LexSTATE OF GUJARAT versus DR. R. B. CHANDRACHUD
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A STATE OF GUJARAT • _.., v. DR.R.B.CHANDRACHUD • November 19, 1968 B [S. M. S!KRI, R. S. BACHAWAT AND K. S. HEGDE, JJ.] .. Baroda State Merger-Huzur order passed by Mahara;a .relating to .,. retirement terms of members of Executive Council prior to transferring full executive authority to new Council-New Council purporting to re- voke earlier order passed in exercise of Maharaja's prerogative powers- If valid-Whether provisions of Baroda Merger Agreement and subse- • quent continuance of all laws previously in force amounted to recognition c of clailns relating to retirement benefits. On August 15, 1947 upon the passing of the Indian Independence Act, 1947 when paramountcy of the British crown lapsed, the erstwhile State of Baroda acceded to India. By a proclamation on August 25, 1948 the Maharaja of Baroda announced inter alia that the entire 'execu- tive authority of the State would immediately vest in his Executive Coun- .. cil. On March 21, 1949 he executed the Baroda Merger Agreement f l> whereby the full powers in relation to the governance of the State were transferred to the Indian Government from May 1, 1949. These powers were then delegated to the Provincial Government of,Bombay_ The respondent was an official member of the Maharaja's Executive Council of the State of Baroda. in January, 1948 when it was considered likely that in view of the imminent constitutional changes m the State E the members of the old Executive Council might be prematurely retired, the Maharaja enhanced the respondents' salary, and by 'a Huzur order dated February 8, 1948, he fixed the pension and other retirement 1!ene- fits of the resoondent and another member of the Executive Council. It ·-r was provided that in the event of their pre-mature retirement, they would get as compensation an amount equivalent to what they would have re- ceived if they continued in service upto the date of retirement and a full pension of Rs. 500.00 per month from the date of the pre-mature F retirement. On May 18, 1948, the Maharaja directed compulsory retire- ment of the respondent with effect from June 1, 1948 and he therefore drew Rs. 95,196.00 on account of his compensation. At the instance of a new Executive Council the Mah·araja passed another Huzur order on \ July 22, 1948 modifying his previous orders and directing that the respon- dent and the other officials would draw pension only when they reached the age of retirement and would in addition draw the salary to which they ' G were eligible under the Account Rules. On April 22, 1949, the new Executive Council purported to review and set aside the Huzur orders with respect to p·ayment of compensation to the retired officials and directed, inter alia, that a sum of Rs. 77,416.00 o~t of the compensation received by the respondent be recovered from him under •ectton 148 of the Baroda Land Revenue code. He was compelled to refu_lld Rs. 65,000.00 and a balance of Rs. 12,416.00 was H de!lland~d from him by the Collector of Baroda. The respondent filed a -. ,,,, smt agamst the State of Bombay asking inter alia for a declaration that the Huzur order dated Febn;ary 8, 1948 as modified by the Huzur Order dated July 22, 1948 was bmdtng on the defendants and that the order of the Executive Council of April 22, 1949 was invalid. The Trial 756 SUPREME COURT REPORTS (1969] 2 S.C.R. Court decreed the suit and the High Court, in. appeal, substantially upheld A the respondent's case but reduced the amount of the decree. ,-. ' Apart from the validity of the Executive Council's order of April 22, 1949, the other questions arising for· detel"!llination in the appeal to this Court were whether the Government of Baroda was liable to pay the sum of Rs. 65,000 .to the respondent; and if so, whether the liability devolved upon the appellant State of Gujarat. HELO : Llismissing the. appeal : B (i) The Huzur order of February 8, 1948 was passed by the Maharaja · f- in the exercise of his prerogative and inherent powers. The Executive Council had no authority to revoke that order and until the Maharaja passed the entire executiv!' authority to the Council on August 25, 1948, he was still the sovereign ruler. The order of the Executive Council • dated April 22, 1949 was therefore ultra vires and not binding upon the C respondent. [7 61 GI (ii) The direction in the order of April 22, 1949 for the recovery of monies under s. 148 of the
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