LexBENGAL NAGPUR COTTON MILLS versus BOARD OF REVENUE, MADHYA PRADESH & ORS.
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1963 The- State Trading Corpo· ration of India Ltd. & Others. v. The Commer· cial Tax Officer, Visakhapatnam and Others. Shah /. 1963 July, 30. 190 SUPREME COURT REPORTS [1%4] or it be a citizen cannot enforce the fundamental rights against another body which can be regarded also as a State within the meaning of Art. 12 of the Constitution. In my view, therefore, the first question should be answered in the affirmative, and the first part of the se- cond question in the negative. The answer to the second part of the second question will be as follows : even if the State Trading Corporation be regarded as a depart- ment Q[ organ of the Government of India, it will, if it be a citizen competent to enforce fundamental rights un- der Part III of the Constitution against the State as defined in Art. 12 of the Constitution. BENGAL NAGPUR COTTON MILLS 11. BOARD OF REVENUE, MADHYA PRADESH & ORS . . (A. K. SARKAR, M. HrnAYATULLAH AND J. C. SHAH JJ.) Octroi duty-Agreement-Exempted by former State-Liabi· lity to pay Octroi duty-Merger of State-If Municipality can levy after merger. The Ruler of the former State of Nandgaon established a mill called Central Provinces Mills Ltd. A firm purchased the said mill and changed its name to Bengal Nagpur Cotton Mills Ltd. The ruler and the appellant company entered into an agreement on March 1, 1943. By this agreement the appellant company was exempred from liability to pay octroi dury to the State or to the municipality of the area. The ruler bound himself in considera- tion of certain advantages promised to him Py the mill. In conse- quence of the said agreement neither the ruler nor the municipality collected octroi from _the company. On December 31, 1947, the State merged with the State of Madhya Pradesh. On September 20, 1952, the Municipal Committee passed a resolution stating therein that this committee would levy octroi duty on the appel~ !ant company as the Darbar Agreement of 1943 was not binding on this committee. The appellant challenged this resolution in a petition under Art. 226 and Art. 227 of the Constitution before the High Court. The High Court dismissed the application and hence the appeal has been filed in this Court. Held (i) that the agreement of 1943 cannot be regarded as la\v as it is in the shape of a contract between both the parties. \ I - -· 4 S.C.R. SUPREME COURT REPORTS 191 Madhaorao Phalke v. State Madhya Pradesh, [1961] 1 S.C.R. 957, explained. Maharaja Shree Umaid Mills Ltd. v. Union of India, [1963] Supp. 2 S. C. R. 515, relied on. (ii) that the agreements culminating in the agreement of 1943, could not be regarded as law but must be regarded only as agree- ments which might have bound the sovereign as a contracting party and not the Municipal Committee. (iii) that an indication of the will of the ruler meant to bind as a rule of conduct and enacted with some formality either tradi- tional or specially devised for the occasion, resulted in a law, but not an agreement to which there were two parties, one of which was the ruler. (iv) that the Municipal Committee's rules and bye-laws though they applied to the appellant-company, remained in suspense because of the ruler's desire not to collect octroi from the appellant-com· party, but could be invoked when the ruler's \vish ceased to operate. ( v) that the ruler's desire that octroi should not be collected ceased to operate from the moment he ceased to be the ruler and therefore the resolution of Municipal Committee was in order and binding on the appellant. CIVIL APPELLATE JURISDICTION : Civil Appeal No. 416 of 1961. Appeal by special leave from the judgment and order dated April 4, 1959, of the Madhya Pradesh High Court in Misc. Petition No. 546 of 1956. S. T. Desai and G. C. Mathur, for the appellant. H. N. Sanyal, Solicitor-General of India, and A. G. Ratnaparkhi, for respondent No. 2. July 30, 1963. The Judgment of the Court was deli- vered by 1963 Ben gal Nagpur Cotton Mills v. Board of Revenue, Madhya Pradesh & Others HmAYATULLAH J.-This is an appeal by special leave Hidayatullah /. against an order of the High Court of Madhya Pradesh dated April 4, 1959, dismissing a petition filed by the ap- pellant under Art. 226 of the Constitution. By that petition, the appellant asked for a writ of certiorari to quash an order of the Board of Revenue, dated September 15, 1956, by which the right of the
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