UNION OF INDIA versus CHAMAN LAL LOONA

Citation: [1957] 1 S.C.R. 1039 · Decided: 30-04-1957 · Supreme Court of India · Bench: SUDHI RANJAN DAS · Disposal: Appeal(s) allowed

Judgment (excerpt)

S.C.R. 
SUPREME COURT REPORTS 
1039 
This objection, however, does not require a detailed 
consideration because the Sessions Judge clearly stated 
in his judgment that apart from the onus, he 
w~s 
satisfied that the prosecution had fully established on 
the evidence that the appellant had failed to send a 
copy of the budget as required by law. 
It was also pointed out that s. 65 does not provide 
for any imprisonment in default . of payment of fine, 
but the 
appellant 
was sentenced to 15 days simple 
imprisonment in default of payment of fine. · Section 33 
of the Code of Criminal Procedure read with ss. 40 and 
67 of the Indian Penal Code appears to us to be a clear 
answer to this contention. 
It was also pointed out that under s. 65 of the Act 
a sentence of fine extending upto five hundred rupees 
could be imposed for a second or for a subsequent 
offence. We need not, however, consider that matter 
in the present appeal as it was conceded on behalf of 
the appellant that the sentence of fine imposed upon 
him in the present case was for a first offence. · 
The appeal is accordingly dismissed. 
Appeal dismissed. 
UNION OF INDIA 
v. 
CHAMAN L:(\.L LOONA 
(S. R. DAS C.J., JAFER IMAM, s. K. DAS, 
GoVINDA MENON and A. K. SARKAR J J.) 
Partition of India-Distribution 
of 
rights 
and liabilities-
Contract by Governor-General in Council, if and when for the purposes 
of Pakistan-Test-Such purpose, if can be modified by powers of 
control vested in /oint Defence Council-Adjudication of. rights and 
liabilities 
under 
such 
contract-Indian 
Independence 
(Rights, 
Property and Liabilities) Order, 1947, Arts. 8(1), 3(2)-/oint Defence 
Council Order, 1947, Art. B(c). 
The correct test to determine whether a contract made before 
the partition 
of India on behalf 
of the 
Governor-General 
in 
Council comes within the purview of cl. (a) 'of Art. 8(1) of the 
Indian 
Independence 
(RightS; Property and 
Liabilities) 
Order, 
1957 
B1JJhiruddi11 khmf 
v.. 
Thi Stat• ef Bilw 
Imam]. 
1957 
April 30. 
1957 
Th• Unicn ef India 
v. 
Chaman Lal L«ina 
1040 
SUPREME COURT REPORTS 
[1957] 
1947, 
so ·as to be deemed 
to 
have 
been made on behalf of the 
Dominion of Pakistan, is-either (I) if the contract was 1nade on 
AubTUSt I?,. 1947, it \V?ul<l have been a contract for the purposes of 
the Dom1n1on of Pakistan ; or (2) if Pakistan had existed on the 
day the contract was made, it would be a contract for. the purposes 
of Pakista1:. 
· 
Union of India '" Chinu Bhai feshingbhai, I.L.R. 1953 Bom. 
ll7, approved. 
1~he purpose of a contract is not to be confused with 
the 
Ultimate disposal of the goods supplied thereunder since such 
disposal can in no way detcnnine or modify it. Nor do the po\vers 
of 
control 
over 
military 
stores 
vested 
in 
the 
Joint l)cfencc 
Council by Art. 8(c) of the Joint Defence Council Order, J947, and 
saved by Art. 3(2) of the Indian Independence (Rights, Property 
and Liabilities) Order, 1947, whereby the goods might be trans-
ferred anywhere in India, make any difference and the rights and 
liabilities accruing from such contracts fall entirely to be adjudged 
by the provisions of the Indian Independence Order and not by 
the Joint Defence Council Order. 
The concluding part of Art. 8( I) makes it quite dear that the 
Article makes no distinction between contracts \vhere 
the con-
sideration is either executed or executory in nature and applies 
equally to both. 
Elahi Bux v. Union of India, A.I.R. 1952 Cal. 
471 
and 
Krishna~Ranjan v. Union of India, A.I.R. 1954 Cal. 623, approved. 
Union of l:idia 
v. 
Loke Nath, 
A.LR. 
1952 
Cal. 
140, 
disapproved. 
Consequently, in a case where the Union of India was sought 
to be made liable on the basis oi a contract entered into on behalf 
of the Governor-General of India in Council for the supply of 
fodder to 
the Manager, Military Farms, 
Lahore 
Cantonment, 
which was in Pakistan on August 15, 1947, and the trial Court 
found for the Union of India but the High Court, taking the view 
that the· fodder constituted military 
stores under the exclusive 
control of the Joint Defence Council on August 15, 1947, liable to 
be 
transferred 
anywhere in 
India, 
reversed 
that finding, ,the 
contract, even assuming that view to be correct, must be held to be 
one exclusively for the purposes of Pakistan as from that date and 
the Union of India could not be made liable thereunder. 
CIVIL APPELLATE 
JURISDICTION : 
24 of 1954. 
Civil Appeal No. 
Appeal

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