Case: State Of Punjab  Vs. Okara Grain Buyers Syndicate Ltd.And Ors.(And Connected Appeals)

decision held, following these earlier rulings on the construction of the Civil Procedure Code, particularly S. 20 and other like enactments, that the provisions of S. 4 which enabled suits to be filed in India notwithstanding that the cause of action arose in Pakistan could not be availed of by displaced persons to file suits against the Government - of the State or of the Union.33. The net result of this construction was that in cases where no part of the action arose within India, no suit could be instituted against the State or the Union Government notwithstanding that by the combined operation of the Independence (Liabilities) Order, 1947, read with either S. 176 of the Government of India Act, or Art. 300 of the Constitution, as the case may be, a liability was cast on the Government of the State and the Union to make good a claim. This result might be unfortunate but if it was designed, there was no escape from that conclusion.34. The argument of the learned Advocate-General was that when this enactment of 1948 lapsed by efflux of time in 1951, its place was taken by the Act and that as the same word "person" with the qualifying expressions indicating his or its residence or place of business were repeated in the Act without any specific provision for claims against the State, Parliament must be taken to have affirmed this decision, adopting its reasoning and that consequently, in any event, the general rule of interpretation about the State not being bound by an enactment in which it is not named expressly or by necessary implication was doubly attracted and reinforced.35.We are clearly of the view that this argument does not deserve to be accepted. In the first place, we are concerned solely with the interpretation of the Act of 1951 and unless there was an ambiguity it would be impermissible to refer to any previous legislation for construing the words in it. The examination we have made of the Act read in conjunction with the purposes it seeks to achieve which are manifest in its various provisions have led us unmistakably to the conclusion which we have expressed earlier. In the circumstances, there is no scope for invoking this external aid to the construction of the expression used in the Act. Secondly, the scope of the two enactment viz., the Act of 1948 and that of 1951 are widely different, and the latter has a definitely more extended scope and is designed to secure substantive advantages to displaced persons which were wholly foreign to the earlier law which was but of very limited scope. Therefore even if the language used in the two enactments were identical - which is not even the case here - the same conclusion would not necessarily follow having regard to the differing scopes of the two pieces of legislation. It could not therefore be said that the two Acts are in pari materia so as to attract the rule relied on. Lastly, the rule of construction which is certainly not one of a compelling nature, is generally adopted in the construction of consolidating enactments where provisions which have appeared in earlier repealed statutes which have received an uniform and accepted judicial interpretation are re-enacted. Obviously that is not the case here. In the circumstances, we consider it unnecessary to examine whether this solitary decision on the construction of S. 4 of the Act of 1948, was correct. We have, therefore, no hesitation in rejecting the second point urged.36. The last submission was that the learned Judges were not right in considering that unless the construction of S. 13 which they accepted was correct, almost the entire body of displaced creditors would be without a remedy in respect of their claims against the Government of the State and the Union. Though the learned Advocate-General started by saying that in every case in which there could be a cause of action against the State Government under Para 8 of the Indian Independence (Liabilities) Order, 1947, a suit would lie after partition, even on the basis of S. 20 of the Civil Procedure Code, he had to concede that in a number of cases the party would be without a remedy. Apart from this admission, we consider that in a large number of cases the cause of action would have arisen in Lahore where the contract with the Government of the Province of Punjab was concluded and it is possible that no part of the cause of action might arise in India so as to permit a suit against the Government of the Punjab or of the Union if the provisions of the Civil Procedure Code determined the forum therefor. In our judgment nothing turns on the exact proportion of the cases, where the party would be without a remedy. If the terms of the enactment were ambiguous and had to be interpreted in the light of the circumstance whether the one construction or the other would leave parties without a remedy then in that event something might depend on whether it was only a marginal case that was beyond the provisions of the Act or the bulk of the cases. That, however, is not the position here. We have arrived at the construction of the provisions of the Act, without reference to the hardship which the opposite view might cause to particular displaced creditors. It is for this reason that we say that the question of the relative number of creditors who would suffer hardship is not strictly material for the decision. We have, therefore, thought it unnecessary to examine the precise circumstances in which displaced creditors might or might not be in a position to institute suits against the State Government to enforce claims which fell within Para 8 of the Independence (Liabilities) Order, 1947.37. In these circumstances, we consider, though for different reasons that the conclusion of the High Court was right and that the revision petitions were properly rejected.38.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]In the view we take of the construction of the provisions of the Act before us, in the light of the principles of construction formulated by Lord Du Parcq, we do not consider it necessary to examine whether there are any further limitations, qualifications or exceptions to the rule as applied to Indian statutes as have been accepted in the United Kingdom which have been set out and expounded at pages 438-443 of the sixth edition of Crais onsee force in the submission of the learned Advocate-General and if the matter had to be decided solely on the basis of the expressions used to define the word "debt and the description of the "person against whom proceedings could be taken under S. 13 of the Act, there would undoubtedly be grave difficulties in the way of accepting the view that "person" was intended to include the Government of the Union or of the State.From the above it follows that the respondent does not gain any advantage for the decision of the matter now under debate by being able to establish that the State or the Government of a State is an entity, nor the appellant by demonstrating that the State is not a juristic person of the same type as a corporation. We do not therefore propose to deal any further with thiswould, however, make two observations : (1) that the mere fact that certain artificial entities like corporations are brought within the scope of the Act, would not by itself rebut the presumptive rule of construction that the State is not bound by a statute unless it is brought within its scope expressly or by necessary implication, (2)it would not be correct to say that the State is not a constitutional or even juristic entity for the reason that it does not partake the characteristics of or satisfy in whole the definition of a corporation. The State is an organised political institution which has several of the attributes of a corporation. Under Art. 300 of the Constitution, the Government of the Union and the Government of a State are enabled to sue and be sued in the name of Union of India and of the Government of the State, as the case may be. It would not, therefore be improper to speak of the Union and the State as constitutional entities which have attributes defined by theis manifest that the property referred to in the schedule prescribed under S. 5(2)(iii), the expression "attachable assets" in the Explanation to S. 32, and the words "property moveable or immovable" in S. 47 must all bear the same connotation. If a debt due to a displaced debtor is not within S. 5 it could not be within the other provisions just now referred to. If that were the proper construction, the result would be that the displaced debtor could obtain the entire benefit provided for by S. 32(2) and (3) etc. and later if he realised any dues from the State keep the same to himself free of the claims of all his creditors. It is obvious that such a result could not have been intended and, therefore, it must be held that such a debt as an asset must be included in the schedule of properties referred to in S. 5 and that so far as S. 32 is concerned the debts owing by the State to displaced debtor ought to be ascertained for determining the paying capacity of the debtor and relief afforded to the displaced debtor on the basis that such debts due to him are realisable assets within the scope of the Act. It would follow that the debt by the Government or by the State is within the Act by necessary implication, because the same is necessary for working out the relief to which a displaced debtor who files an application under S. 5 or S. 11 (2) is entitled. We have already made reference to S. 11. Its first sub-section deals with an application by a displaced creditor who seeks to enforce his claim against a displaced debtor. The second sub-section permits the displaced debtor to make an application under S. 5 and the two - the claim and what might be called a cross claim - have to be considered together, and the relief open to the displaced person who might be a debtor or a creditor have to be worked out conjointly.Confining oneself to what is strictly material "Debt" is defined as a pecuniary liability due to a "displaced person" from "any other person" ordinarily residing in the territory to which the Act extends. It was because of the circumstance that such a condition of residence would not be apt in the case of a State or Government as regards which no residence could be attributed, that it was said that the debt due by a State was not within the definition. That is, no doubt, a weighty argument and if it stood alone its effect could be over-whelming, but as against it must be noticed that it is really a part of the definition which has to be applied in the absence of anything to the contrary in the context and if on a consideration of S. 13 and the other relevant provisions to which we have referred it was the intention of the enactment not to exclude the State from its operation, the definition clause could not per se negative such a construction. The definition would, in the context of the other provisions, be read as applying the test of "residence" or "of carrying on business" exclusively to natural or artificial persons to whom such conditions would beare clearly of the view that this argument does not deserve to be accepted. In the first place, we are concerned solely with the interpretation of the Act of 1951 and unless there was an ambiguity it would be impermissible to refer to any previous legislation for construing the words in it. The examination we have made of the Act read in conjunction with the purposes it seeks to achieve which are manifest in its various provisions have led us unmistakably to the conclusion which we have expressed earlier. In the circumstances, there is no scope for invoking this external aid to the construction of the expression used in the Act. Secondly, the scope of the two enactment viz., the Act of 1948 and that of 1951 are widely different, and the latter has a definitely more extended scope and is designed to secure substantive advantages to displaced persons which were wholly foreign to the earlier law which was but of very limited scope. Therefore even if the language used in the two enactments were identical - which is not even the case here - the same conclusion would not necessarily follow having regard to the differing scopes of the two pieces of legislation. It could not therefore be said that the two Acts are in pari materia so as to attract the rule relied on. Lastly, the rule of construction which is certainly not one of a compelling nature, is generally adopted in the construction of consolidating enactments where provisions which have appeared in earlier repealed statutes which have received an uniform and accepted judicial interpretation are re-enacted. Obviously that is not the case here. In the circumstances, we consider it unnecessary to examine whether this solitary decision on the construction of S. 4 of the Act of 1948, was correct. We have, therefore, no hesitation in rejecting the second point urged.The last submission was that the learned Judges were not right in considering that unless the construction of S. 13 which they accepted was correct, almost the entire body of displaced creditors would be without a remedy in respect of their claims against the Government of the State and the Union. Though the learned Advocate-General started by saying that in every case in which there could be a cause of action against the State Government under Para 8 of the Indian Independence (Liabilities) Order, 1947, a suit would lie after partition, even on the basis of S. 20 of the Civil Procedure Code, he had to concede that in a number of cases the party would be without a remedy. Apart from this admission, we consider that in a large number of cases the cause of action would have arisen in Lahore where the contract with the Government of the Province of Punjab was concluded and it is possible that no part of the cause of action might arise in India so as to permit a suit against the Government of the Punjab or of the Union if the provisions of the Civil Procedure Code determined the forum therefor. In our judgment nothing turns on the exact proportion of the cases, where the party would be without a remedy. If the terms of the enactment were ambiguous and had to be interpreted in the light of the circumstance whether the one construction or the other would leave parties without a remedy then in that event something might depend on whether it was only a marginal case that was beyond the provisions of the Act or the bulk of the cases. That, however, is not the position here. We have arrived at the construction of the provisions of the Act, without reference to the hardship which the opposite view might cause to particular displaced creditors. It is for this reason that we say that the question of the relative number of creditors who would suffer hardship is not strictly material for the decision. We have, therefore, thought it unnecessary to examine the precise circumstances in which displaced creditors might or might not be in a position to institute suits against the State Government to enforce claims which fell within Para 8 of the Independence (Liabilities) Order, 1947.In these circumstances, we consider, though for different reasons that the conclusion of the High Court was right and that the revision petitions were properly rejected.