LexSCINDIA STEAM NAVIGATION CO. LTD. versus UNION OF INDIA
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412
.SUPREl.lE .COURT REPORTS
{1962]
SCINDIA STEAM NAVIGATION CO. LTD.
v.
UNION OF JNDIA
(P. B. GAJENDRAGADKAR, K. Sulll!A RAo and
llf. H!DA¥A.'l'ULLAil ' JJ.)
Partition of irufia-Diatrib1tion of rig/it and lialrili1i.--
Contr11ct ~ Go~·er"°r General in Council, if JOI' pv.rposPa of t'
Paki&Jan-Te8!-0wnership, if a relerant con•iderat;on-Indian
Independenu (Right•, l'roJl'rt.v and I.iabilitiea) Or~er 1947,
.Art.. 8(1), 6.
The appellant, a navigation company, claimed a sum of
Rs. 44,449/· as freight from the Union of India for carrying
IOgs of teak-wood from the fore.ts of Kanara to Karachi for
the use of !he North Western Railway on the ba>is of a contract
"'ith the Conservator of Forests, North Kanara, representing
the North Western Railway. Soon after tjle steamship arri""d
at Karachi, India was partitioned on Au1:ust 15, JM7, and in'
canstquen.ce the North Western Railway was di\'idcd into
two sections, the Pakistan .section ret•incd the original name
and t11e Indian section \\'a~ ca11ed the Eas~ern Punjab Railway.
The claim against the respondent, the :Union af India, was
based on Art. 8( 1) of the Indian I ndepecdcnee (Rights,
Property and Liabi!itie.) Order, 1947, and in ·the alternative
on a Press Communique issued by the respondent on ~fay
22, 1948. The re.<pondent denied the claim. The trial court
held that since the suit contract could not be said to be one -<.
exclusively for the purposes of Pakistan under Art. 8(l)(a)
of the order, the respondent was liable under Art. 8( I )(b) of
the order ; if, hov.•e-\·er, found that the Press C'Jmmunique
afforded no ba<is for the claim. The Court of Appral while
agreci~g in rejecting the claim on the basis of the Press
Communique, held that the contract frll within Art. 8(l)(a)
of the order and dismissed the suit.
J/eld (per G•jendragadkar and
Hidayatuallah, JJ.),
that the viev.· taken hy the Appeal Court that the contract fell
within Art. O(l)(a) ofthe order was co,,.ct and must he
affirmed.
•
Judged by either of the two tests approved by this c'.'~rt
in Union of India "· Chlman Lal J.oona as to the apphcab1hty
of Art. 8(1)(a) and (b) of the order namd)', (1) whether the
contract if it had been made on August 15, 1947, would have
been a ;,ntraet for the Dominion of Pakistan or (2) whether if the
Dominion of Pakistan had been in existence when the contract-
"'*
\vas entered into, it would have been a contract for the pur-
poses of Pakistan, and looking at the substance of the contract,
-
'11 S.C.R.
SUPHElME COURTlREPORTS
and not its f01m, there could be no doubt that the contract
if> was exclusively for the purposes of Pakistan.
The alternative tests approved by this court are wholly
consistent with the consideration of ownership under Art. 6
of the order and such consideration is both relevant and
material in the application of tests.
Union of India v. Chaman Lal Laona, (1957) S.C.R.
1039, followed.
-..
Union of India v. Chinubhai Jeshingbhai, (1952) 54 B.L.R.
561 and Krishna Rajan Basu Ray v. /, nion of India, A.LR.
1954 Cal. 623, approved.
Union of India v. Lake Nath Saha; A.LR. -1952 Cal.
l 40A., disapproved.
Held, further, that the courts below were right in the
view that they took of the
Communique issued by the
respondent, since it could not be said to embody a specific
~ agreement between the two Dominions so as. to bring into
operation Art. 3( 1) of the Order.
The pleas of e8foppel ar.d noratio, involving as they do
questions of fact, ar.d can only be raised where rdevant facts
are pleaded.
Per Subba Rao, J. The word 'purposes' occurring in
Art. 8( I) of the order must be given its natural meaning
namely, the purpose for which the contract was made and
-" that purpose must be ascertoined from the terms of the con·
tract itself and not from any other extraneous consideratio~,
statutory or otherwise.
The Order made
an essential
distinction between the purpose of the contract under Art.
8( I) and any subsequent vesting of the goods ;n any of the
Dominions under Art. 6 of the Order and the rights and
liabilities of the respective Dominions und.er th.e contract
must be separately dealt with.
J
Since the purpose of the contract in the instant case
was to convey the goods
to
the North Western Rail-
way which was now in both the Dominions, the purposes of
the contract were not exclusively for the Dominion o~ l'akistan.
Consequently, the contract feil within Art. 8(l}(b) of theExcerpt shown. Read the full judgment & AI analysis in Lexace.