The State of Tripura Vs. The Province of
East Bengal Union of India [1950] INSC 37 (4 December 1950)
SASTRI, M. PATANJALI KANIA, HIRALAL J. (CJ)
FAZAL ALI, SAIYID MUKHERJEA, B.K.
AIYAR, N. CHANDRASEKHARA
CITATION: 1951 AIR 23 1951 SCR 1
CITATOR INFO :
E 1966 SC1089 (18,60) F 1966 SC1412 (3,4,5) E
1969 SC 78 (5,19) RF 1969 SC1302 (17) D 1973 SC 381 (12)
ACT:
Indian Independence Act, 1947, s. 9--Indian
Independence (Legal Proceedings) Order, 1947, Art. 4--Indian Independence
(Rights, Property and Liabilities) Order, 1947, Arts.
10 (2), 12 (2)-Notice on Ruler of State for
return of income under Bengal Agricultural Income tax Act, 1944--Suit for
declaration of invalidity of Act and injunction restraining Income-tax Officer
from proceeding with assessment--Partition of India pending suit--Property
falling within Province of East Bengal--Jurisdiction of court in West Bengal to
proceed with suit against Province of East Bengal--Interpretation of
Orders--"Liability", "actionable wrong other than breach of
contract", meanings of--Torts and actionable wrongs--Bengal Agricultural
Income-tax Act, 1944, s. 65Suit in civil court for declaration and injunction
restraining assessment proceedings-Maintainability.
HEADNOTE:
The Income-tax officer, Dacca, acting under
the Bengal Agricultural Income-tax Act, 1944, sent by registered post a notice
to the Manager of an Estate belonging to the Tripura State but situated in
Bengal, calling upon the latter to furnish a return of the agricultural income
derived from the Estate during the previous year. The notice was received by
the Manager in the Tripura State. The State, by its then Ruler, instituted a
suit in June, 1946, against the Province of Bengal and the Income-tax Officer,
in the court of the Subordinate Judge of Dacca for a declaration that the said
Act in so far as it purported to impose a liability to pay agricultural
income-tax on the plaintiff was ultra vires and void, and for a perpetual
injunction to restrain the defendants from taking any steps to assess the
plaintiff. The suit was subsequently transferred to the Court of the Subordinate
Judge of Alipore. The partition of India under the Indian Independence Act took
place on the 158h August 1947, and the 2 Province of East Bengal in which the
Estate was situated, was substituted as a defendant in the place of the
Province of Bengal on an application made by it, and in its written statement
it contended that the court of Alipore which was situated in West Bengal had no
jurisdiction to proceed with the suit. The High Court of Calcutta, reversing
the order of the Subordinate Judge of Alipore held that the provisions of the
Indian Independence (Legal Proceedings) Order, 1947, and the Indian
Independence (Rights, Property and Liabilities)Order, 1947, did not apply to
the case and, as the matter was accordingly governed by the rules of
international law, the court of Alipore had no jurisdiction to proceed with the
suit:
Held per KANIA C.J., PATANJALI SASTRI,
MUKHERJEA and CHANDRASEKHARA AIYAR JJ. (FAZL ALI J. concurring)--The suit was
not one with respect to any property transferred to East Bengal by the Indian
Independence (Rights, Property and Liabilities) Order, 1947, nor was it a suit
in respect of any "rights" transferred by the said Order, inasmuch as
the Province of East Bengal obtained the right to levy income tax not by means
of any transfer under the said Order, but by virtue of sovereign rights which
were preserved by s. 18 (3) of the Indian Independence Act, 1947, and Art. 12
(2) of the said Order had no application to the case.
Held per KANIA C.J., PATANJALI SASTRI,
MUKHERJEA AND CHANDRASEKHARA AIYAR J.J. (FAZL ALI J, dissenting.) (i) Since the
object of the Indian Independence (Rights, Property and Liabilities) Order,
1947, was to provide for the initial distribution of rights, properties and
liabilities as between the two Dominions and their Provinces, a wide and
liberal construction, as far as the language used would admit, should be placed
upon the Order, so as to leave no gap or lacuna in relation to the matters
sought to be provided for. The words "liability in respect of an actionable
wrong" should not therefore be understood in the restricted sense of
liability for damages for completed acts, but so as to cover the liability to
be restrained by injunction from completing what on the allegations in the
plaint are illegal or unauthorised acts which have been commenced.
As the Province of Bengal was, on the:
allegations in the plaint, liable to be restrained from proceeding with an
illegal assessment, that liability was, accordingly, a liability in respect of
"an actionable wrong other than breach of contract" with in the
meaning of Art. 10 (2) (a) of the above said Order; and, as the cause of action
arose wholly in Dacca within the Province of East Bengal, that liability passed
to the province of East Bengal under Art.
10 (2) (a), the latter must be deemed to be
substituted as a party to the suit and the suit must continue in the court of
the Subordinate Judge of Alipore, under Art.4 of the Indian Independence (Legal
Proceedings) Order, 1947.
(ii) Assuming that the cause of action did
not wholly arise 3 in Decca, Art. 10 (9.) (c) would apply and the Province of
East Bengal would still be liable, though jointly with the Province of West
Bengal.
(iii) As the suit was not one "to set
aside or modify any assessment made under the Act", s. 65 of the Bengal
Agricultural Income-tax Act, 1944, had no application and the suit was
therefore one in respect of an "actionable" wrong within the moaning
of Art. 10 (2) (a).
Per FAZL ALI J.--The words "liability in
respect of an actionable wrong other than breach of contract" in Art. 10
of the Indian Independence (Rights, Property and Liabilities) order 1947, refer
to liability capable of being ascertained in terms of money such as liability
for damages for tort and not liability in any abstract or academic sense.
Even if a meaning, as wide' as they can bear
in a legal context, is given to the words "actionable wrong" and
"liability" two elements are necessary to constitute an actionable
wrong, namely, (i) an act or omission amounting to an infringement of a legal
right of a person or breach of duty towards him, and (ii) damage or harm
resulting there from.
The mere issuing of a notice under s. 4 of
the Bengal Agricultural Income-tax Act, 1944, by the Income-tax Officer is not
an actionable wrong because no right known to law is infringed thereby and no
action for damages can be maintained in respect of such an act, even assuming
that the Income-tax Officer had exceeded his powers or acted under an invalid
provision of law. No "liability for an actionable wrong" was thus
involved in the suit and no liability in respect of such a wrong could
therefore be said to have been transferred to the Province of East Bengal
within the meaning of Art. 10 (2.) of the said Order so as to entitle the
plaintiff to continue the suit against the Province of East Bengal under Art.
10 (2).
For the purpose of understanding the full
scope of s. 65 of the Bengal Agricultural Income-tax Act, 1944 it is necessary
also to read the latter part which provides that no suit or other proceeding
shall lie against any officer of the Crown for anything in good faith done or
intended to be done under the Act." The latter part of the section clearly
excludes the jurisdiction of the courts to prevent the Income-tax Officer from
proceeding with an assessment which has been started and the section must on a
fair construction be held to bar all suits in connection with such assessment
whether against the State or an Income-tax Officer of the State. If, therefore,
no suit or action lies, there cab be no liability for an actionable wrong.
[The nature of actionable wrongs and torts
discussed.] Judgment of the Calcutta High Court reversed.
APPELLATE JURISDICTION: Case No. IV of 1949.
Appeal from a judgment of the High Court of
Judicature at Calcutta (Harries C.J. and Chakravarthi J. (dated 30th November,
1948, in Civil Revision Case No. 712 of 1948.
N.C. Sen Gupta (Ajit Kumar Dutta, with him)
for the Appellant.
Faiyaz Ali, Advocate-General of East Bengal
(B. Sen and Noor-ud-din, with him) for the Respondent.
M. C, Setalvad, Attorney-General for India,
(S. M. Sikri and V.N. Sethi, with him) for the Intervener.
1950. Dec. 4. The judgment of Kania C.J.,
Patanjali Sastri j. and Chandrasekhara Aiyar J. was delivered by Patanjali
Sastri J. Fazl Ali and Mukherjea JJ. delivered separate judgments.
PATANJALI SASTRI J.--This is an appeal from a
judgment of the High Court of Judicature in West Bengal reversing a finding of
the Second Subordinate Judge of 24 Parganas at Alipore that he had jurisdiction
to proceed with a suit after substituting the Province of East Bengal (in
Pakistan)in the place of the old Province of Bengal against which the suit had
originally been brought.
The facts leading to the institution of the
suit are not in dispute. The Bengal Agricultural Income-tax Act was passed by
the Provincial Legislature of Bengal in 1944. It applied to the whole of Bengal
and purported to bring under charge the agricultural income of, inter alia,
"every Ruler of an Indian State." Acting under the provisions of that
Act, which came into force on 1st April, 1944, the Incometax Officer, Dacca
Range, sent by registered post, a notice to the Manager of the Zemindari Estate
called Chakla Roshanabad belonging to the Tripura State but situated in Bengal
outside the territories of that State, calling upon him to furnish a return of
the total income derived in the 5 previous year from lands in the Estate used
for agricultural purposes. The notice was received by the Manager at Agartalla
in Tripura State. Thereupon, the State, by its then Ruler, Maharaja Sir Bir
Bikram Bahadur, instituted the suit in question on 12th June, 1945, against the
Province of Bengal and the Agricultural Income-tax Officer, Dacca Range, in the
Court of the First Subordinate Judge, Dacca, contesting the validity of the
notice and the proposed assessment on the grounds that the "Provincial Legislature
of Bengal had no authority to impose tax on any income of an Indian State or
its Ruler" and that, in any case, "the Income-tax Officer, Dacca
Range, had no authority or jurisdiction to issue the said notice to the Manager
of the Estate outside British India." The cause of action of the suit was
alleged to have arisen in the town of Dacca within the jurisdiction of the
Court on 28th February, 1945, when the notice was issued. The reliefs sought
were a declaration that the Bengal Agricultural Income-tax Act: 1944, in so far
as it purported to impose a liability to pay agricultural income tax on the
plaintiff as a Ruler of an Indian State was ultra vires and void and that, in
any case, the notice served by the Agricultural Income-tax Officer, Dacca Range,
was void and no assessment could be made on the basis of such notice, and a
perpetual injunction to restrain the defendants from taking any steps to assess
the plaintiff to agricultural income-tax. Before the defendants filed their
written statements the suit was transferred by the High Court to the Court of
the District Judge, 24 Parganas, and was again transferred from that Court to
the Court of the Subordinate Judge at Alipore. The ruler who brought the suit
having died, the plaint was amended by the substitution in his place of his son
and heir in June 1947, and the suit was pending in that Court when the
partition of India took effect on the 15th August, 1947 On 9th December, 1947,
the Province of East Bengal filed a petition stating that the Province of
Bengal, the original defendant No. 1 in the suit, had ceased to exist with
effect from 15th August, 1947, and 6 in lieu thereof two new Provinces, namely,
the Province of East Bengal and the Province of West Bengal had come into
existence and that, inasmuch as the Province of West Bengal was taking no
interest in the suit, it was necessary in the interests of East Bengal that the
suit should be contested and that a written statement should be put in on its
behalf for such contest. It was accordingly prayed that the' delay should be
condoned and the written statement which was filed with that petition should be
accepted. In the written statement it was pleaded that inasmuch as the Province
of East Bengal was a Province of the; Dominion of Pakistan and that defendant
No. 2 was a Revenue officer of that Province, the Court had no jurisdiction to
hear the suit or make an order of injunction against the defendants. It was
stated that the Province of East Bengal appeared only to contest the
jurisdiction of the Court. By another written statement filed on the same day
defendant No. 2 raised also other pleas in defence but his name was struck off
the record at the plaintiff's instance as not being a necessary party to the
suit. On the 10th December, 1947, the Province of East Bengal was substituted
as the defendant in the place of the Province of Bengal which had ceased to
exist, and the written statement filed on behalf of the former was accepted.
Thereupon the Subordinate Judge framed a
preliminary issue on the question of jurisdiction and, as stated already, found
it for the plaintiff relying on s. 9 of the Indian Independence Act and article
4 of the Indian Independence (Legal Proceedings) Order, 1947. It may be mentioned
in passing that the assessment of the plaintiff was proceeded with by the
Agricultural Income-tax Officer, Comilla Range (East Bengal), who, by his order
dated the 22nd December, 1947, imposed on the plaintiff a tax of Rs.
1,79,848-12-0 for 1944-45 and Rs.
1,34,326-7-0 for 1945-46, but the recovery of the amounts has been deferred
under orders of the Court pending the decision on the preliminary issue.
As pointed out by the Federal Court in
Midnapore 7 Zemindary Co. Ltd. v. The Province of Bengal and ,Others (1), the
orders promulgated on-the 14th August, 1947, by the Governor-General of India
before the partition in exercise of the powers conferred under s. 9 of the
Indian Independence Act, 1947, and containing provisions specially designed to
remove the difficulties arising in connection with the transition to the new
situation created by the partition are binding on both the Dominion of India
and the Dominion of Pakistan. Among such Orders those relevant to the present
controversy are the Indian Independence (Legal Proceedings) Order, 1947, and
the Indian Independence (Rights, Property and Liabilities)Order, 1947. By
article 4 of the former Order (1) All proceedings pending immediately before
the appointed day in any of the special tribunals specified in col. 1 of the
Schedule to this Order shall be continued in that tribunal as if the said Act
had not been passed, and that tribunal shall continue to have for the purposes
of the said proceedings all the jurisdiction and powers which it had
immediately before the appointed day;
* * * * (3) Effect shall be given within the
territories of either of the two Dominions to any order or sentence of any such
Special Tribunal as aforesaid and of any High Court in appeal or revision
therefrom as if the order or sentence had been passed by a court of competent
jurisdiction in that Dominion;
* * * * and by article 12 (2) of the latter
Order Where any Province from which property, rights or liabilities are
transferred by this Order is, immediately before the transfer a party to legal
proceedings with respect to that property or those rights or liabilities the
Province which succeeds to the property, rights or liabilities in accordance
with the provisions of this Order shall be deemed to be substituted for the
other Province as a party to those proceedings and the proceedings may continue
accordingly.
(1) [1949] F.C.R. 309.
8 On the effect of these provisions the
learned Judges of the High Court observed: "If this provision [i.e.,
article 12 (2)] applies to the present case, there can be no doubt that the
Province of East Bengal was substituted in the suit for the Province of Bengal
by operation of law, and by reason of the Legal Proceedings Order the suit
shall continue in the Court of the Second Subordinate Judge, 24 Parganas, as a
suit against the substituted defendant." With that statement of the
position we entirely agree. The learned Judges, however, proceeded to examine,
laying stress on the words "by this Order" in article 12 (2), whether
any property, rights or liabilities could be said to have been transferred by
the Indian Independence (Rights, Property and Liabilities) Order, 1947, from
the Province of Bengal to the Province of East Bengal, and they took the view
that neither any property, nor rights, nor liabilities were so transferred
under that Order and that, therefore, the continuation of the proceedings
against the Province of East Bengal, which was now part of an Independent
Sovereign State, was governed by the principles of international law and comity
of nations, and that, according to those principles, East Bengal, being a
Province of a sovereign state, could not be sued against its will in the
municipal courts of India, with the result that the suit pending in the Court
at Alipore must abate. They also negatived a further contention raised before
them, apparently for the first time, to the effect that by reason of the
petition filed on behalf of the Province of East Bengal for acceptance of its
written statement condoning the delay involved and also by reason of sundry
other proceedings for interim relief sought by the plaintiff which were
actively resisted by the Province of East Bengal, that Province must be taken
to have submitted to the jurisdiction of the Court. On behalf of the appellant,
Mr. Sen Gupta challenged the correctness of the decision on both points.
Before dealing with these contentions, it
will be convenient to dispose of two preliminary points raised by Mr.
Faiyaz Ali, Advocate-General of East Bengal.
9 In the first place, he submitted that the
State of Tripura having since been merged in the Dominion of India and a Chief
Commissioner having been appointed to administer its territories, the appeal
could no longer be prosecuted by the present Maharaja through his mother as his
next friend. It was, however, represented to us on his behalf that under the
agreement of merger the Estate of Chakla Roshanabad was left to the Maharaja as
his personal property and it no longer formed part of the territories of the
Tripura State.
The Attorney-General, appearing on behalf of
the Dominion of India, the intervener, confirmed that position. There is thus
no substance in the objection as any formal defect in the proceeding could be
set right by suitably amending the cause title.
Mr. Faiyaz Ali next drew our attention to the
Pakistan (Indian Independence Legal Proceedings) Order, 1948, promulgated by
the Governor-General of Pakistan on 13th November, 1948, with retrospective
effect from the 15th August, 1947, and pointed out that in view of its
provisions any decree that might eventually be passed by the Court at Alipore
would receive no effect in Pakistan and that, therefore, it was unnecessary for
this Court to decide the question of the jurisdiction of the Alipore Court to
proceed with the suit.
We are unable to take that view. The effect
of the Order referred to above on any decree that may eventually be passed in
the pending suit may have to be taken note of by the Court trying that suit
after hearing arguments on the validity of that Order which is challenged but
we are at present concerned only with the question of the jurisdiction of that
Court to try the suit and we cannot at this stage refuse to give our ruling on
that question merely because any decree that might be passed in favour of the
plaintiff might prove ineffectual.
Turning now to the main question, it is clear
that article 12 (2) of the Rights, Property and Liabilities Order applies only
to property rights or liabilities which were transferred by the Order from a
Province which was a party to legal proceedings 2 10 "with respect
to" that property or those rights or liabilities. As the suit in question
cannot be said to have been instituted with respect to the property
transferred, namely, Chakla Roshanabad, the appellant cannot rely upon the
transfer of that property from the Province of Bengal to the Province of East
Bengal as part of the territories of Pakistan under the scheme of partition.
Nor was there any transfer of "rights"such as was contemplated under
that article, for the only right with respect to which the Province of Bengal
could be said to have been a party to the pending proceeding on the facts of
this case was the right to tax the agricultural income of the plaintiff under
the provisions of the Bengal Agricultural Income-tax Act, 1944, and that right
was not derived by the Province of East Bengal by transfer under the Rights,
Property and Liabilities Order. As rightly pointed out by the High Court, the
right of taxation under the Bengal Act of 1944 passed to the Province of East
Bengal as part of the Sovereign Dominion of Pakistan by virtue of the
provisions of s. 18(3) of the Indian Independence Act, 1947, which provided
that "the law of British India and of the several parts thereof immediately
before the appointed day shall, so far as applicable and with the necessary
adaptations, continue as the law of each of the new Dominions and the several
parts thereof, until other provision is made by the laws of the legislature of
the Dominion in question or by any other legislature or other authority having
power in that behalf." The question next arises whether there was a
transfer of any "liability" by the Order as contemplated in article
12(2). Mr. Sen Gupta relied in this connection on article 10 (2) (a) which
provides that "where immediately before the appointed day the Province of
Bengal is subject to any such liability (i.e., "any liability in respect
of an actionable wrong other than breach of contract") referred to in subsection
(1)that liability shall, where the cause of action arose wholly within the
territories which, as from that day, are the territories of the Province of
East Bengal, be a liability of that Province." It was contended that the
Province 11 of Bengal was, according to the plaintiff's case, liable to be
restrained from proceeding with the illegal and unauthorised assessment on the
basis of the notice issued under the Bengal Act of 1944, and that liability, in
respect of which the cause of action arose wholly in Dacca (where the assessment
proceeding had been initiated) within the territories of the Province of East
Bengal, became a liability of that Province. The High Court rejected this
contention on the ground "that article 10(2) is concerned with the liability
for an actionable wrong other than breach of contract and it is impossible to
say that by serving a notice on the plaintiff under the Bengal Agricultural
Income-tax Act through one of its officers the Province of Bengal had committed
an actionable wrong'. Assuming that it exceeded its power or acted under an
invalid provision of law, the plaintiff may have a declaration to that effect
but the Act complained of cannot be said to have been a tortious act.
But even assuming that it was, it is to be
remembered that the issue of the notice was an exercise of powers conferred by
the Act in relation to the sovereign rights of the Crown and it is elementary
that the Crown or the State is not answerable for even negligent or tortious
acts of its officers done in the course of their official duties imposed by a
statute, except where the particular act was specifically directed and the
Crown profited by performance ....... No liability for an actionable wrong is
thus involved in the suit and Dr. Sen Gupta cannot establish a right to proceed
against the Province of East Bengal on the basis that the liability was
transferred to that Province under article 10(2) of the Order." We are
unable to share 'this view. The learned Judges have placed much too narrow a
construction on the phrase "liability in respect of an actionable
wrong". They have assumed that the phrase connotes only a liability for
damages for a completed, tortious act and that the initiation of what according
to the plaintiff was an unauthorised and illegal assessment proceeding by
purporting to serve a notice requiring the plaintiff to submit a return of his
total agricultural income under s. 24 (2) of the Bengal Agricultural 12
Income-tax Act, 1944, through an appropriate officer functioning under that
Act, the Province of Bengal had not committed an "actionable wrong".
This, in our opinion, is not a correct view of the matter. Under s. 9(1) (b) of
the Indian Independence Act, 1947, the Governor-General of British India was
directed to make provision by order "for dividing between the new
Dominions and between the new Provinces to be constituted under this Act, the
powers, rights, property, duties and liabilities of the GovernorGeneral in
Council or as the case may be of the relevant Provinces which under this Act
are to cease to exist", and the Indian Independence (Rights, Property and
Liabilities) Order is the only Order by which such provision was made.
The intention being thus to provide for the
initial distribution of rights, property and liabilities as between the two
Dominions and their Provinces, a wide and liberal construction, as far as the
language used would admit, should be placed upon the terms of the Order, so as
to leave no gap or lacuna in relation to the matters sought to be provided for.
There is no reason, accordingly, why the words "liability in respect of an
actionable wrong" should be understood in the restricted sense of
liability for damages for completed tortious acts. We consider that the words
are apt to cover the liability to be restrained by injunction from completing
what on the plaintiff's case was an illegal or unauthorised act already
commenced. The service of the notice on the plaintiff under s. 24(2) of the
Bengal Act amounts to much more than a mere threat in the abstract to impose an
illegal levy. It is the actual initiation of an illegal assessment proceeding
which, in the normal course, will 'in all probability culminate in an illegal
levy of tax. The failure to make a return as required by the notice would
result under s. 25(5) of the Act in the Income-tax Officer making an ex parte
assessment to the best of his judgment and determining the sum payable by the
assessee on the basis of such assessment. Such failure would also expose the
plaintiff under s. 32(1) of the Act to the imposition of a penalty which may
equal the amount of the tax assessed on him or to a prosecution as for an
offence 13 before a Magistrate under s. 53 (1), at the option of the Income-tax
authority. It is thus plain that the service of a notice requiring a return of
income to be furnished for assessment under the Act is a step fraught with
serious consequences to the assessee, and if the assessment proposed was
illegal and unauthorised by reason of the Act itself being ultra vires in so
far as it purported to make the Rulers of Indian States liable to taxation
thereunder as contended for by the plaintiff, the service of such notice marked
the commencement of a wrongful act against the plaintiff by the Bengal
Government under colour of the Act and there can be no doubt that such a
wrongful act is actionable in the sense that an action would lie in a civil
court for an injunction restraining its completion. That was the liability to
which the Province of Bengal was subject according to the plaintiff's case at the
time when he instituted the suit, and that liability, in our opinion, passed to
the Province of East Bengal by virtue of article 10 (9.) (a) of the Indian
Independence (Rights, Property and Liabilities) Order, 1947. There is no
question here of the liability of the Crown for damages for the negligent or
tortious act of its officers. On the allegations in the plaint, which must, for
the purpose of deciding the question of jurisdiction as a preliminary issue, be
assumed to be wellfounded, the Province of Bengal was undoubtedly liable to be
sued for an injunction restraining it from proceeding with the assessment and
none the less so because the notice was served in purported exercise of powers
conferred by the Bengal Act. The name of the Income-tax Officer originally
impleaded as the second defendant having been struck off the record, no
question in regard to his liability arises.
Reference was made to certain text-books
where a "tort" is spoken of as an "actionable wrong" and it
was suggested that the two expressions are synonymous. Every tort is
undoubtedly an actionable wrong but the converse does not necessarily follow.
Indeed, the words "other than breach of contract" used in article 10
(1) make it plain that the expression "actionable wrong" is used in a
wider sense 14 which would have included breach of contract but for those
limiting words.
It was said that even assuming that the
service of the notice calling for a return of income was a wrongful act, it was
not "actionable", as s. 65 of the Bengal Act barred suits in civil
courts "to set aside or modify any assessment made under this Act".
The short answer to this contention is that the suit in question is not a suit
"to set aside or modify an assessment" made under the Act, as no
assessment had yet been made when it was instituted, and the subsequent
completion of the assessment was made by the Pakistan Income-tax authorities on
terms agreed to between the parties and sanctioned by the Court. The decision
of the Privy Council in Raleigh Investment Co. Ltd. v. Governor-General in
Council (1) relied on in support of the contention is distinguishable, as the
main relief claimed there was repayment of the tax alleged to have been
wrongfully levied under colour of an ultra vires provision in the Indian
Income-tax Act. Their Lordships observed:
"In form the relief claimed does not
profess to modify or set aside the assessment. In substance it does, for
repayment of part of the sum due by virtue of the notice of demand could not be
ordered so long as the assessment stood.
Further, the claim for the declaration cannot
be rationally regarded as having any relevance except as leading up to the
claim for repayment, and the claim for an injunction is merely verbiage. The
cloud of words fails to obscure the point of the suit." The position here
is entirely different. The gist of the wrongful act complained of in the
present case is subjecting the plaintiff to the harassment and trouble by
commencing against him an illegal and unauthorised assessment proceeding which
may eventually result in an unlawful imposition and levy of tax.
It was suggested, somewhat faintly, that the
cause of action for the suit, though stated in the plaint to have arisen in
Dacca, now in the Province of East (1) [1947] F.C.R. 59.
15 Bengal, did not arise wholly within the
territories of the Province of East Bengal within the meaning of Article 10 (2)
(a) inasmuch as the notice calling for a return, though issued from Dacca, was
received by the Manager of the Estate at Agartalla in Tripura State. Assuming
that the contention has any substance it is of no assistance to the respondent,
for article 10 (2) (c) would then be applicable to the case and the Province of
East Bengal would still be liable, though jointly with the Province of West
Bengal.
We are therefore of opinion that the Province
of East Bengal having succeeded to the liability to which the Province of
Bengal was subject immediately before the appointed day, the former Province is
to be deemed to be substituted for the other Province as a party to the suit
and the suit must accordingly continue in the Court of the Subordinate Judge at
Alipore, which has jurisdiction to proceed with it under article 4 of the
Indian Independence (Legal Proceedings) Order, 1947.
In this view it is unnecessary to consider
the question of submission to jurisdiction urged in the alternative by the
appellant.
In the result the appeal is allowed, the
order of the Court below is set aside and the suit now pending in the Court of
the Subordinate Judge at Alipore will be heard and determined by it. The
respondent will pay the appellant's costs throughout.
FAZL ALI J.--The question to be decided in
this appeal is whether the Subordinate Judge's Court at Alipore in the State of
West Bengal, has jurisdiction to try a suit in which the Province of East
Bengal was impleaded as a defendant, after the 15th August,1947 In what
circumstances this question has arisen will appear from the facts of the case
which may be briefly stated.
In 1944, the Bengal Legislature passed an Act
called the Bengal Agricultural Income-tax Act, 1944 (Bengal Act IV of 1944),
which enabled it to impose a tax on the agricultural income of various classes
16 of persons including "every Ruler of an Indian State," holding
lands within the territory of Bengal. The appellant, who is the Ruler of the
State of Tripura, holds a zamindary called Chakla Roshanabad Estates, which was
situated in the Province of Bengal and in the District of Sylhet formerly
appertaining to the Province of Assam. On the 28th February, 1945, the
Agricultural Income-tax Officer, Dacca Range, issued a notice under section 24
(2) of the Bengal Act to-the Manager of the Chakla Roshanabad Estates calling
upon him to furnish a return of the appellant's total agricultural income for
the previous year, derived from lands situated within the Province of Bengal.
On the 12th June, 1945, the appellant instituted a suit in the Court of the
Subordinate Judge at Dacca, against the Province of Bengal and the Agricultural
Income-tax Officer, Dacca Range, claiming the following reliefs:(1) For a
declaration that the Bengal Agricultural Income-tax Act, 1944, so far as it
imposes a liability to pay agricultural income-tax on the plaintiff is ultra
vires and void and that the plaintiff' is not bound by the same.
(2) For a declaration that in any case the
notice served by the Agricultural Income-tax Officer, Dacca Range, above
referred to, is void and of no effect and that no assessment can be made on the
basis of that notice.
(3) For a perpetual injunction to restrain
the defendants from taking any steps to assess the plaintiff to agricultural
income-tax.
On the 15th July, 1945, the suit was
transferred to the Court of the Subordinate Judge at Alipore in the District of
24 Parganas, by an Order of the Calcutta High Court. While the suit was still
pending, the new Province of East Bengal, which forms part of the territories
of the Dominion of Pakistan, came into existence on the 15th August, 1947, as a
result of the Indian Independence Act, 1947, and it appears that the whole of
Chakla Roshanabad Estates falls within that Province. After the creation of the
new Province, 17 a petition was filed on the 9th December, 1947, on behalf of
the Province of East Bengal, drawing the attention of the Court at Alipore to
the fact that the Province of West Bengal, which forms part of the territories
of the Dominion of India, was taking no interest in the suit and asking the
Court to accept a written statement which was also filed along with the
petition, and in which the only plea taken was that the Alipore Court had no
jurisdiction to hear the suit or make any order of injunction against the
Province of East Bengal or defendant No. 2. The last paragraph of the written
statement was to the following effect:-"The Province of East Bengal
appears only to contest the jurisdiction of the court and it submits that the
suit should be dismissed on that ground." Later on, the Province of East
Bengal was irapleaded as a defendant in the suit and the name of the Income-tax
Officer of Dacca was removed from the category of defendants. The Subordinate
Judge then proceeded to try the question of jurisdiction as a preliminary
issue, and decided that by virtue of the provisions of the Indian Independence
(Legal Proceedings) Order, 1947, read with section 9 of the Indian Independence
Act, 1947, the Court had jurisdiction to try the suit against the new Province.
Thereupon, the respondent (the Province of East Bengal) moved the High Court at
Calcutta under section 115 of the Code of Civil Procedure, against the order of
the Subordinate Judge, and a Bench of the High Court consisting of Harries C.J.
and Chakravarthi J. allowed the application and set aside the order of the
Subordinate Judge, giving effect to the objection of the respondent that the
Court at Alipore was not competent to try the suit against the Province of East
Bengal. One of the points raised on behalf of the appellant before the High
Court was that the Province of East Bengal had submitted to the jurisdiction'
of the Subordinate Judge's Court, but this point was negatived. The appellant
was thereafter granted a certificate under section 205 (1) of the Government of
India Act, 1935, and on the basis of it he has preferred this appeal.
18 On a reference to the judgments of the
learned Subordinate Judge and the High Court, it appears that three provisions
were relied upon by the appellant in support of his contention that the Court
at Alipore had jurisdiction to try the suit, these being section 9 of the
Indian Independence Act, 1947, article 4 of the Indian Independence (Legal
Proceedings) Order, 1947, [hereinafter referred to as 'the Legal Proceedings
Order'], and section 12 of the Indian Independence (Rights, Property and Liabilities)
Order, 1947, Therein after referred to as ' the Rights, etc., Order'].
These provisions run as follows :Section 9 of
the Indian Independence Act :-"The Governor-General shall by order make
such provision as appears to him to be necessary or expedient-(a) for bringing
the provisions of this Act into effective operation;
(b) for dividing between the new Dominions,
and between the new Provinces, to be constituted under this Act, the powers,
rights, property, duties and liabilities of the Governor-General in Council or,
as the case may be, of the relevant Provinces which, under this Act, are to
cease to exist ............" Section 4 of the Legal Proceedings Order :-"Notwithstanding
the creation of certain new Provinces and the transfer of certain territories
from the Province of Assam to the Province of East Bengal by the Indian
Independence Act, 1947,-(1) all proceedings pending immediately before the
appointed day in any civil or criminal court (other than a High Court) in the
Province of Bengal, the Punjab or Assam shall be continued in that court as if
the said Act had not been passed, and that court shall continue to have for the
purposes of the said proceedings all the jurisdiction and powers which it had
immediately before the appointed day;
(2) any appeal or application for revision in
respect of any proceedings so pending in any such 19 court shall lie in the
court which would have appellate, or as the case may be revisional,
jurisdiction over that court if the proceedings were instituted in that court
after the appointed day; and (3) effect shall be given within the territories
either of the two Dominions to any judgment, decree, order, or sentence of any
such court in the said proceedings, as if it had been passed by a court of
competent jurisdiction within that Dominion." Section 12 of the Rights,
etc. Order :--"(1) Where immediately before the appointed day, the
Governor-General in Council is a party to any legal proceedings with respect to
any property, rights or liabilities transferred by this Order, the Dominion
which succeeds to the property, rights or liabilities in accordance with the
provisions of this Order shall be deemed to be substituted for the
Governor-General in Council as a party to the proceedings, and the proceedings
may continue accordingly.
(2) Where any Province from which property,
rights or liabilities are transferred by this Order is, immediately before the
transfer, a party to legal proceedings with respect to that property or those
rights or liabilities, the Province which succeeds to the property, rights or
liabilities of this Order shall be deemed to be substituted for the other
Province as a party to those proceedings, and the proceedings may continue
accordingly.
(3) Any proceedings which, immediately before
the appointed day, are pending by or against the Secretary of State elsewhere
than in the United King dom in respect of any liability of the Governor-General
in Council or a Province shall,-* * * * (b) in the case of proceedings in
respect, of the Province of Bengal, the Province of the Punjab, or the Province
of Assam, be continued by or against the Province which succeeds to the
liability ............ " The learned Subordinate Judge based his judgment
entirely upon s. 4 of the Legal Proceedings 20 Order, but the High Court has
pointed out that that Order standing by itself can be of no help to the
appellant.
According to the High Court, that section
might have enabled the appellant to prosecute his suit against the Province of
Bengal, but it could not enable 'him to continue the suit against the new
Province without invoking s. 12 (2) of the Rights, etc. Order, which provides
among other things that the Province which succeeds to the rights or
liabilities of the old Province of Bengal by virtue of that Order shall be
deemed to be substituted for the latter as a party to the pending proceedings.
In my opinion, this is the correct view. It Was urged before us that a Court
which had jurisdiction to try a suit against a party would, by reason of what
is provided in s. 4 of the Legal Proceedings Order, naturally have jurisdiction
to substitute the heir or legal representative of that party. Generally
speaking, this must be so, but, in the present case, the Province of East Bengal
which forms part of another sovereign State could not be automatically
substituted for the Province of Bengal, unless the substitution was permitted
by some provision of the Indian Independence Act or any of the Orders issued
there under. The whole case thus rests on the proper construction of section
12(2) of the Rights, etc. Order. In the High Court, it was strenuously urged on
behalf of the appellant that section 12(2) is fully applicable to the present
case on account of certain rights having been transferred to the Province of
East Bengal from the old Province of Bengal.
This argument was reiterated in this Court
also, but it is obviously untenable, for the reasons set out in the judgment of
the High Court. As has been pointed out by the High Court, s. 12 (2) is of no
help to the appellant, unless the rights in question were transferred by the
Rights, etc.
Order itself. The learned counsel for the
appellant however failed to point out any provision of this Order, by which any
of the rights referred to by him had been transferred.
He had therefore to fall back upon an
alternative argument based on s. 10(2) of the same Order; and the point to be
decided by this Court has thus 21 crystallized into one simple issue, namely,
whether s.
10(2) of the Order can be of any avail to the
appellant.
Section 10 (2) must be read with s. 10 (1),
and the material part of these two sub-sections runs as follows :"10 (1)
Where immediately before the appointed day the Governor-General in Council is
subject to any liability in respect of an actionable wrong other than breach of
contract, that liability shall,-(a) where the cause of action arose wholly
within the territories which, as from that day, are the territories of the
Dominion of India, be a liability of that Dominion;...
(2) Where immediately before the appointed
day the Province of Bengal is subject to any such liability as aforesaid, that
liability shall, (a) where the cause of action arose wholly within the
territories which, as from that day, are the territories of the Province of
East Bengal, be a liability of that Province;
(b) where the cause of action arose wholly
within the territories which, as from that day, are the territories of the
Province of West Bengal, be a liability of that Province; and (c) in any other
case, be a joint liability of the Provinces of East and West Bengal." * *
* * It is quite clear that for the application of section 10(2), it is
necessary to show inter alia that the Province of Bengal was subject to a
liability in respect of an actionable wrong other than a breach of contract. A
reference to any book on tort will show that the words used in sub-s.
(1) are commonly used to define a tort. A
tort has been defined in Stroud's Judicial Dictionary, Second Edition, page 2072,
as a wrong independent of contract, and it is also so described in the Common
Law Procedure Act, 1852 (15 & 16 Vict., c. 76); in Halsbury's Laws of
England and in many textbooks. The difference between "a wrong independent
of contract" and "a wrong other than a 22 breach of contract" is
merely verbal and has little significance. A tort is also often referred to as
"an actionable wrong" and the two expressions have been synonymously
used by eminent writers including Sir Fredrick Pollock and Professor Burdick of
America, who has designated his well-known book on the law of torts as "a
concise treatise on civil liability for actionable wrongs to person and
property".
Whether the expression can be taken to be a
complete definition of a tort may be questioned, because as Addison has pointed
out in his book on torts, "to say that a tort is an actionable wrong
leaves undefined the term 'actionable wrong'." But there can be no doubt
that in legal parlance, the two expressions are assumed to be interchangeable.
There is also another matter to be borne in
mind in construing s. 10 (2) of the Rights, etc. Order, and that is the
well-recognized fact that the primary and most common remedy for a tort is an
action for damages. That this is an important feature of a tort is shown by the
fact that in many textbooks an action for damages has been made an integral
part of the definition of a tort. A few examples will make this clear. A tort
is defined by Salmond as "a civil wrong for which the remedy is a common law
action for unliquidated damages and which is not exclusively the breach of a
contract or the breach of a trust or other merely equitable obligation."
Professor Winfield, who did not see eye to eye with Salmond on many matters
connected with the law of torts, gives the following definition of tortious
liability :--" Tortious liability arises from the breach of a duty
primarily fixed by the law; this duty is towards persons generally and its
breach is redressible by an action for unliquidated damages." In
Underhill's law of torts, the definition runs as follows :--"A tort is an
act or omission which is unauthorized by law and independently of contract
infringes (i) some absolute right of another, etc., and (ii) gives rise to an
action for damages at the suit of the injured party." The learned author
after attempting to define a tort in this way goes on to state: "A tort is
described in the Common 23 Law Procedure Act, 1852, as a wrong independent of
contract.
If we use the word 'wrong' as equivalent to
violation of a right recognized and enforced by law by means of an action for
damages, the definition is sufficiently accurate, but scarcely very lucid;for
it gives no clue to what constitutes a wrong or violation of a right recognized
and enforced by law. It does, however, emphasize the fact that an essential
characteristic of a tort is that the appropriate remedy for it is an action for
damages. An act or omission which does not give rise to an action for damages
is not a tort." It must be recognized that an injunction may also be an
appropriate remedy in a limited number of cases, but it is not a remedy of
universal application, and no one has yet suggested that it may be treated as
an incident of tort.
In the light of the foregoing discussion, it
seems to me to be permissible to infer, firstly, that s. 10 of the Rights, etc.
Order refers to liability for a tort, and secondly, that what is contemplated
there is pecuniary liability such as liability to damages. The word
"liability" has a wider meaning and also a narrower meaning, and the
latter would appear to be the appropriate meaning where the word is used in
contrast to assets or something which corresponds to or is in the nature of
assets, and where it is used in plural or is preceded by an indefinite article,
e.g., when the expression "a liability" is used. We must remember
that the purpose of the Rights, etc. Order was, among other things, to divide
or distribute the rights, property and liabilities of the undivided Province of
Bengal between the two new Provinces. Therefore, the view that the liabilities
referred to in s. 10 are liabilities capable of being ascertained in terms of
money and not liabilities in any abstract or academic sense, is in consonance
with the purpose of the Order as well as the well known fact that for a tort
the most common and appropriate remedy is an action for pecuniary damages. This
view is further confirmed by reading s. 13 (2) of the Rights, etc.
Order, which runs thus :-24 "Where by
virtue of the preceding provisions of this Order either of the Dominions or any
Province becomes subject to any liability, and it is just and equitable that a
contribution towards that liability should be made by the other Dominion, or by
another Province, as the case may be, the other Dominion shall make to the
Dominion or Province primarily subject to the liability such contribution in
respect thereof as, in default of an agreement, may be determined by the
Arbitral Tribunal." It should be noted that the words "becomes subject
to any liability" used in the above provision are practically the words
which occur in s. 10 of the same Order, and the language of s. 13 (2) clearly
shows that the word "liability" must have been used in the narrower
sense of pecuniary liability, because otherwise no question of contribution
towards that liability by the Dominion or Province would arise. It will be also
instructive to refer to Part VII, Chapter III of the Government of India Act,
1935, the heading of which is "Property, Contracts, Liabilities, and
Suits," and upon which the Rights, etc. Order appears to have been
modeled. In s. 179 of the Government of India Act, 1935, which occurs in this
Chapter, the clue to the meaning of the word ' liability.' is furnished by the
provision that "any sum ordered to be paid by way of debt, damages or
costs in any such proceedings, and any costs or expenses ............ shall be
paid out of the revenues of the Federation or the Province, as the case may be
........
"I think that it will be quite a fair
construction to hold that what is contemplated in section 10 of the Rights,
etc.
Order is that the liability referred to
therein would be met out of the revenues of the Province concerned.
The construction I have suggested appears to
me to represent what the framers of the Order must have intended to convey by
the words "liability in respect of an actionable wrong", but, lest it
should be said that it is too narrow a construction, I shall deal with the
matter more fully giving to the words "actionable wrong" and
"liability" as wide a meaning as they can 25 bear in a legal context.
Proceeding on this footing, the first question to be asked is: What is a wrong
other than a breach of contract ? In answering this question, it is neither
possible nor helpful to ignore all that has been said in authoritative
textbooks and judgments in dealing with the question of a tort, because the
foundation of every tort is a wrong or a wrongful act. It is true that at one
time some of the writers were inclined to think that "there was no English
law of tort but there was merely an English law of torts, that is, a list of
acts and omissions which under certain conditions were actionable." But,
now, the view has considerably broadened, and, generally speaking, it is
acknowledged that' 'torts are infinitely various--not limited or confined"
(see Chapman v. pickersgill), and that wherever there is an injury by the
invasion of a right, a wrong or a tort is committed. This is often conveyed by
the expression injuria sine damnum. The word "wrong" has been used in
sections 17, 18 and 19 of the Code of Civil Procedure, and the following
extract from Mulla's commentary thereon will show how this word has been
construed:-"Wrong means a tort or actionable wrong, i.e., an act which is
legally wrongful as prejudicially affecting a legal right of the
plaintiff." Underhill also construes "wrong" in the same sense,
because a wrong is, according to him, equivalent to violation of a right
recognised and enforced by law by means of an action for damages. I think
therefore that in view of all that has been written and said on the subject, it
may be safely stated that a wrong must consist of the following elements :--(1)
There must be an act or omission amounting to an infringement of a legal right
of a person or a breach of legal duty towards him; and (2) The act or omission
must have caused harm or damage to that person in some way, the damage being
either actual or presumed.
These two elements are denoted by two Latin
expressions, injuria and damnum. I have to include (1) [1762] 2 Wils. 146, per
Pratt C.J.
4 26 presumed damage under the second head,
because in certain cases such as trespass, assault, false imprisonment, etc.
the invasion of a right may be so flagrant
that "the law conclusively presumes damage." (See observations of
Lord Wright M.R. in Nicholls v. Ely Beet Sugar Factory(1 ). Such cases are
often described as cases of absolute liability or cases where a tort is
actionable per se without proof of damage.
Let us then see whether the two elements of
an actionable wrong are present in this case. For this purpose, we must examine
the best and most plausible statement of the appellant's case which may be put
more or less in the following way :-The issue of a notice, which has been
referred to in paragraph S of the plaint calling upon the appellant to furnish
a return of his total agricultural income derived from lands situated within
the Province of Bengal, was the first step in the initiation of an illegal
assessment proceeding which was likely to lead to an illegal levy of tax, and
the commencement of an illegal proceeding in this manner gave a right of action
to the appellant and entitled him to claim an injunction restraining the
defendants from completing the proceeding. Such being the position, the case is
covered by section 10 of the Order under consideration, the words used there
being wide enough to cover liability to be restrained by an injunction from
completing an illegal or unauthorized act already commenced. Consequently, the
liability to be so restrained must be deemed to have been transferred to the
Province of East Bengal, by virtue of section 10 of the Rights, etc. Order.
This may appear to be a plausible way of
putting the case, but, when we subject it to a close scrutiny, we find that
even on the above statement the true requirements of the material provision are
not satisfied.
If we confine ourselves to something which
has happened, as opposed to something which may happen in future, that is to
say, if we look for an act or omission which must be the foundation of every
wrong, we find that all that is said to have happened in this (1) [1931] 2 Ch.
84.
27 case is the issuing of a notice, which is
not some unauthorised or prima facie unlawful act but is an act done trader the
authority of a statute and enjoined by it. It has to be borne in mind that the
attack in the plaint is not against the whole Act but all that is contended is
that only a particular provision of it is ultra vires. The contention comes to
this, that the issuing of a notice against every person other than the Ruler of
an Indian State would-have been a perfectly legitimate act, but the issuing of
a notice against a Ruler is ultra vires. But that is not enough to constitute a
wrong. What has to be shown is that the issuing of the notice is a wrongful
act, i.e., it amounts to an infringement of some right. What known right of
person or property or any other description it infringes is not at all clear;
nor has that been stated in the pleadings. It is conceded that there has been
no assessment and no realization of any tax and it could not also be disputed
that it was open to the appellant to show to the assessing authority that he
was not assessable at all. To say that a notice is the first step , in the
initiation of an illegal assessment proceeding, does not carry the matter
further, but it would seem to be merely a piece of verbiage used to obscure the
fundamental weakness of the appellant's case. Construing "wrong" as
it should be construed, the essential thing to find out is in what way a right
has been infringed or there has been a breach of duty. It is the appellant's
own case that the suit is for a threatened or apprehended wrong, but that very
expression shows that the suit has been brought before the alleged wrong was
committed.
The other element of a wrong, namely, that
the person should have sustained some harm or injury, is also wanting in this
case. It is not the case of the appellant that the notice has in any way caused
any actual damage to him. Nor is it suggested that this is one of those cases
in which damage should be presumed.
All that is said is that the notice was
likely to entail trouble and harassment to the appellant, but that by itself
will not constitute a wrong.
28 The matter may be tested in another way.
As Underhill points out," an act or omission which does not give rise to
an action for damages is not a tort." To the same effect is the following
observation in Salmond's Law of Torts:-" No civil injury is to be classed
as a tort unless the appropriate remedy for it is an action for damages. Such
an action is an essential characteristic of every true tort." Again,
Professor Winfield says that an action for unliquidated damages is the one sure
test of tortious liability and has cited cases where this statement has
received judicial approval. I think these statements will be equally true if we
drop the word "tort" and substitute the words" actionable
wrong" in its place. It follows that one of the tests of an actionable
wrong is that while other remedies also may be open to the plaintiff, an action
for damages is the primary remedy for it. Can the appellant in this case
maintain a suit for damages on the allegations made by him in his plaint? As I
have already stated, a reference to the plaint shows that no damages has been
either alleged or claimed and it has also not been stated that the appellant is
entitled to any damage. In Rogers v. Rajendro Dutt(1)the Privy Council stated
that "it is essential to an action in tort that the act complained of
should be legally wrongful as regards the party complaining; that is, it must
prejudicially affect him in some legal right." Again, it was observed in
Kali Kischen Tagoor v. Jodoo Lal Mullick(2) that" there may be, where a
right is interfered within juria sine damno sufficient to found an action; but
no action can be maintained if there is neither damnum nor injuria." It
seems to me therefore that in the absence of the two elements to which I have
referred, no case for liability in respect of an actionable wrong has been made
out, and it is wholly inappropriate to invoke section 10 of the Rights, etc.
Order in the present case.
It appears that the whole of the appellant's
arguments has been woven round the following two matters :-(1) 8 Moore's I.A.
103 at p. 135. (2) 6 I.A. 190.
29 (1) Injunction is a recognized form of
action; and (2) Injunction has been asked for in the present Case, in
connection with something which is said to be likely to culminate in a wrong.
The situation as envisaged is however very
different from what is contemplated in section 10 of the Rights, etc.
Order, which is liability for an actionable
wrong and not liability for something which may become a wrong in future.
It is to be remembered that there are two
words used in the section, viz., actionable and wrong. The mere fact that a
matter is actionable will not bring the case within the four corners of'
section 10 of the Order, unless all the elements of a wrong are established.
I think it will be appropriate at this stage
to say a few words about the remedy by way of an injunction in cases where an
actionable wrong is said to have been committed. It cannot be disputed that
injunction is one of the remedies in certain cases of torts. As Addison has
pointed out, "the origin of' the remedy by way of an injunction is to be
found in the inadequacy of the legal remedy by way of damages in many of the
more serious wrongs, such as continuing trespasses and nuisances, where a
wrongful act has been done and there was an intention to continue doing it.
(See Addison's Law of Torts, 8th Edn. 111). Injunction will also be granted to
prevent a threatened injury or wrong, if it can be shown that the threatened
act if carried into execution will lead to violation of a right and such will
be the inevitable result. As was pointed out in an English case, the interference
of the court in these cases is rounded on its jurisdiction to give relief in
the shape of preventive justice in order to protect properties and rights from
that which, if completed, would give a right of action. These two cases in
which an injunction may be issued stand on two different footings, and the
liability to an injunction does. not necessarily and always amount to
"liability in respect of an actionable wrong". The two liabilities
may possibly coincide where there is a continuing wrong and the injunction is
intended to stop its 30 continuance. But, as I have already stated, where no
wrong has been committed, it would require considerable straining of the
meaning of familiar legal expressions to say that "liability in respect of
an actionable wrong" is identical with "liability to an injunction in
respect of an apprehended wrong". "Liability in respect of an
actionable wrong" means liability when an actionable wrong has been
committed.
It cannot mean liability to be prevented from
a wrong which is apprehended. Nor can the liability which is contemplated in
section 10 of the Rights, etc. Order be created by the mere filing of a suit in
which an injunction is claimed.
I should like to refer here to section 176
(1) of the Government of India Act, 1935, which provides as follows :"The
Federation may sue or be sued by the name of the Federation of India and a
Provincial Government may sue or be sued by the name of the Province, and,
without prejudice to the subsequent provisions of this chapter, may, subject to
any provisions which may be made by Act of the Federal Legislature or a
Provincial Legislature enacted by virtue of powers conferred on the Legislature
by this Act, sue or be sued in relation to their respective affairs in like
cases as the Secretary of State in Council might have sued or been sued if this
Act had not been passed." This section is divisible into two parts. The first
part states as to which authority should be named as a plaintiff or as a
defendant in a suit brought by or against the Crown or the Government, and the
second part deals with cases in which the Federal or the Provincial Government
may sue or be sued. To understand the latter provision, the section is to be
read with section 65 of the Government of India Act, 1858, and section 32 of
the Government of India Act, 1915. Section 65 of the Act of 1858 enacted that"the
Secretary of State in Council shall and may sue and be sued as well in India as
in England by the name of the Secretary of State in Council as a body
corporate; and all persons and bodies politic shall and 31 may have and take
the same suits, remedies and proceedings, legal and equitable, against the
Secretary of State in Council of India as they could have done against the said
Company." (East India Co.).
The same provision is substantially made in
section 32 of the Act of 1915. Such being the law, the question has been posed
in a number of cases from very early days as to whether, and, if so, in what
cases, the Secretary of State would be liable for a wrong or a tort committed
by the servants of the Crown, and it has now been definitely held that he may
be liable in certain cases. So far as the present discussion is concerned, the
following three points which emerge from a careful perusal of a large number of
cases bearing on the subject, seem to be material :-(1) The principles of the
law of torts have been consistently applied in all cases dealing with the
liability of the Secretary of State for wrongs committed by the servants or
agents of the crown or the Government.
(2) It is settled law that the Secretary of
State cannot be held liable for wrongs committed by the servants of the Crown
in the performance of duties imposed by the Legislature: [See Shivabhajan v.
Secretary of State for India(1).
James Evans v. Secretary of State(2). Tobin
v. Reg(3). Ross v. Secretary of State(4), in which this principle is fully
explained and the reasons upon which it is based, are clearly set out].
(3) It is also well-settled that where a
statute specially authorizes a certain act to be done by a certain person,
which would otherwise be unlawful or actionable, no action will lie for the
doing of the act.
On these principles, it would appear that
neither the Agricultural Income-tax Officer, who has now been dismissed out of
action, nor the Province of East Bengal, could be said to be subject to a
liability in respect of an actionable wrong, assuming that an actionable wrong
has been committed. It must (1) I.L.R. 28 Bom. 314. (3) 16 C.B.N.S. 310.
(2) A.I.R. 1920 Lah. 364. (4) I.L.R. 1915
Mad. 434.
32 however be stated that this conclusion
rests on the. assumption that my construction of an actionable wrong is
correct.
It was contended that in deciding the present
appeal, we must assume all the facts stated in the plaint to be correct and
therefore assume that the Bengal Act is ultra vires and the notice issued was
without authority. I have already pointed out that the whole Act is not
attacked, but only one single provision thereof is said to be ultra vires, and
I shall show later, when I deal with section 65 of the Bengal Act, that even
the assumption we are asked to make will not bring the case within section 10
of the Rights, etc. Order.
Mr. Setalvad, the learned Attorney-General of
India, who intervened on behalf of the Union of India in the appeal, supported
the judgment of the High Court on three main grounds, which may be summed up as
follows :-(1) that the words used in section 10 of the Rights, etc. Order do
not cover this case, because here no wrong has been actually committed and a
threatened wrong is different from an actual wrong;
(2) that section 65 of the Bengal Agricultural
Income tax Act is a bar to the suit; and (3) that the present suit must in any
event end in an infructuous decree and should not be allowed to be pursued.
I have already dealt with the first point,
and wish simply to add that the point which is now pressed is not specifically
raised in the Memorandum of Appeal presented in this Court, nor is there any
trace of it in the Statement of Case filed by the appellant. The point which is
mentioned in the Memorandum of Appeal and the Statement of Case is that section
12 of the Rights, etc. Order is applicable to the present case, because certain
rights have been transferred from the old Province of Bengal to the Province of
East Bengal. There is however no mention of section 10 of the Order, nor is it
stated that liability to an injunction brings the case within that 33 section.
Thus, a notable feature of the case is that almost every argument which was
advanced in the courts below is to be discarded, and we are asked to base our
decision on a point, which is not urged in the Statement of the Case, and
which, in accordance with the rules of practice of this Court, cannot
ordinarily be entertained.
The second point urged by Mr. Setalvad is
based on section 65 of the Bengal Act, which runs as follows :"No suit shall
be brought in any Civil Court to set aside or modify any assessment made under
this Act, and no prosecution, suit or other proceeding shall lie against any
officer of the Crown for anything in good faith done or intended to be done
under this Act." Strictly speaking, this section does not apply to the
present case, as there has yet been no assessment and ex facie the appellant's
suit cannot be regarded as a suit to set aside or modify any assessment. Mr.
Setalvad however contends that this section must be read with the decision of
the Privy Council in Raleigh Investment Co. v. Governor General in Council(1).
That was a case under the Indian Incometax Act, 1922, the provisions of which
are similar to the provisions of the Bengal Act and which contains a section
(section67) which is almost identical in terms with section 65 of the latter
Act. In that case, an assessee paid under protest the tax assessed on him and
then brought a suit for the following reliefs :(a) a declaration that certain
provisions of the Income-tax Act on which the assessment was based were ultra
vires and so the assessment was illegal;
(b) an injunction restraining the. Income-tax
Department from making the assessments in future;
(c) repayment of the sum assessed.
It was strongly contended upon the facts of
the case that section 67 of the Income-tax Act had no application, but it was
held by the Privy Council that "though in form the relief claimed did not
profess to (1) [1947] F.C.R. 59.
5 34 modify or set aside the assessment, in
substance it did because the repayment could not be ordered so long as the
assessment stood' '. It was further held that an assessment made under the
machinery provided by the Act, if based on a provision subsequently held to be
ultra vires was not a nullity but a mistake of law in the course of its
exercise. Lastly, it was held that the Act contained machinery which enabled an
assessee to raise the question whether or not a particular provision of the Act
bearing on the assessment made upon him was ultra vires and that jurisdiction
to question the assessment otherwise than by use of the machinery expressly
provided by the Act appeared to be inconsistent with the statutory obligation
to pay 'arising by virtue of the assessment. The material part of the judgment
on the last point runs as follows :-"In construing the section it is
pertinent in their Lordships' opinion, to ascertain whether the Act contains
machinery which enables an assessee effectively to raise in the Courts the
question whether the particular provision of the Income-tax Act bearing on the
assessment made is or is not ultra vires. The presence of such machinery,
though by no means conclusive, marches with a construction of the section which
denies an alternative jurisdiction to enquire into the same subject-matter. The
absence of such machinery would greatly assist the appellant on the question of
construction and, indeed, it may be added that, if there were no such machinery
and if the section affected to preclude the High Court in its ordinary civil
jurisdiction from considering a point of ultra vires, there would be a serious
question whether the opening part of the section, so far as it debarred the
question of ultra vires being debated, fell within the competence of the Legislature.
In their Lordships view it is clear that the
Income-tax Act, 1922, as it stood at the relevant, date,did give the assessee
the right effectively to raise in relation to an assessment made upon him the
question whether or not a provision in the Act was ultra vires. Under section
30, an assessee whose only ground of complaint was that effect had been given
in the assessment 35 to a provision which he contended was ultra vires might
appeal against the assessment. If he were dissatisfied with the decision on
appeal--the details relating to the procedure are immaterial--the assessee
could ask for a case to be stated on any question of law for the opinion of the
High Court and, if his request were refused, he might apply to the High Court
for an order requiring a case to be stated and to be referred to the High Court
...... It cannot be doubted that included in the questions of law which might
be raised by a case stated is any question as to the validity of any taxing
provision in the Income-tax Act to which effect has been given in the
assessment under review. Any decision of the High Court upon that question of
law can be reviewed on appeal. Effective and appropriate machinery is therefore
provided by the Act itself for the review on grounds of law of any assessment.
It is in that setting that section 67 has to be construed.
In conclusion their Lordships would observe
that the scheme of the Act is to set up a particular machinery by the use of
which alone total income assessable for income-tax is to be ascertained. The
income-tax exigible is determined by reference to the total income so
ascertained and only by reference to such total income. Under the Act (s. 45)
there arises a duty to pay the amount of tax demanded on the basis of that
assessment of total income. Jurisdiction to question the assessment otherwise
than by use of the machinery expressly provided by the Act would appear to be
inconsistent with the statutory obligation to pay arising by virtue of the
assessment. The only doubt, indeed, in their Lordships' mind, is whether an
express provision was necessary in order to exclude jurisdiction in a civil
Court to set aside or modify an assessment." The authority of this
decision was not questioned before us, but it was pointed out firstly that the
present suit is not hit by the first part of section 65 of the Bengal Act,
which refers only to suits to set aside or modify any assessment, and secondly,
that if the case is not covered by section65, the decision of the Privy
Council, which was based on the construction of section 36 67 of the Income-tax
Act, is not applicable. Mr. Setalvad, replying to the first contention, has
urged that we must not look merely to the letter of the section but to the
principle underlying it, and he has particularly referred us to the fact that,
strictly speaking, the reliefs claimed in the above mentioned case do not fall
within the letter of section 67 of the Income-tax Act and hence the Privy
Council observed in that case: "In form the relief claimed does not
profess to modify or set aside, the assessment. In substance it does ...... The
cloud of words fails to obscure the point of the suit." However that may
be, it seems to me that the Privy Council in arriving at their decision, were
influenced not only by the language of section 67 of the Income-tax Act but
also by the complete machinery furnished by that Act for dealing with all
questions arising in regard to the assessment, including the question of ultra
vires as would appear from the fact that while laying down that there was no
jurisdiction to question the assessment except by use of the machinery
expressly provided by the Act, their Lordships added: "The only doubt,
indeed, in their Lordships' mind, is whether an express provision was necessary
in order to exclude jurisdiction in a civil court to set aside or modify an
assessment." think that, for the purpose of understanding the full scope
of section 65, we must read not only the first part of the section which bars
suits to set aside or modify an assessment, but also its latter part which
provides that "no suit or other proceeding shall lie against any officer
of the Crown for anything in good faith...intended to be done under this
Act." The latter part of the section clearly excludes the jurisdiction of
the court to prevent the Income-tax Officer from proceeding With an assessment
which has already been started. Reference may here be made to Secretary of
State v. Meyyappa Chettiar(1) where it was held that the expression
"intended to be done" signified futurity so as to preclude suits for
injunction in respect of proceedings 'intended' to be taken by the Income-tax
Officer. It is true that in terms the provision concerns the Income-tax Officer
only, but it (1) I1946] 14 I.T.R. 341, at 352.
37 could hardly have been the intention of
the Legislature that though that Officer is not liable to be restrained from
proceeding with an assessment, the provision which ensures such a result may be
rendered nugatory by permitting an injunction to be claimed against the
Provincial Government or the State. In my opinion, it will be a strange
construction of the section to hold that although it bars suits to modify or
set aside an assessment and though it bars all proceedings to restrain the
Officer who is making the assessment from proceeding with it, yet it leaves it
open to a party to stop an assessment by claiming an injunction against the
Provincial Government or the State instead of the Officer concerned. There is
no reference to the Provincial Government or the State at all in the first or
the second part of the section, but the section as a whole concerns only with
excluding the jurisdiction of the civil court in regard to certain acts done or
intended to be done in connection with the assessment of agricultural incometax,
and, on a fair construction, it must be held to bar all suits in connection
with such assessment.
In urging his third point, the learned
Attorney General relied on an Ordinance passed by the Governor-General of
Pakistan on the 13th November, 1948, section 2 whereof runs as follows :"No
judgment, decree, order or sentence referred to in paragraph (3) of Article 4
of the Indian Independence (Legal Proceedings) Order, 1947, shall affect the
legislative or executive right or authority of the Central or any Provincial
Government of Pakistan and where such right or authority has been at issue, the
judgment, decree, order or sentence shall be invalid and inoperative subject to
any decision that may be obtained from a competent court, of the Province
concerned." It was pointed out that by reason of this Ordinance, any
decree which may be obtained in the present suit would be wholly infructuous
and in this view this was a meaningless litigation which should not be allowed
to continue. There is force in this argument, 38 but the point need not be
pursued, as, in my opinion, the first two points raised by the Attorney-General
are sufficient to meet the principal contention advanced by the appellant.
The question of submission to jurisdiction
appears to me to be unarguable upon the facts stated, and it was not seriously
argued before us. The Province of East Bengal did intervene and apply for
permission to file a written statement, but the only statement made by it was
that the Court had no jurisdiction to proceed with the suit. It cannot
therefore be held that it had submitted to the jurisdiction of the Court.
I have tried to deal with the question posed
in this appeal in all its material aspects, but it can, I think, be disposed of
on the simple ground that the mere issuing of a notice under section 4 of the
Bengal Agricultural Income-tax Act by the Agricultural Income-tax Officer
cannot be held to be an actionable wrong, because no right known to law can be
said to have been infringed thereby. One of the recognized tests of an
actionable wrong is that, while other remedies may also be open to the person
to whom the wrong is done, he can always maintain an action for damages, on the
principle that every injury imports damage. I am however certain that no action
for damages can be maintained on the allegations made by the appellant in his
plaint. I think that the entire argument urged on behalf of the appellant has
been sufficiently answered by the High Court in the following passage, which
appears to me to sum up the legal position accurately and concisely :-"Nor
was Dr. Sen Gupta right in relying on article 10 (2) for the transfer of
liabilities. That Article is concerned with liability for an actionable wrong
other than breach of contract and it is impossible to say that by serving a
notice on the plaintiff under the Bengal Agricultural Income Tax Act through
one of its officers, the Province of Bengal had committed an actionable wrong.
Assuming it exceeded its powers or acted under an invalid provision of law, the
plaintiff may have a declaration to that effect, but the 39 act complained of
cannot be said to have been a tortious act. But even assuming it was, it is to
be remembered that the issue of the notice was in exercise of powers conferred
by the Act in relation to the Sovereign rights of the Crown and it is
elementary that the Crown or the State is not answerable for even negligent or
tortious acts of its officers done in the Course of their official duties
imposed by statute, except where the particular act was specifically directed
and the Crown profited by its performance. There is no such allegation in the
plaint in the present case.
The plaintiff could not therefore have sued
the Province of Bengal for an actionable wrong and the suit actually brought is
not a suit of that character. It is a suit for ,certain declarations and an
injunction and does not seek to make the Province liable for any actionable
wrong in any way. No liability for an actionable wrong is thus involved in the
suit and Dr. Sen Gupta cannot establish a right to proceed against the Province
of East Bengal on the basis that the liability was transferred to that Province
under article 10 (2) of the Order." In the result, I would dismiss this appeal
with costs.
MUKHERJEA J---I agree with my learned brother
Patanjali Sastri J. that this appeal should be allowed and I would desire to
indicate briefly the reasons that have weighed with me in coming to a
conclusion different from that arrived at by the learned Judges of the Calcutta
High Court.
All the material facts in relation to this
case have been set out with elaborate fullness in the judgment of the High
Court and I deem it quite unnecessary to state them over again. The whole
controversy centers round the point as to whether the suit which was instituted
by the plaintiff appellant against the Province of Bengal, as it was prior to
the 15th of August, 1947, and which is still pending in the Court of the
Subordinate Judge at Alipore can be continued against the Province of East
Bengal which has come into existence, as a part of the Dominion of Pakistan,
upon the 40 partition of Bengal under the Indian Independence Act; and whether
the court of the Subordinate Judge of Alipore which is a court in the Dominion
of India has any jurisdiction to proceed with and try such suit.
The Subordinate JUdge decided these questions
in favour of the plaintiff appellant basing his decision entirely upon article
4 (1) of the Indian Independence (Legal proceedings) Order, 1947, read with s.
9 of the Indian Independence Act.
The High Court in revision' set aside the
order of the Subordinate Judge holding inter alia that neither article 4 (1) of
the Legal Proceedings Order nor article 12 (2) of the Indian Independence (Rights,
Property and Liabilities) Order, 1947, could confer upon the plaintiff any
right to continue the suit against the Province of East Bengal. The Alipore
Court, it has been held, has no jurisdiction to proceed with the suit and no
jurisdiction has been conferred upon it by reason of the Province of East
Bengal appearing in the suit and putting in a written statement only for the
purpose of challenging the competency of the court to try the same. It is the
propriety of this decision that has been challenged before us in this appeal.
The first point that requires consideration
is whether article 4 (11 of the Legal Proceedings Order has any application to
the facts of the present case. In my opinion, the answer to this question must
be in the negative and the view taken by the High Court on this point seems to
me to be perfectly sound and unassailable.
The Legal Proceedings Order as well as
several other orders dealing with various constitutional matters affecting the
two Dominions which were to come into being on and from the 15th of August,
1947, were promulgated by the Governor General of India just on the previous
day, that is to say, the 14th of August, 1947, in pursuance of section 9 (1) of
the Indian Independence Act which made it a duty on the part of the
Governor-General to make suitable provisions for removing the difficulties
arising in connection with the transition to the new constitutional order. As
the two 41 Dominions came into existence under the Indian Independence Act
passed by the British Parliament and these orders were made by the
Governor-General of India in exercise of the authority conferred upon him by
the Independence Act, there cannot be any doubt that the provisions of these
orders are fully binding on India as well as the Dominion of Pakistan;
and they being provisions made to be
applicable only for the transitional period, the question does not really arise
as to whether or not they are in strict conformity with the principles of
International Law which would ordinarily govern the relations between two
sovereign States.
Article 4(1) of the Legal Proceedings Order
is worded as follows:
"Notwithstanding the creation of certain
new Provinces and the transfer of certain territories from the Province of
Assam to the Province of East Bengal by the Indian Independence Act, 1947,-(1)
all proceedings pending immediately before the appointed day in any civil or
criminal court (other than a High Court) in the Province of Bengal, the Punjab
or Assam shall be continued in that court as if the said Act had not been
passed, and that court shall continue to have for the purposes of the said
proceedings all the jurisdiction and powers which it had immediately before the
appointed day." The clause of the article is couched in very wide language
and under it all proceedings pending in any civil or criminal court in the
Province of Bengal, the Punjab or Assam immediately before the 15th of August,
1947, would continue as before and be heard and tried by the courts before
which they are pending irrespective of the fact that such proceedings might
relate to persons or property situated in the other Dominion. I agree with the
High Court in holding that comprehensive though the provision is, by itself it
can render no assistance to the plaintiff appellant. The suit was commenced
here by the plaintiff against the old Province of Bengal as the party defendant
and against 42 that defendant the suit may be continued if the plaintiff so
chooses under article 4(1) of the Legal Proceedings Order mentioned above. But
this would be of no benefit or advantage to the plaintiff for what he wants is
to proceed against the Province of East Bengal which is a part of the Dominion
of Pakistan as a substituted defendant in place of the Province of Bengal. Dr.
Sen Gupta argues that if the court has jurisdiction to continue the suit, this
would necessarily carry with it the power to make proper orders for
substitution as the court considers necessary. But such substitution could be
made only under the ordinary provisions of law which regulate the conduct of
such suits. There is no provision of any municipal law which contemplates or
authorises the substitution of one sovereign state for another in a pending
suit. If, therefore, the plaintiff wants to proceed against the new Province of
East Bengal, he must find warrant for it in some of the provisions made by the
Governor General of Indian exercise of the powers vested in him under the
Indian Independence Act. Admittedly there is no such provision in the Legal Proceedings
Act and reliance is, therefore, placed by the plaintiff upon article 12 (2) of
the Rights, Property and Liabilities Order, 1947, which is in the following
terms :-"Where any Province from which property, rights or liabilities are
transferred by this Order is, immediately before the transfer, a party to legal
proceeding with respect to that property or those rights or liabilities, the
Province which succeeds to the property, rights or liabilities in accordance
with the provisions of this Order shall be deemed to be substituted for the
other Province as a party to those proceedings, and the proceedings may continue
accordingly.
It is not disputed that in order to attract
the operation of this provision, it is incumbent upon the plaintiff to show
that the right or liability to which his suit relates has been transferred from
the Province of Bengal, as it existed prior to the 15th of August, 1947, 43 to
the Province of East Bengal in Pakistan in accordance with the provisions of
this Order. To establish this, reliance was placed on behalf of the plaintiff
upon several provisions of the Rights, Property and Liabililies Order, 1947,
and none of his contentions in this respect were accepted as sound by the
learned Judges of the High Court.
In this court Dr. Sen Gupta took his stand on
a two-fold ground. He argued in the first place that for the purpose of
invoking the aid of article 12(2) of the Rights, Property' and Liabilities
Order it is not necessary that the transfer of the right and liability to which
the proceeding relates should take place under any of the specific articles
enumerated in the Order. It would be enough according to him, if there is a
transfer by or under any machinery which the Order sets up or authorises What
he says is that as the Province of East Bengal is proceeding to assess and levy
agricultural income-tax upon the plaintiff in respect of a period anterior to
15th of August, 1947, the right to do so can vest in the Province either under
an agreement between the two Dominions or the two Provinces or on the basis of
an award by an arbitral tribunal as contemplated by article 3 of the Rights,
Property and Liabilities Order. In either case it would amount to transfer of
rights under the provisions of the Order and would attract the operation of
article 12(2).
This argument is manifestly unsound and
cannot be accepted. If the right referred to by the learned Counsel means the
fight to impose tax on agricultural income earned within its territory, the
State of Pakistan did not acquire such right by transfer from the Province of
Bengal. It is a right inherent in sovereignty itself which the Dominion of
Pakistan got under the Indian Independence Act. Again if the right has been
created by the Bengal Agricultural Income-tax Act, the Province of East Bengal
would certainly be entitled to avail itself of the provisions of that Act under
section 18(3) of the Independence Act. Apart from this, Dr. Sen Gupta has not
referred us to any agreement between the two Dominions or the two Provinces or
to the decision of any arbitral tribunal 44 under which the right in dispute in
the present case was transferred to the Province of East Bengal. This
contention must therefore fail.
I have now to consider the other argument on
this point advanced by the learned Counsel that the liability of the Province
of Bengal in respect to the cause of action upon which the plaintiff's suit had
been rounded became a liability of the Province of East Bengal under the
provision of article 10(2) of the Rights, Property and Liabilities Order.
It is not disputed that if this contention
succeeds, the plaintiff would be entitled to the benefit of clause (2) of
article 12 of the Order.
Clause (2) of article 10 has to be read with
clause (1) of that article and taking the two clauses together the provision of
article 10(2) would stand thus :"Where immediately before the appointed
day the Province of Bengal is subject to any liability in respect of an
actionable wrong other than a breach of contract, the liability shall (a) when
the cause of action arose wholly within the territory which as from that day
are the territories of the Province of East Bengal be a liability of that
Province." If the allegations made by the plaintiff in the plaint are assumed
to be correct, the Province of Bengal was liable to be restrained from
proceeding to levy agricultural income-tax upon the plaintiff which was
illegal, as being imposed by a statute which so far as it affected the plaintiff
was unconstitutional and void. The question is whether this can be said to be a
liability in respect of an actionable wrong other than a breach of contract
within the meaning of that expression occurring in article 10 set out above. It
may be noted here that the rights and liabilities arising out of contracts have
been dealt with in articles 8 and 9 of the Order. The High Court took the view
that the expression "actionable wrong other than a breach contract"
is synonymous with 'tort'. It has held that the act complained of cannot be a
tortious act and 45 even if it is so, no action would lie upon it, it being an
established proposition of law that the State is not answerable for any
tortious acts of its officers done in the course of official duties imposed by
a Statute. It seems to me that the learned Judges have attached a narrow and
somewhat restricted meaning to the words of the Article mentioned above and
that the plain language of the provision read in the light of the context would
demand and justify a wider and more liberal interpretation. In my opinion,
there can be an actionable wrong which does not arise out of a breach of
contract and at the same time does not answer to the description of a 'tort' as
it is understood in English law; and if the plaintiff's allegations are
correct, it is an actionable wrong precisely of that type which we have in the
present case.
The word "wrong" in ordinary legal
language means and signifies "privation of right". An act is wrongful
it infringes the legal right of another, and "actionable" means
nothing else than that it affords grounds for action in law.
Ordinarily, the word "injury" is
used in the same sense of actionable wrong, while "damage in contrast with
injury means loss or harm occurring in fact whether actionable as injury or
not"(1). In English law "tort" is a species of civil injury and
so is a breach of contract; but it is not quite correct to say that the two
together exhaust all forms of actionable wrongs known to English law. It is
true that a tort is often described as wrong independent of contract.
As a legal definition this description, as I
shall show presently, is not quite accurate and unless taken with certain
limitations is apt to be misleading.
It is well known that in England the
principles of modern law of contract and tort emerged solely out of the
intricacies of the old "Forms of Action'" under which they lay buried
for ages. The injuries which in modern law are described as torts were remedied
in early time by certain writs, known as writs of trespass (1) Vide the
observation of Viscount Simon in Crofter etc.
Company Ltd v. Vetch [1942] A.C. 435, 442.
46 and trespass on the case. The latter was
more elastic than the former and was capable of being adapted to new circumstances
and to new types of injuries. There was no clear line of demarcation in those
days between contractual and tortious liability and in fact tile action of
"assumpsit" -which was the method of enforcing simple contracts was a
variety of action on the case and was made use of for recovery of compensation
from a party who failed to perform his agreement on the ground that such
failure amounted to a wrong in the nature of deceit(1).
When the principles of substantive law
gradually extricated themselves from the entanglements of for realistic
procedure, a distinction was drawn between liability for breach of contract and
that for tort. In a breach of contract the right violated owes its origin to
the agreement of the parties while in tort the right infringed is one created
by tile general law of the land. From about the middle of the 19th century the
assumption current in England was that all civil causes of action must be
rounded either on contract or on tort and all injuries which were not breaches
of contract would come under the category of torts. This assumption as Sir
Frederick Pollock observes has no historical foundation to rest upon(2). In
1852 the Common Law Procedure Act was passed and a tort was described in the
Act as "a wrong independent of contract". It cannot be denied that
this mode of expression became very common in legal parlance; but as more than
one modern writer on the law of torts have pointed out, the words in such
description would have to be interpreted in a particular way and with certain
limitations; taken literally it would not be a correct statement of law.
It has been observed by Underhill in his
"Law of Torts" that a description like this would be accurate in law
if the word "wrong" is taken in the restricted and technical sense as
equivalent to "violation of a right (1) Vide Pollock on Contract, 12th
Edition, p. 111;
Winfield on Tort pp, 3-4 (4th Edition).
(2) Vide Pollock's Article on Tort, Encyc.
Brit. Vol.22, p. 307.
47 recognised and enforced by law by means of
an action for damages". Taken in this form, the definition though it gives
no clue as to what constitutes a wrong, certainly does lay stress on the
essential characteristic of a tort, viz., that the appropriate remedy f9r it is
an action for damages(1). It is really this characteristic that differentiates
a tort from other forms of civil injury or actionable wrong even though the
latter are unconnected with any contract. There may be other remedies besides
damages available to the plaintiff against a tortfeasor in the shape of
restitution, injunction etc., but no "civil injury" as Salmond
observes "can be classed as tort unless the appropriate remedy for it is
an action for damages. Such an action is an essential characteristic of every
true tort."(2) Other remedies like injunction or restitution can be
claimed by the plaintiff but it is solely by virtue of a right to damages that
the wrong complained of can be regarded as a tort. By way of illustration the
author points out that a public nuisance is not to be deemed a tort, because
the civil remedy by way of injunction may be obtained at the suit of the
Attorney-General. A refusal to perform a statutory duty is not a tort if the
remedy is by way of mandamus.
Nor would any wrong be regarded as a tort if
the remedy is not an action for unliquidated damages but for a liquidated sum
of money. A breach of trust is certainly an actionable wrong independent of
contract and the beneficiaries can claim compensation if the trustee has
misappropriated trust property; but as the claim cannot be for unliquidated
damages, it is not regarded as a tort(3). According to Salmond, the reason for
this exclusion is purely historical as a breach of trust or any other equitable
obligation was considered to be within the special jurisdiction of equity
courts. It is interesting to observe that although the difference between
equitable and common law jurisdiction is not existent at the present day, the
old rule is still applied (1) Vide Underbill's Law of Torts. 16th Edn., p. 4.
(2) Vide Salmond's Law of Torts, 10th Edn.,
pp. 7 & 8.
(3) Vide Winfield's Law of Tort, p. 11 48 to
demarcate the boundary of the law of torts in English common law.
Thus tort is a civil injury other than a
breach of contract which is capable of sustaining an action for unliquidated
damages in a court of law. If the appropriate remedy is not a claim for
unliquidated damages but for injunction or some other relief, it would not rank
as a tort though all the same it would be an actionable wrong.
By way of illustration I may refer to the
case of Halsey v. Brotherhood(1) which was decided by Sir George Jessel.
Both the plaintiff and defendant in this case
were engineers and held patents for the manufacture of certain types of
engines. The plaintiff brought an action against the defendant alleging that
the latter had threatened to bring legal proceedings against several persons
who were actual or intending purchasers of engines from the plaintiff asserting
that the engines manufactured by the plaintiff were infringements of the
defendant's patent. There was a claim for damages and also for injunction. It
was held by Sir George Jessel that the plaintiff could not claim damages on the
basis of slander of title, as he nowhere alleged that the defendant's
statements or representations were not bona fide. But even though the
statements had been made in good faith, the plaintiff would be entitled to an
injunction against the defendant if he succeeded in proving that the latter's
allegations of infringement were not true. As no proper case for injunction on
this basis was made in the claim, the action was dismissed; but liberty was
given to the plaintiff to bring an action in the proper form claiming an
injunction to restrain the defendant from threatening the plaintiff's customers.
This threat to customers was thus held to be an actionable wrong but as the
remedy was injunction and not damages, it was not a tort in the legal sense of
the term.
In the case before us the act of the Province
of Bengal complained of by the plaintiff is not a tort according to the
technical rules (1) 15 Ch. D. 514.
49 of English law, but is certainly an
actionable wrong as it can be sued upon in a court of law and remedied in an
effective manner. The appropriate remedy for the wrong is not unliquidated
damages which is essential in a tort but an injunction restraining the
defendant from proceeding with the illegal assessment or from realising the
amount assessed if assessment has actually taken place.
If, as the plaintiff alleges, the relevant
provision of the Bengal Agricultural Income-tax Act, under which the plaintiff
is sought to be assessed, is illegal and ultra vires, the issuing of the notice
by the Income-tax Officer is certainly the first and the essential step in the
commission of the wrongful act which furnishes a sufficient cause of action for
the suit. As this is not a case of tort, the principle of law, according to
which a state is not liable to any damages for tortious acts of its servants,
cannot be invoked as a bar to the suit. A remedy by way of injunction can be
claimed against a State or Province unless the act complained of amounts to an
'act of State' in its strict sense and is not purported to be done in exercise
of the powers conferred upon the Government by any municipal law.
As the avowed object of the Rights, Property
and Liabilities Order is to distribute and adjust as far as possible the
rights, properties and liabilities between the two Dominions which were to come
into being under the Indian Independence Act, the language of the Order should
be construed as liberally as possible, and there is no warrant for putting an
interpretation upon the words used more restricted than they would bear in
English law.
It is argued that article 10(2) (a) does not
apply to this case as the cause of action did not wholly arise within the
territory of the Province of East Bengal. The argument does not impress me at
all. The notice was issued by the Income-tax Officer of Dacca which is in
Pakistan territory though it was received by the plaintiff's manager at Agartala
which was outside British India at that time. In any event, the Province 50 of
East Bengal cannot escape liability on this ground. It would be jointly liable
with the Province of West Bengal under article 10(2) (c) of the Rights,
Property and Liabilities Order.
In view of my decision on this point, the
other question raised by Dr. Sen Gupta as to whether the defendant submitted to
the jurisdiction of the Alipore Court or not does not fall for determination.
The learned Attorney-General, who intervened
on behalf of the Union of India, put forward certain additional grounds in
support of the order made by the learned Judges of the High Court. One of the
points raised by him is that section 65 of the Bengal Agricultural Income-tax
Act constitutes a bar to the suit which, therefore, should not be allowed to
'continue. The other material point is that the suit cannot but result in an
infructuous decree, and consequently there is no justification for allowing it
to proceed. It is pointed out that an Ordinance has been passed by the
GovernorGeneral of Pakistan on the 13th of November, 1948, under which "no
judgment, decree or order referred to in paragraph 3 of Article 4 of the Indian
Independence (Legal Proceedings) Order, 1947, shall, in any way, affect the
legislative or executive right or authority of the Central or any Provincial
Government of Pakistan and where such authority or right has been at issue, the
judgment, decree or order shall be invalid and inoperative". The first
point has been dealt with by my learned brother Patanjali Sastri J. in his
judgment and I concur with him in holding that section 65 of the Bengal
Agricultural Incometax Act has no application to the present case. The second
point, I must say, embarrassed me to some extent and if the effect of the
Ordinance is, as has been stated by the learned Attorney-General, a doubt may
legitimately arise whether it would be worthwhile for the plaintiff to proceed
with the suit and whether it would not be more to his advantage to seek relief
in the court of Dacca. But as this point was not raised before the High Court
and the question whether an Ordinance of this character could override the
provisions of the 51 Orders passed by the Governor-General of India under the
Indian Independence Act has still to be decided, I refrain from expressing any
opinion on this point.
In the result, the appeal, in my opinion,
should be allowed and I concur in the order which has been made by my learned
brother Patanjali Sastri, J.
Appeal allowed.
Agent for the Appellant: R.R. Biswas.
Agent for the Respondent: P.K. Bose.
Agent for the Inervener: P. A, Mehta.
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