Special Leave Petition Civil No 284 of 1982
From the Judgment and Order dated the 2nd September 1981 of the Rajasthan High Court in Civil Revision Petition No 273 of 1981 KG Bhagat Addl
Sol General Miss A Subhashini and Vijay Panjwani for the Petitioners
702 The Judgment of the Court was delivered by VENKATARAMIAH J
The precise question which arises for consideration in this petition is whether a suit filed by the State of Rajasthan against the Union of India for recovery of compensation for loss on account of the damage caused to the goods despatched through the Indian Railways in a civil court at Rajasthan is maintainable or whether it should be filed in this Court under Article 131 of the Constitution
The facts of the case are these
The District Administrator of Baarmer in Rajasthan was in need of a certain number of tents and their accessories and at his request 170 bundles of tents and their accessories were despatched by Chief Commandant Mana Shivir Raipur Madhya Pradesh to the Collector Barmer through the Indian Railways under RR No 423978 dated February 17 1972 to be delivered at Barmer
No intimation was received about the arrival of the consignment at Barmer till August 61972
On hearing that the consignment had reached Barmer on August 6 1972 the Additional Collector and the District Rehabilitation Officer went to Barmer on August 6 1972 for taking delivery but it was found that the packings of the goods had been seriously damaged and as a consequence thereof the tents as well as the accessories had become unfit for use
The delivery was not therefore taken and a request was made for assessing the damages
The goods were auctioned and a sum of Rs 15000 was fetched in the auction
Since the claim of the consignee was not settled by the Railway Administration after issuing necessary notice to the General Manager Northern Railway New Delhi a suit was filed by the State of Rajasthan through the District Rehabilitation Officer Barmer claiming damages amounting to Rs 1 5782580 against the Union of India in the Court of the District Judge Balotra on July 231977
The suit was contested by the Union of India and the Railway Administration on various grounds and one of them was that the suit was not maintainable in the District Court in view of Article 131 of the Constitution which according to them conferred exclusive jurisdiction on the Supreme Court to decide all disputes arising between a State and the Union
The 6th issue framed in the suit related to the competence of the District Court to entertain the said suit
The above issue was heard as a preliminary issue and the District Judge held by his order dated April 16 1981 that he 703 had jurisdiction to try the suit
Against the order of the District Judge a revision petition was filed before the High Court of Rajasthan and that petition came to be dismissed on September 21981
This petition for Special Leave is preferred under Article 136 of the Constitution against the order of the High Court
After the case was heard for some time the learned Additional Solicitor General very fairly stated that the suit could be allowed to be proceeded with before the District Court
Since the question was of importance and that every suit instituted by any State Government against the Railway Administration may give rise to a similar issue we propose to dispose of this Special Leave Petition with our reasons
Article 131 of the Constitution reads thus 131
Subject to the provisions of this Constitution the Supreme Court shall to the exclusion of any other court have original jurisdiction in any dispute a between the Government of India one or more States or b between the Government of India and any State or States on one side and one or more other States on the other or c between two or more States if and in so far as the dispute involves any question whether of law or fact on which the existence or extent of a legal right depends Provided that the said jurisdiction shall not extend to a dispute arising out of any treaty agreement covenant engagement sanad or other similar instrument which having been entered into or executed before the commencement of this Constitution continues in operation after such commencement or which provides that the said jurisdiction shall not extend to such a dispute
 The provision corresponding to Article 131 of the Constitution in the Government of India Act 1935 was section 204 of that Act
That section prior to its amendment by the India Provisional Constitution Order 1947 read as 704 204
Original jurisdiction of Federal Court
1 Subject to the provisions of this Act the Federal Court shall to the exclusion of any other court have an original jurisdiction in any dispute between any two or more of the following parties that is to say the Federation any of the provinces or any of the Federated States if and in so far as the dispute involves any question whether of law or fact on which the existence or extent of a legal right depends Provided that the said jurisdiction shall not extend to a a dispute to which a State is a party unless the dispute i concerns the interpretation of this Act or of an Order in Council made thereunder or the extent of the legislative or executive authority vested in the Federation by virtue of the Instrument of Accession of that State or ii arise under an agreement made under Part VI of this Act in relation to the administration in that States of a law of the Federal Legislature or otherwise concerns some matter with respect to which the Federal Legislature has power to make laws for that State or iiiarises under an agreement made after the establishment of the Federation with the approval of His Majesty s Representative for the exercise of the functions of the Crown in its relations with Indian States between that State and the Federation or a Province being an agreement which expressly provides that the said jurisdiction shall extend to such a dispute b a dispute arising under any agreement which expressly provides that the said jurisdiction shall not extend to such a dispute
2 The Federal Court in the exercise of its original jurisdiction shall not pronounce any judgment other than a declaratory judgment
 705 It may be noted that while the main part of sub section 1 of section 204 of the Government of India Act 1935 is more or less similar to Article 131 of the Constitution there is a difference between the structure of the proviso to Article 131 and the structure of the proviso to section 204 1
Article 131 of the Constitution provides that subject to the provisions of the Constitution the Supreme Court shall to the exclusion of any other Court have original jurisdiction in any dispute a between the Government of India and one or more States or b between the Government of India and any State or States on one side and one or more other States on the other or c between two or more States if and in so far as the dispute involves any question whether of law or fact on which the existence or extent of a legal right depends
That means that if there is any dispute involving any question about the existence of a legal right or even where the existence of legal right is admitted if there is a dispute about its scope between or amongst the States and the Government of India as stated therein the Supreme Court would have exclusive jurisdiction to decide the question whether of law or fact
No other court has jurisdiction to deal with it
Similarly under section 204 of the Government of India Act 1935 the Federal Court had exclusive jurisdiction to decide similar questions which arose between or amongst the Federation any of the Provinces or any of the Federated States
Under the proviso to that section however it was provided that the said jurisdiction would not extend to dispute to which a State a Federated State was a party unless the dispute concerned matters mentioned in clauses i to iii thereof
Under the proviso to Article 131 of the Constitution the original jurisdiction of the Supreme Court does not extend to matters referred to therein
In the State of Bihar vs Union of India  Anr
after reviewing the constitutional history which led to the enactment of Article 131 of the Constitution a Constitution Bench of this Court observed at pages 529 530 thus Although article 131 does not define the scope of the disputes which this Court may be called upon to determine in the same way as section 204 of the Government of India Act and we do not find it necessary to do so this much is certain that the legal right which is the subject of dispute must arise in the context of the Consti 706 tution and the Federation it sets up
However there can be no doubt that so far as the parties to the dispute are concerned the framers of the Constitution did intend that they could only be the constituent units of the Union of India and the Government of India itself arrayed on one side or the other either singly or jointly with another unit or the Government of India Underlining by us The Constitution Bench ultimately held in the above case that if a private person firm or corporation was also impleaded as a party the dispute could not be tried by the Supreme Court under Article 131 of the Constitution
In Union of India vs State of Mysore the question was whether a writ petition filed in the High Court by a State against the Union of India questioning the correctness of the order of the Central Government passed on a revision petition filed under the rejecting the contention of the State Government against the levy of excise duty on goods in stock with the state s Implements Factory was maintainable
The High Court held that the Central Government being a Tribunal as such while disposing of the revision petition in the exercise of power conferred on it by Section 36 of the could not be a disputant in the dispute it decided
The Central Government was only interested in the recovery of duty which was properly payable but that by itself did not transform it from a Tribunal into a disputant
The High Court observed that A dispute falls within Article 131 of the Constitution only when the Central Government is a disputant as such
The dispute must directly arise between the State and the Central Government as the repository of the executive power of the Union
An indirect interest in the collection of the revenue in the form of excise duty if the excise duty demanded by the Central Excise is exigible is far too slender a foundation for the postulate that in every controversy arising under the provisions of the Central Excise Act the Central Government is necessarily a disputant
The acceptance of such interpretation would make the Central Government a party to every proceeding under the Central 707 Excise Act in the role of a disputant and that consequence can scarcely fit into its constitution as a tribunal under section 36 of the Act Vide State of Mysore
vs Union of India  Ors
Accordingly the contention raised by the Union of India was negatived by the High Court
This Court affirmed the above view of the High Court in the case of Union of India vs State of Mysore supra at page 845 thus Mr Raman tried to argue that the High Court erred in not applying article 131 of the Constitution to the controversy even though the writ petition was barred thereunder as it fell exclusively within the jurisdiction of this Court under article 131 of the Constitution as a dispute between the Government of India and the State of Mysore
The argument is however futile because there is nothing on the record to show that there was any such dispute between the Central and the State Government
As the High Court has pointed out the Union of India was made a party to the writ petition merely because it had dismissed the revision application of the State Government In State of Rajasthan  Ors etc etc
vs Union of India etc
while explaining the scope of Article 131 of the Constitution Chandrachud J as he then was said at page 54 The dispute between the Union of India and a State cannot but be a dispute which arises out of the differences between the Government in office at the Centre and the Government in office in the State In office  means in power  but the use of the latter expression may prudently be avoided with the realization of what goes with power
But there is a further prerequisite which narrows down the ambit of the class of dispute which fall within article 131
That requirement is that the dispute must involve a question whether of law or fact on which the existence or extent of a legal right depends
It is this qualification which affords the true guide for determining whether a particular 708 dispute is comprehended with article 131 
The purpose of article 131 is to afford a forum for the resolution of disputes which depend for their decision on the existence or extent of a legal right
 In State of Karnataka vs Union of India  Anr
Beg CJ Stated as under It has to be remembered that Article 131 is traceable to section 204 of the Government of India Act
The jurisdiction conferred by it thus originated in what was part of the federal structure set up by the Government of India Act 1935
It is a remnant of the Federalism found in that Act
It should therefore be widely and generously interpreted for that reason too so as to advance the intended remedy
It can be invoked in my opinion whenever a State and other States or the Union differ on a question of interpretation of the Constitution so that a decision of it will affect the scope or exercise of governmental powers which are attributes of a State
It makes no difference to the maintainability of the action if the powers of the State which are Executive Legislative and Judicial are exercised through particular individuals as they necessarily must be
It is true that a criminal act committed by a Minister is no part of his official duties
But if any of the organs of the State claim exclusive power to take cognizance of it the state such becomes interested in the dispute about the legal competence or extent of powers of one of its organs which may emerge
 On a careful consideration of the whole matter in the light of the decisions of this Court referred to above we feel that Article 131 of the Constitution is attracted only when a dispute arises between or amongst the States and the Union in the context of the constitutional relationship that exists between them and the powers rights duties immunities liabilities disabilities etc
flowing therefrom
Any dispute which may arise between a State in the capacity of an employer in a factory a manufacturer of goods subject to excise duty a holder of a permit to run a stage carriage a trader or businessman carrying on business not incidental 709 to the ordinary functions of Government a consumer of railway services etc
like any other private party on the one hand and the Union of India on the other cannot be construed as a dispute arising between the State and the Union in discharge of their respective executive powers attracting Article 131 of the Constitution
It could never have been the intention of the framers of the Constitution that any ordinary dispute of this nature would have to be decided exclusively by the Supreme Court
It is well to remember that the constitutional proposals of the Sapru Committee advocated the strengthening of the position of the Federal Court in India and widening its jurisdiction on the original side so that the Federal Court could act as an interpreter and guardian of the Constitution and as a tribunal for the determination of the disputes between the constituent units of the Federation
The Joint Committee on Indian Constitutional Reforms was also of opinion that the object of conferring exclusive original jurisdiction on the Federal Court was that the disputes of the kind specified between the Federation and the Provinces as the constituent units of the Federation should not be left to be decided by courts of law of a particular unit but be adjudicated upon only by the highest tribunal in the land which would be beyond the influence of any one constituent unit
The Special Committee consisting of Sriyuts section Varadachariar Alladi Krishnaswami Ayyar BL Mitter
KM Munshi and BN Rau appointed by the constituent Assembly to consider and report on the constitution and powers of the Supreme Court suggested that the Supreme Court like the Federal Court under the 1935 constitution would be the best available forum for the adjudication of all disputes between the Union and a unit and between one unit and another and proposed that the court should have an exclusive original jurisdiction in such disputes 
Vide The Framing of India s Constitution A Study by Shri B Shiva Rao at p 483
Considered in the light of the foregoing the conclusion becomes inevitable that disputes of the nature involved in this case could not have been in the contemplation of the framers of the constitution when they adopted Article 131 of the Constitution
In the instant case the legal right of the State of Rajasthan to sue for damages for the loss suffered by it on account of the damage caused to the goods transported through the Railway Administration as such is not in dispute between the Union Government and like State of Rajasthan
The State Government has made a claim the any other consignee of goods despatched through the railway for 710 compensation and its success or failure in the suit depends on proof of facts which have to be established in the same way in which a private person would have to establish
This is not even a case where a formal contract is entered into between the Union of India and the State of Rajasthan in accordance with the requirements of Article 299 of the Constitution
It is just a commercial contract under which an officer of the State of Rajasthan was entitled to claim delivery of the goods consigned as any ordinary consignee
It may be noticed that the jurisdiction of the Supreme Court under Article 131 of the Constitution is subject to the other provisions of the Constitution
Under Article 298 of the Constitution the executive power of the Union and of each State extends to the carrying on of any trade or business and to the acquisition holding and disposal of property and the making of contracts for any purpose
That Article further provides that the said executive power of the Union shall in so far such trade or business or such purpose is not one with respect to which Parliament may make laws be subject in each State to legislation by the State and said executive power of each State shall in so far as such trade or business or such purpose is not one with respect to which the State Legislature may make laws be subject to legislation by Parliament
The claim involved in this case is one based on section 80 of the Indian Railways Act 1890
Under that section a suit for compensation for loss of life of damage deterioration or non delivery of animals or goods may be instituted if the passenger was or the animals or goods were booked from one station to another on the railway of the same Railway Administration against that Railway Administration and if the passenger was or the animals of goods were booked through over the railways of two or more railway administrations against the Railway Administration from which the passenger obtained his pass or purchased his ticket or to which the animals or goods were delivered for carriage as the case may be or against the railway administration on whose railway the destination station lies or the loss injury destruction or damage or deterioration occurred and in either case the suit may be instituted in a court having jurisdiction over the place at which the passenger obtained his pass or purchased his ticket or the animals or goods were delivered for carriage as the case may be or over the place in which the destination station lies or the loss injury destruction damage or deterioration occurred Section 80 of the Indian Railways Act 1890 indicates that the claim made under it is essentially against the Railway Administration concerned
The Union of Indian is impleaded as a party to suits instituted thereunder being the owner of the Indian Railways by 711 virtue of Article 300 of the Constitution
The statute however treats the dispute as one between the Railway Administration concerned and the person instituting the suit
Neither of the parties to these proceeding is questioning the applicability of the provisions of the Indian Railways Act 1890 to these proceedings
It is therefore difficult to hold that in these proceedings is any question which falls within the scope of Article 131 of the Constitution
The High Court and the District Judge were therefore right in holding that the suit was entertainable by the District Court
For the foregoing reasons this Special Leave Petition fails and hereby dismissed
HSK Petition dismissed


Summary:
The respondent State of Rajasthan through its District Rehabilitation Officer Barmer filed a suit in the court of the District Judge Balotra against the appellant Union of India and the Railway Administration claiming damages for the loss suffered by it on account of the damage caused to the goods transported by rail through the Railway Administration
The appellant contended that the suit was not maintainable in the District Court in view of Article 131 of the Constitution which according to it conferred exclusive jurisdiction on the Supreme Court to decide all disputes arising between a State and the Union
The District Judge held that he had jurisdiction to try the suit
A Revision Petition filed against the order of the District Judge was dismissed by the High Court
Hence this petition for special leave to appeal
Dismissing the petition  HELD The suit was entertainable by the District Court
On a careful consideration of the whole matter in the light of the decisions of this Court it is felt that Article 131 of the Constitution is attracted only when a dispute arises between or amongst the States and the Union in the context of the constitutional relationship that exists between them and the powers rights duties
immunities liabilities disabilities etc
flowing therefrom
Any dispute 701 which may arise between a State in the capacity of an employer in a factory a manufacturer of goods subject to exercise duty a holder of a permit to run a stage carriage a trader or businessman carrying on business not incidental to the ordinary functions of Government a consumer of railway services etc
like any other private party on the one hand and the Union of India on the other cannot be construed as a dispute arising between the State and the Union in discharge of their respective executive powers attracting Article 131 of the Constitution
It could never have been the intention of the framers of the Constitution that any ordinary dispute of this nature would have to be decided exclusively by the Supreme Court
708G H 709A B State of Bihar vs Union of India  Anr   Union of India vs State of Mysore 1977 SCR 842
State of Mysore vs Union of India  Ors
AIR at pages 239 240 State of Rajasthan  Ors etc
vs Union of India etc
   State of Karnataka vs Union of India  Anr  at page 92 and The Framing of India s Constitution A Study by Shri B Shiva Rao at page 483 referred to
In the instant case the State Government has made a claim like any other consignee of goods despatched through the railway for compensation and its success or failure in the suit depends on proof of facts which have to be established in the same way in which a private person would have to establish
This is not even a case where a formal contract is entered into between the Union of India and the State of Rajasthan is accordance with the requirements of Article 299 of the Constitution
It is just a commercial contract under which an officer of the State of Rajasthan was entitled to claim delivery of the goods consigned as any ordinary consignee
The claim involved in this case is one based on section 80 of the Indian Railways Act 1890
Section 80 of the Indian Railways Act 1890 indicates that the claim made under it is essentially against the Railway Administration concerned
The Union of India is impleaded as a party to suits instituted thereunder being the owner of the Indian Railways by virtue of Article 300 of the Constitution
The statute however treats the dispute as one between the Railway Administration concerned and the person instituting the suit
Neither of the parties to these proceedings is questioning the applicability of the provisions of the Indian Railways Act 1890 to these proceedings
It is therefore difficult to hold that in these proceedings there is any question which falls within the scope of Article 131 of the Constitution
709H 710A B D H 711A B