TMI Blog1950 (12) TMI 1X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 - Judge(s) : MUKHERJEE., KANIA., FAZL ALI., PATANJALI SASTRI., CHANDRASEKHARA AIYAR JUDGMENT The Judgment of KANIA, C.J., PATANJALI SASTRI and CHANDRASEKHARA AIYAR, JJ., was delivered by PATANJALI SASTRI, 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 Pakistan) 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 Agricultual Income-tax Act was passed by the Provincial Legislature of Bengal in 1944. It applied to the whole of Bengal and purported 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 1st April, 1944, the Income-tax Officer, Dacca Range, sent by registered post, a notice to the Manager of the Zamindary Estate called Chakla Roshanabad belonging to the Tripura State but situated in Bengal outside the territorie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h as the Province of West Bengal was taking no interest in the suit, it was necessary in the interests 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 inasmuch 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 the 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 acce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r those rights or liabilities the Province which succeeds to the property, rights or liabilites 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. " 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, and 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 substituted defendant." With that statement of the position we entirely agree. The learned Judges, however, proceeded to examine, 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Section 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 parts 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 of 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 terri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r 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 Section 9(1)(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 distribution of rights, property and liabilities as between the two Dominions and their Provinces, a wide land 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 liab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 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 Section 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vince as a party 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. FAZL ALI, 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 cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 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 removed 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 appli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t a tort is an actionable wrong leaves undefined the term 'actionable wrong' ". But there can be on doubt that in legal parlance, the two expressions are assumed to be interchangeable. There is also another matter to be borne in mind in construing Section 10(2) of the Rights, etc. Order, and that is the well-recognized fact that the primary and most common remedy for a tort is an action for damages. That this is an important feature of a tort is shown by the fact that in many text-books an action for damages has been made an integral part of the definition of a tort. A few examples will make this clear. A tort is defined by Salmond as "a civil wrong for which the remedy is a common law action for unliquidated damages and which is not exclusively the breach of a contract or the breach of a trust or other merely equitable obligation". Professor Winfield, who did not see eye to eye with Salmond on many matters connected with the law of torts, gives the following definition of tortious liability :--- "Tortious liability arises from the breach of a duty primarily fixed by the law: this duty is towards persons generally and its breach is redressible by an action for unliquidated damag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... action for pecuniary damages. This view is further confirmed by reading Section 13(2) of the Rights, etc. Order, which runs thus :---- " Where by virtue of the preceding provisions of this Order either of the Dominions or any Province becomes subject to any liability, and it is just and equitable that a contribution towards that liability should be made by the other Dominion, or by another Province, as the case may be, the other Dominion shall make to the Dominion or Province primarily subject to the liability such contribution in respect thereof as, in default of an agreement, may be determined by the Arbitral Tribunal. " It should be noted that the words "becomes subject to any liability" used in the above provision are practically the words which occur in Section 10 of the same Order, and the language of Section 13(2) clearly shows that the word "liability", must have been used in the narrower sense of pecuniary liability, because otherwise no question of contribution towards that liability by the Dominion or Province would arise. It will be also instructive to refer to Part VII, Chapter III, of the Government of India Act, 1935, the heading of which is "Property, Contract ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly affecting a legal right of the plaintiff. " Underhill also construes "wrong" in the same sense, because a wrong is according to him, equivalent to violation of a right recognised and enforced by law by means of an action for damages. I think therefore that in view of all that has been written and said on the subject, it may be safely stated that a wrong must consist of the following elements :--- (1) There must be an act or emission amounting to an infringement of a legal right of a person or a breach of legal duty towards him; and (2) The act or omission must have caused harm or damage to that person in some way, the damage being either actual or persumed. These two elements are denoted by two Latin expressions, injuria and damnum. I have to include presumed damage under the second head, because in certain cases, such as trespass, assault, false imprisonment etc., the invasion of a right may be so flagrant that "the law conclusively presumes damage" (See observations of Lord Wright, M. R., in Nicholls v. Ely Beet Sugar Factory). Such cases, are often described as cases of absolute liability or cases where a tort is actionable per se without proof of damage. Let u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... some right. What known right of person or property or any other description it infringes is not at all clear ; not has that been stated in the pleadings. It is conceded that there has been no assessment and no realization of any tax and it could not also be disputed that it was open to the appellant to show to the assessing authority that he was not assessable at all. To say that a notice is the first step in the initiation of an illegal assessment proceeding, does not carry the matter further, but it would seem to be merely a piece of verbiage used to obscure the fundamental weakness of the appellant's case. Construing "wrong" as it should be construed, the essential thing to find out is in what way a right has been infringed or there has been a breach of duty. It is the appellant's own case that the suit is for a threatened or apprehended wrong, but that very expression shows that the suit has been brought before the alleged wrong was committed. The other element of a wrong, namely, that the person should have sustained some harm or injury, is also wanting in this case. It is not the case of the appellant that the notice has in any way caused any actual damage to him. Nor is i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n connection with something which is said to be likely to culminate in a wrong. The situation as envisaged is however very different from what is contemplated in Section 10 of the Rights, etc. Order, which is liability for an actionable wrong and not liability for something which may become a wrong in future. It is to be remembered that there are two words used in the section, viz., actionable and wrong. The mere fact that a matter is actionable will not bring the case within the four corners of Section 10 of the Order, unless all the elements of a wrong are established. I thing it will be appropriate at this stage to say a few words about the remedy by way of an injunction in cases where an actionable wrong is said to have been committed. It cannot be disputed that injunction is one of the remedies in certain cases of torts. As Addison has pointed out, "the origin of the remedy by way of an injunction is to be found in the inadequacy of the legal remedy by way of damages in many of the more serious wrongs, such as continuing trespasses and nuisances, where a wrongful act has been done and there was an intention to continue doing it". (See Addison's Law of Torts, 8th Edn. p. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich the Federal or the Provincial Government may sue or be sued. To understand the latter provision, the section is to be read with Section 65 of the Government of India Act, 1858, and Section 32 of the Government of India Act, 1915. Section 65 of the Act of 1858 enacted that :--- " the Secretary of State in Council shall and may sue and be sued as well in India as in England by the name of the Secretary of State in Council as a body corporate; and all persons and bodies politic shall and may have and take the same suits, remedies and proceedings, legal and equitable, against the Secretary of State in Council of India as they could have done against the said Company. (East India Co.) " The same provision is substantially made in Section 32 of the Act of 1915. Such being the law, the question has been posed in a number of cases from very early days as to whether, and, if so, in what cases, the Secretary of State would be liable for a wrong or a tort committed by the servants of the Crown, and it has now been definitely held that he may be liable in certain cases. So far as the present discussion is concerned, the following three points which emerge from a careful persual of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the present suit must in any event end in an infructious decree and should not be allowed to be pursued. I have already dealt with the first point, and wish simply to add that the point which is now pressed is not specifically raised in the Memorandum of Appeal presented in this Court, nor is there any trace of it in the Statement of Case filed by the appellant. The point which is mentioned in the Memorandum of Appeal and the statement of Case is that Section 12 of the Rights, etc. Order is applicable to the present case, because certain rights have been transferred from the old Province of Bengal to the Province of East Bengal. There is however no mention of Section 10 of the Order, nor is it stated that liability to an injunction brings the case within that section. Thus, a notable feature of the case is that almost every argument which was advanced in the courts below is to be discarded, and we are asked to base our decision on a point, which is not urged in the Statement of the Case, and which, in accordance with the rules of practice of this Court, cannot ordinarily be entertained. The second point urged by Mr. Setalvad is based on Section 65 of the Bengal Act, whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ertinent, in their Lordships' opinion, to ascertain whether the Act contains machinery which enables an assessee effectively to raise in the Courts the question whether a particular provision of the Income-tax Act bearing on the assessment made is or is not ultra vires. The presence of such machinery, though by no means conclusive, marches with a construction of the section which denies an alternative jurisdiction to enquire into the same subject-matter. The absence of such machinery would greatly assist the appellant on the question of construction and, indeed, it may be added that, if there were no such machinery, and if the section affected to preclude the High Court in its ordinary civil jurisdiction from considering a point of ultra vires, there would be a serious question whether the opening part of the section, so far as it debarred the question of ultra vires being debated, fell within the competence of the Legislature. In their Lordships' view it is clear that the Income-tax Act, 1922, as it stood at the relevant date, did give the assessee the right effectively to raise in relation to an assessment made upon him the question whether or not a provision in the Act was ul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... replying to the first contention, has urged that we must not look merely to the letter of the section but to the principle underlying it, and he has particularly referred us to the fact that, strictly speaking, the reliefs claimed in the abovementioned case do not fall within the letter of Section 67 of the Income-tax Act and hence the Privy Council observed in that case : " In form the relief claimed does not profess to modify or set aside the assessment. In substance it does ....The cloud of words fails to obscure the point of the suit." However that may be, it seems to me that the Privy Council, in arriving at their decision, were influenced not only by the language of Section 67 of the Income-tax Act but also by the complete machinery furnished by that Act for dealing with all questions arising in regard to the assessment, including the question of vires as would appear from the fact that while laying down that there was no jurisdiction to question the assessment except by use of the machinery expressly provided by the Act, their Lordships added: "The only doubt, indeed, in their Lordships' mind, is whether an express provision was necessary in order to exclude jurisdiction in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al Proceedings) Order, 1947, shall affect the legislative or executive right or authority of the Central or any Provincial Government of Pakistan and where such right or authority has been at issue, the judgment, decree, order or sentence shall be invalid and inoperative subject to any decision that may be obtained from a competent court of the Province concerned. " It was pointed out that by reason of this Ordinance, any decree which may be obtained in the present suit would be wholly infructuous and in this view this was a meaningess litigation which should not be allowed to continue. There is force in this argument, but the point need not be pursued, as, in my opinion, the first two points raised by the Attorney-General are sufficient to meet the principal contention advanced by the appellant. The question of submission to jurisdiction appears to me to be unarguable upon the fact stated, and it was not seriously argued before us. The Province of East Bengal did intervene and apply for permission to file a written statement, but the only statement made by it was that the Court had no jurisdiction to proceed with the suit. It cannot therefore be had that it held submitted to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y way. 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. " In the result, I would dismiss this appeal with costs. MUKHERJEA, J.---I agree with my learned brother Patanjali Sastri, J., that this appeal should be allowed and I would desire to indicate briefly the reasons that have weighed with me in coming to a conclusion different from that arrived at by the learned Judges of the Calcutta High Court. All the material facts in relation to this case have been set out with elaborate fullness in the judgment of the High Court and I deem it quite unnecessary to state them over again. The whole controversy centres round the point as to whether the suit which was instituted by the plaintiff-appellant against the Province of Bengal, as it was prior to the 15th of August, 1947, and which is still pending in the Court of the Subordinate Judge at Alipore can be continued against the Province of East Bengal which has come into existence, as a part of the Dominion of Pakistan, upon the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y binding on India as well as the Dominion of Pakistan ; and they being provisions made to be applicable only for the transitional period the question does not really arise as to whether or not they are in strict conformity with the principles of International Law which would ordinarily govern the relations between two Sovereign States. Article 4(1) of the Legal Proceedings Order is worded as follows :---- " Notwithstanding the creation of certain new Provinces and the transfer of certain territories from the Province of Assam to the Province of East Bengal by the Indian Independence Act, 1947,---- (1) all proceedings pending immediately before the appointed day in any civil or criminal court (other than a High Court) in the Province of Bengal, the Punjab or Assam shall be continued in that court as if the said Act had not been passed, and that court shall continue to have for the purposes of the said proceedings all the jurisdiction and powers which it had immediately before the opppinted day. " The clause of the Article is couched in very wide language and under it all proceedings pending in any civil or criminal court in the Province of Bengal, the Punjab or Assam im ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cumbent upon the plaintiff to show that the right or liability to which his suit relates has been transferred from the Province of Bengal, as it existed prior to the 15th of August, 1947, to the Province of East Bengal in Pakistan in accordance with the provisions of this Order. To establish this, reliance was placed on behalf of the plaintiff upon several provisions of the Rights, Property and Liabilities Order, 1947, and none of his contentions in this respect were accepted as sound by the learned Judges of the High Court. In this Court Dr. Sen Gupta took his stand on a two-fold ground. He argued in the first place that for the purpose of invoking the aid of article 12(2) of the Rights, property and Liabilities Order it is not necessary that the transfer of the right and liability to which the proceeding relates should take place under any of the specific Articles enumerated in the Order. It would be enough, according to him, if there is a transfer by or under any machinery which the Order sets up or authorises. What he says is that as the Province of East Bengal is proceeding to assess and levy agricultural income-tax upon the plaintiff in respect of a period anterior to 15th of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assumed to be correct, the Province of Bengal was liable to be restrained from proceeding to levy agricultural income-tax upon the plaintiff which was illegal, as being imposed by a statute which so far as it affected the plaintiff was unconstitutional and void. The question is whether this can be said to be a liability in respect of an actionable wrong other than a breach of contract within the meaning of that expression occurring in Article 10 set out above. It may be noted here that the rights and liabilities arising out of contracts have been dealt with in Articles 8 and 9 of the Order. The High Court took the view that the expression "actionable wrong other than a breach of contract" is synonymous with "tort". It has held that the act complained of cannot be a tortious act and even if it is so, no action would lie upon it, it being an established proposition of law that the State is not answerable, for any tortious acts of its officers done in the course of official duties imposed by a Statute. It seems to me that the learned Judges have attached a narrow and somewhat restricted meaning to the words of the Article mentioned above and that the plain language of the provision r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he right violated owes its origin to the agreement of the parties while in tort the right infringed is one created by the general law of the land. From about the middle of the 19th century the assumption current in England was that all civil causes of action must be founded either on contract or on fort and all injuries which were not breaches of contract would come under the category of torts. This assumption as Sir Frederick Pollock observes has no historical foundation to rest upon. In 1852 the Common Law of Procedure Act was passed and a tort was described in the Act as "a wrong independent of contract". It cannot be denied that this mode of expression became very common in legal parlance ; but as more than one modern writer on the law of torts have pointed out, the words in such description would have to be interpreted in a particular way and with certain limitations ; taken literally it would not be a correct statement of law. It has been observed by Underhill in his "Law of Torts" that a description like this would be accurate in law if the word "wrong" is taken in the restricted and technical sense as "equivalent to violation of a right recognised and enforced by law by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... way of illustration I may refer to the case of Halsey v. Brotherhood which was decided by Sir George Jessel. Both the plaintiff and defendant in this case were engineers and held patents for the manufacture of certain types of engines. The plaintiff brought an action against the defendant alleging that the latter had threatened to bring legal proceedings against several persons who were actual or intending purchasers of engines from the plaintiff asserting that the engines manufactured by the plaintiff were infringements of the defendant's patent. There was a claim for damages and also for injunction. It was held by Sir George Jessel that the plaintiff could not claim damages on the basis of slander of title, as he nowhere alleged that the defendant's statements or representations were not bona fide. But even though the statements had been made in good faith, the plaintiff would be entitled to an injunction against the defendant if he succeeded in proving that the latter's allegations of infringement were not true. As no proper case for injunction on this basis was made in the claim, the action was dismissed; but liberty was given to the plaintiff to bring an action in the proper f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtala which was outside British India at that time. In any event, the Province of East Bengal cannot escape liability on this ground. It would be jointly liable with the Province of West Bengal under Article 10(2)(c) of the Rights, Property and Liabilities Order. In view of my decision on this point, the other question raised by Dr. Sen Gupta as to whether the defendant submitted to the jurisdiction of the Alipore Court or not does not fall for determination. The learned Attorney-General, who intervened on behalf of the Union of India, put forward certain additional grounds in support of the order made by the learned Judges of the High Court. One of the points raised by him is that Section 65 of the Bengal Agricultural Income-tax Act constitutes a bar to the suit which, therefore, should not be allowed to continue. The other material point is that the suit cannot but result in an infructuous decree and consequently there is no justification for allowing it to proceed. It is pointed out that an Ordinance has been passed by the Governor-General of Pakistan on the 13th of November, 1948, under which "no judgment, decree or order referred to in paragraph 3 of Article 4 of the Ind ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
