civil appellate jurisdiction civil appeal number 10 of 1959.
appeal from the judgment and decree dated march 22 1956 of
the bombay high companyrt in appeal number 60 of 1955.
purshottam trikamdas s. n. andley j. b. dadachanji
ravinder narain and o. c. mathur for the appellants. c. setalvad attorney-general for india nanak chand
and t. m. sen for the respondent. 1961. august 31. the judgments of the companyrt were
delivered. b. gajendragadkar j.-this appeal by a certificate
issued by the bombay high companyrt under art. 133  1  a  of the
constitution arises out of a suit initially filed on the
original side of the bombay high companyrt  suit number 232 of
1951  by the bombay steam navigation company limited  hereafter
called the b.s.n.  and the eastern steam navigation company
ltd.  hereafter called the e.s.n.  against the respondent
the union of india to recover a sum of rs. 64699-6-0 by way
of charges for carriage of logs of teakwood timber from the
forests of kanara to karachi. a further sum of rs. 445-4-0
was also claimed for storage charges of the said logs at
marmagoa. this latter claim was given up at the time of the
hearing of the suit. the b.s.n. then merged in the scindia
steam navigation company limited and so the latter companypany came on
the record in place of the b.s.n. this companypany is the first
appellant before us. the e.s.n. was in liquidation and so
its liquidators have joined the present litigation as
plaintiff 2 and so they are appellant 2 in this companyrt. the e.s.n. had a ship called azadi. it appears that the

s.n. looked after the business of the e.s.n. and arranged
on its behalf freight to be carried by the ship belonging to
it. in 1947 there was an agreement between the b.s.n. as
representing the e.s.n. on the one hand and the
conservator of forests numberth kanara representing the
numberth-western railway on the other for the carriage of logs
of teakwood timber from the forests in kanara first by rail
to marmagoa and then by a steamer belonging to the e.s.n. from marmagoa to karachi. pursuant to this agreement 636
tons of timber were shipped by the steamer azadi which left
marmagoa on july 23 1947. it is companymon ground that the
condition of the bill of lading provided that the appellants
had the right to have the logs of wood remeasured at karachi
but it was agreed between the railway and appellants that
freight should be paid on the basis of 70 more than the
measurements shown by the records of the forest department
of south kanara. in the plaint as it was originally filed
freight bad been claimed on the said basis but it appears
that before the learned trial judge this claim was given up
and in companysequence the amount claimed was reduced from rs. 64699-6-0 to rs. 44449/-. it is with this claim that the
appellant went to trial against the respondent. soon after the azadi reached karachi the partition of india
into the two dominions of india and pakistan took place on
august 15 1947 and that led to a good deal of
correspondence between the parties which shows that the
appellants were sent from pillar to post from one authority
to the other but ultimately their efforts to recover the
amount due under the companytract failed. that is why the
appellants had to file the present suit against the
respondent. their claim against the respondent is based on
art. 8  1  b  of the indian independence  rights property
and liabilities  order 1947  hereafter called the order . in the alternative the same amount is claimed on the footing
of a press companymunique alleged to have been issued by the
respondent on may 22 1948.
the respondent. denied this claim. it was urged that the
suit. as framed was number maintainable
and that the plaint did number disclose a cause of action. it
was alleged that the suit was barred by limitation. on the
merits the respondents case was that the appellants claim
was number companyered by the press companymunique and that the press
communique companyld number afford the appellants a valid. cause
of action. the appellants companytention that the relevant
clause of the order justified the claim was also. denied. on these pleadings eleven substantive issues were framed by
the learned trial judge. on the principal issue between
the parties which related to the applicability of art. 8  1
 b  of the order to the appellants claim the learned judge
found that the appellants claim attracted the provisions of
the said article. in companying to this companyclusion the learned
judge numberdoubt numbericed the fact that on august 15 1947 the
numberth-western railway which originally ran through the
provinces which subsequently because part of pakistan as
well as through some of the provinces which formed part of
india was divided between the dominion of india and pakistan
into two sections and the section that was allotted- to
the share of pakistan companytinued to be knumbern as numberth-western
railway while the extention of the railway in.-the
territory of india came to be knumbern as eastern punjab
railway. according to the learned judge if the timber that
was carried to karanchi was for the purposes of numberth-
western railway as a whole it was obviously at the appointed
the 15th of august 1947 which is the appointed date for
the purpose both of that part of the numberth-western railway
which went to the dominion of pakistan as well. as for that
part of the numberth-western railway which came to the domi-
nion of india and become the eastern punjab railway. on
this view the learned trial judge reached the companyclusion
that the suit companytract cannumber be said to be exclusively for
the purposes
of the dominion of pakistan an required by art. 8 1  a
and so it must be deemed to be a companytract falling under art.  8  1  b . the 1earned judge then companysidered the
alternative claim made by the appellants on the press
communique in question and came- to the companyclusion that the
said companymunique did number afford a valid basis for the claim. it was number an agreement between the two dominions and so it
could number attract the provisions of art. 3 1  of the order. the appellants case was that the said companymunique
represented agreement between the- two dominions and so it
fell within art. 3 1  of the order and that made the
respondents liable for theft claim. this companytention has
been rejected by the learned trial judge. the plea of
limitation raised by the respondent was rejected by the
learned judge an the ground that the claim made by the
appellants was saved by acknumberledgment made by the
respondent. with the findings recorded by the learned
judge on the other- issues we are number companycerned in the
present appeal. in the result the appellants claim for rs. 42449/- was referred to the companymissioner for taking
accounts in order to ascertain the amounts due to the
appellants having regard to the team of the companytract. the decree was challenged by the respondent by its appeal
before the companyrt of in the said high companyrt. the appeal
court agreed with the trial judge is rejecting the
alternative basis on which the appellants had wader the
claim. on the question about the applicability of art. 8 1   b  of the order the appeal companyrt differed from. the
trial judge and held that the suit companytract fell within
art. 8 1  a  of the order. according to the finding of the
appeal companyrt the companytract was for exclusively which as from
the relevant date. were exclusively purposes of the
dominion of pakistan and so the respondent was number liable
under it. on this view
the. appeal companyrt did number think it necessary to companysider
the question of limitation. two additional grounds were
sought to be raised before the appeal companyrt on behalf of the
appellants in support of the decree passed by the trial
court. it was urged that by its companyduct the respondent was
estopped from disputing the validity of the appellants
claim and that there was numberatio which made the respondent
liable. the appeal companyrt took the view that both these
pleas were pleas of fact which companyld number be allowed to be
raised for the first time in the appeal. as a result of
the companyclusion that the suit companytract fell under art. 8 1  a  of the order the decree passed by the trialcourt
was reversed and the appellants suit was dismissed with
costs. certain cross-objections had beenfiled by the
appellants claiming additional relief against the
respondent but since the appellants failed on the
principal question cross-objections were a so dismissed with
costs. the appellants then applied for and obtained a
certificate from the high companyrt and with the said certi-
ficate they have companye to this companyrt with the present appeal. before dealing with the merits of the companytentions raised by
mr. purshottam in this companyrt on behalf of the appellants it
is necessary to read the relevant provisions of the order. this order was issued on august 14 1947 and was made by
the governumber-general in exercise of the powers companyferred on
him by s. 9 of the indian independence act and all other
powers enabling him in that behalf. the appointed day under
the order was august 151947. under art. 3  1  it was
provided that the provisions of the order related. to the
initial distribution on rights property and liabilities
consequential on the setting up of the dominions of india
and pakistan and that the same shall have effect inter
alia subject to any agreementbetween the two dominions. articles 4 and 5 dealt with land and vesting thereof in
the two dominions as therein
prescribed. article 6 provided that the provisions of arts. 4 and 5 shall apply in relation to all goods companyns bank
numberes and currency numberes which immediately before the
appointed day vested in his majesty for the purposes of the
governumber-general in companyncil or of a province as they applied
in relation to land so vested. article 8  1  with which we
are companycerned in the present appeal reads thus
8  1  any companytract made on behalf of the
governumber-general in companyncil before the
appointed day shall as from that day-
 a  if the companytract is for the purposes
which as from that day are exclusively
purposes of the dominion of pakistan be
deemed to have been made on be half of the
dominion of pakistan instead of the governumber-
general in companyncil and
 b  in any other case be deemed to have
been made numberbehalf of the dominion of india
instead of the governumber-general in companyncil
and all rights and liabilities which have
accrued or may accrue under any such companytract
shall to the extent to which they would have
been rights or liabilities of the governumber-
general in companyncil be rights or liabilities
of the dominion of pakistan or the dominion of
india asthe case may be. it is unnecessary to set out the rest of the provisions of
the order. the question about the scope and effect of the provisions of
art. 8  1   a  and  b  has been companysidered by this companyrt in
union of india v. chaman lal loona  1 . in that case two
previous decisions of the high companyrts have been expressly
approved and so it may be companyvenient to refer to those
two decisions first. the first decision which has been
 1  1957 s.c.r. 1039.
approved by this companyrt is the judgment of the bombay high
court in the union of india v. chinubhai jeshingbai  1 . in that case the firm of chinubhai jeshingbai was doing
business at baroda by three sale numberes executed ox march
10 1947 it had purchased from the government of india cer-
tain quantities of long-cloth which were lying at the
ordinance parachute factory at lahore under the said sale
numberes rs. 37000/- and odd had been paid by the plaintiff
firm of chinubhai jeshingbai to the. defendant the union of
india. one of the terms of the companytract was that the goods
the subject-matter of the companytract had to be stamped. owing to the disturbances caused by serious companymunal riots in lahore in
august 1947 the goods companyld number be stamped
and remained unstamped even after partition. the plaintiff
thus failed to secure the performance of the companytract or
refund of the money paid by it in respect of the said
contract either from the government of india or from the
government of pakistan and so it filed the suit in
question for recovery of the amount. justice companyajee who
heard the suit decreed the plaintiffs claim. on appeal the
decree was set aside and the case was remanded. for the
trial of an issue framed by the companyrt of appeal. the issue
thus remanded was whether the goods companyered by the three
sale numberes were lying in the territory companystituting the
dominion of pakistan by the independence act of august 15
1947.
considering. art 8 1  a  and  b  the high companyrt held that
in giving effect to the said article an artificial test had
been prescribed and the test may be either if the companytract
had been entered into on august 15 1917 whether it would
have been a companytracts for the purposes of the dominion of
pakistan or if the dominion of pakistan had been in
existence when the companytract was entered into whether it
would have been a companytract for the purposes of pakistan. it was then pointed out that it was
 1   1952  54 b.l.r. 561.
difficult to understand how it was possible to argue that
when a state or a dominion enters into a companytract in
respect of property or goods belonging to it it is number a
contract for the purposes of that state or dominion. in
other words according to this decision in applying the
tests prescribed by art. 8 it would be relevant to enquire
to whom the property or goods which is the subject-matter of
the companytract belong companytract belonged an the appointed day. in that particular cage numberfinding had been recorded by the
-trial companyrt as to where the goods lay on the relevant date
and so an issue was framed in that behalf and remanded for a
finding. in other words the appeal companyrt took the view
that if the goods lay in pakistan and thus became the
property of pakistan the companytract in question would
undoubtedly fall under art. 8  1  a  and number under art.8
 1  b . the second decision to which reference must be made is the
judgement of the the calcutta high companyrt in krishna ranjan
basu ray v. union of india representing eastern railway
ors.  1  according to this decision a suit for companypensation
for-numberdelivery of goods companysigned with the bengal and assam
railway prior to august 15 1947 for delivery at a place
which had fallen to pakistan in number maintainable against the
union of india. in companying to this companyclusion the high companyrt
he that it was wrong to companysider the earning of profit as
the purpose of the companytract. the purpose of the companytract
was the carriage of goods and where the destination was some
point in pakistan it seems to be reasonable to hold that the
purpose was the purpose-.of dominion of pakistan. where
on thecontrary the carriage was to a point which remained
in the indian dominion it would be a purpose of the
dominionumber india. a companytrary view taken by the said high
court in union of india v. loke nath. saha  1  was
dissented-from. we will number revert to the decision of this companyrt in chaman
lal loonas case  1  s.k. das j.

a.i.r. 1954 cal. 623.

a.i.r. 1952 cal. 140 a
 3  1957 s.c. r. 1039.
who spoke for the companyrt posed the question raised for the
decision of the companyrt in these words what is the proper
meaning of the expression companytract for the exclusive
purposes of the dominion of pakistan and he answered it
with the observation that we assent to the view expressed
by chagla c. j. in union of india v. chinubhai jeshingbhai
 1  and quoted with approval to the tests to which we have
already referred. the learned judge has also expressly
approved of the decision in krishna ranjan ba8us case  2
and disapproved the companytrary view expressed in union of
india v. loke nath saha  3 . in the case of chaman lal
loona  4  this companyrt was dealing with a companytract entered
into on behalf of the governumbergeneral in companyncil for the
supply of fodder to the manager military farms lahore
cantonment which was in pakistan on august 15 1947. the
trial companyrt bad found that the companytract was number enforceable
against the union of india but this companyclusion was reversed
by the high companyrt on the ground that the fodder companystituted
military stores under the exclusive companytrol of the joint
defence companyncil on the appointed day and that it was liable
to be transferred to anywhere in india. this companyrt held
that even if it be assumed that the high companyrt was right in
holding that the fodder was liable to be transferred to
anywhere in india the companytract must nevertheless be held to
be one exclusively for the purposes of pakistan and the
union of india companyld number made liable thereunder. this
conclusion was based on the fact that the purpose of a
contract is number to be companyfused with the ultimate disposal
of the goods supplied thereunder since such disposal can in
numberway determine or modify the companytract. it would thus be
seen that in companysidering the nature of the companytract in the
present appeal either of the two artificial tests approved
by this companyrt must be applied. does the application of
either of the said tests justify the answer given by the
appeal companyrt ? that is the main question which arises for
decision before us.  1   1952  54 b.l.r. 561.  2  a.i.r. 1954 cal. 623.

a.i.r. 1952 cal. 140  a .  4  1957 s.c.r. 1039.
it is clear that the fact that the companytact in question was
made by the companyservator of forests kanara is immaterialin
determining its character under art. 8 1  number is it
relevant to companysider the fact that the companytract had been
made on behalf of the numberth-western railway. it is obvious
that all companytracts prior to the appointed day were made by
the officers of the government of india or by or on behalf
of the said government and so both the companyrts below are
rightly agreed that in determining the character of the
contract who initially made the companytract with the appellants
is of numberrelevance. similarly the respondent cannumber rely on
the fact that the companytract was made on behalf of the numberth-
western railway and the original numberth-western railway has
number been split up into two sections the pakistan section
being knumbern by the name of numberth western railway and the
indian section being knumbern by the name of eastern punjab
railway. it may be that the numberth-western railway on whose
behalf the companytract was made number runs in pakistan alone but
that is hardly relevant for determining the character. of
the companytract. in dealing with this question we must took at
the substance of the companytract and number its form. it is true that the timber which was carried to karachi
under the companytract was for the purposes of the numberth-western
railway as a whole and there is numberevidence on the record to
show that it was intended to be used for that section of the
said railway which ran either through sind or western punjab
which subsequently formed part of pakistan. on the other
hand the appeal companyrt has found that the goods were lying
in karachi from august 15 1947 to december 1947 and that
it can be taken to be established that these goods were in
the dominion of pakistan on the relevant date and had been
in fact used for the purposes of the numberth-western railway
which was in the dominion of pakistan. we have already seen
that the
purpose of the companytract is number to be companyfused with the
ultimate user or disposal of the goods but it appears that
the learned trial judge was somewhat influenced by the fact
that the goods under the companytract were originally intended
for the use of the numberth western railway as a whole and
since the us of the said railway as a whole companyld number be
said to be limited to the use of pakistan alone the
contract was number exclusively for the purposes of pakistan. it is only in that companytext that we have referred to the
finding of the aappeal companyrt that in the circumstances of
this case there can be numberdoubt that the goods which lay in
karachi from august 15 1947 to december 1947 have in fact
been used by the numberth-western railway which fell to the
share of the dominion of pakistan. number applying the tests approved by this companyrt the question
which we have to ask ourselves is if the said companytract had
been made on august 15 1947 would it have been a companytract
for the dominion of pakistan or number we have seen the
nature of the companytract. it was a companytract for the carriage
of logs of teakwood timber from the kanara forests to
karanchi for the purpose of the railway. the destignation
of the delivery of goods was karanchi and the object of
securing the goods was to use them for the railway. in such
a case it is difficult to resist the companyclusion that if this
contract had been made on august 15 1947 it would number have
been exclusively for the purposes of the dominion of
pakistan. it is inconceivable that on the appointed day a
contract companyld have been made for the shipment of goods to
karachi unless the companytract was for the purposes of the
dominion ion of pakistan. if the companytracted been even
partially for the purposes of india shipment of all the
goods to karanchi would number have been the term of the
contract. the same result follows if we apply the
alternative test. if pakistan had existed on the date of
the companytract in our opinion the companytract
as made would obviously and clearly be for the purposes of
pakistan. that is the view taken by the appeal companyrt and
we see numberreason to differ from it. in this companynection the appeal companyrt has taken into account
the fact that the goods had become the property of pakistan
by virtue of art. 6 of the order so that on the appointed
day the goods the shipment of which was the subject matter
of the companytract were the property of pakistan. if that be
so we do number see how we can escape the companyclusion that the
application of either of the two artificial tests prescribed
by art. 8 1  will inevitably lead to the companyclusion that the
contract had been made exclusively for the purposes of
pakistan. we have already seen that the tests enunciated by
the bombay high companyrt in the case of chinubhai jeshinghbai
 1  have been expressly approved by this companyrt in the case
of chaman lal loona  2 . it is true that in terms the
significance of the vesting of the title in the goods by the
operation of art. 6 of the order to which the bombay high
court attached companysiderable importance in the case of
chinubhai jeshingbhai has number been numbericed by this companyrt
and so in that sense it may be permissible to urge that that
part of the judgment had number been expressly approved. however such a companytention in our opinion is purely
technical. we are inclined to hold that the alternative
tests which have been expressly approved by this companyrt are
wholly companysistent with the companysideration of ownership to
which the bombay high companyrt attached importance and is both
relevant and material in the application of the said tests. if the goods which are the subject matter of the companytract
have become the goods of pakistan that would be a relevant
and material fact in companysidering whether the companytract in
question if made on the appointed day would have been made
by pakistan or whether pakistan would have made the said
contract if it had. been in existence
 1   1952  54 b.l.r. 561.  2  1957 s.c.r. 1039.
on the actual date of the companytract. therefore in our
opinion the appeal companyrt was right in companying to the
conclusion that the suit companytract fell within the scope of
art. 8 1  a  and the assumption made by the appellants that
art. 8 1  b  companyld be invoked against the respondent is number
well founded. the next question which requires to be companysidered is whether
the appellants claim on the alternative ground of the press
communique is well-founded. let us first read the press
communique
the government of india has been companysidering
for some time the question of arranging for
the speedy payment of the outstanding claims
in respect of supplies and services rendered. to the undivided government of india up to and
before the date of partition. at the time of the partition there was an
arrangement between the dominions that each
dominion would pay the claims arising in its
area subject to subsequent adjustment
particularly those relating to areas number in-
cluded in pakistan are still outstanding due
partly to disturbances in the punjab and
large-scale movement of population and partly
to the discontinuance of payment by the
pakistan government from about the middle of
december last owing to difference of opinion
between the two governments about the
liability for these payments. in order to
avoid hardship to the suppliers and
contractors the government of india after
careful companysideration have decided that they
should undertake the initial liability for
these payments and recover pakistans share
through debts settlement. mr. purshottam companytends that this companymunique represents an
agreement between the two dominions and so under art. 3 1
of the order the appel-
lants claim can be justified on the strength of this
agreement alone even if the said claim fails under art. 8 1  b . the companyrts below have held that the appellants
bad failed to prove that the companymunique in question
represents. an agreement between the two dominions. they
have companystrued the companymunique as amounting to numbermore than a
unilateral declaration made by the union to which art. 3 1
cannumber apply. mr. purshottam quarrel with the companyrectness
of this companyclusion. in support of his argument mr.
purshottam has taken us through the whole of the relevant
correspondence. we may briefly indicate the broad features
of the said companyrespondence. it appears that on july 10
1918 the director-general railway department. government
of pakistan karachi wrote to the general manager n.w. railway lahore in regard to the question about the
disposal of pre-partition claims outstanding against the
undivided government of india. in this letter he set out
the companytents of the press companymunique on which the appellants
rely. the companylector of stores karachi drew attention of
the appellants to the said companymunique by his letter dated
july 19 1948. in their companyrespondence with the railway
authorities the appellants have sometimes described this
communique as joint press numberification. similarly in their
letters written to appellant i the railway authorities in
pakistan also have described the said companymunique as joint
numberification said to have been issued by the dominions of
india and pakistan. then we have some letters from the
railway authorities in india which would show that the
appellants claim was being companysidered by them. we have
for instance a letter addressed to the stores accounts
officer e. p. railway delhi by the headquarters office at
delhi in which the appellants claim is indicated at serial
numbers 4 and 5 and the stores accounts officer is asked to
deal with it. the administrative officer e. p. railway
delhi wrote to appellant to say that its
claim had been registered and that further action would be
taken when orders of the railway board had been received. the appellants then reminded the railway officers from time
to time and on august 5 1950 their attorneys were told
that the claim was still under verification by the n. w.
railway and until it is verified by the f.a.c.a.0. n. w.
railway lahore it companyld number be finalised. the attorneys
of the appellants then enquired as to how much time the
process of verification would take but since no
satisfactory answer was given the appellants filed the
present suit. it is however clear that some attempts were
made by the railway authorities in india for getting the
appellants claim verified but the said attempts did number
succeed. indeed the learned attorney-general for the
respondent has filed an affidavit by mr. r. l. takyar. legal assistant numberthern railway baroda house new delhi
which shows that in pursuance to the assurance given by the
learned advocate-general before the bombay high companyrt
attempts were made by the respondent to have the appellants
claim verified but the said attempts failed and it adds
that in the absence of the verification of the claim and
the authorisation by the pakistan government the union of
india was number in a position to make any payment ex gratia to
the appellants. we sympathise with the grievance made by
the appellants that they have been driven from pillax to
post and have yet received numbersatisfaction to their claim
either from the pakistan government or from the respondent
but the difficulty in the way of the appellants is that the
statements in the companyrespondence to which we have been
referred do number at all justify the appellants claim that
the companymunique represents an agreement between the two
dominions. first of all the appellants should have taken
proper steps to prove the said companymunique and should have
called upon the respondent to produce all relevant documents
in respect of the alleged agree-
ment  in which the appellants-relied. besides the terms
of the companymunique themselves negative the theory that the
communique represents an agreement between the two
dominions. the companymunique expressly refers to the
discontinuance of payment by the pakistan government from
about the middle of december owing to difference of opinion
between the two governments about the liability of these
payments and it proceeds to state the decision of the
respondent that in order to avoid hardships to suppliers and
contractors the respondent had decided that it should
undertake initial liability for these payments and recover
pakistans share through debt settlement. that sometimes in
the companyrse of the companyrespondence the pakistan authorities
referred to the press companymunique as a joint companymunique can
hardly assist the appellants in showing that the companymunique
was the result of an agreement between the two dominions. it is number unlikely that there may have been some agreement
between the two dominions because the companyduct of the railway
authorities in india can be satisfactorily explained only on
the basis of some agreement or other but unfortunately the
appellants have number produced sufficient or satisfactory
material to prove their case that there was a specific
agreement between the two dominions which brought into play
the provisions of art. 3 1  of the order. on the material
produced by the appellants the companyrts below have made a
concurrent finding that numbersuch agreement had been proved. having gone through the companyrespondence to which our
attention was drawn we are satisfied that the appellants
cannumber successfully attack the validity or companyrectness of
the said companycurrent companyclusion. therefore if the theory of
an agreement between the two dominions fails the press
communique cannumber help to sustain the appellants claim
against the respondent. it is number suggested by the
appellants that the unilateral statement which is companytained
in the press companymunique can itself without anything more
help to sustain the appellants claim. then mr. purshottam wanted to companytend that the respondent
was estopped from disputing its liability under the
contract and he also wanted to urge the ground of numberatio. his companytention was that the facts necessary for the purpose
of pleading estoppel and numberatio were available on the
record and in the interest of justice he should number be pre-
cluded from urging those points on the ground that the
appellants had number taken the said points in the trial companyrt. we are number impressed by this argument. there can be no
doubt that both the pleas are pleas which can be effectively
raised only after pleading the relevant and material facts
and since numberrelevant or material fact had been averred in
the plaint on which either of the two pleas can be raised
and numberissue was asked for in the trial companyrt in respect of
either of the said pleas the appeal companyrt was justified in
refusing leave to the appellants to raise the said pleas for
the first time in appeal. in our opinion mr. purshottam is
number right in companytending that the appeal companyrt was unduly
technical when it refused leave to the appellants to raise
the said pleas. we have already seen that on the pleadings
as many as eleven issues were framed by the learned trial
judge. the plaint itself is an elaborately drawn document
and so the appellants cannumber be heard to companyplain if for
their failure to make adequate and proper pleadings they are
number allowed to raise the plea of estoppel or numberatio at the
appellate stage. id. our opinion therefore the appeal
court was right in number permitting the said pleas to be
raised in appeal. in the result the appeal fails and is dismissed with companyts. subba rao j.-i regret my inability to agree in regard to
the application of art. 8 1  of the indian independence
 rights property and liabilities  order 1947  hereinafter
called the order  to the facts of the case. the facts are fully stated in the judgment of my learned
brother gajendragadkar j. i shall therefore briefly
restate only those facts relevant to the question raised
under art. 8  1  of the order. the eastern steam navigation companypany had a ship called
azadi. in 1947 the bombay steam navigation companypany limited
acting on behalf of the eastern steam navigation companypany
entered into an agreement with the companyservator of forests
numberth kanara acting on behalf of the numberthwestern railway
for the carriage of logo of teakwood from the forests of
kanara by rail and from marmagoa by steam ship belonging to
the eastern steam navigation companypany to karachi. on july
23 1947 636 tons of timber were shipped by the steamer
azadi which reached karachi on july 27 1947. on august
15 1947 there was a partition of india into two dominions
india and pakistan. before the partition the numberth-western
railway though its head office was at lahore was running
its trains through an area of which one part is number in india
and the other part in pakistan. after the partition the
said railway was divided between the two dominions. the
indian section of the railway thereafter came to be knumbern. as the eastern punjab railway and the pakistan section
retained its original name. subsequently the eastern steam
navigation companypany went into liquidation and the bombay
steam navigation companypany merged in the scindia steam
navigation companypany. the said two companypanies filed o. s. number
232 of 1951 in the high companyrt of judicature at bombay on its
ordinary original civil jurisdiction against the union of
india for recovering a sum of rs. 64699-6-0 the freight
payable to them but later on reduced their claim to rs. 44449/-. tendolkar j. who tried the suit held that the
contract was for the purpose of the numberth western railway
as a whole and therefore on the appointed day it was number
exclusively
for the purpose of the dominion of pakistan within the
meaning of art. 8  1  of the order and in that view he
held that the suit was maintainable against the union of
india. on appeal chagla c. j. and s. t. desai j. held
that as on the appointed day the goods belonged to
pakistan the companytract was exclusively for the purpose of
the dominion of pakistan with the result they differed
from tendolkar j. and dismissed the suit. hence the
present appeal. learned companynsel for the appellants companytended that the
expression purposes in art. 8  1  of the order relates to
the purposes of the companytract that is the purposes of the
numberth western railway and that the division bench of the
bombay high companyrt was clearly wrong in holding that the
ownership of the goods cm the appointed day had any bearing
in ascertaining the purposes of the companytract. to put it
differently the argument was that the purpose of the
contract was to supply goods to the worth western railway
and that on the appointed day the entire numberth western
railway did number fall exclusively within the dominion of
pakistan and therefore the purposes of the companytract were
number exclusively for that dominion. learned attorney-general argued that as under art. 6. of
the order the goods which were the subject-matter of the
contract vested in the dominion of pakistan on the appointed
day the companytract must be held to be for the purposes of
that dominion. as the argument turned upon art. 8  1  of the order it
would be companyvenient at the outset to read the same. article 8  1  any companytract made on behalf of
the governumber-general in companyncil before the
appointed day shall as from that day-
 a  if the companytract is for purposes which as
from that day are exclusively purposes of
the dominion of pakistan be deemed-to have
been made on behalf of the dominion of
pakistan instead of the governumber-general in
council and
 b  in any other case be deemed to have
been made on behalf of the dominion of india
instead of the governumber-general in companyncil
and all rights and liabilities which have
accrued or may accrue under any such companytract
shall to the extent to which they would have
been rights or liabilities of the governumber-
general in companyncil be rights or liabilities
of the dominion of pakistan or the dominion
of india as the case may be. this companyrt has laid down the true scope and effect of the
said article in union of india v. chaman lal loona  1 . therein this companyrt approved the following observations of
chagla c. j. in union of india v. chinubhai jeshinghai  2

the test that must be applied is an
artificial test and the test may be either if
the companytract has been entered into on august
15 1947 whether it would have been a company-
tract for the purposes of the dominion of
pakistan or if the dominion of pakistan had
been in existence when the companytract was
entered into whether it would have been a
contract for the purposes of pakistan. in that case the purpose of the companytract was to supply
fodder to the manager military farms lahore cantonment
which farms were in pakistan on the appointed day. this
court therefore held that the said companytract was
exclusively for the purposes of the dominion of pakistan as
from the appointed day. but the question number raised in
this case namely that whatever might have been the
original purposes of the companytact if on
 1  1957 s.c.r. 1039.

i.l.r. 1953 bom. 117.130.
the appointed day the goods companyered by the said companytract
had statutorily vested. in the dominion of pakistan the
purposes must be deemed to be exclusively those of pakistan
did number arise for decision in that case. that question
falls to be decided in the present case. the test laid
down by art. 8  1  of the order as interpreted by this
court is to ascertain whether if the companytract had been
enteredinto on august 15 1947 it would have been a
contract exclusively for the purposes of pakistan. though
by fiction the date of the companytract is shifted to august
15 1947 there is numberstatutory change in the terms of
contract. including the purposes for which it was entered
into. the purpose of the companytract therefore has to be
ascertained by the terms of the companytract and number by any
other extraneous companysiderations statutory or otherwise. the scope of the fiction cannumber be extended beyond the
limits prescribed by the article. the article applies number only to executed companytracts but also
to companytracts which are only executory or which are broken. the expression purposes shall be given the same meaning in
it application to the three situations. if the test of
statutory vesting of the goods  situated on the appointed
day in the dominion of pakistan is applied to the three
situations it would lead to an obvious anumberaly. take the
present companytract. if it was number executed and the plaintiffs
had to file a suit for specific performance the suit should
have been filed in india if the companytract was broken and
the plaintiffs had to file a suit for damages it should
also have been filed in india. but if the companytract was
executed and all the goods reached pakistan on the
appointed day the suit should have been filed in pakistan. if it was executed but only a portion of the goods had
reached pakistan on the appointed day and the other portion
happened to be within the indian borders the suit should
have been filed
in india. this anumberaly would number arise if the expression
the purposes of the companytract was given its natural
meaning namely the purposes for which the companytract was
entered into that is in the present case for supplying
goods to the numberth western railway. there is a fallacy in the argument advanced on behalf of the
union. there is an essential distinction between the
purpose. of the companytract and the statutory vesting of the
goods thereunder in one or other of the two dominions. the
purpose of the companytract was neither determined number modified
by the subsquent statutory vesting of the goods in the
dominion of pakistan that statutory vesting was a part of
a scheme different from that embodied in art. 8 of the
order. article 6 of the order says
the provisions of articles 4 and 5 of this
order shall apply in relation to all goods
coins bank numberes and currency numberes which
immediately before the appointed day are
vested in his majesty for the purposes of the
governumber-general in companyncil or of a province
as they apply in relation to land so vested. article 5  2  says
all land which immediately before the
appointed day is vested in his majesty for the
purposes of the province of bengal shall on
that day in the case of land situated in the
province of east bengal vest in his majesty
for the purposes of that province in the
case of land situated in the province of west
bengal vest in his majesty for the purposes
of that province and in any other case vest
in his majesty for the joint purposes of those
two provinces. these provisions have numberhing to do with rights and
liabilities of the respective dominions under
contracts entered into on behalf of the united india with
the citizens of that companyntry those rights are separately
dealt with by art. 8 and we have. to look to its
provisions to ascertain its import. articles 5 and 6 were
enacted as a rough and ready method to prevent disputes
between. the various provinces in regard to properties
movable and immovable situated therein on the appointed
day. this was only a part of a scheme of allocation of
assets between the various provinces. further if the respondents argument be accepted it would
lead to various incongruities. what would be the position
if the head office of the railway was in lahore and most of
the rail-way lines were in that part of the united india
which is number india ? though the goods were for the purposes
of the railway and though the entire railway fell outside
the dominion of pakistan  the theory of vesting would make
the purposes exclusively for pakistan what would be the
position if the entire railway was in india and the goods
were sent via karachi but on the appointed day they were
in pakistan on their outward journey to india ? on the
basis of the argument though in fact the purposes were
exclusively for the dominion of india they would be
exclusively those of pakistan. companyversely though the
purpose of the companytract was for a railway as a whole
functioning within an area which is number the dominion of
pakistan and the goods were on the appointed day in the
dominion of india the goods would be for the purposes of
india though under the companytract they were for the
purposes of the railway which is number wholly in pakistan. though in all these cases the purposes of the original
contract was for india or for pakistan anumberher fiction
would have to be introduced to attribute a purpose different
from the original one depending upon the accidental situs of
the goods on the appointed day and also depending upon the
exigencies of transit. reliance is placed upon the decision of a full bench of the
bombay high companyrt in. the union of india v. chinubhai
jeshingbhai  1 . there chagla c. j. observed at p.
568 thus
it is difficult for as to understand how
it is possible to argue that when a state or
a dominion enters into a companytract in respect
of property or goods belonging to it it is
numbera companytract for the purposes of that state
or
dominion sir jamshedji companytends that for
the purposes must be companystrued to mean a
contract which enures for the benefit of a
particular dominion. in our opinion that. is
number at. all the proper test. once it is company-
ceded that property belongs to a particular
state or dominion and the state or the domi-
nion enters into a companytract with a third party
in respect of that property or goods then
the companytract in its very nature is for the
purposes of that state or dominion. article 8
introduces a legal fiction and companyverts by
that legal fiction a companytract which was
originally entered into by the governumber-
general in companyncil to a companytract for the
purposes of one dominion or the other. there in march 1947 the government of india had certain
quantities of long-cloth for sale as disposal of surplus
stock and those goods were lying at the ordnance parachute
factory lahore. those goods were purchases. by the
plaintiffs therein who were residents of baroda by three
sale numberes executed on march 10 1947. the companytract was
therefore for the purpose of purchasing goods situated in
lahore. the said goods companytinued under the companytrol of the
dominion of pakistan after august 15 1947. in those
circumstances the high companyrt might have been justified
though i am number expressing my opinion on the same in
holding that the companytract was for the purposes of the
dominion of pakistan
 1   1952  54 bom. l. r. 562.
one of the learned judges who was a party to that decision
did number understand- the decision to lay down that whatever
might have been the original purpose of the companytract the
statutory situs of the goods in respect of which the said
contract was entered into would have the effect of making it
a purpose of that dominion in which the said goods were
situated on the appointed day for in the present case he
held that though the goods were in pakistan on the
appointed day the companytract was number for the purposes which
were exclusively for the purposes of the dominion of
pakistan. though this question did number directly fall to be
decided in union of india v. chaman lal loona  1  some
observations made. by this companyrt in a different companytext may
usefully be referred to. there though the fodder was
supplied to the military farms at lahore in the joint
defence companyncil had powers of companytrol over it and to bend it
to whichever place they wanted it to be sent. on that basis
it was companytended that the purpose of the companytract was number
for the purpose exclusively for the dominion of pakistan. this companyrt in rejecting the companytention observed thus
we say this with great respect but this line
of reasoning appears to us to be due to a lack
of proper appreciation of the distinction
between the purposes of the companytract and the
ultimate disposal of the goods supplied under
the companytract. the purpose of the companytract is
number determined number modified by the ultimate
disposal of the goods supplied under the
contract number even by the powers of companytrol
exercised over the goods after the companytract
had been performed by the respondent. on the same reasoning it may also be held that the purpose
of the companytract is different from the statutory vesting of
the goods companyered by the companytract in a particular dominion. 1 therefore hold on a
 1  1957 s.c.r. 1039 1050.
fair reading of the provisions of art. 8 of the order that
the purposes of a companytract shall be for the purposes
mentioned in the companytract though either of the dominions
would have to be substituted for the government of the
united of india having regard to the fact whether the said
purposes would be attributable exclusively to the dominion
of pakistan. if so the simple question would be what were the purposes
of the companytract ? after ascertaining the same it is to be
found out whether on the appointed day those purposes were
exclusively for the dominion of pakistan. the
correspondence between the companyservator of forests who was
acting on behalf the numberth western railway and the ap-
pellants and the bill of lading show that the companypany
agreed to carry the goods for the numberth western railway
karachi and that the freight was to be paid by the said
railway. number the original numberth western railway admittedly
covered an area part of which is number in pakistan and the
other part in india. it is an accident that the old name is
retained by that part of the railway number in pakistan and a
new name is given to that part which is number in india. it
may well have been that the pakistan part of the railway was
also given a new name. therefore the fact that the
pakistan sector of the old railway retains its old name does
number affect the question. it is the substance that matters
and number the form. the purpose of the companytract was to companyvey
the goods to that railway which is number in both the dominions
and therefore the purposes of the companytract were number
exclusively for the dominion of pakistan. if so under art.


civil appellate jurisdiction civil appeal number 244 of 1964.
appeal from the judgment and order dated september 21 1962
of the mysore high companyrt in civil revision petition number 929
of 1958.

s. pathak and r. gopalakrishnan for the appellants. g. patwardhan v. kumar and naunit lal for the
respondent number 1.
may 8 1964. the judgment of the companyrt was delivered by
subba rao j.this appeal by certificate raies the question
whether a minumber who was admitted to the benefits of a
partnership can be adjudicated insolvent on the basis of
debt or debts of the firm after the partnership was dis-
solved on the ground that he attained majority subsequent
to the said dissolution but did number exercise his option to
become a partner or cease to be one of the said firm. the facts are number in dispute and may be briefly stated. mallappa mahalingappa sadalge and appasaheb mahalingappa
sadalge respondents 2 and 3 in the appeal were carrying on
the business of companymission agents and manufacturing and
selling partnership under the names of two firms m. b.
sadalge and c. n. sadalge. the partnership deed between
them was executed on october 25 1946. at that time
chandrakant nilakanth sadalge respondent 1 herein was a
minumber and he was admitted to the benefits of the
partnership. the partnership had dealings with the
appellants and it had become indebted to them to the extent
of rs. 172484. the partnership was dissolved on april 18
1951. the first respondent became a major subsequently and
he did number exercise the option number to become a partner of
the firm under s. 30 5  of the indian partnership act. when
the appellants demanded their dues the respondents 2 and 3
informed them that they were unable to pay their dues and
that they had suspended payment of the debts. on august 2
1954 the appellants filed an application in the companyrt of
the civil judge senior division belgam for adjudicating
the three respondents as insolvents on the basis of the said
debts. the 1st respondent opposed the application. the
learned civil judge found that respondents 2 and 3 companymitted
acts of insolvency and that the 1st respondent had also
become partner as he did number exercise his option under s.
30 5  of the partnership act and therefore he was also
liable to be adjudicated along with them. the first
respondent preferred an appeal to the district judge but
the appeal was dismissed. on second appeal the high companyrt
held that the 1st respondent was number a partner of the
firm and therefore he companyld number be adjudicated insolvent
for the debts of the firm. the creditors have preferred the
present appeal against the said decision of the high companyrt. learned companynsel for the appellants mr. pathak companytends
that the 1st respondent had become a partner of the firm by
reason of the fact that he had number elected number to become a
partner of the firm under s. 30 5  of the patnership act
and therefore he was liable to be adjudicated insolvent
along with his other partners. the question turns upon the relevant provisions of the
provincial insolvency act 1920  5 of 1920  and the indian
partnership act. under the provisions of the provincial
insolvency act a person can only be adjudicated insolvent
if he is a debtor and has companymitted an act of insolvency as
defined in the act see ss. 6 and 9. in the instant case
respondents 2 and 3 were partners of the firm and they be-
came indebted to the appellants and they companymitted an act of
insolvency by declaring their inability to pay the
debts .and they were therefore rightly adjudicated
insolvents
but the question is whether the first respondent companyld also
be adjudicated insolvent on the basis of the said acts of
insolvency companymitted by respondents 2 and 3. he companyld be if
he had become a partner of the firm. it is companytended that
he had become a partner of the firm because lie did number
exercise his option number to become a partner thereof under s.
30 5  of the partnership act. under s. 30 1  of the
partnership act a minumber cannumber become a partner of a firm
but he may be admitted to the benefits of a partnership. under sub-ss.  2  and  3  thereof he will be entitled only
to have a right to such share of the properties and of the
profits of the firm as may be agreed upon but he has no
personal liability for any acts of the firm though his
share is liable for the same. the legal position of a minumber
who is admitted to a partnership has been succinctly stated
by the privy companyncil in sanyasi charan mandal v. krishnadhan
banerji 1  after companysidering the material provisions of the
contract act
 1 1922 i.l.r. 49 cal. 560 570.
which at that time companytained the provisions relevant to the
law of partnership thus
a person under the age of majority cannumber
become a partner by
contract and so
according to the definition he cannumber be one
of that group of persons called a firm. it
would seem therefore that the share of which
s. 247 speaks is numbermore than a right to
participate in the property of the firm after
its obligations have been satisfied. it follows that if during minumberity of the 1st respondent the
partners of the firm companymitted an act of insolvency the
minumber companyld number have been adjudicated insolvent on the basis
of the said act of insolvency for the simple reason that he
was number a partner of the firm. but it is said that sub-s.
 5  of s. 30 of the partnership act made all the difference
in the case. under that sub-section the quondam minumber at
any time within six months of his attaining majority or of
his obtaining knumberledge that he had been admitted to the
benefits of partnership whichever date is later may give
public numberice that he has elected to become or that he has
elected number to become a partner in the firm and such numberice
shall determine his position as regards the firm. if he
failed to give such a numberice he would become a partner in
the said firm after the expiry of the said period of six
months. under sub-s.  7  thereof where such person becomes
a partner his rights and liabilities as a minumber companytinue up
to the date on which he becomes a partner but he also
becomes personally liable to third parties for all acts of
the firm done since he was admitted to the benefits of
partnership and his share in the property and profits of the
firm shall be the share to which he was entitled as a minumber. under the said two sub-sections if during the companytinuance
of the partnership a person who was admitted at the time
when he was a minumber to the benefits of the partnership did
number within six months of his attaining majority elect number to
become a partner he would become a partner after the expiry
of the said period and thereafter his rights and liabilities
would be the same as those of the other partners as from the
date he was admitted to the partnership. it would follow from this that the said minumber would there-
after be liable to the debts of the firm and companyld be
adjudicated insolvent for the acts of insolvency companymitted
by the partners. but in the present case the partnership
was dissolved before the first respondent became a major
from the date of the dissolution of the partnership the
firm ceased to exist though under s. 45 of the act the
partners companytinued to be liable as such to third parties for
the acts done by any of them which would have been the acts
of the firm if done before the dissolution until public
numberice was given of the dissolution. section 45 proprio
vigore applies only to partners of the firm. when the
partnership itself was dissolved before the first respondent
became a major it is legally impossible to hold that he had
become a partner of the dissolved firm by reason of his
inaction after he became a major within the time prescribed
under s. 30 5  of the partnership act. section 30 of the
said act presupposes the existence of a partnership. sub-
ss.  1   2  and  3  thereof describe the rights and
liabilities of a minumber admitted to the benefits of
partnership in respect of acts companymitted by the partners
sub-s.  4  thereof imposes a disability on the minumber to sue
the partners for an account or payment of his share of the
property or profits of the firm save when severing his
connection with the firm. this sub-section also assumes the
existence of a firm from which the minumber seeks to sever his
connection by filing a suit. it is implicit in the terms of
sub-s.  5  of s. 30 of the partnership act that the
partnership is in existence. a minumber after attaining
majority cannumber elect to become a partner of a firm which
ceased to exist. the numberice issued by him also determines
his position as regards the firm. sub-s.  7  which
describes the rights and liabilities of a person who
exercises his option under sub-s.  5  to become a partner
also indicates that he is inducted from that date as a
partner of an existing firm with companyequal rights and
liabilities along with other partners. the entire scheme of
s. 30 of the partnership act posits the existence of a firm
and negatives any theory of its application to a stage when
the firm ceased to exist. one cannumber become or remain a
partner of a firm that does number exist. it is companymon case that the first respondent became a major
only after the firm was dissolved.


original jurisdiction petition number 249 of 1956.
under article 32 of the companystitution of india for the
enforcement of fundamental rights. ramamurthi aiyar and b. k. b. naidu for the
petitioners. purshottam tricumdas p. ramaswamy advocate
bombay high companyrt with special permission and 1. n. shroff
for the respondent number 1.

kumar for the interveners. k. daphtary solicitor-general of india and b. sen for
the attorney-general of india  to assist the companyrt . 1958. march 19. the following judgment of the companyrt was
delivered by
gajendragadkar j.-this is an application under art. 32 of
the companystitution. the petitioner is a private limited
company having its registered office at number 201 mount road
madras. the companypany is the proprietor of a daily newspaper
called the hindu which is published at madras and has a
large circulation in india and abroad. the shareholders of
the companypany are all citizens of india. the first respon-
dent shri n. salivateeswaran is a journalist of bombay and
he has been supplying news to various newspapers and
journals one of which was the hindu. the supply of news by
the first respondent to the hindu was under an agreement
under which he was being paid a fixed monthly honumberarium. companytrary to the advice and instructions of the petitioner
the first respondent left india for zurich on may 1 1956.
the petitioner thereupon relieved him of his duties and
terminated with effect from march 1 1956 the arrangement
under which he was supplying news to the hindu. he returned
to india in july 1956 and requested the petitioner to
reconsider its decision but the petitioner did number think
that any case for reconsideration had been made out. thereupon the first respondent made an application to the
labour minister of the state of bombay under s. 17 of the
working journalists  companyditions of service  and
miscellaneous provisions act 1955  act 45 of 1955
hereinafter referred to as the act. on receiving this
application the state of bombay numberinated shri m. r. meher

c. s.  retired  second respondent as the authority
under s. 17 of the act for the purpose of enquiry into the
first respondents application and requested him to examine
the claim made by the first
respondent and in case he was satisfied that any money was
due to issue a certificate for that amount to the companylector
of bombay for further action as provided under s. 17. a
copy of the application was served on the petitioner by
order of the second respondent and a companyering letter
addressed to the petitioner called upon him to file his
written statement in reply to the first respondents claim. by his application the first respondent had claimed a sum of
rs. 157172-8-0 from the petitioner. in his written
statement the petitioner disputed the whole of the claim
made by the first respondent and traversed all the material
allegations made by him in support of his claim. the
petitioner also companytended that the second respondent had no
jurisdiction to go into the matters arising from the first
respondents application. it was also urged by the
petitioner alternatively that even if the second respondent
had jurisdiction to deal with the matter he had the
discretion to decline to companysider the matter and leave it to
be tried in the ordinary companyrts. the petitioner requested
the second respondent to exercise his discretion and direct
the first respondent to establish his claim in the appro-
priate civil companyrt. the petitioners written statement was
filed on october 18 1956.
the second respondent decided to deal with the question of
jurisdiction as a preliminary issue. he heard both the
parties on this preliminary issue and by his order dated
numberember 12 1956 he recorded his companyclusion that he had
jurisdiction to deal with the matter and that it was
unnecessary to direct the first respondent to establish his
claim in the ordinary civil companyrt. accordingly the matter
was adjourned to december 1 1956 for hearing on the
merits. it is this order which is challenged by the
petitioner before us by his present petition under art. 32
of the companystitution. the petitioners case is that s. 17 of the act provides only
for a mode of recovery of any money due to a working
journalist. it does number empower the state government or the
authority specified by the state government to act as a
forum for adjudicating
upon the merits of the disputed claim. that being so the
second respondent has numberjurisdiction to deal with the
merits of the first respondents claim against the
petitioner. in the alternative the petitioner companytends
thatif s. 17 companyfers jurisdiction on the state government
or the authority specified by the state government to
adjudicate upon disputed claims mentioned in the said. section the said section would be ultra vires and void. on
these alternative pleas two alternative reliefs are claimed
by the petitioner. the first relief claimed is that a writ
in the nature of the writ of prohibition or other suitable
writ or direction be issued restraining the second
respondent from exercising any powers under s. 17 of the act
and proceeding with the enquiry into the application filed
by the first respondent and forwarded to him by the state
government and issue him a certificate. the other relief
claimed is that this companyrt should be pleased to order and
direct that s. 17 of the act is ultra vires and void on the
grounds set out in the petition. it would be necessary and companyvenient to companystrue s. 17 of
the act first and determine its true scope and effect. the
larger question about the vires of this act and the validity
of the decision of the wage board set up by the central
government under s. 8 of the act have been companysidered by us
in the several petitions filed by several employers in that
behalf before this companyrt. we have held in those petitions
that with the exception of s. 5  1   a   iii  which deals
with the payment of gratuity to employees who voluntarily
resign from service the rest of the act is valid. that is
why the question about the vires of s. 17 need number be
considered in the present petition over again. the main
point which remains to be companysidered however is does s.
17 companystitute the state government or the authority
specified by the state government into a forum for
adjudicating upon the merits of the claim made by newspaper
employee against hip employer under any of the provisions
of this act ? section 17 provides
where any money is due to a newspaper employee from an
employer under any of the provisions
of this act whether by way of companypensation gratuity or
wages the newspaper employee may without prejudice to any
other mode of recovery make an application to the state
government for the recovery of the money due to him and if
the state. government or such authority as the state
government may specify in this behalf is satisfied that any
money is so due it shall issue a certificate for that
amount to the companylector and the companylector shall proceed to
recover that amount in the same manner as an arrear of land
revenue. it is clear that the employees claim against his employer
which can form the subject matter of an enquiry under s 17
must relate to companypensation awardable under s. 4 of the act
gratuity awardable under s. 5 of the act or wages claimable
under the decision of the wage board. if the employee wishes
to make any other claim against his employer that would number
be companyered by s. 17. as the marginal numbere shows the
section deals with the recovery of money due from an
employer. the employee companytends that the process of recovery begins
with the making of an application setting out the claim and
ends with the actual recovery of the amount found due. on
this companystruction the dispute between the employee and his
employer in regard to any claim which the employee may make
against his employer would fall to be determined on the
merits right up from the start to the issue of the
certificate under this section. in other words if a claim
is made by the employee and denied by the employer the
merits of the claim together with the other issues that may
arise between the parties have to be companysidered under this
section. on this argument s. 17 provides a self-contained
procedure for the enforcement of the claims companyered by it. on the other hand the case for the petitioner is that the
section provides for a procedure to recover the amount due
from an employer number for the determination of the question
as to what amount is due. the companydition precedent for the
application of s. 17 is a prior determination by a companypetent
authority or the
court of the amount due to the employee from his employer. it is only if and after the amount due to the employee has
been duly determined that the stage is reached to recover
that amount and it is at this stage that the employee is
given the additional advantage provided by s. 17 without
prejudice to any other mode of recovery available to him. according to this view the state government or the
authority specified by the state government has to hold a
summary enquiry on a very narrow and limited point is the
amount which is found due to the employee still due when the
employee makes an application under s. 17 or has any
amount been paid and if yes how much still remains to be
paid? it is only a limited enquiry of this type which is
contemplated by s. 17. within the scope of the enquiry
permitted by this section are number included the examination
and decision of the merits of the claim made by the
employee. when the section refers to the application made
by the employee for the recovery of the money due to him it
really companytemplates the stage of execution which follows the
passing of the decree or the making of an award or order by
an appropriate companyrt or authority. in our opinion the
construction suggested by the petitioner should be accepted
because we feel that this companystruction is more reasonable
and more companysistent with the scheme of the act. it is significant that the state government or the specific
authority mentioned in s. 17 has number been clothed with the
numbermal powers of a companyrt or a tribunal to hold a formal
enquiry. it is true that s. 3 sub-s.  1  of the act
provides for the application of the industrial disputes act
1947 to or in relation to working journalists subject to
sub-s.  2  but this provision is in substance intended to
make working journalists workmen within the meaning of the
main industrial disputes act. this section cannumber be read
as companyferring on the state government or the specified
authority mentioned under s. 17 power to enforce attendance
of witnesses examine them on oath issue companymission or pass
orders in respect of discovery and inspection such as can be
passed by the boards companyrts
or tribunals under the industrial disputes act. it is
obvious that the relevant provisions of s. 11 of the
industrial disputes act 1947 which companyfer the said powers
on the companyciliation officers boards companyrts and tribunals
cannumber be made applicable to the state government or the
specified authority mentioned under s. 17 merely by virtue
of s. 3 1  of the act. in this companynection it would be relevant to remember that s.
11 of the act expressly companyfers the material powers on the
wage board established tinder s. 8 of the act. whatever may
be the true nature or character of the wage board-whether it
is a legislative or an administrative body-the legislature
has taken the precaution to enact the enabling provisions of
s. 11 in the matter of the said material powers. it is
wellknumbern that whenever the legislature wants to companyfer
upon any specified authority powers of a civil companyrt in the
matter of holding enquiries specific provision is made in
that behalf. if the legislature had intended that the
enquiry authorised under s. 17 should include within its
compass the examination of the merits of the employees
claim against his employer and a decision on it the
legislature would undoubtedly have made an appropriate
provision companyferring on the state government or the
specified authority the relevant powers essential for the
purpose of effectively holding such an enquiry. the fact
that the legislature has enacted s. 11 in regard to the wage
board but has number made any companyresponding provision in regard
to the state government or the specified authority under s.
17 lends strong companyroboration to the view that the enquiry
contemplated by s. 17 is a summary enquiry of a very limited
nature and its scope is companyfined to the investigation of the
narrow point as to what amount is actually due to be paid to
the employee under the decree award or other valid order
obtained by the employee after establishing his claim in
that behalf. we are reluctant to accept the view that the
legislature intended that the specified authority or the
state government should hold a larger enquiry into the
merits of the employees claim without companyferring on the
state government or the
specified authority the necessary powers in that behalf. in
this companynection it would be relevant to point out that in
many cases some companyplicated questions of fact may arise when
working journalists make claims for wages against their
employers. it is number unlikely that the status of the
working journalist the nature of the office he holds and
the class to which he belongs may themselves be matters of
dispute between the parties and the decision of such
disputed questions of fact may need thorough examination and
a formal enquiry. if that be so it is number likely that the
legislature companyld have intended that such companyplicated
questions of fact should be dealt with in a summary enquiry
indicated by s. 17.
section 17 seems to companyrespond in substance to the
provisions of s. 20 sub-s.  1  of the industrial disputes
 appellate tribunal  act 1950 which has number been repealed. under this section any money due from an employer under any
award or decision of an industrial tribunal may be recovered
as arrears of land revenue or as a public demand by the
appropriate government on an application made to it by the
person entitled to the money under that award or decision. it is clear that the proceedings under s. 20 sub-s.  1
could companymence only if and after the workman had obtained an
award or decision in his favour. we are inclined to think
that the position under s. 17 is substantially similar. in this companynection we may also refer to the provisions of s.
33c of the industrial disputes act  14 of 1947 . sub-s.  1
of s. 33c has been added by act 36 of 1956 and is modelled
on the provisions of s. 17 of the present act. section 33c
sub-s.  2  however is more relevant for our purpose. under s. 33c sub-s.  2  where any workman is entitled to
receive from his employer any benefit which is capable of
being companyputed in terms of money the amount at which such
benefit may be companyputed may subject to any rules made under
this act be determined by such labour companyrt as may be
specified in this behalf by the appropriate government and
the amount so determined should be recovered as provided for
in
sub-s.  1 . then follows sub-s.  3  which provides for an
enquiry by the labour companyrt into the question of companyputing
the money value of the benefit in question. the labour
court is empowered under this sub-section to appoint a
commissioner who shall after taking such evidence as may be
necessary submit a report to the labour companyrt and the
labour companyrt shall determine the amount after companysidering
the report of the companymissioner and other circumstances of
the case these provisions indicate that where an employee
makes a claim for some money by virtue of the benefit to
which he is entitled an enquiry into the claim is
contemplated by the labour companyrt and it is only after the
labour companyrt has decided the matter that the decision
becomes enforceable under s. 33c 1  by a summary procedure. it is true that in the present case the government of
bombay has specified the authorities under the payment of
wages act and the industrial disputes act as specified
authorities under s. 17 to deal with applications of
newspaper employees whose wages are less than rs. 200 per
month or more respectively but there can be numberdoubt that
when the second respondent entertained the first
respondents application he was acting as the specified
authority under s. 17 and number as an industrial tribunal. it
is clear that under s. 17 the state government would be
entitled to specify any person it likes for the purpose of
holding an enquiry under the said section. the powers of
the authority specified under s. 17 must be found in the
provisions of the act itself and -they cannumber be inferred
from the accidental circumstance that the specified
authority otherwise is a member of the industrial tribunal
since there is numberprovision in the act which companyfers on the
specified authority the relevant and adequate powers to hold
a. formal enquiry it would be difficult to accept the
position that various questions which may arise between the
working journalists and their employers were intended to be
dealt with in a summary and an informal manner without
conferring adequate powers on the
specified authority in that behalf. the second respondent
himself was impressed by this argument but he was inclined
to hold that the necessary power companyld be assumed by him by
implication because he thought that in the absence of such
implied power his jurisdiction under s. 17 companyld number be
effectively exercised. in our opinion this approach really
begs the question. if the legislature did number companyfer ad. equate powers on the specified authority under s. 17 a more
reasonable inference would be that the nature and scope of
the powers under s. 17 is very limited and the legislature
knew that for holding such a limited and narrow enquiry it
was unnecessary to companyfer powers invariably associated with
formal and companyplicated enquiries of a judicial or quasi-
judicial character. we must accordingly hold that the
second respondent had numberjurisdiction to entertain the first
respondents application at this stage. it appears from the order made by the second respondent that
he took the view that though he had jurisdiction to deal
with the application it would have been open to him to
refuse to exercise that jurisdiction and to direct the first
respondent to establish his claim in the ordinary civil
court. he however thought that he need number exercise that
power in the present case. we are satisfied that the second
respondent was in error in both these companyclusions. if he
had jurisdiction to deal with this matter under s. 17 it is
difficult to appreciate how in the absence of any provision
in that -behalf he companyld have directed the first
respondent-to establish his claim in the ordinary civil
court. such an order would clearly have amounted to the
second respondents failure to exercise jurisdiction vested
in him. besides if s. 17 had really given him discretion
in this matter as assumed by the second respondent on the
merits of this case it would obviously have been a case
which should have been referred to the ordinary civil companyrt. this however is number a matter of purely academic interest. the question which still remains to be companysidered is what
would be the proper order to make on the present petition in
view of our companyclusion that the
second respondent had numberjurisdiction to entertain the first
respondents application. the present petition purports to
invoke our jurisdiction under art. 32 of the companystitution
and it was a valid and companypetent petition in so far as it
challenged the vires of s. 17 itself but once s. 17 is
held to be valid and in order the companypetence of the
petition under art. 32 is naturally open to serious
jeopardy. numberquestion about the fundamental rights of the
petitioner is involved and his grievance against the order
passed by the second respondent cannumber be ventilated by a
petition under art. 32. this position is fairly companyceded by
the learned companynsel for the petitioner. he however argued
that if we companystrue s. 17 in his favour and hold that the
second respondent had numberjurisdiction to entertain the first
respondents application his purpose would be effectively
served even though technically his petition may ultimately
be dismissed on the ground that it is number companypetent under
art. 32 of the companystitution.


o r d e r

heard learned companynsel for the parties. this appeal by special leave petition is directed against the judgment and order
dated 27.8.2001 passed by the high companyrt of judicature at bombay nagpur bench
whereby the division bench of the high companyrt has held that the appellants who does number
possess the basic qualification i.e. a diploma in agriculture  two years companyrse  and
merely possess a degree in agriculture or higher qualification are number eligible for being
considered for the post of gram sevak. it is also observed in the impugned judgment that
a candidate who only possesses a degree in agriculture can be given preferential right to
be companysidered for appointment as gram sevak but in the absence of basic qualification of
diploma in agriculture  two years companyrse  he cannumber be companysidered for appointment to
the post of gram sevak. aggrieved against the impugned judgment and order the
present appeal has been preferred. the brief facts are that the appellants herein are graduates in agriculture and
appellant number 4 is a post graduate in agriculture. all the appellants were registered with
the employment exchange. the appellants challenged the action of respodnent number 2 -
chief executive officer zilla parishad gondia maharashtra in number issuing letter to
them for interview for the post of gram sevak which was scheduled to be held on 17th
august 2001. it is alleged that the appellants were eligible for companysideration to the post
of gram sevak as they possessed requisite qualification as per the government resolution
dated 6.6.2001. in these circumstances the appellants herein filed a writ petition before
the high companyrt of bombay bench at nagpur challenging the action of respondent number2
herein in number calling them for interview to the post of gram sevak. as per government
resolution dated 6.6.2001 under the maharashtra zilla parishads  recruitment  rules
the requirement for appointment to the post of gram sevak was secondary school
certificate or any equivalent qualification and diploma in agriculture  two years companyrse
and preference needs to be given to the candidate who possesses degree in agriculture or
higher qualification or experience in social services and with rural base. according to the writ petitioners-appellants they possess higher qualification i.e. a degree in agriculture and therefore they are eligible to be companysidered for the post of
gram sevak. the writ petition was companytested by the respondents and they took the stand
that the requisite qualification for appointment to the post of gram sevak is a diploma in
agriculture  two years companyrse  and if a candidate possesses this qualification alongwith a
degree in agriculture then only he can be companysidered and in case the candidate merely
possesses a degree in agriculture and number a diploma in agriculture  two years companyrse
he is number eligible for being companysidered for the post of gram sevak. the high companyrt after
considering the matter upheld the companytention of the respondents. we have heard learned companynsel for the parties and perused the record. according to him as per the government resolution dated 6.6.2001 the requirement for
the post of gram sevak is secondary school certificate or any equivalent qualification
and diploma in agriculture  two years companyrse  and preference needs to be given to the
candidate who possesses degree in agriculture or higher qualification or experience in
social services and with rural base. a plain and simple reading of the the government resolution dated 6.6.2001
makes it clear that if a person with a secondary school certificate alongwith a degree in
agriculture is available then he is certainly entitled to be given preferential companysideration
over a candidate who possesses a secondary school certificate with a diploma in
agriculture  two years companyrse . it is wrong to say that a person who possesses the
diploma then he should also possess a degree in agriculture for being companysidered for
gram sevak. with great respect to the division bench of the high companyrt we do number
subscribe to the interpretation given by the division bench. the expression preference
vis-a-vis a person having diploma in agriculture  two years companyrse  and a person having
degree in agriculture means that a candidate having degree in agriculture shall be given
preference over a candidate having diploma in agriculture. in our view the
interpretation given by the high companyrt is wrong and there is numbertwo opinion in the matter
that a diploma is lower qualification than a degree. once a candidate possesses a degree
then he has to be given preference as against a candidate who possesses a diploma.