# [1951] 1 S.C.R. 1

- **Citation:** [1951] 1 S.C.R. 1
- **Court:** Supreme Court of India
- **Decided:** 1951
- **Case number:** Civil Revision Case No. 712 of 1948
- **Bench:** Shri Harilal Kania C.J, Saiyid Fazl Ali, Patanjali Sastri, MuKHERJEA, CHANDRASH'llKHARA AIYAR
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/1951-1-s-c-r-1-174
- **Pages:** 51

## Headnote

Indian Independence Act, 1947, s. 9-Indian Independence
'\"(Legal Proceedings) Order, 1947, Art. 4-lndian /rzdependence
(Rights, Property and Liabilities) Order, 1947, Arts. JO (2), 12
(2)-Notice on Ruler of State for return of income under Bengal
Agricultural Income-tax Act, 1944-Suit for declaration of invalidity of Act and injunction restraining Income-tax Officer from proceeding
with assessment-prtition
of India
pending suit-Pro-·
perty falling within Province of East Bengal-/urisdiction of court
in West Bengal to proceed with suit against Province of East
Bengal-Interpretation
of Orders-"Liability", "actionable wrong
'1 other than breach of contract", meanings of-Torts and actionabie
wrongs-Bengal Agricultural Income-tax Act, 1944,
s. 65-Suit
in civil court for declaration and injunction 1·estraining assessment
proceedings-Maintainability.
The Income-tax
Officer, Dacca,
acting under the Bengal
Agricutural
Income-tax
Act,
1944,
sent by
registered
post a
notice to the Manager of an Estate belonging to the T ripura State
but situated in Bengal, calling upon the latter to furnish a return
'!.'. of the agricultural income derived from the Estate during the
previous year.
The notice
was received by the Manager ;n the
Tripura State. The State, by its then Ruler, instituted a suit in
June, 1946, against the Province of Bengal and the Income-tax
Officer, in the court of the Subordinate Judge of Dacca for
~
declaration that the said Act in so far it purporated to impose a
liability to pay agricultural income-tax on the plaintiff was ultra
vires and void, and for a perpetual injunction to restrain the
defendants from taking any steps to assess the plaintiff.
The
.::f
suit was subsequently transferred to the Court of the Subordinate
Judge of Alipore.
The partion of India under the Indian
Independence Act took place on the 15th
August 1947, and
the
1950
December
1950
The State of
Trip111tJ
••
ne Provin,;e of
EtvtBenzal
2
SUPREME COURT REPORTS
[1951]
Province of East Bengal in which the Estate was situated, was
substituted as a defendant in the place of the Province of Bengal ·"'
on an application made by it, and in its
written statement it
contended that the court of Alipore which was situated in W•st
Bengal had no jurisdiction to proceed with the suit.
The High
Court of Calcutta, reversing the order of the Subordinate Judge of
Alipore held that the provisions of the Indian Independence (Legal
Proceedings) Order, 1947, and the Indian Independence (Rights,
Property and Liabilities) Order, 1947, did not apply to the case
and, as the matter was accordingly governed by the rules
of
international law, the court of Alipore had no jurisdiction to
y
proceed with the suit : .
Held per KANIA C. J.,
PATANJALI SAsni,
MuKHEIJEA and
CHANDRASEKHARA
AIYAR )J.
(FAZL
Au
J,
concum'ng)-Thc
suit was not one with respect to any property transferred to East
Bengal by the Indian Independence (Rights, Property and
Liabilities) Order, 1947, nor was it a suit irr respect of any "rip.ts"
transferred by the said Order, inasmuch as the Province of East
Bengal obtained the right to levy income-iax not by means of any
transfer under the said Order, but by virtue of sovereign rights .,.
which were preserved by s. 18 (3) of the Indian Independence Act,
1947, and Art. 12 (2) of the said Order had no application to the
case.
Held per
KANIA
C. J.,
PATANJALI
SASTRr,
MUKHEJ.Jl!.\ AND
CttANDRASEKHARA
AIYAll JJ.
(FAzL ALI J. tlissenting-(i) Since
the object of the Indfan Independence (Rights, Property
and
Liabilities) Order, 1947, was to provide for the initial distribution
of rights, properties and liabilities as between the two Dominions
and their Provinces, a wide and liberal constrUction, as far as the '>-
language used would admit, should be placed upon the Order, so
as to leave no gap or lacuna in relation to the matters sought to be
provided for.
The words "liability in respect
of
an
actionable
wrong" should not therefore be understood in the restricted sense
of liab

## Text

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-
'
,
'i
Supreme Court Reports
VOL. II -
1951
THE STATE OF TRIPURA
v •
THE PROVINCE OF EAST BENGAL
UNION OF INDIA-INTERVENER
[SHRI HARILAL KANIA C.J., SAIYID FAZL ALI,
PATANJALI SASTRI, MuKHERJEA AND
CHANDRASH'llKHARA AIYAR JJ.)
Indian Independence Act, 1947, s. 9-Indian Independence
'\"(Legal Proceedings) Order, 1947, Art. 4-lndian /rzdependence
(Rights, Property and Liabilities) Order, 1947, Arts. JO (2), 12
(2)-Notice on Ruler of State for return of income under Bengal
Agricultural Income-tax Act, 1944-Suit for declaration of invalidity of Act and injunction restraining Income-tax Officer from proceeding
with assessment-prtition
of India
pending suit-Pro-·
perty falling within Province of East Bengal-/urisdiction of court
in West Bengal to proceed with suit against Province of East
Bengal-Interpretation
of Orders-"Liability", "actionable wrong
'1 other than breach of contract", meanings of-Torts and actionabie
wrongs-Bengal Agricultural Income-tax Act, 1944,
s. 65-Suit
in civil court for declaration and injunction 1·estraining assessment
proceedings-Maintainability.
The Income-tax
Officer, Dacca,
acting under the Bengal
Agricutural
Income-tax
Act,
1944,
sent by
registered
post a
notice to the Manager of an Estate belonging to the T ripura State
but situated in Bengal, calling upon the latter to furnish a return
'!.'. of the agricultural income derived from the Estate during the
previous year.
The notice
was received by the Manager ;n the
Tripura State. The State, by its then Ruler, instituted a suit in
June, 1946, against the Province of Bengal and the Income-tax
Officer, in the court of the Subordinate Judge of Dacca for
~
declaration that the said Act in so far it purporated to impose a
liability to pay agricultural income-tax on the plaintiff was ultra
vires and void, and for a perpetual injunction to restrain the
defendants from taking any steps to assess the plaintiff.
The
.::f
suit was subsequently transferred to the Court of the Subordinate
Judge of Alipore.
The partion of India under the Indian
Independence Act took place on the 15th
August 1947, and
the
1950
December
1950
The State of
Trip111tJ
••
ne Provin,;e of
EtvtBenzal
2
SUPREME COURT REPORTS
[1951]
Province of East Bengal in which the Estate was situated, was
substituted as a defendant in the place of the Province of Bengal ·"'
on an application made by it, and in its
written statement it
contended that the court of Alipore which was situated in W•st
Bengal had no jurisdiction to proceed with the suit.
The High
Court of Calcutta, reversing the order of the Subordinate Judge of
Alipore held that the provisions of the Indian Independence (Legal
Proceedings) Order, 1947, and the Indian Independence (Rights,
Property and Liabilities) Order, 1947, did not apply to the case
and, as the matter was accordingly governed by the rules
of
international law, the court of Alipore had no jurisdiction to
y
proceed with the suit : .
Held per KANIA C. J.,
PATANJALI SAsni,
MuKHEIJEA and
CHANDRASEKHARA
AIYAR )J.
(FAZL
Au
J,
concum'ng)-Thc
suit was not one with respect to any property transferred to East
Bengal by the Indian Independence (Rights, Property and
Liabilities) Order, 1947, nor was it a suit irr respect of any "rip.ts"
transferred by the said Order, inasmuch as the Province of East
Bengal obtained the right to levy income-iax not by means of any
transfer under the said Order, but by virtue of sovereign rights .,.
which were preserved by s. 18 (3) of the Indian Independence Act,
1947, and Art. 12 (2) of the said Order had no application to the
case.
Held per
KANIA
C. J.,
PATANJALI
SASTRr,
MUKHEJ.Jl!.\ AND
CttANDRASEKHARA
AIYAll JJ.
(FAzL ALI J. tlissenting-(i) Since
the object of the Indfan Independence (Rights, Property
and
Liabilities) Order, 1947, was to provide for the initial distribution
of rights, properties and liabilities as between the two Dominions
and their Provinces, a wide and liberal constrUction, as far as the '>-
language used would admit, should be placed upon the Order, so
as to leave no gap or lacuna in relation to the matters sought to be
provided for.
The words "liability in respect
of
an
actionable
wrong" should not therefore be understood in the restricted sense
of liability for damages for completed acts, but so as to cover the
liability to be restrained by injunction from completing what on
the allegations in the plaint arc illegal or unauthorised acts which
have been commenced. As the Province of Bengal was, on the \.
allegations in the plaint, liable to be restrained. from proceeding
with an illegal assessment, that liability was, accordingly, a liaMlity in respect of "an actionable wrong other than breach of
contract" within the meaning of Art. 10 (2) (a) of the abovcsaid
Order; and, as the cause of action arose wholly in Dacca
within
the Province of East Bengal, that liability passed to the
Province
of East Bengal under Art. 10 (2) (a), the latter must be deemed
to be substituted as a party to the suit and the suit must continue
in· the court of the Subordinate Judge of Alipore,
under Art. 'f4 of the Indian· Independence (Legal Proceedings) Order, 1947.
(ii) Assuming that the cause of action did not wholly arise
•
S.C . .R.
SUPREME COURT REPORTS
3
in Dacca, Art. IO (2) (c) would apply and the Province of East
~ Bengal would still be liable, though jointly with the Province of
West Bengal.
(ii;) As the suit was not one "to set aside or modify any
assessment made under the Act", s. 65 of the Bengal Agricultural
Income-tax Act, 1944, had no application and the suit was
therefore one in respect of an "actionable" wrong within the meaning
of Art. 10 (2) (a).
'(
Per
FAZL
ALI J.-The words
"liability
in
respect
of an
actionable
wrong other than breach of contract" in Art. 10 of the
Indian Independence
(Rights, Property and
Liabilities)
Order
1947, refer to liability capable of being ascertained in terms of
money such as liability for damages for tort and not liability in
any abstract or academic sense. Even if a meaning, as wide as they
can ~r in a legal context, is given to the words
"actionable
wrong" and "liability" two elements arc necessary to constitute
an actionable wrong, namely, (i) an act or omission amounting to
an infringement of a legal right of a person or breach of duty
'>\. towards him, and (ii) damage or harm resulting therefrom.
Tiile mere issuing of a notice under s. 4 of the
Bengal
Agricultural Income-tax Act, 1944, by the Income-tax Officer is not
an actionable wrong because no right known to law is infringed
thereby and no action for damages can be maintained in respect of
such an act, even assuming that the Income-tax Officer had exceeded his powers or acted under an invalid provision of law. No
"liability for an actionable wrong" was thus involyed in the suit
and no liability in respect of such a wrong could therefore be said
"
to have been transferred to the Province of East Bengal
i.1rithin
the meaning of Art. 10 (2) of the said Order so as to entitle the
plainti11 to continue the suit against the Province of East Bengal
under Art. 10 (2).
For the purpose of understanding the full
scope of s. 65
of tbe Bengal Agricultural Income-tax Act, 1944, it is necessary
also to read the latter part which provides that no suit or other
proettding shall lie against any officer of the Crown for anything
in good faith done or intended to be done under the Act." The
latter part of the section clearly excludes the jurisdiction of the
courts to prevent the Income-tax Officer from proceeding with an
assessment which has been started and the section must on a fair
construction be held to bar all suits in connection with
such
assessment whether against the State or an Income-tax Officer of
the State. 1£, therefore, no suit or action lies, there can be no
liability for an actionable wrong.
[The nature actionable wrongs and torts discussed.]
Judgment of the· Calcutta High Court reversed.
1950
The State of
Ttipwa
v.
The Province o[
East Bengal
1950
The State of
Tri'pura
'"
The Province of
East Bengal
4
SUPREME COURT REPORTS
[1951]
APPELLATE JURISDICTION: Case No. IV of 1949.
Appeal from a judgment of the High Court of
Judicature at Calcutta (Harries C. J.
and
Chakravarthi J. ), dated 30th November, 1948, in Civil Revision
Case No. 712 of 1948.
N. C. Sen Gupta (Ajit Kumar Dutta, with him)
for the Appellant.
Faiyaz
Ali,
Advocate-General
of 'East
(B. Sen and Noor-ud-din, with him) for the
dent.
Bengal
ResponM. C. Seta/vat!, Attorney-General for India (S. M.
Sikri and V. N. Sethi, with him) for the Intervener.
1950.
Dec. 4. The judgment of Kania C.
J.,
Patanjali
Sastri
J.
and
Chandrasekhara
Aiyar
J.
was delivered by Patanjali Sastri
J.
Faz! Ali and
Mukherjea JJ. delivered separate judgments.
Patanjali SastriJ.
PATANJALI
St.sTRI J.-This is an appeal from a
judgment of the High Court of Judicature in West
Bengal reversing a finding of the Second Subordinate
Judge of 24 Parganas at Alipore that he had
jurisdiction to proceed with a suit after substituting the
Province of East Bengal (in Pakistao) in the place of
,_
the old Province of Bengal against which the suit had
originally been brought.
The facts leading to the institution of the suit are
not in dispute.
The Bengal Agricultural Incqme-tax
Act was passed by the Provincial Legislature ot Bengal
in 1944. It applied to the whole of Bengal and purJ.
ported to bring under charge the agricultural income
of inter alia, "every Ruler of an Indian State." Acting under the provisions of that Act, which came into
force on lst April, 1944, the Income-tax Officer Dacca
Range, sent by registered post, a notice to the Manager
of the Zemindari Estate called Chakla Roshanabad
belonging to the Tripura State but situated in Bengal
~
outside the territories of that State, calling upon him
to furnish a return of the total income derived in the
y
S.C.R.
SUPREME COURT REPORTS
5
previous year from lands in the Estate used for agricultural purposes. The notice was received
by
the
Manager at
Agartalla in Tripura State.
Thereupon,
the State, by its then Ruler, Maharaja Sir Bir Bikram
Bahadur, instituted the suit in question on 12th June,
1945, against the Province of Bengal and the Agricultural Income-tax Officer, Dacca Range, in the Court of
the First. Subordinate Judge,
Datca, contesting
the
validity of the notice and the proposed assessment on
the grounds that the 'Provincial Legislature of Bengal
had no authority to impose tax on any income of an
Indian State or its Ruler" and that, in any case, "the
Income-tax Officer, Dacca Range, had
no authority or
jurisdiction to issue the said notice to the Manager of
the Estate outside British India."
The cause of action
of the suit was alleged to have arisen in the town of
Dacca within the jurisdiction
of the Court
on
28th
February,
1945,
when the notice was issued. The
reliefs sought were a declaration that the Bengal Agricultural Income-tax Act, 1944, in so far as it purported
to impose a liability to pay agricultural income-tax on
the
plaintiff
as a Ruler of an Indian State was
ultra vires
and
void
and
that,
in any
case, the
notice served by the Agricultural Income-tax Officer,
Dacca Range, was void and
no assessment
could be
made on the basis of such notice, and a perpetual
injunction to restrain the defendants from taking- any
steps to assess the plaintiff to agricultural income-tax.
Before the defendants filed their written statements
the suit was transferred by the High Court to
the
Court of the District Judge,
24 Parganas,
and
was
again transferred
from that Court to the Court of the
Subordinate Judge at Alipore.
The ruler who brought
the suit having died, the plaint was amended by the·
substitution in his pface of his son and heir in June
1947, and the suit was pending ill that Court whe1i the
partition of India took effect on the 15th August, 1947.
~
On 9th December,
1947,
the Province of
East
BengaJ
filed a petition stating that the Province of
Bengal, the
original defendant }'lo. -1 in the suit, had
ceased to exist with effect from 15th August, 1947, and
t9SO
The State of
Tripura
v.
The Province of
Ea3tBengal
Patanjali Sastri J.
1950
The State of
Tripuro
v.
The hovince of
&Mt llefl8a/
Patanjati Sas1ri J.
6
SYPREME COURT REPORTS
[1951]
in lieu thereof
two
new
Provinces,
namely,
the
Province of East Bengal and the Province of West
Bengal had
come into existence and that, inasmuch as
the Province of West Bengal was taking no interest in
the suit, it was necessary in the interest of East
Bengal that the suit
should
be contested and that a
written statement should be put in on its behalf
for
such contest.
It was
accordingly
prayed
that
the
delay
should be condoned and
the written statement
which was filed with that petition should be accepted.
,
In the written statement it was pleaded that inasmucl}
as the Province of East Bengal was a Province of the
Dominion of Pakistan and that defendant No. 2 was a
Revenue Officer of that Province, the Court had
no
jurisdiction to hear the
suit or make an order
of
injunction against the defendants. It was stated that "'
the Province of East Bengal appeared only to contest
the
jurisdiction of the Court.
By another written
statement filed on the same day defendant No. 2 raised
also other pleas in defence but his name was struck off
the record at the plaintiff's instance as not being a
necessary party to the suit. On the 13th December,
1947, the Province of East Bengal was substituted as
the defendant in the place of the Province of
Bengal
,.
which had ceased to exist, and the written statement
filed on behalf of the former was accepted.
Thereupon the Subordinate Judge framed
a preliminary issue. on the question of jurisdiction and, as
stated already, found it for the plaintiff relying on s. 9
of the Indian Independence Act and article 4 of the
Indian Independence (Legal Proceedings)
Order, 1947
It may be mentioned in passing that the assessment
of the plaintiff was proceeded with by the Agriculturaf
Income-tax Officer, Comilla Range (East Bengal), who,
by his order dated the 22nd December, 1947, imposed
on the plaintiff a tax of Rs. 1,79,848-12..0 for
1944..45
and Rs.
1,34,326.7-0 for
194546, but the recovery
of the
amounts
has
been deferred under orders
of the Court pending the decision on the preliminary
issue.
As pointed out by the Federal Coun in Midnaporc
lr
-
S.C.R.
SUPREME COURT REPORTS
7
Zemindary Co. ,Ltd. v.
The Province of Bengal and
Others(1), the orders promulgated on the 14th August,
1947, by the Governor-General of India before the
partition in exercise of the powers confened under
s. 9 of the Indian Independence Act, 1947, and containing provisions
specially designed
to remove the
difficulties arising in connection with the transition to
the new situation created by the partition are binding
on both the Dominion of India and the Dominion of
Pakistan. Among such
Orders those relevant to the
present
controversy
are
the Indian
Independence
(Legal Proceedings)
Order,
1947,
and
the Indian
Independence
(Rights,
Property
and
Liabilities) .
Order, 1947.
By
article
4
of
the former Order.
(I) All proceedings
peti'ding
immediately
before
the appointed
day
in
any
of the sp.ecial tribunals
specified in col. 1 of the Schedule to this Order shall
be continued in that tribunal as if the said Act had
not been passed, and that tribunal shall continue
to
have for the purposes
of the said proceedings all the
jurisdiction and
powers which
it had
immediately
before the appointed day;
•
•
•
•
•
(3) Effect shall be given within the territories of
either of the two Dominions to any order or sentence
of any such Special Tribunal as aforesaid and of any
High Court in appeal or revision therefrom
as if the
order or sentence had been passed by a court of competent jurisdiction in that Dominion;
and by article 12(2) of the latter Order
•
•
•
•
•
Where. any
Province from which property, rights
or liabilities are transferred by this Order is, immediately before the transfer a party to legal proceedings
with respect to that property or those rights or liabilities the Province
which succeeds to the property,
rights or liabilities in accordance with
the provisions
of this Order shall be deemed to be substituted for the
other Province as a party to those proceedings and the
proceedings may continue accordingly.
!1) [1949) F.C.R.309.
19SO
Tlie State of
Triplll'a
v.
The Province of
East Bencal
Patanjali SaJtri J.
1950
The State of
Tlipura
v.
The Province of
East Bengal
Patanjali Sastli J.
8
SUPREME COURT REPORTS
[1951]
On the effect of these provisions the learned Judges
of the High Court observed:
"If this provision
[i.e.,
article 12(2)] applies to the present case, there can be
no
doubt that the Province of East Bengal was
substituted in the suit for the Province of Bengal by
operation
of law, a.nd
by
reason of the
Legal
Proceedings Order the suit shall continue in the Court
of the Second Subordinate Judge, 24 Parganas, as a
suit against the
suhstit1.1ted defendant."
With
that
statement of
the position we
entirely
agreed.
The
learned Judges, however, proceeded to exmine, laying
stress on the words "by this Order" in article 12 (2),
whether any property, rights or
liabilities
could be
said to have been transferred by the Indian Independence
(Rights, Property and Liabilities) Order,
1947,
from the Province of Bengal to the Province
of East
Bengal, and they took the
view that neither any
property, nor rights, nor liabilities were so transferred
under that Order and that, therefore, the continuation
of the proceedings against the Province of East ·Bengal, which was now part of an Independent Sovereign
State, was governed by the principles of international
law and comity of nations, and that, according to those·
principles, East Bengal, being a Province of a sovereign
state, co1.1ld not be sued against its will in the municipal couns of India, with the result that the suit pending in the Court at Alipore must abate.
They· also
negatived
a further
contention
raised before
them,
apparently for the first
time,
to
the effect that by
reason of he petition filed on behalf of the Province
ot East Bengal for acceptance of its written statement
condoning the
delay involved and also by reason ot
sundry other proceedings for 1nterim relief sou&ht by
the
plaintiff which
were actively
resisted by
the
Province of East Bengal, that Provinae must be taken
to have submitted to the jurisdiction of the Court.
On behalf of the appellant, Mr. Sen Gupta challenged
the correctness of the decision on both points.
Betore dealing with these contentions, it
will
be
convenient to dispose of two preliminary points raised
by Mr. Faiyaz Ali, Advocate-General of East Bengal.
'
1.
S.C.R.
SUPREME COlJRT REPORTS.
9
In the first place, he submitted that the Stafe of
Tripura having ::.ince been merged in the ·Dominion of
India and a Chief Commissioner having been appointed
to administer its territories, the appeal could no longer
be prosecuted by the present Maharaja through his
mother as his next friend.
It was however, represented to us on his behalf that under the agreement of
merger the Estate of Chakla Roshanabad was left to
the Maharaja as his personal property and it no longer
formed part of the territories
of
the Tripura State.
The Attorney-General,
appearing on behalf of
the
Dominion of India,
the intervener, confirmed
that
position.
There is thus no substance in the objection
as any formal defect in the proceeding could be set
right by suitably amending the cause title.
Mr. Faiyaz Ali next drew our attention to the
Pakistan
(Indian
Independence Legal
Proceedings)
Order, 1948, promulgated
by
the Governor-General of
Pakistan on 13th November,
1948, with retrospective
eff!!ct from the 15th August,
1947, and pointed out that
in · view
of its provisions
any
decree that might
eventually be passed by the Court at Alipore would
receive no effect in Pakistan and that,
therefore, it
was unnecessary for this Court
to decide
the question
of the jurisdiction of the Alipore Court to proceed
with the suit.
We are unable to take that view. The
effect of the Order referred to above on any decree
that
may eventually be passed in the pending suit may have
to be taken note of by the Court trying that suit after
hearing
arguments on the validity of that Order
which is challenged
but we are at present concerned
only with
the question of
the jurisdiction of that
Court to try the suit and we
cannot
at this stage
refuse to give
our ruling on that question merely
because any decree that might be
passed in
favour
of the plaintiff might prove ineffectual.
Turning now to the main question, it is clear that
article 12 (2) of the Rights,
Property
and Liabilities
Order applies
only to property rights
or
liabilities
which
were
transferred
by the
Order from
a
Province
which. was a party to legal proceedings
1950
The State of
Tripura
·v.
The Province of
EtM Bengal
Paranjali Sastri J. ·
1930
The State of
Tripu111
••
The Province of
EQJt Bengal
Patanjali Sastrl J.
10
SUPREME
COURT REPORTS
[1951]
:I>
"with
respect to"
that
property or · those
rights
or liabilities.
As they suit in question cannot be
said to have been instituted with respect to the property
transferred, namely,
Chakla
Roshanabad,
the appellant cannot rely upon the transfer of that property
from the Province of Bengal to the Province of
East
Bengal as part of the territories of Pakistan under the
scheme of partition.
Nor was there any transfer of
"rights" such as was contemplated under that article,
for the only right with respect to whicli the Province of
Bengal could be said to have been a party to the
pending proceeding on the facts of this case was the
right to tax the agricultural income
of the
plaintiff
under the provisions of the Bengal Agricultural Income-tax Act, l~, and that right was not derived by
the Province s>f East
Bengal by
transfer under the
Rights,
Property
and
Liabilities Order. As rightly
pointed out by
the High Court, the right of taxation
under the Bengal Act of 1944 passed to the Province of
East Bengal as part of the Sovereign Dominion of
Pakistan by virtue
of the provisions of s. 18 (3) of the
Indian Independence Act,
1947, which provided that
"the law of British India and
of the
several parts
thereof immediately
before the
appointed day shall,
so far as
applicable and with the necessary adaptations, continue as the law of each of the new Dominions
and the several pai;rs thereof until other provision
is
made by the laws of the legislature of the Dominion
in question or by any other legislature or other authority having power in that behalf."
The question next arises whether there was a transfer of any "liability"
by the Order as contemplated in
article 12(2). Mr. Sen Gupta relied in this connection
on article 10 (2) (a) which provides that "where immediately before the appointed day the Province of
Bengal is subject to any such liability (i.e., "any liability in respect of an actionable wrong other than breach
-0£ contract") referred to in sub-section (1) that liability
shall, where the cause of action arose
wholly
within
the territories which as from that day, are the territories of the Province of East Bengal be a liability
of
that Province." It
was
contended
that the Province
•
S.c.R.
SUPREME COURT REPORTS
11
of Bengal was, according to the plaintiff's case, liable
to be restrained from proceeding with the illegal and
unauthorised assessment on the basis of the notice
issued under the Bengal Act of 1944, and that liability,
in respect of which the cause of action arose wholly in
Dacca (where the assessment
proceeding
had
been
initiated)
within the territories of the Province of East
Bengal, became a liability
of that Province. The High
Court rejected this contention on the ground "that article 10(2) is concerned
with the liability for an actionable wrong other than breach of contract and it is
impossible to say that by serving a notice on the plaintiff
under the Bengal Agricultural Income-tax Act through
one of its officers the Province of Bengal had committed an actionable wrong. Assuming that it exceeded
its power or acted under an invalid provision of law,
the plaintiff may have a declaration to that effect but
the Act complained of cannot be said to have been a
tortious act.
But even assuming that it was, it is to
be
remembered
that the issue of the notice was an
exercise of powers conferred by the Act in relation to
the sovereign rights of the Crown and it is elementary
that the Crown or the State is not answerable for even
negligent or tortious acts
of its officers
done in the
course of their official duties imposed
by a statute,
except where the particular act was specifially directed and the
Crown profited by performance ...... No
liability for an actionable wrong is thus involved
in
the suit and
Dr. Sen
Gupta cannot establish a right
to proceed against the Province of East Bengal
on
the basis
that the liability was transferred to
that
Province under article 10(2) of the Order."
We arc unable to share this view.
The learned
Judges have placed much
too narrow
a construction
on the phrase "liability in respect
of an
actionable
wrong".
They have assumed that the phrase cannotes
only a liability for damages for a completed tortious
act and that the initiation of what according to the
plaintiff was an
unauthorised
and illegal assessment
proceeding by purporting to serve a notice requiring
the plaintiff to submit a return of his total agricultural income under s. 24(2) of the Bengal Agricultural
19SO
The State of
f"ripura
"·
7"e Province of
Btut Be111al
Patonjali-Sastri J.
1950
Th State of
Tripura
..
The Province of
East &nga/
Patanja/i Sa!lti J.
12
SUPREME COURT REPORTS
[1951]
Income-tax Act, 1944, through an appropriate officer
functioning under that Act, the Province of Bengal
had not committed an "actionable wrong." This in
our opinion, is not a correct view of the matter. Under
s. 9( l) (b) of the Indian Independence Act, 1947, the
Governor-General of
British
India was
directed
to
make provision by order "for dividing between the new
Dominions and between the new Provinces to be constituted under this
Act, the powers,
rights, property,
duties and liabilities of the Governor-General in Council or as the case may be of the relevant Provinces which
under this Act are to cease to exist", and the Indian
Independence (Rights, Property and Liabilities) Order
is the only Order by which such provision was made.
The intention being thus to
provide for the initial
1istribution of
rights,
property
and
liabilities
as
between the two Dominions and their Provinces, a wide
and liberal construction, as far as the language used
would admit, should be placed upon the terms of the
Order, so as to leave no gap or lacuna in relation to
the matters sought to be provided for.
There is no
reason,
accordingly, why
the words
"liability in respect of an actionable wrong" should be understood in
the restricted sense of liability for damages for completed tortious acts. We consider that the words are apt
to cover the liability to be restrained by injunction. from
completing what on the plaintiff's case was an illegal
or unauthorised act already commenced.
The service
of the notice on the plaintiff under s. 24(2) of the Bengal Act amounts to much more than a mere threat in
the abstract to impose an illegal levy.
It is the actual
initiation of an illegal assessment proceeding which,
in the normal course, will in all probability culminate
in an illegal levy of tax. The failure to make a return
as required by the notice would result under s. 25(5)
of the Act in the Income-tax Officer making an er parte
assessment to the best of his judgment and determining the sum payable by the assessee on the basis of
such assessment.
Such failure would also expose the
plaintiff under s. 32(1) of the Act to· the imposition of
a penalty which may equal the amount of the tax
assessed on him or to a prosecution as for an offence
S.C.R.
SUPREME COURT REPORTS
13
before a Magistrate under s. 53(1), at the option· of
the Income-tax authority. It is thus plain that the
service of a notice requiring a return of income to be
furnished for
assessment
under the
Act is a
step
fraught with serious consequences to the assessee, and
if the assessment proposed was illegal and unauthorised by reason of the Act itself being ultra vires in so
far as
it
purported to
make the Rulers of Indian
States liable
to
taxation thereunder as
contended for
by the plaintiff, the service of such notice marked the
commencement of a wrongful act against the plaintiff
by the Bengal Government under colour of the Act
and there can be no doubt that such wrongful act is
actionable in the sense that an action would lie in a
civil court
for an
m1unction
restraining its completion.
That was the liability to which the Province of
Bengal was subject according to the plaintiff's case at
the time when he instituted the suit, and that liability,
in our opinion, passed to the Province of East Bengal
by virtue of article 10(2) (a) of the Indian Independence (Rights, Property and Liabilities) Order, 1947.
There is no question here of the liability of the Crown
for damages for the negligent or tortious act of its officers.
On the allegations in the plaint, which must, for
the p1,1rpose of deciding the question of jurisdiction as
a preliminary issue, be assumed to be well-founded, the
Province of Bengal was undoubtedly · liable to be sued
for an injunction restraining it from proceeding with
the assessment and none the less so because the notice
was served in purported exercise of powers conferred
by the Bengal Act.
The name
of the
Income-tax
Officer originally
impleaded
as the
second defendant
having been struck off the
record,
no
question in
regard to his liability arises.
Reference was made to· certain text-books where
a "tort" is spoken of
as an "actionable wrong" and
it
was
suggested
that
the
two
expressions
are
synonymous.
Every tort
is
undoubtedly an actionable
wrong but the converse does not
necessarily
follow.
Indeed,
the words "other than breach of
contract" used in article 10 (1) make it plain that the
expression "actionable wrong" is used in a wider sense
2-8 S. C. India/67
1950
The State uf
Tripura
v.
The Province of
East Bengal
Patanjali Sa~trl J,
1950
The State of
Tripura
y.
The Province of
East Bengal
Pat njali Sastri J.
14
SUPREME COURT REPORTS
{1951]
which would have included breach of contract but for
those limiting words.
It was said that even assuming that the service of
the notice calling for a return of income was a wrongful act, it was not "actionable'', as s. 65 of the Bengal
Act barred suits in civil courts "to set aside or modify
any assessment
made
under
this
Act". The short
answer to this contention is that the suit in question
is not a suit "to set aside or modify an assessment"
made under the Act, as no assessment had yet been
made when it was instituted,
and
the
subsequent
completion of the assessment was made by the Pakistan
Income-tax authorities on terms
agreed to
between
the parties and sanctioned by the Court. The decision
of the Privy Council in Raleigh Investment Co. Ltd. v.
Governor-General in Council (') relied on in support of
the contention is distinguishable, as the main relief
claimed there was
repayment of the
tax alleged
to
have been wrongfully levied under
colo~r of an ultra
vires provision in the Indian Income-tax Act.
Their
Lordships observed :
"In form the relief claimed does not profess to
modify
or set
aside the assessment. In substance it
does, for repayment of part of the sum due by virtue
of the notice of demand could not be ordered so long as
the assessment
stood.
Further, the
claim
for the
declaration cannot be rationally regarded as having
any relevance except as leading up to the claim for
repayment, and the claim for an injunction is merely
verbiage.
The cloud of words fails to
obscure the
point of the suit."
The
pos11:ton
here is
entirely different.
The gist
of the wrongful act complained of in the present case
is
subjecting
the plaintiff
to the
haras5ment
and
trouble by commencing against him an illegal and
nnauthorised
assessment proceeding
which may eventually result in an unlawful imposition and levy of tax.
It was suggested, somewhat faintly, that the cause
of action for the suit, though stated in the plaint to
have
arisen in Dacca,
now in the Province of East
(I) [1947) F.C.R. 59.
S.C.R.
SUPREME COURT REPORTS
15
Bengal, did not arise wholly within the territories of
Iii_
the
Province of East Bengal within the meaning of
Article 10(2) (a) inasmuch as the notice calling for a
return, though
issued from
Dacca, was received
by
the Manager of the
Estate at
Agartalla in Tripura
State. Assuming that the contention has any substance
it is of no assistance to the respondent, for article 10
(2) ( c) would then be applicable to the case and the Province of East Bengal would still be liable, though
jointly with the Province of West Bengal.
We are therefore of opinion that the Province of
East
Bengal
having
succeeded
to
the
liability to
which the Province of Bengal was subject immediately
before the appointed day, the former Province is to be
·deemed to be substituted for the other Province as a
·pa1 cy to the suit and the suit must accordingly continue in the Court of the Subordinate Judge at Alipore,
which has jurisdiction to proceed with it under article
4 of the Indian
Independence (Legal Proceedings)
Order, 1947.
In this view it is
unnecessary to consider the
question of
submission to
jurisdiction urged in the
alternative by the appellant.
In the
result the
appeal is allowed, the order of
the Court below is set aside and the suit now pending
in the Court of the Subordinate Judge at Alipore will
be heard and determined by it. The respondent will
pay the appellant's costs throughout.
F AZL Au J .-The question to be decided in this
appeal is whether the Subordinate Judge's . Court at
Alipore in the State of West Bengal, has jurisdiction
to try a suit in which the Province of East Bengal was
impleaded as a defendant, after the 15th August,
1947. In what circumstances this · question has arisen
will appear from the facts of the case which may be
briefly stated.
In 1944, the Bengal Legislature passed an Act
called the Bengal
Agricultural Income-tax Act, 1944
(Bengal Act IV of 1944), which enabled it to impose
a tax on the agricultural income of various classes
1950
The Sta~ of
.J'ripura
. v.
The Province of
East Bengal
Pattm}ali Sastri J.
Faz Ali J
1950
The State of
Tripura
~
v.
The Province of
East Bengal
Faz/ All J,
16
SUPREME COURT REPORTS
[1951]
of persons including "every Ruler of an Indian State",
holding lands within the territory of
Bengal. The
appellant, who is the Ruler of the State of Tripura,
holds a zamindary called Chakla Roshanabad Estates,
whicl1
was
situated in the Province of Bengal and
in the District of Sylliet formerly appertaining to the
Province of Assam.
On the
28th February,
1945,
the Agricultural
Income-tax
Officer,
Dacca Range,
issued a notice under section 24 (2)
of
the
Bengal
Act to
the
Manager
of the
Chakla
Roshanabad
Estates calling upon him to furnish a return of the
appellant's total
agricultural
income for the previous
year, derived from
lands
situated
within the
Province
of
Bengal.
On the
12th
June,
1945,
the
appellant instituted a suit in the Court of the Subordinate Judge at Dacca, against the Province of Bengal
and the Agricultural Income-tax Officer, Dacca Range,
claiming the following reliefs :-
( 1) For a declaration that the
Bengal
Agricultural Income-tax Act,
1944, so far as
it imposes a
liability
to
pay
agricultural
income-tax
on
the
plaintiff is ultra vires and void and that the plaintiff
is not bound by the same.
(2) For a declaration that in any case the notice
served by the Agricultural Income-tax Officer,
Dacca
Range, above referred to, is void and of no effect and
that no assessment can be made on the basis of that
notice.
(3) For a
perpetual
injunction to
restrain the
defendants from taking
any
steps
to
assess
the
plaintiff to agricultural income-tax.
On the 15th July,
1945, the suit was transferred
to the Court of the Subordinate Judge at Alipore in
the District
of 24 Parganas, by
an
Order of
the
Calcutta High Court. While the ~uit was still pending,
the new Province of East Bengal, whicli forms part of
the territories of the Dominion of Pakistan, came into
existence on the 15th August, 1947, as a result of the
Indian Independence
Act,
1947, and it appears that
t
the whole of Chakla Roshanabad Estates falls within
that Province. After the creation of the new Province,
-f
)
S.C.R.
SUPREME COURT REPORTS
17
a petition was
field on the 9th December, 1947, on
behalf of the Province of East Bengal, drawing the
attention of the Court at Alipore to the fact that the
Province of West Bengal, which forms part of
the.
territories of the
Dominion of India,
was taking no
interest in the suit and asking the Court to accept a
written statement which was also filed along with the
petition, and in which the only plea taken was that
the Alipore Court had no jurisdiction to hear the suit
or make any order of injunction against the Province
of East Bengal or defendant No. 2. The last paragraph
of the written statement was to the following effect :-
"The Province of
East
Bengal
appears only to
contest the
jurisdiction of the
court and
it submits
that the suit should be dismissed on that ground."
Later on, the Province of East Bengal was impleaded as a defendant in the suit and the name of
the Income-tax Officer of Dacca
was
temoved
from .
the category of
defendants.
The Subordinate
Judge
then proceeded to try the question of jurisdiction as a
preliminary issue, and
decided
that by virtue of the
provisions of the Indian Independence (Legal Proceedings) Order, 1947, read with section 9 of the Indian
Independence Act, 1947, the Court had jurisdiction to
try the
suit against the new Province. Thereupon,
the respondent (the Province of East Bengal) moved
the High Court at Calcutta under section 115 of the
Code of
Civil
Procedure,
against the
order of the
Subordinate Judge, and
a Bench of the
High Court
consisting of Harries C. J. and Chakravarthi J. allowed the application and set aside the order of the Subordinate Judge,
giving effect
to the
objection
of the
respondent that the Court at Aliporc was not competent to try the suit against the Province of East Bengal.
One of the points
raised on behalf of the appellant
before the High Court was that the Province of East
Bengal
had
submitted
to
the
jurisdiction
of
the
Subordinate Judge's
Court, but
this point
was negatived.