# S1pumber27 !955 T/,. Stale ' ef Madras and another v. IL. M. Rajagopalan

- **Citation:** [1955] 2 S.C.R. 541
- **Court:** Supreme Court of India
- **Decided:** 1954-03-30
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/s1pumber27-955-t-stale-ef-madras-and-another-v-il-m-rajagopalan-1510
- **Pages:** 29

## Headnote

2S,C.lt
SUPREME COUllT REPOR'I'S
541
and that it invades no fundamental rights of the
landlord.
For the reasons
given above, we must hold that the
scheme embodied in sections 81 to 86 of the Act docs
not transgress any of the Constitutional limit:rtions,
and is valid.
In the result, the petitions are dismissed but in the
circumstances, without costs.
STATE OF MADRAS AND ANOTHER
v.
K. M. RAJAGOPALAN
[VIVIAN BosE, BHAGWATI, JAGANNADHADAS,
B. P. SINHA and }AFAR IMAM JJ·]
Indian Independence Act, 1947 (10 and 11 Geo. VI, C. 30)-
s. 10(2) (a)-The India (Provisional Constitution) Order, 1947Article 7(1)-Inde.pendence, Conferral of-Automatic and legal termination of service-Persons holding civil posts in India-Previous to
Independence-Whether deemed to have been appointed and continue
in service after Independence-Government of India Act, 1935, ss. 240
(2) and 247.
The respondent was recruited to the Indian Civil Service by
open competition in 1936 and joined duty in the Province of Madras
in October 1937. Since then he was serving under the Government
of Madras in various capacities, his last office being Sub-Collector of
Dindigal. He went on leave in June 1947. While on leave he received
a letter from the
Government of India asking him whether he was
willing to continue in the service of the Government after the then
contemplated transfer ot power from the British Government to the
Dominion of India on the 15th August, 1947.
He sent a reply expressing his willingness to continue in service.
On 9th August, 1947
he received a letter from the Government of Madras dated 7th August,
194 7 signed by the Chief Secretary thereof stating that it w.as decided not to retaip his services from and after the 15th August, 1947,
and that his services would be terminated with effect from the afternoon of the 14th August, 1947.
The respondent filed a suit against the State of Madras and the
Union of India for a declaration that the order issued by the Chief
Secretary to the Government of· Madras on the 7th August, 1947
purporting to terminate his services was null, void and inoperative
and that he should be deemed to continue in service. The High Court
granted the declaration prayed for
accepting the respondent's contention that the order terminating his service was in violation of the
1!155
Shri Klihan Singli
/llUl lllltds
v.
TM Stille ef
ilJJJflltltan °"'
others
V enkalarama
..tyyar J.
1955
S1pumber27
!955
T/,. Stale ' ef
Madras and
another
v.
IL. M. Rajagopalan
542
SUPREME COURT REPORTS
[1955]
statutory guarantee relating to his service under s. 240 of the Government of India Act, 1935 which remained in force till the midnight
of the 14th August, 1947.
Held, I. The conferral of .Independence on India
brought
about an automatic and legal termination of service on the date of
Independence.
Reilly v. The King ([1934 J A.C. 176) and Nokes v. Doncaster
Amalgamated Collieries Ltd., ([1940] A.C. 1014), followed.
2. But all persons previously holding civil posts in India arc
deemed to have been appointed and hence to continue in service, except those governed by "general or special orders or arrangements"
affecting their respective cases: vide Article 7( I) of the India (Provisional Constitution) Order, 1947 read with section !0(2)(a) of the
Indian Independence Act and sections 240(2) and 247 of the Government of India Act as adapted.
3. The guarantee about prior conditions of service and the previous statutory safeguards relating to disciplinary action continue
to apply to those who are thus deemed to continue in service but
not to others.
4. Those previously holding civil posts in India had the right>
and were in fact given the option, of declining to "continue in service" under the new regin1e and in the event of their exercising that
option they ceased to serve on and from the date of the passing of
the Constitution.
5. Equally the new GoYernment had
the
right to refuse
to
continue them in service and intimation of this fact given to persons
ahead of

## Text

_Characters 0–39,931 of 64,011. This is a partial read: ask again with offset=39931 for what follows._

2S,C.lt
SUPREME COUllT REPOR'I'S
541
and that it invades no fundamental rights of the
landlord.
For the reasons
given above, we must hold that the
scheme embodied in sections 81 to 86 of the Act docs
not transgress any of the Constitutional limit:rtions,
and is valid.
In the result, the petitions are dismissed but in the
circumstances, without costs.
STATE OF MADRAS AND ANOTHER
v.
K. M. RAJAGOPALAN
[VIVIAN BosE, BHAGWATI, JAGANNADHADAS,
B. P. SINHA and }AFAR IMAM JJ·]
Indian Independence Act, 1947 (10 and 11 Geo. VI, C. 30)-
s. 10(2) (a)-The India (Provisional Constitution) Order, 1947Article 7(1)-Inde.pendence, Conferral of-Automatic and legal termination of service-Persons holding civil posts in India-Previous to
Independence-Whether deemed to have been appointed and continue
in service after Independence-Government of India Act, 1935, ss. 240
(2) and 247.
The respondent was recruited to the Indian Civil Service by
open competition in 1936 and joined duty in the Province of Madras
in October 1937. Since then he was serving under the Government
of Madras in various capacities, his last office being Sub-Collector of
Dindigal. He went on leave in June 1947. While on leave he received
a letter from the
Government of India asking him whether he was
willing to continue in the service of the Government after the then
contemplated transfer ot power from the British Government to the
Dominion of India on the 15th August, 1947.
He sent a reply expressing his willingness to continue in service.
On 9th August, 1947
he received a letter from the Government of Madras dated 7th August,
194 7 signed by the Chief Secretary thereof stating that it w.as decided not to retaip his services from and after the 15th August, 1947,
and that his services would be terminated with effect from the afternoon of the 14th August, 1947.
The respondent filed a suit against the State of Madras and the
Union of India for a declaration that the order issued by the Chief
Secretary to the Government of· Madras on the 7th August, 1947
purporting to terminate his services was null, void and inoperative
and that he should be deemed to continue in service. The High Court
granted the declaration prayed for
accepting the respondent's contention that the order terminating his service was in violation of the
1!155
Shri Klihan Singli
/llUl lllltds
v.
TM Stille ef
ilJJJflltltan °"'
others
V enkalarama
..tyyar J.
1955
S1pumber27
!955
T/,. Stale ' ef
Madras and
another
v.
IL. M. Rajagopalan
542
SUPREME COURT REPORTS
[1955]
statutory guarantee relating to his service under s. 240 of the Government of India Act, 1935 which remained in force till the midnight
of the 14th August, 1947.
Held, I. The conferral of .Independence on India
brought
about an automatic and legal termination of service on the date of
Independence.
Reilly v. The King ([1934 J A.C. 176) and Nokes v. Doncaster
Amalgamated Collieries Ltd., ([1940] A.C. 1014), followed.
2. But all persons previously holding civil posts in India arc
deemed to have been appointed and hence to continue in service, except those governed by "general or special orders or arrangements"
affecting their respective cases: vide Article 7( I) of the India (Provisional Constitution) Order, 1947 read with section !0(2)(a) of the
Indian Independence Act and sections 240(2) and 247 of the Government of India Act as adapted.
3. The guarantee about prior conditions of service and the previous statutory safeguards relating to disciplinary action continue
to apply to those who are thus deemed to continue in service but
not to others.
4. Those previously holding civil posts in India had the right>
and were in fact given the option, of declining to "continue in service" under the new regin1e and in the event of their exercising that
option they ceased to serve on and from the date of the passing of
the Constitution.
5. Equally the new GoYernment had
the
right to refuse
to
continue them in service and intimation of this fact given to persons
ahead of time came into operation and had legal effect from the moment the new Government assumed office on 15-8-1947.
6. As the petitioner was informed that his services would not
be required after 14-8-1947 his services terminated on that date because this was a special order within the meani_qg of Article 7(1) of
the India
(Provisional Constitution) Order, 1947.
Accordingly
there was no
continuance of
service in his
case after
14-8-1947
under the deeming provisions of that Order.
La/l's case (1948) F.C.R. 44 West Rand Central Gold Mining
Co. Ltd. v. The King (1905) 2 K.B. 391, Virendra Singh
v. The
State of Uttar Pradesh (1955) I S.C.R. 415, Raj Rajendra Malojirao
Shitole v. The State of Madhya Bharat (1954) S.C.R. 748, Ladore v.
Bennett (1939) A.C. 468 and Govindan Sel/appah
Nayar Kodakon
Pillai v. Punchi Banda Mudanayake (1953) A.C. 514, referred to.
Crv1L
APPELLATE
Juruso1cTION : Civil Appeal No.
203 of 1954.
On appeal from the Judgment and Order dated
the 30th March 1954 of the Madras High Court in
C. S. No. 216 of 1952.
2 S.C.R.
SUPREME COURT REPORTS
543
M. C. Setalvad, Attorney-General of India, V. K. T.
Chari, Advocate-General of Madras (R. Ganapathy Iyer,
Porus A. Mehta and P. G. Gokhale, with them), for the
appellant.
M. K. Nambiar (C. V. L. Narayan, with him), for
the respondent.
1955.
September 27.
The
Judgment
of
the
Court was delivered by.
JAGANNADHADAS
J.-'"fhis
IS
an
appeal by
the
State of Madras and the Union of India against the
judgment and decree of the
High Court on a certificate granted by that Court under article 133 of the
Constitution.
The appeal arises out of a suit filed by
the respondent herein, who was a member of the
Indian Civil Service, for a declaration that the order
issued
by
the Chief
Secretary to the Government of
Madras on the 7th August, 1947, purporting to terminate his services as from the afternoon of the 14th
August,
1947,
is null,
void and inoperative and that
he must be deemed to continue in the Indian Civil
Service as a Member thereof.
The suit was filed on
the original side of the High Court of Madras and
after having been partly tried by a Single Judge who
recorded
the
evidc:nce,
was
thereafter
heard
by
a
Bench of two Judges in view of the important constitutional question that arose
for consideration in
the case.
The Bench found in favour of the plaintiff
and decreed the suit and hence the appeal by the
State to this Court.
The case for the plaintiff is short and 5imple. He
was recruited
to
the Indian Civil Service by open
competitive examination in 1936
and joined duty in
the then Province of Madras
in October, 1937. Since
then he was serving under the Government of Madras
.in various situations.
The last office he held was as
Sub-Collector and Joint Magistrate at Dindigal.
On
the 2nd June, 1947, he went on leave.
While on leave,
he received
a letter from
the Government of
India
dated the
19th June,
1947, wherein he was asked
whether he was willing to continue in the service of
Slate of Madra.
and another
v.
K. M. Rajagopalata
1955
S- ef Modral
""'.,..,,,,,
v.
K. M. Rajago;o/a•
J4gannadhadas ].
SUPREME COURT llEPORTS
[19551
the Government after the then contemplated
transfer
of power from
the British Government to the
Dominion of India on
the 15th August, 1947. The
plaintiff sent a reply expressing his willingness. On the
9th August, 1947, however, he received a communication from the Government of Madras dated the 7th
August,
1947, and signed by the Chief Secretary
thereof, stating that it was decided not to retain him
in service from
an<i after the 15th August, 1947, and
that his services would therefore be terminated as on
the afternoon of the 14th August, 1947.
He was
directed, therefore to apply for extension
of leave for
which he was then eligible so as to avail himself of
the full period of leave which was to his credit.
On receiving the order of termination of his services,
he made attempts to get it cancelled, by interviewing
the Chief Secretary and the Chief Minister of the
Madras State at the time. But the attempts proved
futile.
In the course of these interviews he says he .
wa$ given the impression that the order of termination, though issued under the signature of. the Chief
Secretary
to the Government of Madras was in fact so
issued under the sanction of the Secretary of State for
India, which, according to him, subsequently turned
out not to be a fact. Being then under that mistaken
impression, he reconciled himself to the situation and
availed himself of the full period of leave and accepted the compensation which was awarded for premature termination of services and also began drawing
his
pension.
Later on
he came
to know from one
Shri Seshadri, another young Civilian, who was in a
similar plight and who had also filed a similar suit
that certain documents produced in the course of that
suit showed that these orders were passed without
the sanction of the Secretary of State for India.
He
accordingly brought these matters again to the notice
of the Government and made further attempts to get
the order in his case reversed.
These again proved
futile.
He thereupon filed an application for a writ in
the High Court on the 7th November, 1951, to quash
this alleged illegal order against him. But the High
Court rejected it on the ground of there having been
2 S.C.R.
SUPREME COURT REPORTS
loqg delay since the passing of the orders sought to
be quashed: The plaintiff thereafter gave the requisite notice to the Government under section 80 of the
Civil Procedure Code
and
filed
this
Suit on
the
15th July, 1952.
In the plaint h~ made the offer to
refund the amount of compensation paid to him after
making such
adjustments
asi
may be
called
for
towards
his claim for
salary for the intervening
period.
The
plaintiff's claim
is
based on the contention
that the termination of his services by the
order
dated the 7th August, 1947, . is in violation of the
statutory guarantee relating to his service under section 240 of the Government of India Act, 1935, which
continued to be operative till the midnight of the
14th August, 1947, and he relies on Lall's case(1 ). To
this suit both the State of Madras and the Union of
India were impleaded as defendants and their defence
was substantially the same.
It is to be found in
paragraph 6 of the written statement filed
by
the
State of Madras which is as follows :
"This defendant states
that
on the
transfer
<>f
power
to the newly constituted Dominion of
India
m
pursuance
of
the Indian Independence
Act .as and from the appointed day, viz., 15th August,
1947, the tenure
of the service of the plaintiff came to
an end and he had no legal claim to continue in service thereafter.
The; plaintiff was holding office only during His
Majesty's pleasure.
When His Majesty's Government
decided to transfer
its power to the Dominion of India
as and from
the 15th day of August, 1947, the career
of the plaintiff under covenant with the Secretary of
State came to a legal termination \ as
and from the
15th day of August, 1947.
It is, therefore, not correct
to
state that there was any termination by
the Government of Madras and that there has been
. utter lack of legality in the order passed by the said
Government. It is further submitted that the alleged
termination
of
the plaintiff's services was only from
the 15th August, 1947, and that on such date the
11) [1948] F.C.R. 44.
195!t
Sia# of Modrtu
arrd onollwr
v.
K. M. RqjagopaJa11
Jaztllllllll/hadtl$ ].
1955
Stal• of Madras
and anotlur
v.
Jr. M. Rajagopo/an
Jagannadhadas J.
546
SUPREME COURT REPORTS
[1955}
Province of Madras acting under the instructions from
the Government of India were competent to decline
to accept the offer to continue in service made by the
plaintiff".
There were
other minor pleas such as estoppel, etc.
which, it is unnecessary to notice at this stage. The
High Court negatived
the defence of the State and
accepted
the contention of the plaintiff and granted
him the declaration prayed for.
The main contention of the learned AttorneyGeneral before us appearing for the State is that the
plaintiff
has misconceived the legal position,
that
what happened in this case was not a wilful order of
termination
of the services of the plaintiff which fell
within the scope of section 240 of the Government of
India Act,. 1935, and whose validity was liable to be
tested with reference thereto.
According to him the·
political changes which came into force from the 15th
August, 1947, operated in law to terminate the set·
vices of
all persons
in the position of the plaintiff as
and from the 15th August, 1947, that in that sitilation
it was open to the new Dominion Government of India
or the Governments of the various Provinces
either
to invite
such persons to continue to be in their respective
services
or
to intimate
that they were no
longer
required,
and
that it was in the exercise of
this
option that the
Government of Madras com·
municated
to
the plaintiff an advance intimation on
the 7th August, 1947, that he would not be retained
in service as
and
from the 15th August, 1947. The
substantial
question therefore, for our decision
is
whether this contention put forward by the learned
Attorney-General is correct.
It may be mentioned
that, as appears born their judgments, the learned
Judges of the High Court appear to have been under
the impression that this defence of automatic termination
of the services was abandoned during the
course of the arguments before them by the learned
Advocate-General of Madras.
This impression seems
to be erroneous.
In any case there is nothing to preclude the question which is purely one of law being
reopened before us with our leave in view of its being
2 S.C.R.
SUPREME COURT REPORTS
547
one of considerable importance.
The learned Attorney-General has based his contention as regards automatic termination of such services on three grounds :
(1) The political change which came into operation on the 15th August, 1947,
resulted in creating a
new
Sovereign State
of India and on the creation of
such Sovereign State, the pre-existing contracts
of
service under the previous Government became
automatically terminated.
(2) The contract between the Secretary of State
for India and the plaintiff being one
of service became
terminated on the Secretary of State ceasing to have
control
in
respect or the services contemplated under
the contract.
(3) The statutory changes which came into operation
as
from
the 15th August, 1947, by themselves
brought about a termination of such services and the
p~otection of section 240 of the Government of India
Act, 1935, was no longer available to a person in the
situation of the respondent.
For the purpose of appreciating the above arguments
it is necessary to notice the various events
that lead up to the political changes, and the statutory provisions by which they were brought about, in
so far as they relate to the class of services with which
we are concerned in this case. The starting point of
these changes was
the announcement of his Majesty's
Government dated the 20th
February, 1947,
that
power would be transferred
to
Indian hands by His
Majesty's Government by
June,
1948, in accordance
with the Cabinet Mission Plan of May, 1946.
Since
then the attention
of
the Government was engaged
in the various. steps to be taken to bring about the
transition as smoothly as possible.
One of the steps
taken in this directiQll, in so far as it concerns this
case, was the announcement by His Excellency the
Viceroy on the 30th April, 1947. That announcement
purported
to relate to "grant of compensation
for
premature termination
of their service in India to
Members of Civil Services app0inted by the Secretary
of State and to regular officers and British Warrant
1955
Stal• of Madra£
and another
v
Ir. M. Rq,agopaku.
Jagannadhadas J.
1955
Stoll qf Mi111ras
""""""""
v.
ICM. R4jagopalan
]4gamwJ/uldas ].
548
SUPREME COURT REPORTS
[1955]
Officers of the Indian Naval and Military Forces",
and was inter alia as follows :
"I. His
Majesty's
Government have announced
their intention that the British Government's authority in India will be finally transferred to Indian
hands by June, 1948.
It is the aim of His Majesty's
Government that the transfer
of power should be
effected in an orderly and regulated manner so that
the new authorities may assume their responsibilities
in conditions conducive to the best interests of India
and maintenance of good relations with Great Britain.
His Majesty's Government are confident that during
this period of transition
the Services and all those
who man them, whether British or Indian will respond to this call.
2. To those serving under covenant or
other
form of agreement with the Secretary of State for
India or who hold commissions from His Majesty the
King, the transfer of power will mean premature
termination on that date of a career under the ultimate
authority of His Majesty's Government and the British
Parliament; and for many there is added to the heavy
call of present duty the burden of anxiety ·for their
QWn future and that of those who depend on them.
3. The Government of India are naturally and
rightly most anxious and His Majesty's Government
share their anxietv that the administration shall not
be weakened by the loss of experienced officers.
To
this end, Government of India undertake that those
members of the Secretary of State's Services who continue to serve under the Government of India after the
transfer of power shall do so on their present terms as
to scales of pay, leave, pensionary rights, and
safeguards in matters of discipline and that provisions to
this effect should be made in the Treaty to deal with
matters arising out of the ·transfer of power.
The
Government of India will now propose to Provincial
Governments that they should give similar assurances
to members of the Secretary of State's $Crvice who
agree to join Provincial services.
4. The Government of India recognise that some
[ndian members of the Secretary of State's services
~ s.c.R.
SUPREME COURT REPORTS
549
may be genuinely anxious about their prospects under
the
Provincial administrations where they
are at
present employed, and
every effort will be made to
arrange suitable transfers in such cases.
5. The Government of India agree that compensation should be payable to such Indian Officers of
these services as-
( 1) are not invited to continue to serve under the
Government of India after transfer of power; or
(2) can satisfy the Governor-General that their
actions in the course
of duty during their service prior
to the transfer of ,power have damaged their prospects,
or that the appointments offered
to them are such as
cannot be regarded as satisfactory in the altered circumstances; or
(3) can show to the satisfaction of the GovernorGeneral that they have legitimate cause for anxiety
about their future in the Province where they are now
serving, and that no suitable transfer can be arranged.
B\lt the Government of India feel that sentiments
of patriotism will naturally impel Indian Officers to
continue to serve their country and that, in the light
of the undertaking that they have given, and the consideration that in fact Indian members of the Ser·
vice will have improved prospects, there is no ground,
save in these special cases, for payment of compensation to Indian officers on account of the transfer
of power.
6. His Majesty's Government have · been reviewing the whole position. They have noted the undertaking which the Government of India have given in regard to officers whom they desire should continue to
serve under the Government of India. They recognise
the force
of
Government of
India's
arguments,
and they agree that to Indian Officers compensation
should not be admissible except in the cases which I
have just
mentioned.
Many Indian members of the
Secretary
of State's
services will however become
members of provincial services and in their cases His
Majesty's Government's agreenient that they need not
be
compensated is
conditional upon
the Provincial
Governments guaranteeing the existing
terms of scr19$5
St(#f of M/JIJNI
qnif !lfllllhlr
V•
fl. M. Jl4jagf1J4la"
]ago'fltWfihatlas J.
1955
Stat1 of Madras
and another
v.
.K. M. Rajagopalan
Jagannadhadas J.
550
SUPREME COURT REPORTS
[1955]
vice. If they are not prepared to do so His Majesty's
Government
reserv.e the
right
to reconsider
the
matter.
7. With these reservations I am now authorised
by His Majes~y's Government to inform members of
the Secretary of State's services that they accept the
obligation to see that they are duly compensated for
the termination of their careers consequent on the
transfer of power ................ "
After this announcement was issued, His Majesty's
Government, for various political reasons, decided to
advance the date of transfer of power and made an
announcement on the 3rd June, 1947, detailing various steps which were proposed to be taken to bring
about an early transfer of power.
Paragraph 20 of
that announcement ran as follows:
"The major political parties have repeatedly emphasized their desire that there should be the earliest
possible transfer of power in India With this desire
His Majesty's Government are in full sympathy, and
they are willing to anticipate the date of June, 1948,
for the handing over of power by the setting up of
an independent Indian Government or Governments
at an even earlier date.
Accordingly, as the most
expeditious, and indeed
the only practicable way of
meeting this desire, His Majesty's Government propose to introduce legislation during the current session
for the transfer of power this year on a Dominion
Status basis
t'o one or two successor authorities
according to the decisions taken as a result of this announcement.
This will be without prejudice to the
right of the Indian Constituent Assemblies to decide
in due course whether or not the part of India in
respect of which they have authority will remain
within the British Commonwealth".
In persuance of what was indicated herein, the Indian
Independence Act was passed on the 18th July, 1947.
In pursuance of the power vested in the GovernorGeneral
thereunder a number of legislative orders
were passed by him.
The relevant provisions of the
Indian Independence Act as well as of some of the
legislative orders will be
presently noticed.
But it
.2 S.C.R.
SUPREME COURT REPORTS
551
will be convenient at this stage to state the further
steps taken by the Government relating to the services
of the kind we are concerned with, in pursuance of
their plan announced on the 3rd June, 1947, to speed
up the transfer of power.
Within about two weeks
after the announcement of His Majesty's
Government
dated the 3rd June, 1947, a circular letter was issued
by the Government of India to the Chief Secretaries
of all the Provincial Governments on the 18th June,
1947, which inter alia stated as follows :
"That in view of the latest announcement of His
Majesty's Government (dated the 3rd June, 1947), it
is essential to ascertain with the least possible delay,
the wishes of individual officers to whom His Excellency the Viceroy's announcement of the 30th April
1947 applies in regard to continuance in service after
the transfer of power.
This will enable Government
to decide which officers they should continue to retain in service after the transfer of power and to
make arrangements to replace officers who desire to
quit service, of their own accord or whom Government
may not wish to continue in service".
The Chief Secretaries were accordingly asked to make
arrangements "to send immediately
to every officer
belonging to any service specified in the schedule, and
serving under the Provincial Government, a copy of
the enclosed letter from the Government of India to
the officers concerned,
where!_>y
the officer was asked
to communicate within ten days of
the receipt of the
letter whether he wishes to continue in the service of
the Government or whether he desires to retire from
service".
The circular letter of the Government of
India to the Chief Secretaries further asked them that
in forwarding the replies received thereto from the
individual officers, they may inform them, in case cl.
persons who have decided to quit service, the earliest
-date on which the Government will be in a position
to release the officer and in case of persons who offer
to continue in service, whether for any reason, they
would prefer him not to continue in the service, notwithstanding the officer's desire to remain in the
1955
StaMqfMabu
and ono#wr
v.
r;, M. RajagoJoltm
Jagannadhatlas J.
l!lS5
Sl.U of Muas
andonotltn
v.
K. M. Rajogopalan
J•g-..UU. . ., J.
552
SUPREME COURT REPORTS
[1955]
service and
pointed out that in the latter case the
Provincial Government will be incurring liability to
pay
compensation.
In pursuance of these instruc..
tions the individual letters to the officers concerned
were presumably sent and
replies were obtained, and
the necessary orders were passed in respect, at any
rate, of such of the officers whom the various Governments were
not prepared to retain in service after the
transfer of power.
Pausing here, it will be seen that
the announcement of the Viceroy dated the 30th April,
1947, and the circular letter issued by the Govern·
ment of India to the Chief Secretaries on the 18th
June, 1947, as well as the individual letters issued by
and under the authority of the Government of India
to those officers on the same date asking for information from them as to their desire to continue in service
or not, were all based on the assumptions clear!,
stated
or indicated therein, (1) that transfer of power
brings about an automatic premature termination
of
the services, (2) on such termination, it woulJ be open
to the servant concerned either to decline to continue
in the service of the new Government or to offer to
continue his services, and (3) that in case the individual
servant intimated his desire to continue in
service, it was open to the Government either to accept
the offer or
not.
Thus the continuance of service was
contemplated only in respect of such
·of the previous
servants who intimated their desire for the continuance of their services and whose offer in this respect
was accepted.
While, therefore,
discontinuance
of
service was to be brought about by the option of
either of the parties and on such discontinuance the
servant was to become entitled to compensation the
continuance of the service was a matter which would
depend upon the mutual consent of both, viz., the individual
servant and the
Government
concerned.
That the position so taken up must have been perfectly within the knowledge of every one of the persons to whom these circular letters were sent is virtually admitted by the plaintiff himself in his evidence
and also appears clearly froni the fact that a copy of
the
Vic~roy' s announcement dated the 30th
April,
2.S.C.R.
SUPREME COURT REPORTS
553
1947, appears to have been enclosed with the individual letters
dated the 18th June, 1947, sent to each
of the officers by the Government of India.
The
plaintiff himself in his letter dated the 2nd July, 1947,
to the Chief Secretary to the Government of Madras,
wrote as follows :
"I am in receipt of your Memorandum No. 2738
of
1947-4, Public
(Special)
Department, dated 5th
June, 1947, enclosing the announcement of His Excellency
the Viceroy. I wish to state that I desire to continue
to
serve
the
Madras
Government
and
that I
desire
no transfer to any other Province".
(The
reference
to
the date
5th June, 1947, is probably
a
mistake since
it is clearly
admitted
in
the
plaint
that
the
plaintiff intimated
his desire to
continue in service in reply to the letter dated the 18th
June, 1947.)
To
complete the course of events as regards
the
imlividual case of the plaintiff, the further facts may
be stated. After receiving this reply ·from the plaintiff
dated the 2nd July, 1947, the Chief Secretary to the
Government of Madras wrote to him a letter dated
the 7th August, 1947, as follows:
"I am to say that with reference to your reply
to the letter cited electing to continue in service after
the transfer of power, the Government have decided
not to retain you in service after 15th August, 1947.
Your services will he terminated on the afternoon of
14th August 1947 and you may proceed on leave (your
present
leave will be automatically converted into
leave) preparatory to retirement as from 15th
August
1947. You may therefore apply for the leave (extension
of leave) for which you arc eligible direct to Government.
The Accountant-General is being asked to
certify the amount of leave for which you are eligible.
A formal communication will issue to you shortly
from the Government of India terminating your services as from 14th August, 1947 A.N.
I am to express regret that the decisions
in your
case has been delayed so long".
This is clearly an advance intimation that the termination
of
the services
of the plaintiff would become
I 7-83 S. C. India./59.
1955
Sla/4 of Madrt11
Olldoaothlr
v.
E. M. Rqjagopala•
JagaMalllulllas J.
1955
Sim of Madras
and anothu
v.
K. M. Rlgagopalan
Jagannadluzdas ].
554
SUPREME COURT REPORTS
[1955]
operative at the very moment when the transfer of
power comes
into force, i.e., on the midnight of 14th/
15th August, 1947.
The mention of the termination
on the afternoon of the 14th August, 1947, was clearly
because of the official practice that a person who
hands over charge of his office in the afternoon of a
particular day, continues in service and draws the
salary for that day. (Vide Audit Instruction
(1)
at
page 163 of the Fundamental Rules, 3rd Edition).
A
letter was immediately addressed by the
Chief Secretary to the Government of Madras under date 8th
August 1947, to the Under Secretary of State for India,
India Office, London, and ;i copy thereof was sent to
the plaintiff. The letter runs thus:
"I am
directed to say that Mr. K. M. Rajagopalan, I. C. S. proceeded on three months' leave on the
3rd June, 1947, and that as he will not continue in
the service of Government in India, al;ter the transfer
of power, he will be entitled to compensation or settlement grant, as the case may be, as from the 15th
August, 1947".
On the 8th August, 1947, a formal Government Order
No. 377 was passed which is as follows :
"Mr. K. M. Rajagopalan, I.C.S. proceeded
on
three months' leave on the 3rd June, 1947, and that
as he will not continue in the service of Government
of India after the transfer of power, he will be entitled
to compensation or resettlement grant, as the
case
may be, as from the 15th August, 1947".
This order was
published in the Fort St. George
Gazette dated the 19th August, 1947. Presumably this
order (along with other similar orders) was also intimated to the Government of India and the Government of India sent a telegram to the Government of
Madras on the 14th August, 1947, as follows: •
" ...... No objection to your proposal to terminate
services of .......... Rajagopalan".
On the 29th September,
1947,
the Government of
Madras
pas<ed
a G.
0.
sanctioning pavment of
£4,500./
as compensation for the plaintiff and ordered
disbursement thereof
by the Accountant-General.
This
compensation was drawn by the plaintiff in April,
2 S.C.R.
SUPREME COURT REPORTS
555
1950. In the light of this background it is now necessary to notice the various statutory prov1S1ons which
brought about the political change and particularly
those which relate to the services.
The instrument which brought about the
transfer
of power from the British Government to the Dominion Government
of
India in a.:cordance with the
announcements of His
Majesty's Government dated
the 20th February, 1947 and the 3rd June, 1947, is
the Indian
Independence Act, 1947,
(10 & 1i Geo. 6,
Ch. 30) passed by
the British Parliament and which
became law on the 18th July,
1947. The preamble
thereto is as follows :
"An Act to
make provision for the setting up in
India of two independent Dominions, to substitute
other provisions for certain provisions of the Govern~
ment of
India Act, 1935, which apply outside those
Dominions
and
to provide for other matters consequential on or connected with the setting up of those
Dominions".
By section 1 of the said Act two independent Dominions to be known respectively, India and Pakistan,
were to be set up in India as
from the 15th day
of august, 1947, with territories assigned to each of
them as indicated in sections 2, 3 and 4 thereof. Under
section 5, there was to be a Governor-General for each
of the Dominions to be appointed by His Majesty who
was to represent His Majesty for the purposes of the
government of the Dominion.
By
section 6 it was
provided that Legislature of each of the new Dominions was to have full power to make laws for that
Dominion including laws
having extra-territorial operation
and laws which would be valid notwithstanding any repugnancy to the law of England or to the
provisions of any existing or future Act of the Parliament.
It was also provided that the assent to the
laws as made by the Legislatures, was to be given by
the Governor-General in the name of His Majesty
without any power of disallowance
by
His Majesty
and without any power of reservation of laws for the
significance of
His Majesty's
pleasure. By section
7,
:it was specifically provided that as from the 15th
!955
Stat• of Madras
and onothn
v.
K. M. Rajagopalon
Jagannadhat!as J,
1955
Slal1 of Madras
and anotktr
v.
Ir. M. Rqjagopalan
]agOIUladMdas J.
556
SUPREME COURT REPORTS
[19551
August, 1947, His Majesty's Government in the United
Kingdom was to have
no responsibility as respects
the Government of any of the territories which, immediately before that day, were included in British
India.
Temporary provisions as to the Government
of each of the new Dominions as from the 15th
August, 1947, until such time that each of the two
Dominions evolves its own independent Constitution
were made by sections 8 and 9. By Section 8(1) the
respective Constituent Assemblies of India, and Pakistan which had
already come -into existence and
were functioning for the purpose of evolving a new
Constitution for each of the Dominions, the first by
virtue of the Cabinet Mission Plan of May, 1946, and
the second by reason of the announcement of His
Majesty's Government dated the 3rd Tune, 1947, were
recognised
as
interim Legislatures for
each of the
Dominions.
By section 8(2) the pre-existing Government
of
India Act, 1935, with modifications and
adaptations to be made by the Governor-General
and
subject to any other provision or alteration to be
made by the Constituent Assembly functioning as the
interim Legislature,
was to continue in force.
By
section 9 of the Act, the Governor-General was given
various and extensive powers to make provisions in
order to bring the provisions of the Indian Independence Act into operation and for removing difficulties
arising in connection with the transition of power
from the British Government to the Dominions and
to carry on the business of the Governor-General in
Council in the interim period. It was specifically provided that the Governor-General's power in this behalf was to be retrospective
as from the 3rd June,
1947.
It will be seen that by virtue of the Indian Independence Act a completely independent Dominion of
India was set up with a wholly independent Lcgisl:lture and with a COl?lpletcly independent Government
free from
any kind of fetters as regards thcit functioning, either
from
the British Parliament or from
the
British Government.
The Government of the
Dominion, however, was still to be carried on in the
2 S.C.R.
SUPREME COURT REPORTS
557
name of His Majesty the King of Great Britain, by
the Governor-General of India to be appointed
by
His Majesty.
The learned Attorney-General strenuously contended that these changes resulted in the
emergence of India as an independent Sovereign State
and that it followed
therefrom, on well-recognised
principles
of international law, that this brought about
automatic
termination of
the contracts of
service
between the prior Government and its servants.
In
support of this principle of international law, the
k1rned Attorney-General cited a number of authorities as also the case in West Rand Central Gold Mining
Co. Ltd. v. The King(1), which was quoted by this
Court in Virendra
Singh
v.
The State of Uttar
Pradesh(2). On the other hand, Shri Nambiar for the
respondent stressed
the fact that however independent the new Dominion Government may be as regards the functioning
of
its Legislature
and of its
executive Government, the new Government was still
to function in the name of His Majesty the King of
Great Britain and that, therefore, the Dominion is
not on the same footing as an independent sovereign
State, which obtains sovereignty over a new country
by virtue of conquest or cession.
He urged that the
principle of international
law relied upon would not
apply to such a case. In support of his contention he
drew our attention to various other provisions in the
Indian Independence Act and to the various
legislative orders passed by the Governor-General by virtue
of powers vested in him under section 9 of the Indian
Independence
Act
as also to adaptations
made in
respect of various existing laws. The question as to
whether the Indian Independence Act brought about
a full oovereign State for each and every purpose is
one of considerable importance and is not free from
difficulty.
We do not wish to decide that question on
the present occasion. It appears to us that the present
case has to be decided with reference to the question
as to what exactly has been brought about by the
Indian Independence Act
and
the
subsidiary legislatirn.1 which followed thereupon, in so far as they relate
(!) [1905] 2 K. B. 391.
(2) [1955] I S.C.R. 415, 427.
!955
Stall of MaJro.r
and anotMr
v.
K. M. R.ajagopalaa
Jagannadhado.r J.
1955
Stale of Madras
and .,.,,,,,,.
v.
K. M. ll<efa10/Jflkm
-JaganMdhada1 J.
558
SUPREME COURT REPORTS
[1955}
to the tenure of persons
in the position of the plaintiff.
For this purpose it is necessary in the first instance
to have a clear idea as to what was the tenure of
service of the plaintiff prior to the 15th August, 1947
Persons in the position
of the plaintiff were recruited
directly by the Secretary of State for India by virtue
of the powers conferred on him under section 244(1)
of the Government
of India Act, 1935 (or under the
corresponding provisions in the prior Government of
India
Acts).
The persons so recruited, were
appointed
to
the service called the Indian Civil Service.
Each person so recruited had to enter into a covenant
by means of an indenture between himself and the
Secretary of State.
The indenture (whose form is to
be found as Appendix I of the Indian Civil Service
Manual) recited that the person was appointed by the
Secretary of State to serve His Majesty as a Member
of the Civil Service of India and that such service was
to continue during the pleasure of His Majesty, to be
signified under the hand of the Secretary of State for
India with liberty for the covenantor to resign the
said service with the previous
permission
of
the
Secretary of State or of the Government under which
he was, for the time being, serving. The indenture incorporated various
covenants by
the
appointee
with
reference
to the exercise of his functions during the
period
of
h_is service
such
as, (1) general
fidelity,
(2) obedience to orders of general nature, (3) keeping
of
regular accounts, preservation and due delivery
and
production of private accounts,
( 4)
not to
misapply or employ for improper purposes the prcr
pcrty entrusted to his care, (5) not to divulge secrets, ( 6) not to accept corrupt presents or to make
corrupt bargains, (7) not to trade contrary to law or
regulations, (8) not to quit India without leave and
to satisfy all debts
due to His Majesty before departure, and (9) to make prescribed payments towards
pension, etc.