$.c.R.

SUPREME COURT REPORTS 553

deposited with the respondents did not require registration and was properly admitted in evidence to prove the creation of the charge.

The appeal fails and is dismissed with costs.

Appeal dismissed.

Agent for the appellant: Tarachand Brijmohanlal.

Agent for respondent No. 1 : S. P. Varma.

THE NEW PIECEGOODS BAZAR CO., LTD.,

BOMBAY

ti.

THE COMMISSIONER OF INCOME-TAX,

BOMBAY

[SAIYID FAZL ALI, PATANJALI SASTRI,

MEHR CHAND MAHAJAN and

, MUKHERJEA JJ.]

Indian Income-tax Act (XI of 1922), s. 9(1) (iv)-Income from pt"Operty-Computation-Deductions-"Annual charge .not being capital charge"-"Annual charge" and 'capital .charge", mean-· ittgi of-Charge for. municipal . property tax and urban immoveable pro,, my tax-Whether deductible--City of Bombay Municipal Act, 1888, s. 212--,-Bombay Finance Act, I 932, s. 22.

The charge created in respect of municipal property tax by s. 212 af the City of Bombay Municipal Act, 1888, is an "annual charge not being a capital charge" within the meaning of s. 9 ( 1)

(it) of the Indian Income-tax Act, 1922, and the amount of such charge should therefore be deducted in computing the income from such property for the purposes of .s- 9 of the Indian Income tax Act.

The charge in . respect of urban immoveable property tax created by the Bombay Finance Act, 1932, is similar in character

and the amount of such charge should also be deducted_

Tl* expression "capital charge" in s. 9 (1) (iv) means a charge created for a capital sum, that is to say, a charge created to secure the discharge of a liability of a capital nature; and an

"annual charge" means a charge to secure an annual liability.

R~ Mfl"'qj

v. Bliagwandas Daruka AtttJ Othm

P atanjali Sastri J.

May26

.N n11 Pieugoods

Baz; ar Co. Lid.

Co.unissioner .of lnamu-lax,

Bomb47

Ma/iqjan ].

APPELLATE LXVI of 1949 .

JuR1so1cnoN: Civil Appeal

(1950}

No.

Appea~ from the High Court of Judicature, Bombay, m a reference under section 66 of the Indian Income-tax Act,. 1922.

K. M. Munshi (N. P. Nathvani, with him), for the appellant.

C. Setalvad, Attorney-General for India (H. J. Umrigar, with him), for the respondent.

1950.

May 26.

The judgment of the Court was delivered by

MEHR

CHAND MAHAJAN J.--This is an appeal against a judgment of the High Court of Judicature at Bombay in an income-t:\X matter and it raises the question whether municipal property tax and urban immoveable property tax payable under the relevant Bombay Acts are allowable deductions under section 9

(1) (iv) of the Indian Income-tax Act.

The assessee company is an investment company deriving its income from properties in the city of Bombay.

For the assessment year 1940-41 the net income of the assessee under the head "property" was computed by the Income-tax Officer in the sum of Rs. 6,21,764 after deducting from gross rents certain payments.

The company had paid during the releva year Rs. 1,22,675 as municipal property tax Rs. 32,760 as urban property tax.

Deduction of t two sums was claimed under the provisions of section 9 of the Act.

Out of the first item a deduction in the sum of Rs. 48,572 was allowed on the ground that this item represented tenants' burdens paid by the assesscc, -0therwise the cl.aim was disallowed.

The appeals of the assessee to the Appellate Assistant Commissioner and to the Income-tax Appellate Tribunal were unsuccessful.

The Tribunal, however, agreed to refer two questions of law to the High Court of Judicature at Bombay, namely,- ·

(1) Whether the munic; ipal taxes pai(l by the :; ipplicant-company are an anwable deductio11 under

the provisions of section . 9 ( 1) (iv) of the Indian Income-tax Act ;

(2) Whether the urban immoveable property taxes paid by the applicant-company are an allowable deduction under section ? (1) (iv) or under section 9

(1) (v) .of the Indian Income-tax Act.

A supplementary reference was made covering a third question which was not raised before us and it is not therefore necessary to refer to it.

The High Court answered all the three questions in the . negative .and hence this appeal.

The question forour determination is whether the municipal property tax and urban immovable property tax can b~ deducted as an alfowance under clause

(iv) of sub-section (1) 9£ section 9 of the Act.

The decision of the point depends firstly on the construction of the language employed in sub-clause (iv) of sub-section (1) of section 9 of the Act, and secondly, on a. finding as to the true nature arid character of the liability of the owner under the relevant Bombay Acts for the payment of these taxes.

Section 9 along with the relevant clause runs thus:-

"9. ( 1) The tax shall be pa, yable by an assessee under the head 'income from property' in respect of the bona fide annual value of property consisting of any buildings or lands appurtenant thereto of which he is the owner, ...... subject to the following allowances, namely:-

(iv) where. the property is subject to a mortgage or other capital charge, the amount of any interest on such mortgage or charge ; where the property is subject to an annual charge not being a capital charge, the amount of such charge ; where the property is subject to a ground rent, the amount of such ground rent: and, where the property has been acquired, constructed, repaired, renewed or reconstructed with borrowed capital, the amount of any interest payable on such • \ II ap1ta : ......... .

It will be seen that clause

(iv) consists of four subclauses corresponding to the four deductions allowed

New Pi4cegoods Baz:ar Co. Ltd.

Commissioner of Incorne-t1J1<,

Bombay

MllMjan].

New Piectgoods Bazar Co. Ltd. v.

Commissionn of /n1; omt-tax,

Bombay

Mahajma].

under the the clause.

Before the amending Act of 1939, clause (iv) contained only the first, third and fourth sub-clauses.

Under the first sul>-clause interest is deductible whether the amount borrowed on the security of the property was spent on the property or not.

There is no question of any capital or other expenditure on the property.

The expression "capital charge" in the sub-clause cannot connote a charge on the capital, that is, the property assessed.

That would be a redundancy as the opening words themselves clearly indicate that the charge is on the property.

We are therefore of opinion that capital charge here could only mean a charge created for a capital sum, i.e., a charge to secure the discharge of a liability of a capital nature.

In 1933 the Privy Council decided the case of Biioy Singh Dud huria v. Commissioner of Income-tax Calcutta (1 ).

It was not an assessment under section 9 but an assessment on the general income of an assessee who was liable to pay maintenance for his step-mother which had been charged on all his assets by a decree of Court.

It was not a liability voluntarily incurred by him but one cast on him by law. The Privy Council held that the amount paid by him in discharge of that liability formed no part of his real income and so should not be included in his assessment. Though the deci, ion proceeded on the principle that the outgoings were not part of the assessee's income at all, the framers of the amending Act of 1939 wanted, apparently, to extend the principle, so far as the assessment of property was concerned, even to cases where obligatory payments had to be made out of the assessee's income from the property charged with such payments, and the second sub-clause, namely, "where the property is subject to an annual charge not being a capital charge, the amount of such charge" was added.

It is this sul>-clause which the appellant invokes in support of its claim to deduction of the municipal and urban property taxes in the present case.

In view of the opening words of the newly added sul>-clause, the expression "capital charge" also used therein cannot have reference to a charge on the property, and we think it must

(1) T.t •. R. 6o Cal. 1029.

be understood in the same sense as in sub-clause ( 1); that is to say, the first sub-clause having provided for deduction of interest where a capital sum is charged on the property, this sub-clause provides for adeduction of annual sums so charged, such sums not being capital sums, the limiting words being intended to exclude cases where capital raised on the securiy of the property is made repayable in instalments.

In Commissioner of Income-tax, Bombay v.

Mahomedbhoy Rowji (1), a Bench of the Bombay High Court considered the meaning of these words.

As regards "annual charge," Beaumont C. J. observed as follows:-

"The words, I think, would cover a charge to secure an annual liability."

Kania J ., as he then was, said as follows :-

"I do not see how a charge can be annual unless it rnearis a charge in respect of a payment to be made a nmw ll v."

This construction of the words has been followed in the iudgment under appeal.

In Gappumal Kanhaiya Lal v.

Commissioner of Income-tax (2) (the connected appeal before use), the Bench of the Allahabad High Court agreed with the construction placed on these words in the Bombay case, i.e., the words "annual charge" mean a charge to secure an annual liabilitv.

It is therefore clear that there is no conflit of jdicial decisions as to the meaning of the phrase "annual charge" occurring in sectian 9 (1) (iv) and the meaning given is the natural meaning of these words.

As. to the phrase "capital charge", Beaumont C. J. in the case above referred to took the view that the words mean a charge on capital.

Kania J., however, took a different view and observed that he was not prepared to accept the suggestion that a document which provides for a certain payment to be made monthly or annually and charged on immoveable propel:ty or the estate of an individual becomes a capital charge.

In the Allahabad judgment under appeal these

Ntt11 Pieugoods Bazar Co. Ltd.

Commissioner of lncMm-lfVI,.

Bomh<ry

Mahajan].

Commissioner ef /nfOme-tax,

Bomb9

words were considered as not meaning a charge on capital.

It was said that if an annual charge means a chrage to secure the discharge of an annual liability, then, capital charge means a charge to secure the discharge of a liability of a capital nature.

We think this construction is a natural onstruction of the section and is right.

The determination of the point whether the taxes in dispute fall within the ambit of the phrase "annual charge not being a capital charge" depends on the provisions of the statutes under which they are levied.

Section 143 of the City of Bombay Municipl Act, 1888, authorises the levy of a general tax on all buildings and lands in the city.

The primary responsibility to pay Jhis property tax is on the lessor (vi de section 146 of the Act).

In order to assess the tax provision has been made for the determination of the annual rateable value of the . building m section 154.

Section 156 provides for the maintenance of an assessment book in which entries have to be made every official year of all buildings in the cit)', their rateable value, the names of persons primarily liable for payment of the property tax on such buildings and of the amount for which each building has been assessed.

Section 167 lays down that the assessment book need not be prepared every official year but public notices shall be given in accordance with sections 160 to 162 every year and the provisions of the said sections an<l of sections 163 and 167 shall be applicable each year.

These sections lay down a procedure for hearing objections and complaints agamst entries in the assessment book.

From these provisions it is clear . that the liability for the tax 1s determined at the 'beginning of each official year and the tax is an annual one.

It recurs from year to year.

Sections 143 to 168 concern themselves with the imposition, liability and assessment of the tax for the year.

The amount of the tax for the year and the liability for its payment having been determined, the Act then prescribes for its collection in the chapter "The collection of taxes". Section. 197 provides that each of the property taxes shall be payable in

advance in half yearly instalments on each first day of April and each first day of October. The provision as to half yearly instalment necessarily connotes an annual liability.

In other words, it means that the annual liability can be discharged by half yearly payments. Procedure has also been prescribed for recovery of the instalments by presentment of a. bill, a notice of demand and then distress, and sale. Finally section 212 provides as follows:-

"Property taxes due under this Act in respect of any building or land shall, subject to the prior payment of th_e land revenue, if any, due to the provincial Government thereupon, be a first charge ...... upon the said building or land ......... "

It creates a statutory charge on the building.

Urban immoveable property tax is leviable under section 22 of Part VI of the Bombay Finance Act, 1932, on the annual letting value of the property.

The duty to collect the tax is laid on the munic!pality and it does so in the same manner as in the case of the municipal property tax.

Section 24 (2) (b) is in terms similar to section 212 of the Bombay Municipal Act.

It makes the land or the building security for the payment of this tax also.

For the purposes of section 9 of the Indian Income-tax Act both these taxes namely, the municipal property tax as well as the urban immoveable property tax are of the same character and stand on the same footing.

Mr. Munshi, the learned counsel for the appellant contended that both the taxes are assessed on the annual value of the land or the building and are annual taxes, although it may be that they are collected at intervals of six _ months for thi:: sake of convenience, that the income-tax itself is assessed on an annual basis, that in allowing deductions all payments made or all liabilities incurred during the ' prc; vious year of assessment should be allowed and that the taxes in question fell clearly within the language of section 9 (1) (iv).

The. learned Attorney-General, on the other hand, argued that although the taxes are assessed for the year the liability to pay them arUc:t at the beginning

V111J Piecegoods, Baz.ar Co. Ltd. v.

Commissi'lNr ?f ln&Omt-lax,.

Bombay

Mahqjan].

!(,.. Piee•& cods JJ"rw Co. l.J4.

v. of l"'601'WIO¥,

Bomb".1

Mahajan].

of each half year and unless a notice of demand is issued and a bill presented there is no liability to pay them and that till then no charge under section 212 of the Act could possibly arise and that the liability to pay being half yearly in advance, the charge is not an anRUal charge.

It was also suggested that the taxes were a capital charge in the sense of the property being security for the payment.

We are satisfied that the contentions raised by the learned Attorney-General are not sound.

It is apparent from the whole tenor of the two Bombay Acts that the t axes are in the nature of an annual levy on the property and are assessed on the annual value of the property each year.

The annual liability can be discharged by half yearly instalments.

The liability being al} annual one and the property having been subjected to it, the provisions of clause (iv) of sub-section ( 1) of section 9 are immediately attracted.

Great emphasis was laid on the word "due" used in section 212 of the Municipal Act and it was said that as the taxes do not become due under the Act unless the time for the payment arrives, no charge comes into existence till then and that the charge is not an annual charge.

We <lo not think that this is a correct construction of section 212.

The words "property taxes due under this Act" mean property taxes for which a person is liable under the Act.

Taxes payable during the year have been made a charge on the property.

The liability an<l the charge both co-exist and are co-extensive.

The provisions of the Act affording facilities. for the discharge of the liability do not in any way affect their true nature and character.

If the annuaf liability is not discharged in the manner laid down by section 197, can it be said that the property cannot be sold for recovery of the whole amount due for the year ?

The answer to this query can only be in the affirmative, i.e., that the property is liable to sale.

In Commissioner of Income-tax, Bombay v. Mahomedhov Rowji ( 1 ) Beaumont C. J., while rejecting the claim for the deduction of the taxes, placed reliance on

section 9 (1) (v) which allows a deduction in respect of any sums paid on account of land revenue.

It was observed that land revenue stands on the same footing as municipal taxes and that as the legislature made a special provision for deduction of sums payable in regard to land revenue but not in respect of sums paid on account of municipal taxes that circumstance indicated that the deduction was not allowable.

For the same purpose reference was also made to the provisions of section 10 which deal with business allowances and wherein deduction of any sum paid on account of land revenue, local rates or municipal taxes has been allowed.

In the concluding part of his judgment the learned Chief Justice said that it was not necessary for him . to consider what the exact meaning of the words was and that it was sufficient for him to say that it did not cover municipal taxes which are made a charge on the property under section 212 of the Bombay Municipal Act.

Without <leterminirig the exact meaning of the words used by the statute .jt seems to us it was not possible to arrive at the conclusion that the taxes were not within the ambit of the clause.

It is elementary that the primary duty of a Court is to give effect tO' the intention of the legislature as expressed in the words used by it and no outside consideration can be called in aid to find that intention.

Again reference to clause ( v) of the section is not very helpful. because land revenue is a .charge of a paramount nature on all buildings and lands and that being so, a deduction in respect of the amount was mentioned in express terms.

Municipal taxes, on the other hand, do not stand on the same footing as land revenue.

The law as to them varies from province to province and they may 1wt be necessarily a charge on property in all cases.

The legislature eems to have thought that so far as municipal taxe~ on property . Are concerned, if they fall within the ambit of clause (iv), deduction will be claimable in respect of them but not otherwise.

The deductions alfowed in section

11) under the head "Income from business" proceed on a different footing and construction of section 9 with the aid of section 10 is apt to mislead.

New Pm, gOf/ds Bazar Co. Ltd.

CommissiOlllr of Income-It"<,

Bombay

Mahajan].

New Pitcegoods Bazar Co. 1.Jd.

Commissiuner of lncometax,

Bombay

Mahajan].

Kania J. in the above case in arriving at his conclusion was influenced by the consideration that these taxes were of a variable character, i.e., liable to be increased or reduced under the various prov1s10ns of the Municipal Act and that the charge was in the natu"re of a contingent charge.

With great respect, it may be pointed out that all charges in a way may be or arc of a variable and contingent nature.

If no default is made, no charge is ever enforceable and whenever there is a charge, it can be increased or reduced during the year either by payment or hy additional borrowing.

In Moss Empires Ltd. v. Inland Rvenue Commissioners ( 1 ) it was held by the House of Lords that the fact that certain payments were contingent and variable in amount did not affect their character of being annual payments and that the word "annual" must be taken to have the quality of being recurrent or being capable of recurrence.

In Cunard's Trustees v. Inland Revenue Commissioners ( 2 ) it was held that the payments were capable of being recurrent and were therefore annual payments even though they were not necessarily recurrent year by year and the fact that they varied in amount was immaterial.

The learned Attorney-General in view of these decisions did not suppor~ the view expressed by Kania J.

Reliance was placed on a decision of the High Court of Madras in Mamad Keyi v. Commissioner of Income-tax, Madras (..~,) in which moneys paid as urban immoveable property tax under the Bombay Finance Act were disallowed as inadmissible under section 9 (1) (iv) dt 9 (1) (v) of the Indian Income-tax Act.

This decision merely followed the view expressed in Commissioner of Income-tax, Bombay v. Mahomed within the meaning of schedule D case III, rule 1 ( 1 ), bhov Rowji ( •) • and was not arrived at on any independent or fresh reasoning and is not of much assistance in the decision of the case.

The Allahabad High Court

in Gappumal Kanhaiya Lal v. Commissioner of Jncometax ( 1 ) (the connected appeal took a correct view of this matter and the reasoning given therein has our approval.

The result is that this appeal is allowed and the two questions which were referred to the High Court by the Income-tax Tribunal and cited above are answered in the affirmative. The appellants will have their costs in the appeal.

Appeal allowed.

Agent for the appellants : M. S. Krishnamoorthi Sastri.

. Agent for the respondent : P. A. Mehta.

COMMISSIONER OF INCOME-TAX, U.P.

GAPPUMAL KANHAlYA LAL

[SAIYID FAzL Au, PATANJALI SAsTRI,

MEHR CHAND MAHAJAN ; nd MuKHERJEA JJ.]

Indian Income-tax (XI of 1922), s. 9 (1) (iv)-lncome from p1"Dperty-Computation of annual value-Deduction of "annual charges not being capital charges"-Municipa/ house-tax and watertax-Whether deductible-Nature of such charges-U.P. Municipalities Act (II of 1916), ss. 128, 149, 177.

The amount of house-tax and the amount of water-tax imposed by the municipal board of Allahabad under s. 128 of the Unit¢ Provinces Municipalities Act, 1916, and paid by the owner as a lessor under .s. 149 of the said Act are "annual charges not being capital _ charges to which the property is subject," within the meaning of s. 9 (1) (iv) of the Indian Income-tax Act, 1922, and should therefore be deducted from the bona fide ai; mual value of the property determined under sub-sections ( l) and -(2) of s. 9 of the Indian Income-tax Act

Judgment of the Allahabad High Court affirmed.

New Pieccgoods. Bazar Co. Ltd. v.

Commissioner of Income-tax, Bombay fl950l S. C. R. 553) followed.

( 1 ) I.L.R. 1943 Born. 628. . 4-5 S, C. Tndia (N. D )/58

New Piecegoods Bazar Co. Ltd. v.

Commissioner of fn, ome-tax,

Bombay

Mahajan].

May26

Tarachand Brijmohanlal

S. P. Varma

THE COMMISSIONER OF INCOME-TAX,

BOMBAY

SAIYID FAZL ALI

PATANJALI SASTRI

MEHR CHAND MAHAJAN

MUKHERJEA JJ.

Indian Income-tax Act

s. 9(1)

s. 212

Bombay Finance Act

s. 22

s. 212

City of Bombay Municipal Act, 1888

s. 9

Indian Income-tax Act, 1922

Bombay Finance Act, 1932

s. 9

Bliagwandas Daruka AtttJ

atanjali Sastri

High Court of Judicature, Bombay

section 66

Income-tax Act

K. M. Munshi

N. P. Nathvani

C. Setalvad

H. J. Umrigar

MEHR

CHAND MAHAJAN

High Court of Judicature at Bombay

section 9

Income-tax Act

Bombay

section 9

Income-tax Act

section 9

Income-tax Act

section 9

section 9

Section 9

section 9

Bombay High Court

Beaumont

Kania

Allahabad High Court

Allahabad

Pieugoods Bazar Co. Ltd.

Section 143

City of Bombay Municipl Act, 1888

section 146

section 154

Section 156

Section 167

sections 160 to 162

sections 163 and 167

Sections 143 to 168

section 212

section 22

Part VI of the Bombay Finance Act, 1932

Section 24

section 212

section 9

Income-tax Act

Munshi

section 9

section 212

section 9

section 212

section 212

section 197

section 9

section 10

section 212

section

11

section 9

section 10

High Court of Madras

section 9

Income-tax Act

M. S. Krishnamoorthi Sastri

P. A. Mehta

COMMISSIONER OF INCOME-TAX, U.P.

GAPPUMAL KANHAlYA LAL

SAIYID FAzL Au

PATANJALI SAsTRI

MuKHERJEA

s. 9

ss. 128, 149, 177

s. 128

Provinces Municipalities Act, 1916

s. 149

s. 9

Indian Income-tax Act, 1922

s. 9

Income-tax Act


S.C.R.

SUPREME COURT REPORTS 563

in Gappumal Kanhaiya Lal v. Commissioner of Jncometax ( 1 ) (the connected appeal took a correct view of this matter and the reasoning given therein has our approval.

The result is that this appeal is allowed and the two questions which were referred to the High Court by the Income-tax Tribunal and cited above are answered in the affirmative. The appellants will have their costs in the appeal.

Appeal allowed.

Agent for the appellants : M. S. Krishnamoorthi Sastri.

. Agent for the respondent : P. A. Mehta.

COMMISSIONER OF INCOME-TAX, U.P.

GAPPUMAL KANHAlYA LAL

[SAIYID FAzL Au, PATANJALI SAsTRI,

MEHR CHAND MAHAJAN ; nd MuKHERJEA JJ.]

Indian Income-tax (XI of 1922), s. 9 (1) (iv)-lncome from p1"Dperty-Computation of annual value-Deduction of "annual charges not being capital charges"-Municipa/ house-tax and watertax-Whether deductible-Nature of such charges-U.P. Municipalities Act (II of 1916), ss. 128, 149, 177.

The amount of house-tax and the amount of water-tax imposed by the municipal board of Allahabad under s. 128 of the Unit¢ Provinces Municipalities Act, 1916, and paid by the owner as a lessor under .s. 149 of the said Act are "annual charges not being capital _ charges to which the property is subject," within the meaning of s. 9 (1) (iv) of the Indian Income-tax Act, 1922, and should therefore be deducted from the bona fide ai; mual value of the property determined under sub-sections ( l) and -(2) of s. 9 of the Indian Income-tax Act

Judgment of the Allahabad High Court affirmed.

New Pieccgoods. Bazar Co. Ltd. v.

Commissioner of Income-tax, Bombay fl950l S. C. R. 553) followed.

( 1 ) I.L.R. 1943 Born. 628. . 4-5 S, C. Tndia (N. D )/58

New Piecegoods Bazar Co. Ltd. v.

Commissioner of fn, ome-tax,

Bombay

Mahajan].

May26

Commissioner of Income-lax,

U.P.

Gappumal Kanhai:1a Lal

Mahajan].

SUPREME COURT REPORTS fl9SO)

APPEAL from the High Court of Judicature at Allahabad (Civil Appeal No. VI of 1949).

This was an appeal from the High Court, Allahabad (Iqbal Ahmad C. J. and Allsop J.) dated 31st August, 1944, in a reference under section 66 of the Indian Income-tax Act, 1922.

The facts are set out in the judgment.

Setalvad, Attorney-General for Indill (H. /. Umrigar, with him), for the appellant.

Gopi Nath Kunzru (K. B. Asthana, with him), for the respondent.

1950 May 26.

The judgment of the Court was delivered by

MEHR CH~ND MAHAJAN ).-This appeal from a judgment of the High Court of Judicature at Allahabad dated 31st August, 1944, raises the same Qoints as have been discussed in Civil Appeal No. 66 of .1949 ( 1).

The Income-tax Appellate Tribunal referred four questions to the High Court of Judicature at Allahabad under section 66 ( 1) of the Indian Income-tax Act. These questions related to the year of assessment 1939-40.

The High Court answered two of the questions in the affirmative and two in the negative.

The two questions relating to the appeal are those that were answered in the affirmative and are as follows :-

"Whethe1 ( 1) the amount of house-tax and (2) the amount of water-tax, imposed by the Municipal Board of Allahabad under section 128, sub-section ( l) clauses

(i) and (x), respectively of the United Provinces Municipalities Act, 1916, and paid by the owner as a lessor under section 149 of that Act should be deducted as an allowance from the bona fide annual value of the property determined under sub-section (1) read with sub-section (2) of secticm (9) of the Act, on the ground that such amount is an annual charge, which is not a capital charge to which the property is subject within the meaning of clause (iv) of sub-section ( 1) of section o of the Al:t."

{1 )New Piecef!oods Bazar eo. lid. ". Commissioner of I~.

Btm1(Jtt

[1950] S.C.R. 553

S.C.R.

SUPREME COURT REPORTS 565

Under section 128 of the United Provinces Municipalities Act, 1916, the municipality can. impose a tax :in the whole or any part of the municipality on the annual value of buildings or Janel or of both, and a water-tax on the annual value of buildings or land or d both.

Every such tax on the annual value of buildings or land or both is leviable on the actual occupier of the property upon which the said taxes are assessed,. if he is the owner of the buildings or lands or holds them on a building or other lease from the Crown or from the Board, or on a building lease from any person. In any other case the tax is leviable from the lessor, if the property is let (vide sectfon 149).

Section 177 enacts that all sums due on account of a tax imposed on the annual vall!e of buildings or lands or both shall 'Subject to the prior payment of the lnd revenue, if any, due to His Majesty thereupon, be a first charge upon such buildings or lands. ·

It is apparent therefore that die prov1S1ons of the United Provinces Act in respect of the levy of the taxes :are substantially similar to the provisions of the Bombay Act discussed in Civil Appeal No. 66 of 1949 ( 1 ) For the reasons given in that appeal and as a result of that decision this appeal stands dismissed with com . and we consider that the High Court of Allahabad has answered the questions above mentioned correctly.

Appeal dismissed.

Agent for the appellant: P. A. Mehta.

Agent for the respondent : S. P. Varma.

(') [1950] S.C.R. 55l

Commissioner of Income-tax,

U.P. v.

Gappumal K anhaiya Lal

Mahajan].

P. A. Mehta

COMMISSIONER OF INCOME-TAX, U

GAPPUMAL KANHAlYA LAL

MEHR CHAND MAHAJAN

nd MuKHERJEA JJ.

s. 9

ss. 128, 149, 177

Allahabad

s. 128

Provinces Municipalities Act, 1916

s. 149

s. 9

Indian Income-tax Act, 1922

s. 9

Income-tax Act

New Pieccgoods. Bazar Co. Ltd.

New Piecegoods Bazar Co. Ltd.

Commissioner of Income-lax,

U.P.

High Court of Judicature at Allahabad

High Court, Allahabad

Iqbal Ahmad

Allsop

section 66

Indian Income-tax Act, 1922

Setalvad

Gopi Nath Kunzru

K. B. Asthana

MEHR CH~ND MAHAJAN

section 66

Income-tax Act

Municipal Board of Allahabad

section 128

section 149

section 128

Section 177

High Court of Allahabad

S. P. Varma


May 19

SUPREME COURT REPORTS (1950 l

RASHID AHMED

fl.

THE MUNICIPAL BOARD,

KAIRANA.

THE UNION OF INDIA and THE STATE OF

UTT AR PRADESH : lNTERVENERS.

[SHRt HARILAL KANIA C. J., SAtYm FAzL Au,

PATA>iJALI SASTRI MEHR CHAND MAHAJAN

MuKHERJEA and DAs J J. J

Constitution of India, Arts. 19 (1), 19 (6), 32-Fundamental right to carry on trade-Reasonableness of restrictions imposed- U. P. Municipalities Act, 1916, s. 241

(2) (a)-Municipal bye/aw prohibiting carrying on u1holesale trade without permission-Absence of provisions for issuing license to old traders-Provisfons permitting grant of monopoly-Lt:gality of bye/aw.

Byelaw No. 2 of the byclaws of a municipal board, which came into force on the 1st January, 1950, provided that

0 no person shall establish any new n1arket or place for wholesale transactions without obtaining the previous permission of the board, and no person shall sell or expose for sale any vegetable, fruit, etc. at any Place other than -that fixed by the board for. the purpose"; and byelaw No. 4 permitted the grant of a monopoly to a contractor to deal in wholesale transactions at the place fixed as a market.

In anticipation of these byclaws the monopoly right to do wholesale business in vegetable for three years was auctioned by the municipal board and granted to the highest bidder and a place was also fixed as the market where such business could be carried on. The petitioner who had been carrying on wholesale business in vegetables at a rented shop with:.o the mtµticipality for two years before the byelaws came into force applO!:d for a license to carry on his business at his shop but this was rejected on the ground that there was no provision in the byelaws authorising the grant of any . such license, and he was prosecuted for contravention of th'c byelaws.

He applied under Art. 32 of the Constitution for the enforcement of his fundamental right as a citizen to carry on his busincsa which was gaaranteed by Art. 19 (1) of the Constitution.

Held

(i) . that the prohibition in byelaw No. 2 became absolute in the absence of provision authorising the issue of a license, and inasmuch as the municipal board had, further, put it out of its power to grant a license to the petitioner by granting a monopoly, the restrictions imposed \Vere not reasonable within

the meaning of Art. 19 ( 6) of the Constitution, and the byelaws were accordingly void and the prosecution of the petitioner illegal, (ii) that the fact that the Constitution came into force only after the byelaws had come into force did not affect the petitioner's right to carry on his business.

Held also, that an appeal under section 318 of the U. P.

Municipalities Act was not _in the circumstances an adequate legal remedy the_ existence of which would disentitlc the petitioner from maintaining this application.

ORIGINAL JuRISDICTION: Petition No. X of 1950

This was an application under article 32 (1) of the Constitution for the enforcement of the applicant's fundamental right to carry on his businss which was guaranteed by article 19 ( 1) of the Constitution.

The facts of the case appear in the judgment.

Nur-ud-din, for the petitioner.

Radhelal Agaruiala, for the opposite prty.

M. C. Setalvad, Attorney-General for India, ( S. M.

Sikri, with him), for the Union of India.

Pearylal Banerji, Advocate-General of U. P. ( Shri Ram, with him), for the State of Uttar Pradesh.

1950.

May 19. The Judgment of the Court was delivered by

DAs J.~I am reading the judgment of the Court.

This i§ an application under article 32 of the Constitution of India made by Rashid Ahmed for enforcement of his fundamental right to carry on his business which is said to have _been completely stopped by the respondent, the Municipal-- Board of K.airana.

The facts shortly are as follows:

The petitioner is an Aratia (commission agent) carrying on wholesale business in vegetables and fruits at Kairana in the District of Muzaffarnagar in the

Rashid Ahnid

Municipal Board,

Kair1111a

Dos].

Das].

SUPREME COL?RT REPORT~ f 1950 J

State of Uttar Pradesh.

He has been carrying on this business for the last two years at a rented shop in Bazar Jama Masjid in the town of Kairana.

Until recently there were no bye-laws of the respondent Board regulating the sale of vegetables and fruit within the limits of the municipality.

In March, 1949, the respondent Board published certain proposed bye- .laws made under section 298 of the U.P. Municipalities Act, 1916.

These bye-laws were passeJ by the respondent Board on the 19th April, 1949.

After confirmation by the Commissioner these bye-laws came into operation on anJ from 1st January 1950.

In anticipation of these new bye-laws coming into effect the respondent Board on the 21st May, 1949, auctioned "the contract for wholesale of vegetables", presumably meaning 'thereby the monopoly right to do wholesale business in vegetables.

The contract was given to one Habib Ahmad, who was the highest bjdder for three years at and for Rs. 72,750 payable in equal quarterly instalments in advance.

On the 31st December, 1949, respondent BoarJ notified a place near Police Post Imam as the market for wholesale pur.chase and sale of vegetables and fruits.

The petitioner applied for a license to carry on his wholesale Aratia business at his shop.

On or about the 22nd December, 1949, the respondent Board by resolution No. 188 rejected the petitioners application. This decision was. communicated to the petitioner on the 9th February 1950. The order of the Chairman of the respond- . ent Board was in these terms : "According to resolution No. 188 dated 22-12-49 the application of Mr. Rashid Ahmed is rejected and he be informed accordingly".

No reason was. assigned by the respondent Board's resolution for the rejection of the petitioner's application.

We are now informed by the learned Advocate tor the respondent Board that the application was rejected as there was no bye-law for entertaining such application or granting such license as was prayed for.

The fact that the respondent Board had already auctioned the conHact to Habib Ahmad might conceivably have had some bearing on this refusal to grant a license to the petitioner.

In the meantime on the 28th

January, 1950. a notice was served on the petitioner in the following terms :

"You are liereby informed that the Municipal Board, Kairana, have given the contract of wholesale .purchase and sale of the vegetables, which is in force from the 1st day of January, 1950.

It has been repeatedly promulgated, in the city by the beat of drum, through a Khakrob (sweeper) that excepting the contractor of vetables the Municipal Board, Kairana, nobody shall deal in wholesale purchase and sale of vegetables at a place other than the one approved by the Municipal Board aforesaid (i.e. the place near Police rost Imam).

As against this, you in the first place kept selling vegetables by wholesale, at the house near Jama Masjid otherwise known as Qaziwala, despite occasional verbal warnings requiring you to desist therefrom, which were conveyed through an employee of the Board. On your failure tG comply, you were warned by a notice in writing, dated the 3rd January, 1950.

That notice was duly served on you.

But still you paid no heed.

Accordingly a complaint was lodged against you, under the bye-laws, quoted above, in the Court of Pargana Officer, Tahsil Kairana.

The com- .Plaint is still pending.

Now you are selling wholesale by auction, vegetable at another place in Jama Masjid Bazar, which is a thoroughfare.

Your above conduct is unlawful and in contravention of the Municipal Board's Bye-law 2 pertaining to vegetable contract.

Moreover, highly prejudicial as it is to the interests of both the contractor and the Board, you are warned that after this notice has been served on you, you should cease to sell any more ffgetable in breach of the bye-laws above mentioned.

Herein fail not."

This notice is rather disingenous in that while it • suggests that everybody can deal in wholesale purchase and sale of vegetables at the place approved by the Board, i.e., at the place near Police Post Imam, the , fact, as we are now told by the learned Advocate for the i:espondent BOard, is entirdy contrary for it is

Rashid Ahmed

"· Municipal Board,

Eairana

Das}.

Rashid Ahmed

Municipal Board,

KaiTtma

Das).

only the contractor Habib Ahmad who can carry on wholesale business at that place.

The position, therefore, is that the petitioner cannot do any wholesale business either at the appointed marktit or at his own shop where he had admittedly been doing wholesale business for two years prior to the bye-laws coming into force.

In short, the petitioner's business has been wholly stopped and he is being prosecuted for alleged breach of the bye-laws.

The above notice was headed as "Notice under bye-law 2 of the bye-laws pertaining to contract of vegetables." Bye-law 2 runs thus :

"No person shall establish any new market or

plcc for wholesale transaction without obtaining the previous permission of the Board and no person shall sell or expose for sale any vegetable, fruit, etc., at any place other than that fixed by the Board for the purpose."

The second part of this bye-law clearly contemplates that everybody will be entitled to do business at the place fixed by the respondent Board, but as a result of a monopoly in favour of the contractor Habib Ahmad having been created, nobody else can do business at that place as conceded by the learned Advocate for the respondent Board.

Under the first part of this bye-law no person can establish a new market or place for wholesale transaction wit.hout obtaining the permission of the respondent Board.

This part of the bye-law clearly contemplates that the Board may permit the establishment of a new market for wholesale dealings in vegetables.

The petitioner applied for this permission but it was refused.

Bye-law 2 is still in force.

If it requires a license then under section 241 (2) (a) the respondent Board cannot refuse such license except on the ground that the place where the market or shop is established fails to comply with any condition prescribed by, or under, the Act.

It is conceded that the rejection of the petitioner's application. was not based on any such ground but that it was because there was no bye-law authorising the issue of any license.

The Constitution by article 19 ( 1) guarantees

to the Indian citizen the right to ca.rry on trade or business subject to such reasonable restrictions as are mentioned in clause ( 6) of that article.

The position, however, under bye-law 2 is that while it provided that no person shall establish a market for wholesale transactions in vegetables except with the permission of the Board, there is no bye-law authorising the respondent Board to issue the license.

The nett result is that the prohibition of this bye-law, in the absence of any provision for issuing license:, becomes absolute.

Further, bye-law 4 contemplates the grant of a monopoly to a contractor to deal in wholesale transactions at the place fixed as a market.

Acting up, on that provision, the respondent Board has granted monopoly to Habib Ahmad and has put it out of its power to grant a license to the petitioner to carry dn wholesale business in vegetables either at the fixed market place or at any other place within the municipal limits of Kairana.

This certainly is much more than reasonable restrictions on the petitioner as are contemplated by clause (6) of article 19.

This being the position, the bye-laws would be void under article 13 (1) of the Constitution.

On the other hand, if there is no bye-law requiring . the petitioner to take out license, then there can' be no justification for the respondent Board to stop the petitioner's business or to prosecute him.

r" Learned counsel tor the respondent Board faintly contended that the bye-laws having come into force on 1st January, 1950, i.e., before the Constitution came into force, the petitioner no longer had any right to continue the business and, therefore, his case is not governed by article 19(1) (g).

There is no substance in this argument for, if it were sound, article 19 (1) (g) would only protect persons who were carrying on business before the Constitution came into force.

Learned Advocate-General of Uttar Pradesh appearing for the intervener drew our attention to section 318 of the U.P. Municipalities Act, 1916, and submitted that the petitioner haviJ:ig adequate remedy by way of appeal, this Court should not grant any writ in the nature of the prerogative writ of mandamus

Muniripal Botmf

Kairana

Das].

Municipal Board,

Kairana

Das].

or certiorari.

There can be no question th.at the aistence of an adequate legal remedy is ; i thing to be taken into consideration in the matter of granting writs, but the powers given to this Court under article 32 are much wider and are not confined to issuing prerogative writs only.

The respondent Board having admittedly put it out of its power to grant a license and having regard to the fact that there is no specific bye-law authorising the issue of a license, we do not consider that the appeal under section 318 to the local Government which sanctioned the bye-laws is, in the circumstances of this case, an adequate legal remedy.

We are satisfied that in this case the petitioner's fundamental rights have been infringed and he is entitled to have his grievance redressed.

The proper order in such circumstances would be to direct the respondent Board not to prohibit the petitioner from carrying on the trade of wholesale dealer and commission agent of vegetables and fruits within the limits of the Municipal Board of Kairana, except in accordance with the bye-laws as and when framed in future according to law and further to direct the respondent Municipal Board to withdraw the pending prosecution of the petitioner and we order accordingly.

The respondents to pahthe costs of the petitioner ..

' ,.

Petition allowed.

Agent for the petitioner : Narmitlal.

Agent for the opposite party : Tarachand Bri; mohanlal.

Agent for the Union of India : P. A. Mehta.

Agent for Uttar Pradesh : Tarachand Bri; mohan/al.

l

RASHID AHMED

THE MUNICIPAL BOARD, KAIRANA, THE UNION OF INDIA and THE STATE OF UTTAR PRADESH

SHRt HARILAL KANIA

PATA>iJALI SASTRI MEHR CHAND MAHAJAN

MuKHERJEA

DAs J

Constitution of India

Arts. 19

Municipalities Act, 1916

s. 241

1st January, 1950

Art. 32

Art. 19

Art. 19

section 318

article 32

article 19

Radhelal Agaruiala

M. C. Setalvad

S. M.

Sikri

Pearylal Banerji

Ram, with

article 32

Constitution of India

Rashid Ahmed

State of Uttar Pradesh

section 298

Municipalities Act, 1916

1st January 1950

21st May, 1949

Habib Ahmad

31st December, 1949

BoarJ

22nd December, 1949

9th February 1950

Rashid Ahmed

28th

January, 1950

1st day of January, 1950

3rd January, 1950

Rashid Ahmed

Rashid Ahmed

Habib Ahmad

section 241

article 19

Kairana

article 19

article 13

article 19(1)

article 19

Uttar Pradesh

section 318

Municipalities Act, 1916

article 32

section 318

Narmitlal

Tarachand Bri

P. A. Mehta


s. c. R.

SUPREME COURT REPORTS

DR. BABU RAM SAKSENA

ti.

THE STATE r SttRI HARILAL KANIA c. J ., SAIYID F AZL Au,

PATANJALI SASTRI, MEHR CHAND MAHAJAN,

MuKHERJEA and DAs JJ.]

Constitutioll of India-Merger of. States-Effect-Treaty of Extradition between British Government and Indian State-Whether subsists after merger-Extradition Act 1903, ss. 7, IS-Provision i11 Act for extradition for additional offences-Whether "derogates" from Treaty-F.xtradition warrant for additional offences-Legality.

In 1869 the British Government and Qie State of Tonk entered into treaty which provided for the extradition of offenders in respect of certain offe11ces specified therein called "heinous offences," which did not include the offences of chcati ng and extortion. In 1903 the Indian Extradition Act was passed which provided for extradition in respect of cheating and extortion also, but s. 18 of the Act provided that nothing contained in the Act "shall derogate from the provisions of any treaty for the extradition of offenders." Under the Independence of India Act, 1947, the suzerainty of His Majesty over the Indian States lapsed ana with it all reaties and agreements in force; but under a "standstill agreement," between the Indian Dominion and the States (including Tonk) all agreements between His Majesty and the States were continued, including agreements in respect of extradition. Tonk acceded to the Dominion of lridia in 1947 and became a member State of the United State of Rajasthan.

The appellant was a member of the Uttar Pradesh Civil Service and his services were lent to the State of Tonk in

1948. After he had reverted to the Uttar Pradesh he was charged with the offences of cheating and extortion alleged to have been committed while he was in Tonk and was arrested under an extradition warrant issued under s. 7 of the Extradition Act,

1903. He applied under ss. 491 and 561-A of the Code of Criminal Procedure for his release, contending that in view of the provisions of s. 18 of the Extradition Act and the Trety of Extradition of 1869, his arrest was illegal :

 Held per KANIA C. J. and PATANJALI SAsTRI J. (FAzL ALI J. concurring).-Even assuming that the Extradition Treaty of 1869 subsisted after the merger of the Tonk State, by providing for extradition for additional offences the Extradition Act of 1903 did not derogate . from the provisions of the Treaty of 1869 or the rights of Indian citizens thereunder, and the arrest and surrender of the appellant under s. 7 of the Act was not, therefore, rendered unlawful by anything contained in the said Treaty.

ltlig 5.

Dr. Babu Ram

Salama

The Siok.

Patdnjali

Sastri].

Per MuKHERJEA J.

(FAZL

AL1, ivfAHAJAN an<l DAs JJ. concurring).-The Extradition Treaty of 1869 \Vas not capable of being given effect to in vie'v of the n1erger of the Tonk State ; n the United State of Rajasthan, and, as no enforceable treaty right existed, s. 18 of the Extradition Act of 1903 had no application ; and inasn1uch as the conditions of s. 7 of the said Act had been complied with, the warrant of arrest issued under s. 7 of the Act \Vas not illegal.

APPELLATE JuR1so1cTroN: Criminal Appeal No. II of 1949.

Appeal by special leave from the judgment of the Allahabad High Court (Harish Chandra J.) dated 11th November, 1949, in Criminal Miscellaneous Case No. 960 of 1949. The facts of the case and the arguments of coumel are set out fully in the judgment.

Alladi, Krishnaswami /year (Alladi Kuppuswami with him) for the appellant.

M. C. Setalvad, Attorney-General for India

(V.

Sethi, with him) for the respondent. 1950.

May 5. The judgment of Kania C.J. and Patanjali Sastri J. was delivered by PATANJALI SASTRI J.-This is an appeal by special leave from an order of the High Court at Allahabad dismissing an application under sections 491 and 561-A of the Code of Criminal Procedure for release of the appellant who was arrested in pursuance of an extradition warrant issued by the Regional Commissioner of the United State of Rajasthan who is the principal officer representing the Crown in tbe territory of that State.

The appellant who is a member of the Uttar Pradesh Civil Service was appointed in 1948 to serve what was then known as the Tonk State in various capacities, and during such service he is alleged to have helped the Nawab in obtaining the sanction of tbe Government of India to the payment of Rs. 14 lakhs to the Nawab out of the State Treasury for the discharge of his debts, and to have induced the Nawab bv threats and deception to pay the appellant, in return. for such help, sums totalling Rs. 3 lakhs on various dates. On these allegations the appellant is charged with having committed offences under section 383 (Extortion) and

section 420 (Cheating) of the Indian Penal Code which are extraditable offences under the Indian Extradition Act, 1903 (hereinafter referred to as "the Act"). The warrant was issued under section 7 of the Act to the District Magistrate, Nainital, where the appellant was residing after reverting to the service of the Uttar Pradesh Government, to arrest and deliver him up

to the District Magistrate of Tonk.

The appellant's case is th:it the sum of Rs. 3 lakhs was paid to him by the Nawab to be kept in safe deposit in a bank for the Nawab's use in Delhi, that no offence was committed and that the amount was returned when demanded by the authorities of. the Tonk State. The warrant was issued mala fide on account of enmity. Various technical objections were also raised to the validity of the warrant and to the jurisdiction of the Magistrate at Nainital to take cogmsance of the matter and rrest the appellant: The High Court overruled all the objections and dismissed the. application for the release of the appellant.

On behalf of the appellant Mr. Alladi Krishnaswami Aiyar contended that section 7 of the Act under which the warrant purports to have been issued had no application to the case and that the ' entire proceedings before the Magistrate were illegal and without jurisdiction and should be quashed. Learned counsel, relying on section 18 of the Act which provides that nothing in Chapter III (which contains section 7) shall "derogate from the provisions of any treaty for the extradition of offenders," submitted that the treaty entered into between the British Government and the Tonk State on the 28th January, 1869, although declared by section 7 of the Indian Independence Act, 1947, to have lapsed as from the 15th August, 1947, was continued in force by the "Standstill Agreement" entered into on the 8th August, 1947, that that treaty exclusively governed all matters relating to extradition between the two States, and that, inasmuch as it did not cover the offences now charged against the appellant, no extradition of the appellant could \>c demanded or ordered.

Dr. Babu Ram

Sahtna

The Stott.

Patwifoli Sastri].

Dr. Babu Ram

Saksnld

T/,. Statt.

Patalljllli Sanri ].

The Attorney-General appearing for the Government advanced three lines of argument in answer to that contention.

In the first place, the standstill agreement entered into with the various Indian States were purely temporary arrangements designed to maintain the status quo ante m respect of certain administrative matters of common concern pending the accession of those States to the Dominion of India, and they were superseded by the Instruments of Accession executed by the Rulers of those States. Tonk having acceded to the Dominion on the 16th August, 1947, the standstill agreement relied on by the appellant must be taken to have lapsed as from that date.

Secondly, the treaty was no longer subsisting and its execution became impossible, as the Tonk State ceased to exist politically and such wvereignty as it possessed was extinguished, when it covenanted with certain other States, with the concurrence of the Indian Government ·"to unite and integrate their territories in one State, with a common executive, legislature and judiciary, by the name of the United State of Rajasthan," the last of such covenants, which superseded the earlier . ones, having been entered into on the 30th March, 1949. ' Lastly, even assuming that the treaty was still m operation as a binding executory contract, its prov1s10ns were in no way derogated from by the application of section 7 of the Act to the present case, and the extradition warrant issued under that section and the arrest made in pursuance thereof were legal and valid and cou Id not be called in question under section 491 of the Criminal Procedure Code.

As we are clearly of opm10n that the appellant's contention must fail on this last ground, we consider it unnecessary to pronounce on the other points raised by the Attorney- .

General especially as the issues involved are not purely legal but partake also of a political character, and we have not had the views of the Governments concerned on those points.

It was not disputed before us that the present case would fall within section 7 of the Act, all the requirements thereof being satisfied, if only the applicability of

the section was not excluded, under section 18, by reason of the Extradition Treaty of 1869, assuming that it still subsists. The question accordingly arises whether extradition under section 7 for an offence which is not extraditable under the treaty is, in any sense, a derogation from the provisions of the treaty, which provides for the extradition of offenders for certain specified offences therein called "heinous offences," committed in the respective territories of the high contracting parties. Under article 1 the Government of the Tonk State undertakes to extradite any person, whether a British or a foreign subject, who commits a l_leinous offence in British territory.

A reciprocal obligation is cast by article 2 on the British Government to extradite a subject of Tonk committing such an offence within the limits of that State. Article 3 provides, inter alia, that any person other than a Tonk subject committing a heinous offence within the limits of the Tonk State and seeking asylum in British territory shall be apprehended and the case investigated by such Court as the British Government may direct. Article 4 prescribes the procedure to be adopted and the conditions to be fulfilled before extradition could be had, and :article 5 enumerates the offences which are "to 1)e deemed as coming within the category of heinous offences" which, however, do not include the offences charged against the appellant.

The argument on behalf of appellant was put thus: The maxim expressio unius est exclusio alterius is :applicable, as pointed out by McNair on The Law of Treaties, (1938-pp. 203, 204), to the interpretation of treaties. According to that rule the treaty in question should be read as allowing extradition only for the specified offences and for no others, that is to .say, as implying a prohibition of extradition by either State for any other offence than those enumerated in article

5. Further, while the treaty entitled each of the high contracting parties to demand extradition on a reciprocal basis; an unilateral undertaking by the Indian Government to grant extradition for an offence for which it could not claim extradition under the treaty

Dr. Babu Ram

Saksenu

Tk State.

Patanjali Sastrij.

Dr. Babu Ram

Saksena

Tk Stale.

Pat1171iali Sas1ri].

violates the principal of reciprocity which is the recognised basis of all international compacts for extradition.

Such an arrangement places the State of Tonk in a more advantageous position which was not contemplated by the framers of the treaty. And whre, as here, the person whose surrender is demanded is an Indian subject who is not liable to be , extradited under the treaty, his surrender under section 7 trenches upon the liberty of the subject. In so far, therefore, as that sec. tion authorises extradition of a person, especially when he is an Indian subject, for an offence which is not extraditable under the treaty, it derogates from the provisions of the treaty within the meaning of section 18, and its application to the present case is thereby excluded. The argument proceeds on a misconception and cannot be accepted.

No doubt the enumeration of "heinous offences" in article 5 of the treaty is exhaustive in the sense that the high contracting parties are not entitled, under the treaty, to claim extradition of criminals in respect of other offences.

But we cannot agree that such enumeration implies a prolzibition against either of those parties providing by its own municipal laws for the surrender of criminals for other offences not covered by the treaty. It is difficult to imagine why the contracting States should place such a fetter on their respective legislatures in advance not only in regard to their subjects but also in regard to alien offenders, for, if such prohibition is at all to be implied, it should cover both.

As pointed out in Wheaton's International Law, there is no universally recognised practice that there can be no extradition except under a treaty, for some countries grant extradition without a treaty : (Fourth Edition, sections 116 (a) to (d), pp. 186-189).

No doubt the constitutional doctrine 'in England is that the Crown makes treaties with foreign States for extradition of criminals but those treaties can only be carried into effect by Act of Parliament : (Ibid-section 116 (b ), p. 187). Accordingly, the extradition Acts arc made applicable by an. Order in Council in the case of each State which enters into an extradition treaty

with the Crown, and they are made applicable only so far as they can be applied constently with the terms and conditions contained in the treaty.

Under such a system where the high contracting parties expressly provide that their own subjects shall not be delivered up, as in the case of the treaty between England and Switzerland, the power to arrest and surrender does not exist: Regina v. Wilson(1 ). This it was observed by Cockburn C.J. in that case, was a "serious

blot" on the British system of extradition, and the Royal Commission on Extradition, of which he was the chairman, recommended in their report that "reciprocity in this matter should no longer be insisted upon whether the criminal be a British subject or not. If he has broken the laws of a foreign country his liability to be tried by them ought not to depend upon his nationality ...... The convenience of trying crimes in the country where they were committed is obvious. It is . very much easier to transport the criminal to the place of his offence than to carry all the witnesses and proofs to some other country where the trial is to be held :" (Wheaton, section 120 (a), pp. 197, 198).

Evidently, similar considerations led to the passing of the Act by the Indian Legislature providing for the surrender of criminals, including Indian subjects, for a wide variety of offences, with power to the Governor-General in Council to add to the list by notification in the Gazette generally for all States or specially for any one or more States. This statutory authority to surrender cannot of course enlarge the obligation of the other party where an extradition treaty has been entered into, and this is made clear by section 18. But it is equally clear that the Act does not derogate from any such treaty when it authorises the Indian Government to grant extradition for some additional offences, thereby enlarging, not curtailing, the power of the other party to claim surrender of criminals. Nor does the Act derogate, in the true sense of the term, from the position of an Indian subject under the treaty of 1869.

That treaty created no right in the subjects of either

(11

3 Q B. D. 42. 5--5 S. C. India ; N.D.)/58

19So

Dr. Babu Rom

Saksma

Thi State.

PaJanjali • .

Sastri J.

Dr. Babu Ram

Saksma

The Stau.

Patanjali Sastri j.

F., J Ali j.

Malrf!ia; o j.

Muk/rerfea].

State any more than in fugitive aliens not to he extradited for other than "heinous offences".

It is noteworthy that even in Wilson's case, (ubi supra) where there was an exception in the treaty in favour of the subjects of the contracting States, the decision was based not on the ground that the treaty by itself conferred any right or privilege on English subjects not to be surrendered but on the ground that the Order in Council applying the Extradition Act, 1870, to Switzerland limited its operation, consistently with the terms of the treaty, to persons other than English subjects. It is, therefore, not correct to say that, by providing for extradition for additional offences, the Act derogates from the rights of Indian citizens under the treaty or from the provisions of the treaty.

We are accordingly of opinion that the arrest and surrender of the appellant under section 7 of the Act is not rendered unlawful by anything contained in the treaty of 1869, assuming that it still subsists.

The appeal fails and is dismissed.

FAzL Au J.-I have had the advantage of reading the judgments prepared by my brothers, Sastri and Mukherjea, who have given different reasons for arriving at the same conclusion. As I am inclined to agree with the line of reasoning in both the judgments, I concur in the order that this appeal should be dismissed.

MAHAJAN J.-I agree with the judgment going to be delivered by my brother Mukherjea. For the reasons given therein this appeal should be dismissed.

MuKHERJEA J.-This appeal, which has come up before us on special leave granted by this Court, is directed against a judgment of Harish Chandra J. of the Allahabad High Court dated 11th of November, 1949, by which the learned Judge dismissed an application of the appellant under sections 491 and 561-A of the Criminal Procedure Code.

The facts which are material for purposes of this appeal are not in controversy and may be shortly stated as follows: The appellant Dr.

Babu Ram

Saksena, who is a resident of the United Provinces, was a member of the Executive Civil Service in that province, and during his official career, extending over 30 years, held various important posts, both in and outside that province. In January, 1948, he was appointed Administrator of the Tonk State, where a

disp.ute was going on at that time regarding succession to the rulership of the State between -two rival claimants. On 11th of February, 1948, the dispute was settled and Ismail Ali Khan was recognised as the Nawab or the Ruling Prince of the State and appellant was then appointed Dewan and Vice-President of the State Council, of which the Nawab was the President. In April, 1948, the Tonk State, together with several other States in Rajputana, integrated and formed together the United State of Rajasthan and the appellant thereupon became the Chief Executive Officer of the Rajasthan Government.

Towards the end of July, 1948, he got a'nother special post under the Rajasthan Governtllent, but soon afterwards, he took leave and proceeded to Naini Tai, where he has been residing since then. On 23rd May, 1949, he was arrested at Naini Tai on the strength of a warrant issued under section 7 of the Indian Extradition Act,

1903, by Shri V. K. B. Pillai, Regional Commissioner and Political Agent of the United State of Rajasthan.

The warrant, which is dated the 8th of May, 1949, was addressed to the District Magistrate of Naini Tai and directed to the arrest of Dr. Saksena and his removal to Rajasthan, to be delivered to the District Magistrate of Tonk for enquiry into certain offences :igainst the laws of that State which he was alleged to have committed. After his arrest, the appellant was released on bail in terms of the warrant itself and was directed to be present before the District Magistrate of Tonk on the 7th of June, 1949.

The allegations against the appellant in substance are, that while he was the Dewan of the Tonk State and Vice-President of the State Council, the Nawab, being in urgent need of money to meet his personal demands, requested Dr. SakSena to help him in obtaining for his own use

Dr. Babu Ram

S.7kstna

The Stair.

Mukhtrjea ].

Dr. Babu Ram

sots ... v.

TM Slat<.

Muklrerjea ].

a sum of Rs. 14 lakhs from the State Treasury.

Dr. Saksena promised his assistance on condition that the Nawab would give him a sum of Rs. 3 lakhs out of this amount as his share. By dint of his efforts, the appellant succeeded in inducing the State Ministry to pay the full amount of Rs. 14 lakhs to the Nawab in different instalments.

The first instalment, amounting to over Rs. 2} lakhs was paid on 31st March, 1948, and a further sum of Rs. 5 lakhs was paid on 21st of April following. On that date, it is said, the Nawab paid to Dr. Saksena a sum of Rs. 1,50,000 which was only half of the promised amount. A few days later, Dr. Saksena pressed for payment of the balance and held out threats to the Nawab that in case the money was not paid, the latter would find himself in serious difficulties as his position as a Ruling Prince of the State was not at all secure and there were grave charges against him. As a result of these threats and misrepresentations, the Nawab was induced .to pay .to the appellant the balance of Rs. 1,50,000 m two mstalments. The matter became known to the Regional Commissioner some time in November 1948 and he called Dr. Saksena for an interview and succeeded in getting back from him the entire sum of Rs. 3 lakhs which the Nawab had paid. On the basis of these facts, Dr. Saksena has been accused of having committed offences under sections 383 and 420 of the Indian Penal Code.

On 3rd June, 1949, Dr. Saksena filed an application in the High Court of Allahabad under sections 491 and 561-A of the Criminal Procedure Code, complaining of illegal and unauthorised detention under the warrant of the Regional Commissioner of Rajputana dated the 8th of May, 1949. The legality of the warrant and of arrest thereunder was attacked on a number of grounds.

It was contended, first of all, that the applicant was falsely implicated by the Nawab on account of enmity which grew up between them for various reasons and the allegations made were totally false. It was next said that the District Magistrate of Naini Tai could not take cognizance of the matter without the previous

sanction of the U. P. Government under section 197 'of the Criminal Procedure Code and that the sanction of the Rajpramukh of the United State of Rajasthan was also necessary before any proceeding could be initiated.

The third and the main contention was that the alleged offences being said to have been committed in the State of Tonk, the case would be governed by the provisions of the Extradition Treaty entered into between the British Government and the Tonk State on 28th of January, 1869, and as neither "extortion" nor "cheating" was mentioned in the list of offences for which extradition was permissible under that Treaty, the warrant .of arrest issued under sectio~ 7 of the Extradition Act was wholly illegal and unauthorised.

It is admitted that these offences are specified in the Schedule to the Inclan Extradition Act of 1903, but it was said that section 18 of the Extradition Act expressly made the Act inapplicable when its provisions "derogated" from those of a Treaty. Lastly, it was urged that the extradition warrant was a mala fide step taken by the Nawab of Tonk with the help of his friend the Regional Commissioner of Rajasthan for ulterior purposes and that it constituted a fraud upon the Statute and an abuse of the processes of law.

The application was head by Harish Chandra, J. sitting singly, and by a judgment dated 11th of November, 1949, which fully and elaborately discussed the different points raised in the case, the learned Judge rejected the application of the petitioner.

No certificate was given by the High Court u_nder section 205(1) of the Government of India Act, 1935, and the present appeal has been, brought to this Court on the strength of special leave granted by it.

Sir Alladi Krishnaswami Aiyar, who appeared in support of the appeal, has very properly not pressd before us all the points that were canvassed on behalf of his client in the Court below. His contention, in substance, is that the rights of extradition in the present case should be regulated exclusively by the provisions of the Extradition Treaty that was entered into

between the 1'onk State and the British Government

Dt. Babu Ram

Soa

Tire State

Mulr.her:ita},

-Or. Babu Ram Sahma

The Stau Muk/ie, j.a J.

on 28th of January, 1869, and was subsequently modified by a supplementary Treaty in the year 1887.

This Treaty, it is argued, has not been abrogated or rendered ineffective in any way by reason of the merger of the Tonk State in the United State of Rajasthan, and the decision of the High "Court on this point is erroneous.

According to the provisions of this Treaty, no extradition is permissible in respect to offences of "extortion" and "cheating" with which the appellant is charged and the warrant of arrest issued by the Political Agent is consequently illegal and ultra vires. It is conceded by Sir Alladi that if section 7 of the Indian Extradition Act, 1903, is held to be applicable to the facts of the present case, the warrant of arrest issued bv the Political Agent of Rajasthan could not be assaifed as invalid or inoperative; but his contention is that section 18 of the Extradition Act makes an express reservation in cases where Treaty rights exist and to the extent that the provisions of Chapter III of the Extradition Act derogate from those of any Treaty relating to extradition of offenders, the Treaty is entitled to prevail.

To appreciate the merits of this contention, it may be convenient to refer at this stage to a few sections of the Indian Extradition Act of 1903 as well as to the material provisions of the Extradition Treaty between the Toni( State and the British Government which have a bearing upon the present question.

Chapter III of the Indian Extradition Act deals with surrender of fugitive criminals in case of States other than foreign States and section 7, with which this chapter opens, provides as follows :

" (I) Where an extradition offence has been committed or is supposed to have been committed by a person, not being a European British subject, in the territories of any State not being a foreign State, and such person escapes into or is in British India, and the Political Agent in or for such State issues a warrant, addressed to the District Magistrate of any district in which such person is believed to be, (or if such person is believed to be in any Presidency town

to the Chief J>residency Magistrate of such town), for his arrest and delivery at a place and to a person for authority indicated in the W'iffitllt such Magistrate shall act in pursuance of such warrant and may give directions accordingly."

• • • •

The expression "extradition offence" has be.::n defined in section 2(b) and means "any such offence as is described in the First Scheme to the Act." The First Schedule gives a catalogue of offences described with reference co specific sections of the Indian Penal Code and it includes offences punishable under sections 383 and 420 of the Indian Penal Code prima facie, it seems therefore that all the conditions laid down in section 7 of the Extradition Act are fulfilled in the present case. The warrant has been issued by the Political Agent of a State which is not a "foreign State" as defined by the Act and the offences with which the appellant is charged are "extradition offences" as specified in Schedule I. Sir Alladi's contention, as stated above, is that section 7, which is in Chapter III of the Extradition Act, is controlled by section 18 which lays down that "nothing in this chapter shall derogate from the provisions of any treaty for the extradition of offenders, and the procedure provided by any such treaty shall be followed in any case to which it applies, and the provisions of this Act shall be modified accordingly."

Turning now to the Extradition Treaty between the Tonk State and the British Government, it will be seen that the First Article of the Treaty provides for extradition, where a British subject or a foreign subject commits a "heinous" offence in British territory an<l seeks shelter within the limits of the Tonk State.

The Second Article deals with an offender who is a subject of the Tonk State and having committed a "heinous" offence within the State seeks asylum in British territory; while the Third Article relates to a person other than a Tonk subject who commits a "heinous" offence within the limits of the Tonk State a!lc seeks asylum in British territory. The conditions

Dr. BabulRam

Saksma

The State •

Mukherjea J.

Dr.BU..R,,,,.

Sobtta

T/w SloU.

under which extradition could be . had in all such cases and the procedure to be followed ate laid down in article 4. Article 5 then gives a list of offences which would be deemed as coming within the category of "heinous" offences. It is not disputed that neithe{ "cheating" nor "extortion" are mentioned in this list. The whole controversy, therefore, centers round the point as to whether in view of the provisions of the Extradition Treaty mentioned above, extradition could legally be made or demanded in respect of offences coming under sections 383 and 420 of the Indian Penal Code which are mentioned in the list of offences speci1ied in Schedule I to the Extradition Act but do not find a place in article 5 of the Treaty. Could it be said that the provisions of the Extradition. ,:\ct, derogate in this respect from the Treaty between the Tonk State and the British Government and consequently, the terms of the Treaty would override the statute as indicated in section 18 of the Extr:iR, ition Act?

The learned Attorney-General, whc appeared £01 the Goverhment of India, put forward a two-fold argument in reply to the contention of Sir Alladi. He argued in the first place, that section 18 of the Indian Extradition Act has no application to the present case inasmuch as the Extradition Treaty between the Tonk State and the British Government, upon which the appellant relies, does not subsist and cannot be enforced, at the present day. The other contention is that even if the Treaty still subsists, there is nothing in its terms which prohibits extradition for offences other than those described as heinous offences in article

5. It is argued that "to derogate~· "to . detract" or "to take away" and the Schedule to the Extradition Act by mentioning certain offences, which do not occur in the list of "heinous offences" as given in the Treaty, cannot be said to have derogated from the terms of the Treaty. Both these points were fully argued on both sides and it is clear that if on either of these points a decision is reached adverse to the appellant, the appeal is bound to fail.

S.C:R.

SUPREl\1E COURT REPORTS 587 -. , So far as the first point is concerned, Mr. Setalvad t950 has drawn our attention to various political changes --,. that have come over the Tonk State since the con- Dr.s~'t' R•m clusion of the Extradition Treaty in 1869. In 1869 :'.no Tonk was one of the Native States in India with a -Tl .. Stat•. "separate'' political existence of its own and the Treaty that was entered _into. in that year was meant to Mukhorje• J. regulate exclusively the rights and obligations in matters of extradition of offenders as between the Tonk State on the one hand and the British Government on the other. In 1887 there was a modification of the Treaty but it is not disputed that the modifica- ·

tion made certain alterations in the procedure which are not material for our present purpose.

The major political change with regard to _all Indian States which vitally affected their existing Treaties with the British Government occurred on th" 15th of August, 1947, when India became an Independent Dominion. Section 7 of the Indian Independence Act provided inter alia that :

", (1) As from the appointed day-

 (b) The suzerainty of His Majesty over the Indian States lapses, and with it, all treaties and agreements in force at the date of the passing of this Act between His Majesty and the rulers of Indian States ..........

As a result of this provisiOn, the Extraqition Treaty between Tonk and the British Government must be deemed to have lapsed with effect\ from the 15th of August, 1947 .. If matters stood there, obviously there would be nothing left upon which section 18 of the Indian Extradition Act could possibly operate. There was, howevei:, a Standstill Agreement entered into by the Indian Dominion with the Indian States, the first article of which runs as follows : "l. (1) Until new agreements in this behalf are made, all agreements and administrative arrangements as to matters of common concern now existing between the Crown and any Indian State shall, in so far as may be appropriate, continue as between the Dominion of

Dr. Ba/Ju Ram

Sahma

v. n. si.,,.

India or, as the case may be, the part thereof, and the State.

(2) In particular, and witfi2ut derogation from the generality of sub-clause (1) of this clause the matters referred to above shall include the matters specified in the Schedule to this agreement."

The Schedule does mention "extradition" as one of the matters to which the Standstill Agreement is applicable. This was certainly intended to be a temporary arrangement and Mr. Setalvad argues that as there was no Treaty in the proper sense of the term. but only a substitute for it in the shape of a temporary arrangement, section 18 of the Extradition Act which expressly mentions a Treaty cannot be applicable.

While conceding that prima facie there is force in the contention, I think that this would be taking a too narrow view of the matter and I should assume for the purposes of this case that under the Standstill Agreement the provisions of the Treaty of 1869 still continued to regulate matters of extradition of criminals as between the Tonk State on the one hand and the Indian Dominion on the other till any new agreement was arrived at between them.

Though the Standstill Agreement was to take effect after the establishment of the Indian Dominion, the Instrument was actually signed on 8th of August, 1947.

On the 16th of August, 1947, Tonk acceded to the Dominion of India and one of the terms. in the Instrument of Accession is that the "Ruler accepts the pos1t1on that with regard to matters specified in the Schedule to the Instrument, the Dominion Legislature would be entitled to make laws for the State". "Extradition including the surrender of criminals and accused persons to parts of His Majesty's Dominion outside India" is one of the matters specified in the Schedule. Thus the State gave up and surrendered in favour of the Dominion Legislature its right to legislate in respect to extradition after the date of accession.

Whether the existing Extradition Treaty was ipso facto abrogated by this Instrument of Acces-- sion is not so clear. Obviously, the Indian Dominion:

could pass any legislation it liked regarding matters of extradition between the Tonk State, and any other State, either Indian or Foreign.

No such law was, however, passed by the Indian Legislature except that very recently under an Adaptation Order the Extradition Act of 1903 has been made applicable to States under Group B in the Indian Constitution in which Rajasthan is included.

It is to be noted that the Extradition Act itself, which is made applicable to the United State of Rajasthan, contains an xpress provision m section 18 which safeguards ex1stmg treaty rights.

It 1s somewhat unusual that an Extradition Treaty would be subsisting even after the State had acceded to India but we have no materials before us upon which we could definitely hold that the Treaty has been expressly superseded or abrogated by the Indian Legislature.

The next important thing is that in April, 1948, there was a Covenant entered into by the Rulers of nine States including Tonk, by which it was agreed by and between the covenanting parties that the territories of these nine States should be integrated into one State by the name of the United State of Rajasthan. This was done with the concurrence of the Dominion of India.

Later on, on 12th of May, 1949, Mewar also became a party to this Covenant and the United State of Rajasthan was reconstituted by the integration of the territories of all the ten States.

By the Covenant of merger, the Covenanting States aweed to unite and integrate their territories in one State known as the United State of Rajasthan and to have a common executive, legislature and judiciary.

The Rulers of all the States became members of the Council of Rulers and the President was designated as the Raj Pramukh of the United State. Article VI of the Covenant of Merger runs as follows :

"(I) The Ruler of each Covenanting State shall, as soon as practicable and in any event not later than the first day of May, 1948, make over the administration of his State to the Raj Pramuh; and thereupon-

Dr. Bab11 Rarrr

Sakseno.

The Stau.

Mukher.fea].

Dr. Babu Ram

Saksoia

Mu.t,.,, j.a ].

(a) all rights, authority and jurisdiction belonging to the Ruler which appertain or are incidental to the Government of the Covenanting State shall vest in the United State and shall hereafter be exercisable only as provided by this Covenant or by the Constitution to be framed thereunder ;

(b) all duties and obligations of the Ruler pertaining or incidental to the Government of the Covenanting State shall devolve on the United Sta~ and shall be discharged by it ; and

( c) all the assets and liabilities of the Covenanting State shall be the assets and liabilities of the United State."

The question now is how far was the Extradition Treaty between the Tonk State and the British Government affected by reason of the merger of the State into the United State of Rajasthan.

When a State relinquishes its life as such through incorporation into or absorption by another State either voluntarily or as a result of conquest or annexation, the general opinion of International Jurists is that the treaties of the former are automatically terminated.

The result is said to be produced by reason of complete loss of personality consequent on extinction of State life('). The cases discussed in this connection are generally cases where independent States have ceased to be such through constrained or voluntary absorption by another with attendant extinction of the former's treaties with other States. Thus the forceable incorporation of Hanover into the Prussain Kingdom destroyed the previous treaties of Hanover.

The admission of Texas into the United States of America by joint resolution extinguished the. Treaties of thr Independent Republic of Texas('). The position is the same when Korea merged into . Japan.

According to Oppenheim, whose opinion has been relied upon by Sir Alladi, no succession of rights and duties ordinarily takes place in such cases, and as political and personal treaties presuppose the existence of a contracting State,

(1) Vide Hyde on International Law, Vol. III, p. 1529.

(1) Vidt Hyde on International Law, Vol. Ill, p. 1531,

thy are altogether extinguisheJ. It is a debatable pomt whether succession takes place in cases of treaties relating to commerce or extradition but here again the majority of writers are of opinion that they do not survive merger or annexation (1 ).

The remarks quoted above do not, however, seem quite appropriate to a case of the present description.

Here there was no absorption of one State by another which would put an end to the State life of the former and extinguish its personality.

What happened here was that several States voluntarily united together and integrated their territories so as to form a larger and composite State of which every one of the covenanting parties was a component part. There was to be one common executive, legislature and judiciary and the Council of Rulers would consist of the Rulers of all the Covenanting States. It may not be said, therefore, that the Covenanting States lost their personality altogether and it is to be noted that for purposes of succession of Ru!ership and for counting votes on the strength of population and other purposes the Covenant of Merger recognises a quasi-separation between the territories of the different States.

But although such separation exists for some purposes between one State

territory and another. it is clear that the inhabitants of all the different States became. from the date of merger, the subjects of the United State of Rajasthan and they could not be described as subjects of any particular State.

There is no such thing as subject of the Tonk. State existing at the present day and the Ruler of Tonk cannot independently and in his own right exercise any form of sovereignty or control over the Tonk territory. The Government, which exercises sovereign powers, is only one, even though the different Rulers may have a voice in it.

It seems to us that in those altered circumstances the Extradition Treaty of 1869 has become entirelv incaoable of execution.

It is not possible for the Tnk St; te, which is one of the contracting parties to act m accordance with the terms of the treaty, for it has no longer any independent

(') Oppenhein on International Law. Vol. I, p. 152.

Dr. Babu Ram

Saksma

The Stale.

Mulclrerjea]

Dr. Babu Ra,.

Salrs.na

Tl14 Stat"

592 srJPREME COURT REPORTS [1950]

authority or sovereign rights over the Tonk territory and can neither make nor demand extradition. When as a result of amalgamation or merger, a State loses its full and independent power of action over the subject-matter of a treaty previously concluded, the treaty must necessarily lapse( 1).

It cannot be said that the sovereignty of the Tonk State in this respect is now vested in the United State of Rajasthan.

The authority, so far as extradition was concerned, was already surrendered by the Tonk State in favour of the Dominion Government by the Instrument of Accession.

But even assuming that these treaty rights could devolve upon the United State of Rajasthan by reason of article 6 of the Covenant of Merger, the latter, it seems to me, could be totally incapable of giving effect to the terms of the treaty.

As has been said already, there could be no such thing as a subject of the Tonk State at the present moment and article 2 of the Treaty which provides for extradition of Tonk subjects accused of having committed heinous offences within Tonk territory and seeking asylum elsewhere would be wholly infructuous. The United State of Rajasthan could not possibly demand extradition on the basis of this article, and if reciprocity, which 1s the essence of an Extradition Agreement, is gone, the Treaty must be deemed to be void and inoperative.

The decision in Terlinden v. Ames(•) which was relied upon by Sir Alladi in course of his arguments, rather fortifies the view that I have taken. The question there was whether an Extradition Treaty between Prussia and the U nitcd States of America, wJ1ich was entered into in 1852, could be given effect to after the incorporation of Prussia into the German Empire.

The question was answered in the affirmative. It was pointed out inter alia that the Constitution of the German Empire left sufficient independent power and sovereignty to the States composing the confederation to enable them to act upon these treaties and il was observed by Chief Justice Fuller, who delivered the opinion of the Court, that where sovereignty in respect

(1) VUle Hyde on International Law, VoL III, p. 153.'1. (') 184 u. s. 270.

to the execution of treaties is not extinguished and the power to execute remains unimpaired, outstanding treaties cannot be regarded as void. This is the real criterion and as obviously the power of the Tonk State to execute the treaty is altogether gone after the Covenant of Merger, the treaty cannot but be regarded as void.

The other case cited by Sir Alladi, viz., that of Lazard Brothers v. Midland Bank Ltd.(1) has absolutely no bea, ring on this point. It laid down the well accepted proposition of International Law that a change in the form of government of a contracting State does not put an end to its treaties.

The treaty entered into by the Czarist Russia could be given effect to after the Revolution, once the new government was recognised as a person in International Law.

My conclusion, therefore, is that the Extradition Treaty between the Tonk State and the Btitish Government in 1869 is nc,>t capable of being given effect to in the present day in view of the merger of the Tonk State in the United State of Rajasthan.

As no treaty rights exist, section 18 of the Indian Extradition Act has no application and sction 7 of the Act has been complied with, there is no ground upon which we can interfere.

In view of my decision on the first point, the second point does not require determination and I refrain from expressing any opinion upon it.

In the result, the appeal fails and is dismissed.

OAS J.-1 substantially agree with the reasonings given in the judgment just delivered by my learned brother Mukherjea and concur in dismissing this application.

Appeal dismissed.

Agent for the appellant: Rajinder Narain.

Agent for the respndent : P. A. Mehta.

(') (1933) A. C. 289.

Dr. Babu Ram

Saluma

Till Stak.

DM].

BABU RAM SAKSENA

THE STATE r SttRI HARILAL KANIA

PATANJALI SASTRI

MEHR CHAND MAHAJAN

MuKHERJEA

DAs JJ.

Extradition Act

ss. 7

Extradition Act

s. 18

Independence of India Act, 1947

and the States

Tonk

Dominion of lridia

United State of Rajasthan

Uttar Pradesh Civil Service

State of Tonk

Uttar Pradesh

Tonk

s. 7

Under the Independence of India Act, 1947

Under the Independence of India Act, 1947

Extradition Act

ss. 491 and 561

Code of Criminal Procedure

s. 18

Extradition Act

KANIA

PATANJALI SAsTRI

FAzL ALI

Extradition Act

s. 7

Babu Ram

ivfAHAJAN

Per MuKHERJEA J.

(FAZL

AL1, ivfAHAJAN an<l DAs JJ.

s. 18

Extradition Act

s. 7

s. 7

Allahabad High Court

Harish Chandra

Alladi

Alladi Kuppuswami

M. C. Setalvad

V.

Sethi

Kania C.J.

Patanjali Sastri

sections 491 and 561

Code of Criminal Procedure

Government of India

section 383

section 420

section 7

District Magistrate, Nainital

Uttar Pradesh Government

District Magistrate of Tonk

Delhi

Tonk State

Nainital

Alladi Krishnaswami Aiyar

section 7

section 18

section 7

British Government

Tonk State

28th January, 1869

section 7

Indian Independence Act, 1947

15th August, 1947

8th August, 1947

Babu Ram

16th August, 1947

Indian Government

30th March, 1949

ones, having been entered into on the 30th March, 1949. '

section 7

section 491

section 7

section 18

section 7

article 1

Government of the Tonk State

British

article 2

Article 3

Article 4

article 5

McNair

article

5

Patanjali Sastrij

section 7

section 18

article 5

Wheaton

sections 116

section 116

Switzerland

Cockburn

section 120

section 18

Babu Rom

5--5 S. C. India ; N.D.)/58

19So

Dr. Babu Rom

Saksma

Thi State.

Sastri

Sastri J.

Dr. Babu Ram

Saksma

The Stau.

Babu Ram

Saksma

Extradition Act

section 7

FAzL Au J.-I

Mukherjea

MAHAJAN

11th of November, 1949

sections 491 and 561

Babu Ram

Saksena

11th of February, 1948

Ismail Ali Khan

Rajputana

United State of Rajasthan

Rajasthan Government

Rajasthan Governtllent

Naini Tai

23rd May, 1949

section 7

Indian Extradition Act

V. K. B. Pillai

8th of May, 1949

Saksena

Rajasthan

7th of June, 1949

SakSena

Babu Ram

Muklrerjea

31st March, 1948

2} lakhs was paid on 31st March, 1948, and a further sum of Rs.

21st of April

5 lakhs was paid on 21st of April following.

sections 383 and 420

Indian Penal Code

3rd June, 1949

sections 491 and 561

District Magistrate of Naini Tai

U. P. Government

section 197

28th of January, 1869

Extradition Act

Extradition Act

section 18

Extradition Act

section 205(1)

Government of India Act, 1935

Babu Ram

Babu Ram

Soa

Tire State

Mulr.her:ita},
Or.

Babu Ram Sahma

Alladi

section 7

Indian Extradition Act, 1903

section 18

Extradition Act

Extradition Act

Extradition Act

Toni( State

Chapter III of the Indian Extradition Act

section 7

Chapter III of the Indian Extradition Act

Chapter III of the Indian Extradition Act

section 2(b)

First Schedule

Indian Penal Code

sections 383 and 420

Indian Penal Code

section 7

Extradition Act

Schedule I

section 7

Chapter III of the Extradition Act

section 18

BabulRam

Saksma

Mukherjea

Sobtta

Sobtta

T/w SloU.

under which extradition could be .

article 4

Article 5

sections 383 and 420

Indian Penal Code

Schedule I to the Extradition Act

article 5

section 18

section 18

Extradition Act

article

5

Extradition Act

Setalvad

15th of August, 1947

Section 7

section 18

Extradition Act

section 18

Extradition Act

8th of August, 1947

16th of August, 1947

Dominion of India

Dominion Legislature

Extradition Act

Extradition Act

section 18

12th of May, 1949

Mewar

United State

Bab11 Rarrr

Sakseno

Babu Ram

Saksoia

Hanover

Texas

United States of America

Korea

The position is the same when Korea merged into .

Japan

Oppenheim

Vide Hyde

Babu Ram

Saksma

Babu Ra

article 6

article 2

Prussia

U nitcd States of America

Fuller

s. 270

Btitish Government

section 18

Extradition Act

Rajinder Narain

Agent for the appellant: Rajinder Narain.

P. A. Mehta

Babu Ram

Saluma