minal Appeal No 158 of 1956
Appeal by special leave from the judgment and order dated February 9 1955 of the Calcutta High Court in Criminal Revision No 282 of 1954 arising out of the judgment and order dated December 15 1953 of the Second Municipal Magistrate Calcutta in Case No 2629C of 1952
Feb 8 9 10
section M Bose Advocate General for the State of West Bengal A C Mitra B Sen P K Bose and D Gupta for the appellant
Three questions arise for determination in this appeal 1 whether State is a  person  within the meaning of section 386 of the Calcutta Municipal Act 1923 2 does the Constitution make any change in the principal of prerogative as part of the common law and 3 does article 372 of the Constitution keep the existing law intact i e the law as declared in L R 73 1
A 271 to the effect that the Crown is not bound by any statute unless it is expressly named or unless it can be held to be included by necessary implication
The word  person  has been held not to include the State
AIR 1954 Punj 49  AIR 57 Punj 150 AIR 53 Nag 35  AIR 1955 Nag 177  ILR 1953 1 Cal
355 62 CWN 561
33 Pat
603 takes the contrary view If the word  person  included the State article 300 of the Constitution would not be 161 necessary
How far the Crown is bound by a Statute not specifically naming it is laid down by the Privy Council in LR 73 IA 271
The decision of the Madras High Court taking a contrary view in ILR was not cited before the Privy Council and is based upon the wrong assumption that common law changed with the change of legislation
The coming into force of the Constitution does not alter the law as laid down in LR 73 IA 271 ILR and ILR Article 372 of the Constitution includes the common law of the land and continues the same after the coming into force of the Constitution
ILR  ILR This common law doctrine of the immunity of the Crown from Statutes not specifically naming it or referring to it by necessary implication is applicable in United States also  52 L Ed 82  M C Setalvad Attorney General for India R Ganapathy Iyer R H Dhebar and T M Sen for intervener No 1 The question is whether the ancient rule of English common law declared to be applicable to India by the Privy Council is applicable to the construction of section 386 and it has to be examined as to what was the position before and after the Constitution
The High Court has decided that even before the Constitution the principle did not apply in spite of the Privy Council decision
The statute of 1923 must be con strued in accordance with the rule of interpretation prevailing in 1923
The makers of statute in 1923 did not intend to include State in the word  person 
The decision of the Privy Council was the binding law of the land unless there was legislation abrogating it or taking away its effect
Article 372 of the Constitution actually continues the law as laid down in LR 73 IA 271
This Article uses the expression  of the law in force in India  and not the words  existing law 
The same expression is used in section 292 of the Government of India Act and was interpreted in There is nothing in the Constitution which takes away the applicability of the rule
There is nothing in 21 162 that rule or in its nature repugnant to any provision of our Constitution
The rule is illustrated in  and I CLR 406
The rule is applicable to all forms of Governments and is based on the ground of public policy and not merely on the ground of prerogative
  V K T Chari Advocate General for Madras and T M Sen for intervener No 4 Supported the Advocate General of Bengal
H M Seervai Advocate General for Maharashtra and R H Dhebar for intervener No 5
The word  person  should be given its normal meaning
It does not include the Crown or the State
It would not include the State unless the statute would be meaningless without such inclusion
LR 73 IA 271  I CLR 406
By  necessary implication  is meant that without the inclusion of the crown or the State the beneficent purpose of the statute would be wholly frustrated
The consensus of judicial opinion in Bombay has been the same as expressed in LR 73 IA 271
The rule has nothing to do with forms of Government93 L Ed 1406
Indian decisions have uniformly taken this view
5 Bom
HCR 23  ILR I Bom
213 36 Bom
LR 820  ILR 2 All 196
ILR accepts the rule but says that it does not apply to taxation
This was a wrongful curtailment of the prerogative
Halsbury Vol 7 p 469 para 98
The judgments of the Privy Council delivered before January 26 1950 are binding on all courts in India except the Supreme Court and they are binding till the Supreme Court takes a different view
AIR 1953 Cal 524 AIR 1955 Nag 293 Government of India Act section 212 provided that the judgments of the Federal Court and of the Privy Council shall be binding and shall be followed
section M Sikri Advocate General of Punjab and D Gupta for intervener No 2
In pre Constitution statutes the word  person  could include  the Crown  but normally or ordinarily it would not so include
In ILR 1958 Punj
201 it was held that person  included the State of Punjab and the Union 163 of India
The rule laid down by the Privy Council is equally applicable to a Republic   65 L Ed 315  and  In AIR 1956 Pat 91 the State has been held to be a person
G C Mathur and C P Lal for intervener No 3
Adopted the arguments of the Advocate General of West Bengal and of the Attorney General of India
T M Sen for intervener No 6
Adopted the arguments of the Advocate General Bengal and the Attorney General of India
N C Chatterjee Sunil K Basu and Sukumar Ghose for respondents
Section 386 is directed towards maintenance of healthy condition etc
and is a wholesome provision for safeguarding the health of the people by providing for the control of storing houses and for the equality of the stores
The financial aspect i e the recovery of license fees or fine is inconsequential
The prerogative of immunity from the statutes is only available when the State acts as State and not when it descends to trade and business
State is a person
Salmond 11th Edition p 35 defines person as an entity capable of rights and duties
It has the power to hold and acquire property  it can sue and be sued Article 300 of the Constitution  60Punj
L R 546
The correct rule of interpretation is that to exempt the State from the operation of a statute there must be express exclusion in favour of the State
Friedman in The mere fact that the State cannot be sent to jail does not indicate that it is not a person
A Corporation is a person
It is the stigma of the conviction that matters and it is not a question of hurting the State financially  1950 SCR 720
A Corporation can be prosecuted even where mens rea or state of mind is concerned
Paton on Jurisprudence 2nd Edition p 279
Sanctions of criminal law should be available against the State for enforcing the law
72 C L R 409 Willis  Constitution Law p 37
State is a person
  I L R 1951 1 All 269
When State engages in trade or commerce it must be treated in the same 164 way as ordinary citizens
A 1
R  A 1
R 1956 Pat
91 State is not a person only for the purposes of article 14
The doctrine of immunity of States from the operation of its laws cannot be invoked in the present constitutional set up
The rule is based on royal prerogative
  Willis p 54
The rule springs from the prerogative that the King can do no wrong
There is no one equivalent to the King now in India and therefore the prerogative does not survive
Law is a scheme of social control and the command of a superior
If the State claims immunity it must be exempted by express legislation
Immunity cannot be implied
There has been progressive restriction on the immunity of the State    IL R lays down the correct law
After the coming into force of the Constitution the High Courts are not bound by the judgment of the Privy Council
All powers are derived from the Constitution and no immunities can be implied
Even if any immunity can be implied then it cannot be invoked in respect of any trading or commercial activity
5 Bom
H C R Appendix 1 at p 13   90 L Ed 326
The activity carried on by the State in storing food grains etc and distributing them was trading activity and not exercise of Governmental function
The State is bound by necessary implication by the provisions of the Calcutta Municipal Act 1923
There are provisions in the Act which expressly exempt the State from their operation
See section 126
section M Bose in reply
Common law can be amended by legislation
See section 4 Hindu Succession Act 30 of 1956 and Hindu Adoptions and Maintenance Act 78 of 1956
There is difference between Civil and Criminal liability
72 C L R 406 at 409 424 425
The State is not carrying on any trading activity but is acting in the exercise of essential Governmental functions
 Common law of England was introduced in the Presidency towns by statutes
See Ormond s Rules of Court 1
L R 61 Cal
165 H M Seervai with the permission of the Court
It is a settled rule that if a word is not a term of art you must take the ordinary meaning and not go to technical books
  90 L Ed 396 Halsbury Vol 7 p 221
section M Sikri with the permission of the Court referred to Holdsworth History of the English Law  Vol 10 p 354
August 16
The Judgment of Sinha CJ Imam and Shah JJ was delivered by Sinha C J Sarkar and Wanchoo JJ delivered separate judgments
SINHA C J
This appeal by special leave is directed against the judgment and order of the High Court at Calcutta dated February 9 1955 whereby that Court in its revisional jurisdiction set aside an order of acquittal dated December 15 1953 passed by the Municipal Magistrate Calcutta in respect of the prosecution launched by the Corporation of Calcutta respondent in this Court against the appellant
The relevant facts are these
On July 1 1952 the Corporation of Calcutta made an application for summons under section 488 of Bengal Act III of 1923 which was substituted by West Bengal Act XXXIII of 1951 against  the Director of Rationing and Distribution representing the Food Department of the Government of West Bengal 
The offence complained of was  for using or permitting to be used premises No 259 Chitpur Road Upper for the purpose of storing rice etc under the provisions of the Bengal Rationing Order 1943 without a licence under section 386 for the year 1951 52 corresponding section 437 of the CMC Act 1951 
Section 3861a of the Calcutta Municipal Act is in these terms  No person shall use or permit to be used any premises for any of the following purposes without or otherwise than in conformity with the terms of a licence granted by the Corporation in this behalf namely any of the purposes specified in Schedule XIX 166 Item 8 of the said Schedule is  storing packing pressing cleansing preparing or manufacturing by any process whatever any of the following articles and the articles mentioned include rice flour etc
The facts alleged by the prosecution were not denied in behalf of the Department which was in the position of the accused but it was contended by way of a preliminary objection that the prosecution was not maintainable in law
After hearing arguments for the parties the learned trial Magistrate passed an order acquitting the accused relying upon a decision of the Calcutta High Court in the case of The Corporation of Calcutta vs Sub Postmaster Dharamtala Post Office1 holding that the provisions of section 386 of the Act neither in terms nor by necessary implication bound the Government
The respondent moved the Calcutta High Court in its revisional jurisdiction in Criminal Revision No 282 of 1954 which was heard by a Division Bench consisting of J P Mitter and section N Guha Ray JJ
Cxuha Ray J who delivered the judgment of the Court Mitter J concurring held that the previous decision of the same High Court in The Corporation of Calcutta vs Sub Postmaster Dharamtala Post Office 1 was clearly distinguishable
The distinction pointed out was that the previous decision of the Court had relied upon the decision of the Judicial Committee of the Privy Council in Province of Bombay vs Municipal Corporation of the Citu of Bombay 2 in a case arising before the coming into force of the Constitution
As the present case arose after the advent of the Constitu tion the High Court did not feel bound by the aforesaid decision of the Privy Council and therefore examined the legal position afresh
On such an examination the High Court came to the conclusion that the Indian Legislature in enacting laws acted on the assumption that the Government would be bound unless excluded either expressly or by necessary implication oftener than on the assumption that it would not be bound unless the Legislature so provided expressly or by necessary implication
The High Court took the view that the decision of the Division 1 2 1946 LR 73 IA 271
167 Bench of the Madras High Court in Bell vs The Municipal Commissioners for the City of Madras 1 was more in consonance with the law in India than the opposite view expressed in the Privy Council judgment aforesaid
They definitely decided that the law of India even before the coming into effect of the Constitution 7 and even at the time of the passing of the Government of India Act 1935 was that the Government was bound by a Statute unless it was exempted either expressly or by necessary implication
In that view of the matter the High Court further observed that the question whether the decision aforesaid of the Privy Council was still good law under article 372 of the Constitution did not arise and that if it did it was inclined to the view that the law declared by the Privy Council was not continued by any provision of law
In effect the High Court took the view that the State was bound by the Statute unless it was excluded from its operation either expressly or by necessary implication
In that view of the matter it held that section 386 of the Act bound the appellant set aside the order of acquittal and sent the case back to the learned Magistrate for disposal according to law
The appellant made an application for special leave to appeal from the aforesaid judgment and order of the High Court and obtained special leave in September 1955
It is thus clear that this case had remained pending in this Court for about five years
If this Court agreed with the view expressed by the High Court the case would have to be tried on merits and the trial would begin more than eight years after the institution of the petition of complaint but as will presently appear this prosecution was misconceived and therefore in effect no one has been the worse for the long pendency of the prosecution which now must come to an end
The short question for determination in this appeal is whether any offence had been committed by the appellant as alleged against him
If he was bound by the provisions of the Act to take out a licence on payment of the necessary fees he must be held to have contravened the provisions of that Statute
It has 1 Mad 457
168 been contended by the learned Advocate General of Bengal representing the appellant that the decision of the Privy Council referred to above is still good law and that the contrary decision of the Division Bench of the Madras High Court 1 did not take the correct view of the legal position
The argument further is that the Privy Council decision was certainly binding on the Courts in India at the time it was rendered
That was the law of the land as declared by the highest judicial authority
Has that judicial determination been altered by the Constitution  It has been argued that the law in India even after the coming into effect of the Constitution continues to be the same as the law in England in respect of the prerogatives of the Crown
The Act in question does not make any express provision binding the Government and there was nothing in the Act to show to the contrary by necessary implication
The Act could operate with reasonable efficacy without being held to be binding on the Government
It was further pointed out that the High Court had failed to take into con sideration the fact that that High Court itself had construed the Calcutta Municipal Act of 1923 which was replaced by the present Act of 1951 on the basis of the Privy Council decision not to have bound the Government
The Act of 1951 did not make any provision expressly abrogating that view
Hence it is argued the High Court should have felt bound by the previous decision of that very Court given on the basis of the Privy Council decision and had erred in taking the opposite view
The argument further was that the State is not a person within the meaning of the penal section with reference to which the prosecution had been launched
The common law could not have been overridden impliedly by a course of legislation
The common law applies to India even after the Constitution not because there is the King or the Queen but because it is the law in force
In other words what was the prerogrative of the sovereign has now become the law of the land in respect of the sovereignty of the State
Thus the law of England which 1 Mad 457 169 in its source was the prerogative of the Crown was the common law of the land and was adopted by the Constitution by article 372 subject to the reservations contained therein
The Attorney General for India as also the Advocates General of Madras and Bombay supported the contention raised on behalf of the appellant
Mr N C Chatterjee who appeared on behalf of the respondent contended that the State is a legal person as recognised in article 300 of the Constitution and was therefore capable of rights and obligations that unless there is an express exclusion of the State by the Legislature the Act would apply to all including the State
He further contended that under the Constitution there is no King and therefore there cannot be any question of prerogative
Any exemption from the operation of the statute must be found in express immunity under the law and cannot be implied
He went to the length of contending that a State s prerogative is inconsistent with the whole Constitution
Whatever may have been the legal position before the coming into effect of the Constitution it has not countenanced the continuance of any such prerogative as is contended for on behalf of the appellant
Another line taken by Mr Chatterjee is that when the State embarks upon a business it does so not in its sovereign capacity but as a legal person subject to the same rights and liabilities as any other person
In effect therefore he contended that the State is a person within the meaning of section 386 of the Act that the doctrine of immunity of States from the operation of its laws cannot be invoked after the advent of the Constitution and alternatively that even if the immunity is available to the State as a sovereign power it is not available to the State when it embarked upon a commercial undertaking and that
in any case the State was bound by the law by applying the rule of necessary implication from the provisions of the Act
In this case it is manifest that it is the Government of West Bengal which is sought to be prosecuted 22 170 through one of its officers
The prosecution is not against a named person but against the Director of a named Department of the Government
The person who was the Director of the Department at the relevant date that is to say in the year 1951 52 may not be the same person who answered that description on the date the prosecution was launched
In essence therefore it is the Government of West Bengal which has to answer the charge levelled by the respondent the Corporation of Calcutta
Whether a prosecution against such an indeterminate person would or would not lie is a matter which has not been raised and therefore need not be discussed
The question most canvassed before us in whether the penal section invoked in this case applies to Government
It has been contended and in our opinion rightly that the provisions of the penal section neither by express terms nor by necessary implication are meant to be applied to Government
The decision of the Judicial Committee of the Privy Council1 if it is good law even now completely covers this case but the decision of the High Court now under examination has taken the view that the earlier decision of the Division Bench of the Madras High Court 2  has laid down the correct law and not the Privy Council decision
We have therefore to decide which of the two decisions has taken the correct view of the legal position as it obtained on the day the prosecution was launched
It is well established that the common law of England is that the King s prerogative is illustrated by the rule that the Sovereign is not necessarily bound by a statutory law which binds the subject
This is further enforced by the rule that the King is not bound by a statute unless he is expressly named or unless he is bound by necessary implication or unless the statute being for the public good it would be absurd to exclude the King from it
Blackstone Commentaries Vol
I 261 262 accurately summed up the legal position as follows The king is not bound by any act of Parliament unless he be named therein by special and 1 1946 LR 73 IA 271
2 Mad
457 171 particular words
The most general words that can be devised affect not him in the least if they may tend to restrain or diminish any of his rights or interests
For it would be of most mischievous consequence to the public if the strength of the executive power were liable to be curtailed without its own express consent by constructions and implications of the subject
Yet when an act of Parliament is expressly made for the preservation of public rights and the suppression of public wrongs and does not interfere with the established rights of the crown it is said to be binding as well upon the king as upon the subject and likewise the king may take the benefit of any particular act though he be not specialty named Quoted at p 355 of Holdsworth A History of English Law Vol
The King s prerogative is thus created and limited by common law and the sovereign can claim no prerogative except such as the law allows
See Halsbury s Laws of England Vol 7 Third Edition para
464 at p 22 1
The prerogative of the Crown in respect of property is thus stated in the same volume of Halsbury s Laws of England para
980 at p 465 The Crown not being bound by any statute whereby any prerogative right title or interest belonging to it may be divested or abridged unless expressly named or bound by clear implication property owned and occupied by the Crown is exempt from taxation unless rendered liable either by express words or necessary implication
Moreover an express exemption of particular classes of Crown property in a statute is not in itself sufficient to raise the implication that such property only is exempt and that other property not falling within the exception is bound such clauses being inserted merely ex majore cautela
 That was the law applicable to India also as authoritatively laid down by the Privy Council in the case referred to above
That decision was rightly followed by the Calcutta High Court as stated above
That would be the legal position until the advent of the Constitution
172 The question naturally arises whether the Constitution has made any change in that position  There are no words in the Constitution which can be cited in support of the proposition that the position has changed after the republican form of Government has been adumbrated by our Constitution
It was argued on behalf of the respondent that the existence of such a prerogative is negatived by the very form of our new set up that is to say it was contended that the republican form of Government is wholly inconsistent with the existence of such a prerogative
In our opinion there is no warrant for such a contention
The immunity of Government from the operation of certain statutes and particularly statutes creating offences is based upon the fundamental concept that the Government or its officers cannot be a party to committing a crime analogous to the I prerogative of perfection  that the King can do no wrong
Whatever may have been the historical reason of the rule it has been adopted in our country on grounds of public policy as a rule of interpretation of statutes
That this rule is not peculiar or confined to a monarchical form of Government is illustrated by the decision of the Supreme Court of U section A in the case of United States of America vs United Mine Workers of America 1 where it is laid down that restrictions on the issue of injunctions in labour disputes contained in certain statutes do not apply to the United States Government as an employer or to relations between the Government and its employees and that statutes in general terms imposing certain restrictions or divesting certain privileges will not be applied to the sovereign without express words to that effect
Similarly in the case of United States of America vs Reginald P Wittek 2 the question arose whether the District of Columbia Emergency Rent Act applied to government owned defence housing or to government owned low rent housing in the District and it was ruled by the Supreme Court reversing the decision of the Municipal Court of Appeals that the statute in question did not apply to the United States Government 1  2  173 which was not a  landlord  within the meaning of the Act
The decision was based on the rule that a general statute imposing restrictions does not impose them upon the Government itself without a clear expression or implication to that effect
Another illustration of the rule is to be found in the case of Jess Larson vs Domestic and Foreign Commerce Corporation 1
In that case a suit by a citizen in effect against the Government War Assets Administration for an injunction was dismissed by the District Court on the ground that the Court did not have jurisdiction because the suit was one against the United States
The Supreme Court by majority held that the suit as against the United States must fail on the ground that according to the laws of the country the sovereign enjoyed an immunity which was not enjoyed by the citizens
The case of Roberts vs Ahern 2 is another illustration of the same rule
It was held by the High Court of Australia in that case that the Executive Government of the Commonwealth or of a State is not bound by a statute unless the intention that it shall be so bound is apparent
On the other hand article 372 of the Constitution has specifically provided that subject to the other provisions of the Constitution all the laws in force in this country immediately before the commencement of the Constitution shall continue in force until altered or repealed or amended by a competent Legislature or by other competent authority
The expression  law in force  has been used in a very comprehensive sense as would appear from the provisions of sub cls
a and b of cl
3of article 13 of the Constitution
If we compare the provisions of article 36610 which defines  existing law  which has reference to law made by a legislative agency in contradistinction to  laws in force  which includes not only statutory law but also custom or usage having the force of law it must be interpreted as including the common law of England which was adopted as the law of this country before the Constitution came into force
It is thus clear that far from 1    2 1904 I CLR 406 174 the Constitution making any change in the legal position it has clearly indicated that the laws in force continue to have validity even in the new set up except in so far as they come in conflict with the express provisions of the Constitution
No such provision has been brought to our notice
That being so we are definitely of the opinion that the rule of interpretation of statutes that the State is not bound by a statute unless it is so provided in express terms or by necessary implication is still good law
But Mr Chatterjee further contended alternatively that even if it were held that the Government as a sovereign power may have the benefit of the immunity claimed it is not entitled to that immunity when it embarks upon a business and in that capacity becomes subject to the penal provisions of the statute equally with other citizens
This question was not raised below and has not been gone into by the High Court nor is it clear on the record as it stands that the Food Department of the Government of West Bengal which undertook rationing and distribution of food on a rational basis had embarked upon any trade or business
In the absence of any indication to the contrary apparently this Department of the Government was discharging the elementary duty of a sovereign to ensure proper and equitable distribution of available food stuffs with a view to maintaining peace and good Government
Therefore the alternative argument suggested by Mr Chatterjee has no foundation in fact
It only remains to consider the other alternative argument that even if the State has not been bound by the penal section in the statute in question in express terms it must be deemed to be bound by it by necessary implication
But no specific provisions of the statute in question have been brought to our notice which could lend any support to this alternative argument
It has not been shown to us that if the section which was sought to be applied against the Government were held not expressly to apply to Government the law will lose any of its efficacy or that its working will be hampered in any way
It must therefore be 175 held that there is no substance in this contention either
The appeal is accordingly allowed the judgment under appeal set aside and the acquittal of the appellant confirmed
SARKAR J
The appellant is an officer of the Government of West Bengal
He was prosecuted before a Municipal Magistrate of Calcutta for storing rice in certain premises without obtaining a licence for that purpose from the respondent the Corporation of Calcutta as required by section 386 of the Calcutta Municipal Act 1923
That was an Act passed by the legislature of the former Province of Bengal and may for the present purpose be taken to have been passed by the legislature of the State of West Bengal
In storing the rice the appellant had acted in his official capacity and for carrying out the West Bengal Government s rationing scheme
The Magistrate acquitted the appellant holding that the Act did not bind the Government as it was neither expressly nor by necessary implication made bound and so the appellant who had been prosecuted as representing the Government would not be liable for non compliance with its provisions
On revision the High Court at Calcutta held that the English rule that a statute did not bind the Crown unless expressly or by necessary implication made bound did not apply to Indian statutes and so the Government would be liable for breach of the provisions of the Calcutta Municipal Act
In this view of the matter the High Court set aside the order of acquittal and sent the case back to the Magistrate for disposal on the merits
This appeal has been taken from the order of the High Court with special leave granted by this Court
The main question is whether the English rule that The Crown is not bound by the provisions of any statute unless it is directly or by necessary implication referred to  applies to India
It is said that the rule is based on the English law of Crown prerogatives and has no application to India since the promulgation of our Constitution as we have now a republican 176 form of government where no question of royal prerogatives can arise
It is pointed out that the prosecution was in this case started since the Constitution came into force and whatever may have been the position earlier the Government can no longer take shelter under the English rule
I think the rule applies to India even after the Constitution
It seems to me that the rule as applied in modern times is really a rule of construction of statutes and is not dependent on royal prerogatives
This is the view that appears to have been taken in all recent authorities to some of which I wish now to refer
In Craies on Statutes 5th Ed it is stated at p 392 that  The rule is analogous if not equivalent to the rule already stated that the common law is not presumed to be altered by statute 
The rule therefore is based on the presumed intention of the legislature and is hence a rule of construction of statutes
Then I find it stated in Attorney General vs Donaldson 1 that  It is a well established rule generally speaking in the construction of Acts of Parliament that the King is not included unless there are words to that effect for it is inferred prima facie that the law made by the Crown with the assent of the Lords and Commons is made for subjects and not for the Crown
Again in Comber V Justices of Berks 2 it was said in reference to this rule  In Rex vs Cook 3 TR 519 the general principle as to the construction of statutes imposing charges as containing an exemption of the Crown was laid down 
In the Australian case of Roberts vs Ahern 3 it was said This rule has commonly been based on the Royal prerogative
Perhaps however having regard to modern developments of constitutional law a more satisfactory basis is to be found in the words of Alderson B The words referred to are what I have already set out from Attorney General vs Donaldson 1
In America too this rule has been applied as a rule 1   123  2   65
3 1904 1CLR 406 417
177 of construction though there is no King there but the government is of the republican form
So in United States vs United Mine Workers of America 1 it was observed  There is an old and well known rule that statutes which in general terms divest pre existing rights or privileges will not be applied to the sovereign without express words to that effect
It has been stated in cases in which there were extraneous and affirmative reasons for believing that the sovereign should also be deemed subject to a restrictive statute that this rule was a rule of construction only 
Again in reference to the same rule it was said in United States V State of California 2
 The presumption is an aid to consistent construction of statutes of the enacting sovereign when their purpose is in doubt 
In our country also in Bell vs The Municipal Commissioners for the City of Madras3 a case on which much reliance has been placed by the respondent it was said after referring to various English cases dealing with the rule  This emphatic statement of the rule being founded upon general principles of construction is undoubtedly applicable as much to Indian enactments as to Colonial or Imperial Statutes 
It was also said at the same page  The rule of construc tion above adverted to cannot itself be regarded as a prerogative of the Crown 
Then I find that in England the rule protects from the operation of a statute not only what may strictly be called Crown prerogatives or whatever is nowadays left of them but all the Crown s rights title and interest see Halsbury s Laws of England 3rd Ed Vol
VII p 465
In volume XXXI of the Second Edition of the same treatise it is stated with reference to the rule that  The Crown for this purpose means not only the King personally but also the officers of State and servants of the Crown when acting within the scope of their authority on behalf of the Crown in the discharge of executive duties 
In Mersey Docka 1   272    902
2   186   574
3 Mad
457 485
23 178 vs Cameron1 Lord Cranworth after referring to the various instances where the rule had been applied to exempt buildings occupied for purposes of the government from rates and other impositions said  These decisions however have all gone on the ground more or less sound that these might all be treated as buildings occupied by the servants of the Crown and for the Crown extending in some instances the shield of the Crown to what might more fitly be described as the public government of the country 
Again in Coomber vs Justices of Berks 2 Lord Blackburn after referring to certain observations of Lord Westbury in the Mersey Docks case1 said He there says that the public purposes to make an exemption  must be such as are required and created by the government of the country and are therefore to be deemed part of the use and service of the Crown and in Greig vs University of Edinburgh 3 be more clearly shews what was his view by using this language property occupied by the servants of the Crown and according to the theory of the Constitution property occupied for the purposes of the administration of the government of the country become exempt from liability to the poor rate 
 In this case it was held that lands with buildings constructed thereon and used by county justices and for police purposes were not liable to income tax
In Cooper vs Hawkins 4 it was held that an engine driver employed by the Crown who drove a steam locomotive on Crown service at a speed exceeding the limit specified by regulations made under a statute was not liable as in the absence of express words the statute did not bind the Crown
Lastly I refer to Roberts vs Ahern 5 where a person acting under the orders of the Government of the Commonwealth of Australia had been prosecuted for having carted away nightsoil from a Post Office without a licence from and without having given any security to the local authority as was required by an enactment of the State of Victoria
It was held that he was not liable to prosecution because 1   508  2   65
3 1868 LRI HL SC348
4 5   417 179  The modern sense of the rule at any rate is that the Executive Government of the State is not bound by Statutes unless that intention is apparent  p 418
It was also said that  The doctrine is well settled in this sense in the United States of America  p 418
It is unnecessary to multiply instances where acts of the executive government have received the protection of the rule
All this would seem to put it beyond doubt that whatever its origin the rule has long been regarded only as a rule of construction
It has been widely used to exempt executive governments from the operation of statutes quite apart from protecting prerogative rights of the British Crown strictly so called
It has been held reasonable to presume that the legislature intended that executive governments are not to be bound by statutes unless made bound expressly or by necessary implication
It would be equally reason
able to do so in our country even under the present set up for the presumption has all along been raised in the past and especially as the applicability of the rule can no longer be made to depend on the prevailing form of government
In countries with a republican form of government the Sovereign would be the State and its acts which can only be the acts of its executive limb would be under the rule exempt from the operation of its statutes
Whether the royal prerogative as understood in England exists in the present day India is not a question that can arise in applying what is a pure rule of construction of statutes
Further it is quite clear that the rule has been applied by courts in India in the construction of Indian statutes all along at any rate upto the promulgation of our Constitution except in the solitary instance of Bell s case 1 earlier referred to
It would therefore be right to hold that the legislatures in our country have proceeded on the basis that the rule would govern the enactments passed by them
That being so and remembering that the rule is one of construction there would be no reason to deny its application to Indian statutes after the Constitution
The Dew republican 1 Mad
180 form of government adopted by us would not warrant a departure from the long established rule of construction
It was then said that the course of legislation in India would indicate that it was not intended even before the Constitution that the rule would apply to Indian statutes
This contention was based on Bell s case1
That case seems to me to have proceeded on a basis not very sound
On an examination of certain Indian statutes it was said  It is noteworthy that as a general rule government is specially excluded whenever the Legislature considered that certain provisions of an enactment should not bind the Government 
From this the conclusion was drawn that According to the uniform course of Indian legislation statutes imposing duties or taxes bind Government as much as its subjects unless the very nature of the duty or tax is such as to be inapplicable to the Government 
It seems to me that this decision overlooks the uniform course of decisions of Indian Courts applying the rule in the construction of Indian statutes
The legislature must be deemed to have known of these decisions and if they wanted to depart from their effect they would have passed a statute bringing about the desired result
No such statute was ever passed
It is wellknown that in these circumstances the legislatures must be taken to have proceeded on the basis that the decisions were correct and the rule was to be applied to the statutes passed by them
That being so an examination of the course of Indian legislation would be irrelevant
The cases where the Government was expressly excluded must be taken to be instances of exemptions ex majori cautila see Hornsey Urban Council vs Hennel2
Furthermore it seems to me that a comparison of the number of statutes where the Government had been specially excluded from their operation with the number where the statutes are silent on the subject is at best a very unsafe guide for deciding whether the rule should be applied to Indian enactments
I therefore dissent from the view expressed in Bell s case1 that the rule does not apply in India
1 Mad
2 181 Now it seems to me that in storing the rice in the present case the Government of West Bengal was performing one of its governmental functions
It was storing rice for purposes of rationing that is making food stuff available to citizens in time of scarcity
That such activity is a part of the government s duty is unquestionable
The act for which the appellant was prosecuted was therefore an act of the West Bengal Government done in discharge of its ordinary duties as the government and the rule would prevent the Act from applying to make the Government liable for a breach of it
Then it is said that the Act binds the Government by necessary implication
In support of this argument we were referred to certain provisions of the Act which expressly exempted the Government from their operation
I am unable to agree that this raises the necessary implication
It has been said in Halsbury s Laws of England 2nd Ed Vol
XXXI at p 523 that  A general prerogative of the Crown is not deemed to have been abandoned by implication by reason of the specific exemption in a statute of any class of the servants of the Crown from acting in compliance with the prerogative nor by reason of the fact that the Crown has foregone or curtailed its rights in some other direction in another part of the statute   see also Hornsey Urban Council case 1 earlier referred to
These observations would show the unsoundness of the contention raised by the respondent
Lastly it is said that the purpose of the Act was to prevent adulteration of food stuffs and this object would be wholly defeated unless the Government was bound by it
It is not in dispute that if this were so that might be a ground for holding that the Act bound the Government
On this aspect of the case reference may be made to Province of Bombay vs Municipal Corporation of Bombay 2
I am however unable to hold that the purpose of the Act would be wholly or at all defeated if the Government were not bound by it
It seems to me that section 386 of the Act the breach of which is complained in this case is concerned with 1 2 1946 LR 73 IA 271
182 the use of premises and not with the prevention of adulteration of food stuffs as was contended for the respondent
The provisions with regard to adulteration of food stuffs are contained in a different part of the statute
There is nothing to show that the purpose of the Act would wholly be defeated if some premises were used contrary to the terms of the Act
I would for these reasons hold that the Act did not bind the Government and the prosecution of the appellant for an act done in the discharge of his duties as an officer of the Government cannot be maintained
This appeal should therefore be allowed and the order of the High Court set aside and that of the Magistrate restored
WANCHOO J I have had the advantage of reading the judgments prepared by my Lord the Chief Justice and my brother Sarkar J
I agree with their conclusion but my reasons are different
I therefore proceed to state my reasons for coming to the same conclusion
The facts have already been stated in the judgment of my Lord the Chief Justice and I will not therefore repeat them
Suffice it to say that the Corporation of Calcutta initiated this prosecution in substance of the State of West Bengal through its Director of Rationing and Distribution under section 488 of the Calcutta Municipal Act No 111 of 1923 now equivalent to section 537 of the Calcutta Municipal Act No XXXIII of 1951 for using or permitting to be used certain premises for the purpose of storing rice etc
under the provisions of the Bengal Rationing Order 1943 without a licence under section 386 of Act III of 1923 now equivalent to section 437 of Act XXXIII of 1951
The State did not deny the facts but it was contended on its behalf that the prosecution was not maintainable in law
The Magistrate held that the provisions of section 386 of the 1923 Act did not apply to the State either expressly or by necessary implication and therefore passed an order of acquittal
The Corporation took the matter in revision to the High Court which distinguished an earlier decision of the High Court relied upon by the Magistrate and held that after India became a 183 democratic republic from January 26 1950 the High Court was not bound by the decision of the Privy Council in a similar matter reported in Province of Bombay vs Municipal Corporation of the City of Bombay 1 and that the rule of construction based on the royal prerogative that the Crown was not bound by a statute unless it was expressly named therein or at any rate could be held to be bound by necessary implication did not apply in India after January 26 1950 and that the true rule of construction on which the Indian legislatures acted was that the State would be bound unless excluded either expressly or by necessary implication
The High Court therefore held that section 488 of the Act of 1923 read with section 386 bound the State and set aside the order of acquittal and sent the case back to the Magistrate for disposal according to law
The most important question thus is whether the rule of construction derived from the royal prerogative in England can still be said to apply in India after January 26 1950
If this rule of construction based on the royal prerogative does not apply it would necessarily follow that the ordinary rule of construction namely that the State would also be bound by the law like anybody else unless it is expressly excluded or excluded by necessary implication would apply
Now the rule of construction based on the royal prerogative is a survival from the medieval theory of divine right of Kings and the conception that the sovereign was absolutely perfect with the result that the common law of England evolved the maxim that  the King can do no wrong 
In course of time however the royal prerogative in England was held to have been created and limited by the common law and the sovereign could claim no prerogatives except such as the law allowed nor such as were contrary to Magna Carta or any other statute or to the liberties of the subject
The courts also had jurisdiction to inquire into the existence or extent of any alleged prerogative
If any prerogative was disputed they had to decide the question whether or not it existed in the same way as they decided any other question of law
If a 1 1946 LR 73 IA 271
184 prerogative was clearly established they could take the same judicial notice of it as they took of any other rule of law see Halsbury s Laws of England 3rd Edition Vol 7 p 221 para 464
The question of royal prerogative was also considered in Attorney General vs De Keyser s Royal Hotel Limited1
It was held there in that even where there was prerogative it could be curtailed by a statute if the statute dealt with something which before it could be affected by the prerogative inasmuch as the Crown was a party to every Act of Parliament
Thus in modern times the royal prerogative is the residue of discretionary or arbitrary authority which at any time is legally left in the hands of the Crown and is recognised under the common law of England
Two things are clear from this modern conception of royal prerogative namely 1 that there must be a Crown or King to whom the royal prerogative attaches and 2 that the prerogative must be part of the common law of England
Both these conditions existed when the Privy Council decision in Province of Bombay vs Municipal Corporation of the City of Bombay 2 was given in October 1946 the King was still there and the Privy Council held that the English common law rule of construction applied to Indian legislation as much as to English statutes
I may mention however that in England also the rule has come in for criticism by writers of books on law
Glanville L Williams in his treatise on  Crown Proceedings  says at p 53  The rule originated in the Middle Ages when it perhaps had some justification
Its survival however is due to little but the Vis inertiae Again at 54 the author says  With the great extension in the activities of the State and the number of servants employed by it and with the modern idea expressed in the Crown Proceedings Act compare in this connection article 300 of our Constitution  that the State should be accountable in wide measure to the law the presumption should be that a statute binds the Crown rather than it does not 1  2 1946 LR 73 IA 271 185 After January 26 1950 when our country became a democratic republic and the King ceased to exist it is rather otiose to talk of the royal prerogative
It is also well to remember that the English common law as such never applied to India except in the territories covered by the original side of the three Chartered High Courts namely Calcutta Bombay and Madras see Kahirodebihari Datta vs Mangobinda Panda1  though sometimes rules of English common law were applied by Indian courts on grounds of justice equity and good conscience
It seems to me therefore that to apply to Indian statutes a construction based on the royal prerogative as known to the common law of England now when there is no Crown in this country and when the common law of England was generally not even applicable except in a very small part would be doing violence to the ordinary principle of construction of statutes namely that only those are not bound by a statute who are either expressly exempted or must be held to be exempt by necessary implication
In our country the Rule of Law prevails and our Constitution has guaranteed it by the provisions contained in Pt
III thereof as well as by other provisions in other Parts see Virendra Singh and others vs The State of Uttar Pradesh 2 
It is to my mind inherent in the conception of the Rule of Law that the State no less than its citizens and others is bound by the laws of the land
When the King as the embodiment of all power executive legislative and judicial has disappeared and in our republican Constitution sovereign power has been distributed among various organs created thereby it seems to me that there is neither justification nor necessity for continuing the rule of construction based on the royal prerogative
It is said that though the King has gone sovereignty still exists and therefore what was the prerogative of the King has become the prerogative of the sovereign
There is to my mind a misconception here
It is true that sovereignty must exist under our Constitution 1 Cal
841 857
2 1955 1SCR 415
186 but there is no sovereign as such now
In England however the King is synonymous with the sovereign and so arose the royal prerogative
But in our country it would be impossible now to point to one person or institution and to say that he or it is the sovereign under the Constitution
A further question may arise if one is in search of a sovereign now whether the State Government with which one is concerned here is sovereign in the same sense as the English King though it may have plenary powers under the limits set under our Constitution
This to my mind is another reason why there being no King or sovereign as such now in our country the rule of construction based on the royal prerogative can no longer be invoked
Reliance was placed in this connection on certain cases from Australia and Canada and also from the United States of America
So far as Australia and Canada are concerned the cases are not of much help for the Crown exists there still
Besides in Canada and in most of the provinces of Canada and in New Zealand provisions have been specifically introduced in the Interpretation Acts laying down that no provision or enactment in any Act shall affect in any manner whatsoever the rights of His Majesty his heirs or successors unless it is expressly stated therein that His Majesty shall be bound thereby see Street on Governmental Liability  at p 152
In the United States also it is doubtful if the royal prerogative as such is relied on as the basis of certain principles which are in force there
In United States of America vs United Mine Workers of America Etc
1 the Supreme Court did say that there was an old and well known rule that statutes which in general terms divested pre existing rights and privileges would not be applied to the sovereign without express words to that effect
But there was no discussion of the royal prerogative as such in the judgment and the rule was called a well established rule of construction only
Besides the Court went on to consider the words of the statutes under consideration and held that on a proper construction of them the United States was not bound
1  187 In United States of America vs Reginald P Wittek 1 the Supreme Court did say that a general statute imposing restrictions does not impose them upon the government itself without a clear expression or implication to that effect but this decision was based mainly on the terms of the State statute there under consideration and the surrounding circumstances and legislative history of the statute concerned
Another case in the same volume is Jess Larson vs Domestic and Foreign Commerce Corporation 2 at p 1628 where a suit was brought against an officer of the United States and it was held that it was in substance a suit against the sovereign government over which the court in the absence of consent had no jurisdiction
There is no discussion in this case of the royal prerogative having continued in the United States and the decision seems to have turned on some law of that country which provides that a suit against the Government could not be tried in a court in the absence of consent
As against these decisions I may refer to H Snowden Marshall vs People of the State of New York 3 to show that royal prerogative as such is losing ground in the United States if nothing more
When dealing with the priority of a State over the unsecured creditors in payment of debts out of the assets of the debtor the Supreme Court held that whether the priority was a prerogative right or merely a right of administration was a matter of local law and the decision of the highest court of the State as to the existence of the right and its incidents would be accepted by the Federal Supreme Court as conclusive
Again in Guaranty Trust Company of New York vs United States of America 4 the Supreme Court held that the immunity of the sovereign from the operation of statutes of limitation although originally a matter of royal prerogative was now based upon the public policy of protecting the citizens of the State from the loss of their public rights and revenues through the 1 L Ed 1406
2 L Ed 1628
3  L Ed 315
4  188 negligence of the officers of the State showing that some of those immunities which in England were claimed as royal prerogatives though preserved in the United States were so preserved for other reasons
Besides it must not be forgotten that though the Crown no longer remained in the United States after the attainment of independence the American colonies out of which the United States arose were colonised by English settlers who carried the common law of England with them to America with the result that the first Constitution of some of the States like New York after independence provided that the common law of England which together with the statutes constituted the law of the colony before independence should be and continue to be the law of the State subject to such alterations as its legislature might thereafter make see H Snowden Marshall vs People of the State of New York  at p 317
That may account for the United States recognising some of those prerogative rights which were in force in England though even so the basis for such recognition is now more the law or public policy than any royal prerogative as such
The position in our country was somewhat different
We had the King but the common law of England did not as already indicated apply as a rule in this country
Now that the King has also gone there seems to be no reason for continuing the royal prerogatives after January 26 1950
Further it appears to me that the royal prerogative where it deals with substantive rights of the Crown as against its subjects as for example the priority of Crown debts over debts of the same nature owing to the subject stands on a different footing from the royal prerogative put forward in the present case which is really no more than a rule of construction of statutes passed by Parliament
Where for example a royal prerogative dealing with a substantive right has been accepted by the Courts in India as applicable here also it becomes a law in force which will continue in force under article 3721 of the Constitution
But 1   189 where the royal prerogative is merely a rule of construction of statutes based on the existence of the Crown in England and for historical reasons I fail to see why in a democratic republic the courts should not follow the ordinary principle of construction that no one is exempt from the operation of a statute unless the statute expressly grants the exemption or the exemption arises by necessary implication
On the whole therefore I am of opinion that the proper rule of construction which should now be applied at any rate after January 26 1950 is that the State in India whether in the Centre or in the States is bound by the law unless there is an express exemption in favour of the State or an exemption can be inferred by necessary implication
The view taken by the Calcutta High Court in this connection should be accepted and the view expressed by the Privy Council in Province of Bombay vs Municipal Corporation of the City of Bombay 1 should no longer be accepted as the rule for construction of statutes passed by Indian legislatures
Let me then come to the question whether on the view I have taken of the rule of construction the prosecution in this case can be allowed to continue
There is nothing in the Act of 1923 or in the Act of 1951 exempting the State specifically from any of the provisions of the Calcutta Municipal Act
In this case the State is being prosecuted under section 488 or section 537 now and that section provides for fine for breach of section 386 or section 437 now
The provision is a penal provision  and immediately a question arises whether the State as such apart from its individual officers as natural persons is liable to prosecution under the criminal law or has to be exempted from the operation of the provisions of criminal statutes by necessary implication
A criminal proceeding generally ends with punishment which may be imprisonment or fine or both
Now it does not require any elaborate reason to realise that the State as such cannot be sentenced to imprisonment because there is no way of 1 1946 LR 73 IA 271 190 keeping it in prison therefore by necessary implication the State is exempt from all penal statutes and provisions providing for sentences of imprisonment or death
Then come those penal provisions which impose fines like the present case and the question is whether in such a case also the State must be deemed by necessary implication to be exempt from the penal provision
Generally speaking fines when inflicted by courts are realised by the State and go to the coffers of the State
In effect therefore if the State as such is to be prosecuted under a penal statute imposing fine the result is that the Court will sentence the State to fine which will go to the State itself
It is obvious that if such is the result of a prosecution namely that the accused gets the fine the intention could never be that such a prosecution should be launched
Therefore where the penalty is fine and the fine goes to the State it must be held that by necessary implication the law does not intend the State to be prosecuted for such an offence
In the present case I find that under section 81 of the Act of 1923 or the corres ponding section 115 of the Act of 1951 the fines imposed by the Magistrate will not go to the Corporation but in the usual way to the State
Under the circumstances whatever other methods may be possible for enforcing the provisions of section 386 or section 437 now against the State it cannot be intended to be enforced by prosecution resulting in fine which would go to the State itself
In these circumstances it must be held that by necessary implication the State is exempt from the penal provisions contained in section 488 now section 537
I would therefore allow the appeal set aside the judgment of the High Court and restore the order of acquittal by the Magistrate
Appeal allowed


Summary:
In pursuance of an agreement dated October 21 954 entered into between the Government of India and the Government of France whereby there was a de facto transfer of the administration of Pondicherry and other French Settlements to the Government of India as and from November 1 1954 a notification dated October 30 1954 was issued by the Government of India called the French Establishments  Application of Laws Order 1954 by virtue of which certain enactments specified in column 3 of the Schedule which included the Sea Customs Act 306 1878 the Imports  Exports Trade Control Act 1947 and the Foreign Exchange Regulation Act 1947 were extended to Pondicherry
Paragraph 6 of the Order provided Unless otherwise specifically provided in the Schedule all laws in force in French Establishments immediately before the commencement of the Order which correspond to enactments specified in the Schedule shall cease to have effect save as respect things done or omitted to be done before such commencement Shortly prior to the transfer of the administration of Pondicherry to India the petitioners had entered into certain agreements with foreign suppliers for the import into Pondicherry of diverse goods
Pondicherry was prior to the transfer to India a free port without any restrictions on imports except on a few items and the importers could acquire foreign exchange either at the official rate in respect of some transactions or at the open market in respect of others
The petitioners had with the consent of the French authorities obtained through the banks foreign exchange from the open market to finance their imports and had with the foreign exchange so acquired opened irrevocable letters of credit in favour of their foreign suppliers on account of the price of the goods to be supplied
On or about November 1 1954 the goods covered by the aforesaid imports were in different stages of shipment and arrived at the port of Pondicherry in January and February 1955
The Collector of Customs treated the imports of the goods as unauthorised and confiscated the same and gave the petitioners an option to pay in lieu of confiscation a penalty on the ground that the petitioners had not obtained a licence for bringing the goods into Pondicherry and that section 1678 of the  was contravened
The petitioners claimed inter alia that the transactions entered into by them with the foreign dealers were  things done  within the meaning of para
6 of the French Establishments  Application of Laws Order 1954 and that therefore the imports by the petitioners were within the saving clause of that paragraph
Held Per Sinha C J Imam and Subba Rao JJ
Sarkar and Shah JJ
dissenting 1 that on its proper interpretation the expression  things done  in para
6 of the French Establishments  Application of Laws Order 1954 was comprehensive enough to take in not only things done but also the effects or the legal consequences flowing therefrom  The Queen vs Justices of the West Riding of Yoykshire and Heston and Isleworth Urban District Council vs Gyout  relied on
2 that the bringing of the goods into India and the rele vant contracts entered into by the petitioners with the foreign dealers formed parts of a same transaction and therefore the imports were the effect or the legal consequence of the  things done  ie the contracts entered into by the petitioner 307 State of Travancore Cochin vs The Bombay Co Ltd  and State of Travancore Cochin V Shanmugha Vilas Cashew Nut Factoyy   relied on
3 that para
6 of the order saved the transactions entered into by the petitioners and that therefore the Collector of Customs had no right to confiscate their goods on the ground that they were imported without a licence
Per Sarkar J 1 The mere making of the contracts and the opening of the letters of credit without the bringing of the goods into Pondicherry would not amount to an  import  and therefore the imports by the petitioners would not be within the saving clause in para
6 as things done before the commencement of the Application of Laws Order
2 In the absence of the necessary words to extend the application of French laws to the effect of things done or rights acquired from the doing of them the saving clause in para
6 could not protect the imports made by the petitioners from the operation of the Indian laws applied to the French Establishments
Per Shah J 1 Steps preliminary to import even if they are closely integrated therewith are not included in the concept of import in dealing with the provisions of the and the Imports and Exports Trade Control Act
2 By the use of the expression things done or omitted to be done before such commencement in cl 6 of the French Establishments  Application of Laws Order 1954 French law applies to acts and omissions before November 1 1954 and not to legal consequences of those acts and omissions ensuing after that date and hence import of goods across the customs frontier in the Pondicherry Port after November 1 1954 without a licence in that behalf is contrary to the provisions of the and the Import and Exports Trade Control Act