indicate the source of the legal principle that had been considered by the Court in reaching its conclusion.