P K BASAK Vs. UNION OF INDIA

JUDGEMENT

(1.) I adhere to the view expressed in the order of reference. The majority of my Lords take the opposite view and I will therefore say a few words in addition to what I have already said in the Order of reference.

(2.) The reason for an article such as Article 8(1) of the Indian Independence (Rights, Property and Liabilities) Order, 1947 is obvious. Up to the 15th August, 1947 there was one Central Government for the whole of undivided India, and hence all contracts made on behalf of the Governor General in Council before that day were for purposes of the Central Government of undivided India. All such contracts were made in exercise of the executive authority of the Governor General in Council see Section 175(3) read with Section 313(3) of the Government of India Act, 1935. With the passing of the Indian Independence Act, 1947 the territorial integrity of British India was broken, and its territories were divided between the Dominion of India and the Dominion of Pakistan. This division necessitated a division of the totality of the rights, property and liabilities of the Central Government of undivided India between the two Dominions. The initial distribution of, the rights and liabilities under contracts made on behalf of the Central Government of undivided India was effected by Article 8(1) of the Indian Independence (Rights, Property and Liabilities) Order, 1947. The test to be applied is whether the contract was for purposes which as from the appointed day are exclusively purposes of the Dominion of Pakistan. In other words the test is whether the contract would have been exclusively for purposes of the Dominion of Pakistan if that Dominion were in existence when the contract was entered into. If the contract satisfies this test but not otherwise the Dominion of Pakistan is substituted as the party to the contract and all rights and liabilities which may have accrued or may accrue under the contract will devolve on that Dominion.

(3.) The purposes of the Dominion of Pakistan as from the appointed day are to be understood in the context of the Government of India Act, 1935 as adapted by the Pakistan (Provisional Constitution) Order, 1947 by which that Dominion became governed as from that day in view of Section 8(2) of the Indian Independence Act, 1947. Railways became one of its central subjects and purposes in view of Sections 100(1) and 316 of the Government of India Act, 1935 read with Item 20 of list I of the seventh schedule to it. Now if a contract were made by the Central Government of the Dominion of Pakistan after the appointed day for purposes of carriage of goods by Railways, such a contract would be for purposes of that Dominion, since Railways were one of its central subjects. This conclusion is supported by the decision of the Federal Court in In the matter of Reference under Section 213, Government of India Act 1935, 1943 FCR 20(30) : AIR 1943 FC 13 (17-18) in which a canal used for irrigation purposes of the Province of Delhi was held to be used for purposes of the Central Government of Undivided India within the meaning of Section 173 of the Government of India Act, 1935 since irrigation in the Province of Delhi which was a centrally administered area was in effect a central subject. In this connection Gwyer, C. J. observed,