Appeals Nos 307 to 309 of 1958
Appeals from the judgment and order dated August 1 1956 of the Orissa High Court in O J C Nos 16 19 137 and 61 of 1954
CB Aggarwala and P C Aggarwala for the appellant In C As
307 to 309 of 58
NC Chatterjee J H Umrigar and T M Sen for the respondents In all the appeals
September 21
The Judgment of the Court was delivered by SHAH J
This is a group of three appeals filed with certificate of fitness under article 132 of the Constitution issued by the High Court of Judicature Orissa
The Legislature of the Province of Orissa enacted the Orissa Agricultural Income tax Act XXIV of 1947 hereinafter referred to as the Act providing for the levy of income tax on agricultural income derived from lands situated in the Province of Orissa
This Act was brought into operation from July 10 1947
By section 3 agricultural income tax at the rate or rates specified in the schedule was made payable for each financial year on the total income of the previous year of every person
By the proviso to that section agricultural income of the Central Government or of the State Government or of any local authority was exempt from taxation
Section 2 cl
1 defined a  person  as inclusive of a Ruler of an Indian State
The appellant in these three appeals is the former Ruler of the State of Sonepur
After 781 the establishment of the Dominion of India on August 15 1947 the appellant as the Ruler of the State of Sonepur executed an instrument of accession to the Dominion restricted to three subjects Defence External Affairs and Communications
On December 15 1947 he executed a merger agreement whereby the territory of the State of Sonepur became merged with the territory of the Dominion of India
By virtue of the merger agreement the Government of India acquired full sovereign rights over the territory of the State but ownership of private properties belonging to the appellant and full enjoyment thereof were under the agreement guaranteed to him under article 3
In exercise of the powers conferred by the Extra Provincial Jurisdiction Act 47 of 1947 the Government of India by notification dated March 23 1948 delegated to the Provincial Government of Orissa full powers to administer the merged States of Orissa including the State of Sonepur
The Government of the Province of Orissa applied to the merged States section 1 of the Act as from January 19 1949 and by notification dated April 1 1949 the remaining provisions of the Act
In the meantime by amendment two new sections section 290A and section 290B were incorporated in the Government of India Act 1935
The Governor General of India was thereby given power to direct by order that a merged State shall be administered in all respects as if it formed part of the Governor s Province specified in the order
The Governor General of India exercising authority under sections 290A and 290B issued on July 27 1949 an order providing that the merged Orissa States including the State of Sonepur shall be administered in all respects as if they formed part of the Province of Orissa with effect from August 1 1949
On December 30 1949 the Governor of Orissa promulgated Ordinance No IV of 1949 providing inter alia that the Agricultural Income tax Act 1947 be applied to the merged Orissa States
This Ordinance was later replaced by the Orissa Merged States Laws Act XVI of 1950
The appellant was then called upon by the Agricultural 782 Income tax Officer to furnish a return of his agricultural income
The appellant disputed his liability to pay the agricultural income tax and declined to furnish the return
The Agricultural Income tax Officer then proceeded to make enquiries about the income received from the lands held by the appellant and assessed him to pay tax for the years 1949 50 to 1953 54
He also imposed a penalty upon the appellant for failure to submit his returns for the years 1949 50 and 1950 51
Against the order assessing him to tax and directing him to pay penalty the appellant preferred appeals to the Assistant Collector of Agricultural Income tax Sambalpur
The appeals were dismissed by that officer
Revision applications to the Collector of Commercial Taxes Cuttack and to the Board of Revenue were unsuccessful
The appellant filed four petitions in the High Court of Orissa being petitions Nos 17 16 19 and 137 of 1954 challenging the assessments made by the taxing authorities for the years 1949 50 1950 51 1951 52 and 1952 53 respectively and two more petitions being petitions Nos 18 and 138 of 1954 against orders imposing penalty for the years 1949 50 and 1950 51 respectively
These six petitions and certain other petitions were heard by a Division Bench of the Orissa High Court
The High Court held that by the guarantee of full ownership use and enjoyment of the private properties under the merger agreement the Properties of the appellant were not rendered immune from liability to pay tax imposed by the Act and that in the absence of an express provision his income from lands was liable to pay agricultural income tax
The High Court also held that even though the appellant was the Ruler of a former Orissa State he was a  person  within the meaning of the Act and was liable to pay agricultural income tax
The learned Judges therefore dismissed the petitions challenging the liability of the appellant for the assessment years 1950 51 1951 52 and 1952 53 to pay agricultural income tax and they cancelled the order of assessment in respect of the year 1949 50 and the orders imposing penalty in respect of years 1949 50 and 783 1950 51
Against the orders dismissing the applications for setting aside the assessments in respect of years 1950 51 1951 52 and 1952 53 these appeals have been preferred with certificate granted by the High Court under article 132 of the Constitution
The appellant was undoubtedly the Ruler of an Indian State before August 15
1947 but by reason of the merger agreement executed by him on December 15 1947 his sovereignty was extinguished
By article 1 of the terms of the merger agreement the appellant ceded to the Dominion of India full and exclusive authority jurisdiction and power for and in relation to the governance of the State and agreed to transfer the administration of the State on the appointed day and as from the said day the Dominion Government became competent to exercise the power authority and jurisdiction in relation to the governance of the State in such matters and through such agency as the Government thought fit
By article 3 the appellant remained entitled to full ownership use and enjoyment of all private properties but not of the State properties belonging to him on the date of the merger
By article 5 the Dominion Government gua ranteed the succession according to law and customs to the gadi of the State and to the personal rights privileges dignities and titles of the appellant
It was provided by article 4 that  the Raja the Rani the Rajmata the Yuvraja and the Yuvrani shall be entitled to all personal privileges enjoyed by them whether within or outside the territories of the State immediately before the 15th day of August 1947 
The appellant contends that as a Ruler of the State of Sonepur he was before merger of his State immune from liability to taxation in respect of his private property both within his territory and outside
He claims that he was so immune in respect of his property within his State as a Ruler and in respect of his property outside the State by the rules of International Law which he submits protect from taxation the properties of a Ruler of a State situate in a foreign State
The appellant says that by articles 4 and 5 the Dominion Government guaranteed to him all 784 his personal rights privileges dignities and titles enjoyed within or without the territory immediately before the 15th August 1947 and that any attempt to tax his private property by the State of Orissa or by the Union Government violates that guarantee
The appellant submits that to give effect to this guarantee all legislation must be interpreted in the light of the merger agreement which he claims is incorporated in article 362 of the Constitution and he must be held exempt from liability to pay tax even though no express provision in that behalf has been made by the Legislature
In our view there is no force in the contentions raised by the appellant
The privileges guaranteed by articles 4 and 5 are personal privileges of the appellant as an ex Ruler and those privileges do not extend to his personal property
In dealing with a similar contention raised on the interpretation of article 4 of the merger agreement entered into by the Ruler of Khairagarh which was in material terms identical with the terms of article 4 of the agreement executed by the appellant section R Das J as he then was observed in Visweshwar Rao vs The State of Madhya Pradesh1  The guarantee or assurance to which due regard is to be had is limited to personal rights privileges and dignities of the Ruler qua a Ruler
It does not extend to personal property which is different from personal rights 
The Act imposes on the agricultural income of every person  liability to pay agricultural income tax
By the proviso to section 3 agricultural income of the Central Government State Government and of local authorities is exempt from tax but this exemption is not extended to any other body or person
It is true that in the definition of the expression  person  as originally enacted in section 2 cl
1 a Ruler of an Indian State was expressly included and by the Adaptation of Laws Order 1950 reference to Rulers of Indian States was deleted as from January 26 1950
But by that amendment an intention to exclude the Rulers of Indian States from liability to pay 1  1054
785 agricultural income tax was in our judgment not evinced
Between the dates on which the Act wag enacted and the Adaptation of Laws Order 1950
several political events of far reaching effect had taken place in consequence of which the appellant bad ceased to be a Ruler of an Indian State
On January 26 1950 the date on which the Adaptation of Laws Order 1950 became operative there were in existence no Indian States
The sovereign rights of the erstwhile Rulers of the Indian States were extinguished and their territories were merged in the Indian Union
The amendment in the definition of person  in section 2 cl
i of the Act was made not with the object of excluding the Rulers of former Indian States from liability to pay tax it was only made to delete a clause which in view of political changes had no practical significance
Liability to pay tax is imposed by the Act and there is in the Act no express exemption in favour of the appellant
The claim of the appellant to exemption on the ground that he is not a  person  cannot therefore be sustained
Article 362 of the Constitution provides In the exercise of the power of Parliament or of the Legislature of a State to make laws or in the exercise of the executive power of the Union or of a State due regard shall be bad to the guarantee or assurance given tinder any such covenant or agreement as is referred to in article 291 with respect to the personal rights privileges and dignities of the Ruler of an Indian State 
Article 291 of the Constitution deals with the privy purse of the Rulers under any covenant or agreement entered into by the Ruler of any Indian State before the commencement of the Constitution payment whereof is free from tax as has been granted or assured by the Government of the Dominion of India
Article 362 recommends to the Parliament and the State Legislatures in making laws after the Constitution  to have due regard to the guarantee or assurance given under any covenant or agreement 
Even though article 362 is not restricted in its recommendation to agreements relating to the privy purse and 786 covers all agreements and covenants entered into by the Rulers of Indian States before the commencement of the Constitution whereby the personal rights privileges and dignities of the Ruler of an Indian State were guaranteed it does not import any legal obligation enforceable at the instance of the erstwhile Ruler of a former Indian State
If despite the recommendation that due regard shall be had to the guarantee or assurance given under the covenant or agreement the Parliament or the Legislature of a State makes laws inconsistent with the personal rights privileges and dignities of the Ruler of an Indian State the exercise of the legislative authority cannot relying upon the agreement or covenant be questioned in any court and that is so expressly provided by article 363 of the Constitution
The plea of the appellant that he was not seeking to enforce the terms of the merger agreement and that be was merely resisting the claim made by the authority appointed by the State of Orissa to levy a tax inconsistently with the terms of the merger agreement has no substance
In truth the appellant sought by his petitions under article 226 of the Constitution to enforce the terms of article 4 of the merger agreement
By his petitions the appellant contended that in enacting the Agricultural Income tax Act and in seeking to enforce it against him the State of Orissa acted contrary to the terms of the merger agreement and he asked the High Court to enforce the terms of the merger agreement
On the grounds therefore that liability to pay agricultural income tax in respect of his private property is imposed upon the appellant by section 3 of the Act and the immunity claimed by the appellant is not one of the personal rights or privileges within the meaning of the merger agreement and that the claim made by the appellant is not justiciable the objection raised by the appellant to liability to pay agricultural income tax assessed under the Act cannot be sustained
Two subsidiary contentions which were sought to be raised before us may be briefly referred to
It was urged that of the forty two villages of which the 787 appellant is held by the assessing authority to be the holder two were in the year 1945 transferred by him to the Yuvrani the appellant s son s wife and on that account the income of those villages was not liable to be taxed in his hands
It appears from the assessment order that this contention was raised before the Agricultural Income tax Officer and that officer rejected the contention relying upon section 14 cl
1 of the Act
It is unnecessary for the purpose of these appeals to decide whether the assessing officer was right in the view which he took
In the petitions filed by the appellant in the High Court this plea was not raised and no relief was claimed by him in respect of the income of the two villages
The question was never mooted before the High Court and the State of Orissa had no opportunity of meeting the claim now sought to be made by the appellant
On the ground that the question was never raised in the High Court we reject this contention
It was also urged that whereas the assessing officer has found that the appellant had lands in forty two villages in the inventory of properties submitted by the appellant to the Government only eighteen villages were set out and this inventory was accepted by the Government of India
Relying upon this premise the appellant contends that he is liable to pay tax in respect of his income from these eighteen villages and no more
But even this plea was never raised in the High Court and we cannot in dealing with these appeals enter upon an enquiry into a question which was never raised on which no evidence was led and on which no finding was given by the High Court
On the view taken by us appeals Nos 307 308 and 309 of 1958 fail and are dismissed with costs
There will be one hearing fee
Appeals dismissed


Summary:
The respondent sued the State of Bihar for a declaration that the Bihar Land Reforms Act 1950 was ultra vires void and unconstitutional and for a permanent injunction restraining the State and its officers or agents from issuing any notification thereunder in respect of her estate or taking possession thereof and on a petition filed along with the plaint obtained an order of temporary injunction against the State in terms of her prayer pending the hearing of the suit
More than a year thereafter the State made an application under 0 39 r 4 of the Code for a discharge of the order of temporary injunction on the ground that the impugned Act had in another case been declarer valid by the Supreme Court
Before that application could however be heard the State of Bihar on May 19 1952 issued a notification under section 31 of the Act authenticated by the Additional Secretary to the Government declaring that amongst others the respondent s estate had vested in the State of Bihar under the provisions of the Act
Thereupon the respondent moved the trial Court for taking action against the State under 0 39 r 23 of the Code
The contention on behalf of the State was that in view of article 31 B of the Constitution the issue of the notification was lawful and could not constitute contempt of Court
The Subordinate judge held that this was no defence to the application by the respondent and directed attachment of the appellant s property to the value of Rs 5000 and the High Court on appeal affirmed that decision
Held that the courts below took the correct view of the matter and that the appeal must be dismissed
The procedure laid down by 0 39 r 23 of the Code of Civil Procedure is remedial and essentially one for the enforcement or execution of an order of temporary injunction passed under 0 39 r 21 and is available against the State although the provision for detention may not apply to it
It is wrong to say that it is either contrary to article 300 of the Constitution or hit by the rule that no action lies against the State in tort or for a wrong doing entailing punishment or compensation
District Board of Bhagalpur vs Province of Bihar AIR 1954 729 Pat
529 and Tarafatullah vs section N Maitra AIR 1952 Cal
gig distinguished
There is also no basis for the contention that the State is not expressly or by necessary implication mentioned in 0 39 r 23
The word person  used by it properly construed includes the defendant against whom the order of injunction is primarily issued as also the defendant s agents servants and workmen
Since the court s power to issue an order of temporary injunction against the State under 0 39 r 21 cannot be in doubt disobedience of such an order when issued necessarily attracts 0 39 r 23 of the Code
Director of Rationing  Distribution vs Corporation of Calcutta   held inapplicable
Held further that when once an order is passed which the Court has jurisdiction to pass it is the duty of the State no less than any private party to obey it so long as it stands and the conduct of the State Government in the instant case in issuing the notification at a time when its application for vacating the injunction was still pending and the attitude taken up by it after the application under 0 39 r 23 was made and persisted in till the end must be disapproved