Appeals Nos
7 to 9 of 1959
Appeals by special leave from the judgment and order dated June 251955 in cases Nos
0551 R CG 54 0602 RCG54 and 0503 RCG54 of 1954
Achhru Ram and B R L Ayengar for the appellants
Gopal Singh and T M Sen for the respondents
March 10
The Judgment of the Court was delivered MUDHOLKAR J
These are appeals by special leave from three orders against an order passed on March 12 1954 by the Custodian General Evacuee Property disposing of three revision petitions two of which were preferred by one Bharoo Mal since deceased 247 and one by his wife and now widow Padma Devi
Even though a common order was passed by the Custodian General three appeals have been preferred before this Court
The facts leading upto the appeals are briefly as follows An agreement was entered into between Bharoomal and one Nanan Begum on April 11 1948 for the exchange of Bharoomal s propertiesat Sukkar in Sind Pakistan for Nanan Begum s properties at Lucknow
Prior to that on April 7 1948 a similar agreement was entered into between Padma Devi and one Tahir Ali
It is common ground that in pursuance of the agreement Bharoomal and Padma Devi entered into possession of the properties obtained by them in exchange from Nanan Begum and Tahir Ali respectively and the latter entered into possession of the properties belonging to the former situated in Sukkar
The deed of exchange was to be executed within two years of the date of agreement but in fact it was never executed
Consequently in the year 1950 Bharoomlal and Padma Devi instituted three suits for specific performance
These suits were decreed and sale deeds conveying certain properties to Bharoomal and certain properties to Padma Devi were executed by the Court in February 1952
In October 1949 the U P Administration of Evacuee Property Ordinance 1949 1 of 1949 was promulgated and shortly thereafter the Administration of Evacuee Property Chief Commissioners Provinces Ordinance 1949 12 of 1949 promulgated by the Central Government was extended to the United Provinces replacing U P Ordinance 1 of 1949
Nanan Begum and Tahir Ali having migrated to Pakistan Bharoomal and Padma Devi made three applications under cl
252 of the Central Ordinance for confirmation of the exchanges in their favour
These applications were granted by the Deputy Custodian of Evacuee Property in the year 1950
Sometime in the year 1951 the Custodian of Evacuee Property suo motu revised the orders of the Deputy Custodian passed in the year 1950 on the ground that the agreements on the basis 248 of which the applications for confirmation were made by Bharoomal and Padma Devi do not amount to transfers and that consequently they could not be confirmed
He also held that the deeds of transfer obtained by Bharoomal and Padma Devi from the court were not confirmed by the Custodian and that therefore the possession of Bharoonal and Padma Devi over the properties in question which wore admittedly evacuee properties was unauthorised
He therefore ordered that possession of the properties be taken back from Bharoomal and Padma Devi and that they should be required to account for the rent and profits realised by them from these properties
These persons preferred applications for revision before the Custodian General of Evacuee Property
Their applications were as already stated rejected by him
In the appeal to this Court the only ground pressed is that the Custodian had no jurisdiction to pass an order requiring the appellants to render accounts of the rents and profits from the properties in their possession
Mr Achhruram who appears for them accepts the position that the orders of the Deputy Custodian of Evacuee Property passed in the year 1950 confirming the transfers were rightly set aside by the Custodian in revision
Therefore only a short question falls to be determined by us and that is whether the Custodian was right in further ordering the appellants to render accounts of rents and profits from the properties in their possession
We asked Mr Gopal Singh who appears for the Custodian General to show us any provision in the Act or in the rules which authorises the Custodian of Evacuee Property to direct a person who is alleged to be in unauthorised possession of evacuee property to render accounts for rents and profits of those properties without resorting to the ordinary remedy provided by law that is by way of suit
Mr Gopal Singh contends that as soon as Nanan Begum and Tahir Ali migrated to Pakistan their property in India automatically vested in the Custodian of Evacuee Property under cl
51 of the U P Ordinance 1 of 1949 and continued to vest under Central 249 Ordinance No XII of 1949 which replaced the U P Ordinance
By virtue of sub section
2 of section 8 of the XXXI of 1950 which came into force on April 18 1950 the property which is vested in the Custodian under any law repealed by the Act shall be deed to be evacuee property within the meaning of the Act and shall be deemed to have vested in the Custodian appointed under that Act
The Central 1 Ordinance XII of 1949 was one of the laws repealed by the Act
He then referred to section 10 and contended that thereunder the Custodian has the power to recover from an unauthorised occupant of evacuee property the rents and profits realised by him during the period of his unauthorised occupation
Sub section 1 of section 10 reads thus Subject to the provisions of any rules that may be made in this behalf the Custodian may take such measures as lie considers necessary or expedient for the purposes of securing administering preserving and managing any evacuee property and generally for the purpose of enabling him satisfactorily to discharge any of the duties imposed on him by or under this Act and may for any such purpose as aforesaid do all acts and incur all expenses necessary or incidental thereto
 According to him the words for the purposes of securing administeringpreserving and managing any evacuee propertyeffectively confer on the Custodian power to recoverrents and profits of the property from the person in possession
There is nothing in the words relied on from which a power of the kind contended for by learned counsel can be deduced
Sub section 2 of section 10 specifically enumerates some of the powers of the Custodian
Learned counsel was not able to point to anything in the sub section which confers power on the Custodian to recover rents and profits from a person in unlawful possession of the properties
Learned counsel then referred to r 10 and said that this rule would entitle the Custodian to determine and recover rents and profits from unauthorised occupants of evacuee property
Sub rule 1 32 250 of r 10 undoubtedly authorises the Custodian to recover possession of property from the evacuee or from a person whether holding on behalf of or under the evacuee or otherwise and not having a lawful title to possession thereof as against the Custodian
There is nothing in this sub rule which further entitles the Custodian to determine and recover rents and profits from an unauthorised occupant of evacuee property
Sub rule 2 of r 10 empowers the Custodian to issue a notice to a tenant or a licensee in possession of evacuee property whom the Custodian cannot eject or does not want to eject
For one thing this sub rule cannot apply to a person who Is alleged to be in unauthorised occupation of evacuee property
Then again it does not confer any power on the Custodian to determine rents and profits or to recover rent in a summary manner
In the circumstances we must hold that this provision also does not help the respondent
Such being the legal position we must quash and set aside that portion of the order of the Custodian confirmed by the Custodian General which requires the appellants to pay rents and profits in respect of properties of Nanan Begum and Tahir Ali in their possession
Both parties will however be at liberty to take such steps is may be open to them at law for establishing or enforcing their respective claims
Costs of the appeal will be borne by the respondents
As the appeals were argued together there will be only one hearing fees
Appeals allowed


Summary:
The appellant had two money claims against the Maharaja of Mayurbhanj State
From January 1 1949 the State merged with the Province of Orissa
Clause 9 of the Administration of Mayurbhanj State Order 1949 promulgated by the Government of Orissa provided for the issuing of a notification for calling upon all persons having pecuniary claims against the Maharaja to notify the same to an officer authorised in that behalf
After issue of the notification the appellant preferred his two claims before the Claims Officer
The Claims Officer made a report substantially accepting the claims
This report was submitted to the Member third Board of Revenue
Without giving the appel lant any hearing the claims were rejected on the ground that they were barred by limitation
The appellant applied for a review and submitted the documents on which he relied but again without giving the appellant a hearing the Board of Revenue declined to review the matter
The appellant contended 206 that there was a breach of the principles of natural justice in the Board of Revenue deciding the matter without giving the appellant a proper hearing
The respondent contended that the rejection of the claims was an act of State that the new Sovereign State could not be compelled by the courts to accept the liability of the old Ruler that though the new Sovereign State might make such enquiry as it chose it was not compelled to give a hearing to the appellant
The appellant replied that the act of State was over when the claims were invited and accepted by the Claims Officer
Held that the rejection of the claims was an act of State and could not be challenged
Unless the new Sovereign either expressly or impliedly admitted the claims the municipal courts had no jurisdiction in the matter
The act of State did not come to an end when Government allowed the claims to be preferred or the Claims Officer made his report
The enquiry was for the benefit of the State and not for conferring rights on the claimants
Till there was an acceptance of the claims by the Government or some officer who could be said to bind the Government the act of State was still open
DalmiaDadri Cement Co Ltd vs Commissioner of Income tax 1959 SCR 729 State of Saurashtra vs Mmemon Haji Ismail Haji  and Vaje Singh ji joravar Singh vs Secretary of State for India 1924 LR 51 IA 357 relied on