State of Bihar Vs. Union of India
& ANR  INSC 252 (19 September 1969)
19/09/1969 MITTER, G.K.
HIDAYATULLAH, M. (CJ) SHAH, J.C.
CITATION: 1970 AIR 1446 1970 SCR (2) 522 1970
SCC (1) 67
CITATOR INFO :
O 1977 SC1361 (153) R 1984 SC1675 (6) D 1986
Constitution of India, Art. 131--Private
party whether can be impleaded in a suit under Article--Article is meant to
settle only disputes between parties mentioned in cls.
(a) (b) and (c) Court can give declaratory
The State of Bihar filed a number of suits in
this Court under Art. 131 of the Constitution in connection with the delayed
delivery of iron and steel materials for its Gandak project. In six of the
suits the defendants were: The Union of India (Defendant No. 1 ) and Hindustan
(Defendant No. 2). In six other suits the
The Union of India (Defendant No. 1) and The
Indian Iron & Steel Co. Ltd. (Defendant No. 2). The prayers in all the
suits were that decrees for specific sums of money be passed either against the
Union of India or the second defendant.
Identical preliminary issues were set down
for consideration in all the suits, namely: (1) whether the cause or causes of
action in this suit are within the scope of Art. 131 of the Constitution? (2)
Whether the suit is within the scope of Art. 131 of the Constitution in view of
a non-State viz.
defendant No. 2, having been made a party to
the suit ? (3) Whether the suit is barred by the provisions of s. 80 C.P.C.
for want of notice to defendant No. 1.
HELD: (i) The specification of the parties in
Art. 131 is not of the inclusive kind. The express words in cls.
(a), (b) and (c) of the Article exclude the
idea of a private citizen, a firm or a corporation figuring as a disputant
either alone or even along with a State or with the Government of India in the
category of a party to the dispute. The contents of the corresponding section,
of the Government of India Act, 1935 namely s. 204, and the legislative history
culminating in the adoption of Art. 131 of the Constitution support the
conclusion that so far as the parties to a dispute are concerned, the framers
of the Constitution did intend that they could only be the constituent units of
the Union of India and the Government of India itself arrayed on one side or
the other either singly Or jointly with another unit or the Government of
India. For other types of controversies or disputes special provision has been
made in the constitution e.g. in Art. 143 257, 262 and 290 A dispute in which a
private party, is involved must be brought before a court other than this Court
having jurisdiction over the matter. [52.6 D--F; 530 B; 531 C, F, H; 532 C] The
United Provinces v. The Governor-General in Council,  F.C.R. 124 and
State of Seraikella and Others v. Union of India and another,  S.C.R. 474,
The enlarged definition of 'State' given in
Parts III and IV of the Constitution is not attracted to Art. 131 of the
Constitution and a body like the Hindustan Steel Ltd.
could not be considered to be "a
State" for the purpose of Art. 131 of the Constitution. [532 G] Rajasthan
State Electricity Board v. Mohan Lal,  3 S.C.R. 377, distinguished.
523 In view of the above finding on issue No.
2 the suits did not lie in this Court under Art. 131 of the Constitution and
the plaints must be returned; it was accordingly unnecessary to decide issues
Nos. 1 and 3. [532 H] Article 131 does not prescribe that a suit must be filed in
the Supreme Court for the complete adjudication of the dispute envisaged
therein or the passing of a decree capable of execution in the ordinary way as
decrees of other courts are. Once this Court has given a declaration of its
rights to the aggrieved party the function of the Court under Art.
131 is over. [525 C--F]
ORIGINAL JURISDICTION: Civil Misc. Petitions
Nos. 512, 513, 574 & 575, 578 & 579, 581 & 582, 583 & 584, 587
& 588, 605 & 606, 609 & 610 and 1466 and 1467 of 1969.
Applications by defendant No. 1 for rejection
of plaints and for stay of the hearing of the suits.
Original suits Nos. 3 of 1967, 1 and 3 to 9
Petitions under Art. 131 of the Constitution
Niren De, Attorney-General, V.A. Seyid
Muhammad and B.D. Sharma, for respondent No. 1 (in all the suits).
D.N. Gupta, for defendant No. 2 fin suits 968
).Nos. 3 to 8 of D.N. Mukherjee, for defendant No. 2 (in suits Nos. 3 of 1967,
1 and 9 of 1968).
D.P. Singh, for the plaintiff (in suits Nos.
3 of 1967, 1, 3, 5 and 6 of 1968).
D. Goburdhun, for the plaintiff (in suits
Nos. 4 and 7 of 1968).
U.P. Singh, for the plaintiff (in suit No. 8
R.C. Prasad, for the plaintiff (in suit No. 9
The Judgment of the Court was delivered by
Mitter, J. This group of applications can be divided into two parts. The object
of one group is to get the plaints in nine suits filed in this Court rejected
while that of the other group is to stay the hearing of the suits.
The suits are all of the same pattern in each
of which the State of Bihar figures as the plaintiff. The Union of India is the
first defendant in all of them while the second defendant in six is Hindustan
Steel Ltd. and in three others the Indian Iron and Steel Company Ltd. The cause
of action in all the suits is of the same nature. Briefly stated the plaintiffs
case in all the suits is that "due to the negligence or deliberate action
of the servants of both defendants there was a short delivery of iron and steel
material ordered by the plaintiff to various sites in the State of Bihar in
connection with the 524 construction work of the Gandak Project". As the
goods were in all cases booked by rail for dispatch to the project site, both
defendants are sought to be made liable for short delivery, the first defendant
as the owner of the railways and the second defendant as the consignor of the
goods under contract with the State of Bihar for supply of the material.
In each case there is a prayer for a decree
for a specific sum of money to be passed either against the first defendant
"or alternatively against the second defendant". Normally all suits
of this kind are instituted all over India in different courts beginning from
the courts of the lowest jurisdiction to the High Courts exercising original
jurisdiction. The only distinguishing feature of this series of suits from
others of everyday occurrence in different courts is that a State is the
plaintiff in each case. In all suits of a similar nature which are filed in
courts other than this Court, a notice under s. 80 of the Code of Civil
Procedure is an essential prerequisite. No such notice has been served in any
of these cases. The applications were set down for trial of three issues sought
to be raised by way of preliminary issues. They are as follows :--
1. Whether the alleged cause or causes of
action in this suit are within the scope of Art. 131 of the Constitution ?
2. Whether this suit is within the scope of
Art. 131 of the Constitution in view of a non-State, viz, defendant No. 2,
having been made a party to the suit ?
3. Whether the suit is barred by the
provisions of s. 80 C.P.C. for want of notice to defendant No. 1 ? The question
before this Court is, whether the dispute in these cases is within the purview
of that article (quoted in the foot-note. It must be noted that the article
confers jurisdiction on this Court to the exclusion of all other courts in any
dispute between the parties mentioned therein. There is however an over-riding
provision that such jurisdiction is subject to the provisions of the Constitution
and our attention was drawn to a few of these provisions where the disputes
specified are to be adjudicated upon in entirely different *Art. 131. Subject
to the provisions of this Constitution, the Supreme Court shall, to the
exclusion of any other court, have original jurisdiction in any dispute-- (a)
between the Government and one or more States; or (b) between the Government of
India and any State or States on one side and one or more other States on the
other; or (c) between two or more States, 525 manner. The most important
feature of Art. 131 is that it makes no mention of any party other than the
Government of India or any one or more of the States who can be arrayed as a
disputant. The other distinguishing feature is that the Court is not required
to adjudicate upon the disputes in exactly the same way as ordinary courts of
law are normally called upon to do for upholding the rights of the parties and
enforcement of its orders and decisions. The words in the article "if and
in so far as the dispute involves any question (whether of law or fact) on
which the existence or extent of a legal right depends" are words of
limitation on the exercise of that jurisdiction. These words indicate that the
disputes should be in respect of legal rights and not disputes of a political
character. Moreover this Court is only concerned to give its decision on
questions of law or of fact on which the existence or extent of a legal right
claimed depends. Once the Court comes to its conclusion on the cases presented
by any disputants and gives its adjudication on the facts or the points of law
raised, the function of this Court under Art. 131 is over. Art. 131 does not
prescribe that a suit must be filed in the Supreme Court for the complete
adjudication of the dispute envisaged therein or the passing of a decree
capable of execution in the ordinary way as decrees of other courts are. It is
open to an aggrieved party to present a petition to this Court containing a
full statement of the relevant facts and praying for the declaration of its'
rights as against the other disputants. Once that is done, the function of this
Court under Art. 131 is at an end. The framers of the Constitution do not
appear to have contemplated the contingency of a party to an adjudication by
this Court under Art. 31 not complying with the declaration made.
Our law is not without instances where a
court may be called upon to make an adjudication of the rights of the parties
to an agreement or an award simpliciter on the basis of such rights without
passing a decree. A case in point is s. 33 of the Indian Arbitration Act.
Further, all adjudications by a court of law even under a decree in a suit need
not necessarily be capable of enforcement by way of execution.
Section 42 of the Specific Relief Act, 1877
now replaced by s. 34 of the new Act enables a person entitled to any legal
character or to any right as to any property to institute a suit against any
person denying or interested to deny his title to such character or right
without asking for any further relief subject to the limitations prescribed by
the section. We If and in so far as the dispute involves any question (whether
of law or fact) on which the existence or extent of a legal right depends:
Provided that the said jurisdiction shall not
extend to a dispute arising out of any treaty, agreement, covenant, engagement,
sanad or other similar instrument which having been entered into or excruciated
before the commencement of the construction, continues in operation after such
commencement, or which provides that the said jurisdication shall not extend to
such a dispute.
526 need not however lay much stress on this
aspect of the case as we are only concerned to find out whether the suits can
be entertained by this Court.
Clauses (a), (b) and (c) of the article
specify the parties who can appear as disputants before this Court.
Under cl. (a) it is the Government of India
and one or more States under cl. (b) it is the Government of India and one or
more States on one side and one or more other States on the other, while under
cl. (c) the parties can be two or more States without the Government of India
being involved in the dispute. The specification of the parties is not of an
inclusive kind. The express words of cls. (a), (b) and (c) exclude the idea of
a private citizen, a firm or a corporation figuring as a disputant either alone
or even along with a State or with the Government of India in the category of a
party to the dispute. There is no scope for suggesting that a private citizen,
a firm or a corporation can be arrayed as a party by itself on one side and one
or more States including the Government of India on the other.
Nor is there anything in the article which
suggests a claim being made by or preferred against a private party jointly or
in the alternative with a State or the Government of India. The framers of the
Constitution appear not to have contemplated the case of a dispute in which a
private citizen a firm or a corporation is in any way involved as a fit subject
for adjudication by this Court under its exclusive original jurisdiction
conferred by Art. 131.
Like many of the provisions of our
Constitution this article had a fore-runner in the Government of India Act,
1935. Section 204 of that Act provided for conferment of original jurisdiction
on the Federal Court of India. That section ran as follows :-- "(1)
Subject to the provisions of this Act, the Federal Court shall, to the
exclusion of any other court, have an original jurisdiction in any dispute
between any two or more of the following parties, that is to say, the
Federation, any of the Provinces or any of the Federal States, if and in so far
as the dispute involves any question (whether of law or fact) on which the
existence or extent of a legal right depends:
Provided that the said jurisdiction shall not
extend to-- (a) a dispute to which a State is a party, unless the dispute- (i)
concerns the interpretation of this Act or of an Order in Council made there under,
or the extent of the 527 legislative or executive authority vested in the
Federation by virtue of the Instrument of Accession of that State; or (ii)
arises under an agreement made under Part VI of this Act in relation to the
administration in that State of a law of the Federal Legislature, or otherwise
concerns some matter with respect to which the Federal Legislature has power to
make laws for that State; or (iii) arises under an agreement made after the
establishment of the Federation, with the approval of His Majesty's
Representative for the exercise of the functions of the Crown in its relations
with Indian States, between that State and the Federation or a Province, being
an agreement which expressly provides that the said jurisdiction shall extend
to such a dispute;
(b) a dispute arising under any agreement
which expressly provides that the said jurisdiction shall not extend 'to such a
(2) The Federal Court in the exercise of its
original jurisdiction shall not pronounce any judgment other than a declaratory
judgment." Clause (a) of the proviso. to the section defined the
categories of disputes which might be raised before the Federal Court while
clause (b) permitted the parties to provide for the exclusion of such jurisdiction
in the agreement in respect whereof the dispute arose. It will be noted that
the scope of the dispute under subcl. (i) of cl.
(a) was limited to the interpretation of the
Government of India Act or Order in Council or to the extent of legislative or
executive authority vested in the Federation while under sub-cl. (ii) the
dispute had to relate to the administration in a State of a law of the Federal
Legislature or otherwise concerned with some matter relating to the legislative
competency of the said legislature. Under sub-cl. (iii) the dispute could only
be one under an agreement made after the establishment of the Federation
between the State and the Federation or a Province subject to the condition
therein specified. A dispute of the nature which is raised in this scries of a
case was outside the ken of s. 204 of the Government of India Act.
It may not be out of place to trace the
origin of s.
204. The proceedings of the Joint Committee
on Indian Constitutional Re- 528 form, Session 1933-34, Vol. 1, Part II,
paragraph 309 read as follows:
"A Federal Court is an essential element
in a Federal Constitution. It is at once the interpreter and guardian of the
Constitution and a tribunal for the determination of disputes between the
constituent units of the Federation. The establishment of a Federal Court is
part of the White Paper scheme, and we approve generally the proposals with
regard to it. We have, however, certain comments to make upon them, which we
set out below." The report of the Joint Committee on Indian Constitutional
Reform, Session 1933-34, Vol. 1, Part 1 contained two paragraphs bearing on
this matter. Paragraph 322 was a reproduction of paragraph 309 quoted above.
Paragraph 324 ran as follows:
"324. It is proposed that the Federal
Court shall have an original jurisdiction in-- (i) any matter involving the
interpretation of the Constitution Act or the determination of any rights or
obligations arising thereunder, where the parties to the dispute are (a) the
Federation and either a Province or a State, or (b) two Provinces or two
States, or a Province and a State;
(ii) any matter involving the interpretation
of, or arising under, any agreement entered into after the commencement of the
Constitution Act between the Federation and a Federal Unit or between Federal
Units, unless the agreement otherwise provides.
This jurisdiction is to be an exclusive one,
and in our opinion rightly so, since it would be altogether inappropriate if
proceedings could be taken by one Unit of the Federation against another in the
Courts of either of them. For that reason we think that, where the parties are
Units of the Federation or the Federation itself, the jurisdiction ought to
include not only the interpretation of the Constitution Act, but also the
interpretation of Federal laws, by which we meant any laws enacted by the
Federal Legislature." It is clear from the above that the framers of the
Government of India Act, 1935 thought that the Federal Court should 529 be the
tribunal for the determination of disputes between the constituent units of the
Federation and it sought to lay down the exact nature of the dispute which that
Court could be called upon to examine and decide.
The Constitutional Proposals of the Sapru
Committee show that they had the said report and the said proceedings of the
Committee in their mind when they advocated the strengthening of the position
of the Federal Court in India and widening its jurisdiction both on the
original side and the appellate side but maintaining at the same time that it
should "act as an interpreter and guardian of the Constitution, and as a
tribunal for the determination of disputes between the constituent units of the
Federation." It is also to be noted that under s. 204 of the Government of
India Act, 1935 the Federal Court's jurisdiction was limited to the
pronouncement of a declaratory judgment.
Art. 109 of the Draft Constitution of India
prepared by the Constituent Assembly was in the same terms as Art. 131 of the
Constitution as it came into force in 1950. The proviso to the original article
was substituted by the new proviso in the year 1956. as a result of the Seventh
Amendment by reason of the abolition of the Part B States and the changes
necessitated thereby. Reference was made at the Bar in this connection to the
Debates in the Constituent Assembly, Vol. IV, 13th July 1947 to 21st July,
1947. They however do not throw any additional light.
So far as the proceedings of the Joint
Committee on Indian Constitutional Reform and the report of the Committee on the
same are concerned, they make it clear that the object of conferring exclusive
original jurisdiction on the Federal Court was that the disputes of the kinds
specified between the Federation and the Provinces as the constituent units of
the Federation, should not be left to be decided by courts of law of a
particular unit but be adjudicated upon only by the highest tribunal in the
land which would be beyond the influence of any one constituent unit.
Although Art. 131 does not define the scope
of the disputes which this Court may be called upon to determine in the same
way as section 204 of the Government of India Act, and we do not find it
necessary to do so, this much is certain that the legal right which is the
subject of dispute must arise in the context of the Constitution and the
Federalism it sets up. However, there can 530 be no doubt that so far as the
parties to the dispute are concerned, the framers of the Constitution did
intend that they could only be the constituent units of the Union of India and
the Government of India itself arrayed on one side or the other either singly
or jointly with another unit or the Government of India.
There is no decision either of the Federal
Court of India or of this Court which throws much light on the question before
us. Reference was made at the Bar to the case of The United Provinces v. The
Governor-General in Council(1) where the United Provinces filed a suit against
the Governor-General in Council for a declaration that certain provisions of
the Cantonments Act. 1924, were ultra vires the then Indian Legislature. A
claim was also made that all fines imposed and realised by criminal courts for
offences committed within the cantonment areas in the United Provinces ought to
be credited to the provincial revenues and that the plaintiffs were entitled to
recover and adjust all such sums wrongly credited to Cantonment Funds since
1924. The Governor-General in Council contended inter alia that the dispute was
not one which was justifiable before the Federal Court. On the question of
jurisdiction. Gwyer, C.J. was not inclined to think "that the plaintiffs
would in any event have been entitled to the declarations for which they
originally asked, in proceedings against the Governor- General in
Council". According to the learned Chief Justice "their proper course
would have been to take proceedings against a name' Contouring Board, though
such proceedings could not have been brought
to this Court." He was of the view that it was competent for the court to
entertain a suit for a declaration "that s. 106 of the Act of 1924 was
ultra vires," and said that as the dispute between the parties depended
upon the validity of the assertion of the Province to have the fines under
discussion credited to provincial revenues and not to the Cantonment funds the
dispute involved a question of the existence of a legal right. According to him
the question might have been raised in proceedings to which a Cantonment Board
was a party but "it was convenient to all concerned that it should be
disposed of in the proceedings before the court." The only other Indian
case cited at the Bar in this connection was that of the State of Seraikella
and others v. Union of India and another(2) where Mahajan, J. expressed the
view that s. 80 of the Code of Civil Procedure would not affect suits
instituted in the Federal Court under s. 204 of the Government of India Act.
(1)  F.C.R, 124. (2)  S.C.R. 474.
531 Our attention was drawn to some
provisions of the American Constitution and of the Constitution Act of
Australia and several decisions bearing on the interpretation of provision
which are somewhat similar to Art. 131. But as the similarity is only limited,
we do not propose to examine either the provisions referred to or the decisions
to which our attention was drawn. In interpreting our Constitution we must not
be guided by decisions which do not bear upon provisions identical with those
in our Constitution .
The Constitution makes special provisions for
settlement of certain disputes in a manner different from that laid down in
Art. 131. For instance, Art. 143 gives an over- riding power to the President
of India to consult the Supreme Court when he is of the view that the question
is of such a nature and of such public importance that it is expedient to do
so. Under el. (1) of that Article the President is empowered to obtain the
opinion of the Supreme Court upon any question of law or fact which has arisen
or is. likely to arise and is of such a nature and of such public importance
that the President considers it expedient to obtain such opinion. In such a
case the Court after giving such hearing as it thinks fit has to report to the
President its opinion thereon. Clause (2) of the article shows that this power
of the President over-rides the proviso to Art. 131.
Art. 257 provides for control of the Union
over the States in certain cases. Under clause (2) thereof the executive power
of the Union also extends to the giving of directions to a State as to the
construction and maintenance of means of communication declared in the
direction to be of national or military importance. Under cl (4) where such
directions are given and "costs have been incurred in excess of those which
would have been incurred in the discharge of the normal duties of the State if
such direction had not been given," the Government of India must pay to
the State such sum as may be agreed, or, in default of agreement, as may be
determined by an arbitrator appointed by the Chief Justice of India, in respect
of the extra costs so incurred by the State, Again, when there is a dispute or
complaint with regard to the use, distribution or control of the waters of, or
in, any inter State river or river valley cl. (2) of Art. 262 gives Parliament
the power by law to provide that neither the Supreme Court nor any other court
shall exercise jurisdiction in respect of such dispute or complaint as is
referred to in clause (1 ). Such a law ousts the jurisdiction of the court
which would normally be attracted by 532 Art. 131. Art. 290 contains a
provision somewhat similar to Art. 257(4) with regard to certain expenses and
pensions and makes the same determinable by an arbitrator to be appointed by
the Chief Justice of India.
Apart from these special provisions a dispute
which falls within the ambit of Art. 131 can only be determined in the forum
mentioned therein, namely, the Supreme Court of India, provided there has not
been impleaded in any said dispute any private party, be it a citizen or a firm
or a corporation along with a State either jointly or in the alternative. A
dispute in which such a private party is involved must be brought before a
court, other than this Court, having jurisdiction over the matter.
It was argued by counsel on behalf of the
State of Bihar that so far as the Hindustan Steel Ltd., is concerned it is
'State' and the suits in which the Government of India along with Hindustan
Steel Ltd. have been impleaded are properly filed within Art. 131 of the
Constitution triable by this Court in its original jurisdiction. Reference was
made to the case of Rajasthan State Electricity Board v. Mohan Lal(1). There
the question arose between certain persons who were permanent employees of the
Government of the State of Rajasthan and later placed at the disposal of the
State Electricity Board and one of the questions was whether the appellant
Board could be held to be 'State' as defined in Art. 12. This Court by a
majority held that the Board was "other authority" within the meaning
of Art. 12 and therefore was a 'State' to which appropriate directions could be
given under Arts. 226 and 227 of the Constitution.
It will be noted that under Art. 12 all local
or other authorities within the territory of India or under the control of the
Government of India are 'States' for purposes of Part III which defines and
deals with the Fundamental Rights enshrined in the Constitution. The expression
"the State" has the same meaning in Part IV of the Constitution under
Art. 36. No reason was shown as to why the enlarged definition of 'State' given
in Parts III and IV of the Constitution would be attracted to Art. 131 of the
Constitution and in our opinion a body like the Hindustan Steel Ltd. cannot be
considered to be "a State" for the purpose of Art. 131 of the
In the result we hold that the suits do not
lie in this Court under Art. 131 of the Constitution and issue No. 2 must be
answered in the negative. It is not necessary to give any answer to issue No. 1
nor to issue No. 3. On the view we take the  3 S.C.R. 377.
533 plaints must be returned for the purpose
of presentation to courts having jurisdiction over the disputes. Let the
plaints be returned for presentation to the proper court after endorsing on
them the date of presentation of the plaints in this Court and the date on
which they were returned. We make no order as to costs of these applications.