1963 (11) TMI 74 - SC - Indian Laws

Supreme Court: State of Punjab liable for debts under Displaced Persons Act

State of Punjab Versus Okara Grain Buyers Syndicate Ltd. and others

The Supreme Court held that applications under Section 13 of the Displaced Persons (Debts Adjustment) Act, 1951 against the State of Punjab were ... Whether an application under s.13 of the Displaced Persons (Debts Adjustment) Act, 1951 is not maintainable against the State of Punjab? Whether under s. 13 of the Act a 'displaced creditor' could make a claim against the Government either of the State or of the Union, subject to the limitation of one year referred to in the opening words of the provision? Held that:- Appeal dismissed. High Court was right and that the revision petitions were properly rejected. Issues Involved:1. Whether an application under Section 13 of the Displaced Persons (Debts Adjustment) Act, 1951 is maintainable against the State of Punjab.2. Whether the claims made by the displaced creditors against the State constitute a 'debt' within the meaning of the Act.3. Whether the State of Punjab can be considered a 'person' under Section 13 of the Act.Issue-wise Detailed Analysis:1. Maintainability of Application under Section 13 against the State of Punjab:The respondents, who are displaced creditors, filed claims under Section 13 of the Displaced Persons (Debts Adjustment) Act, 1951 against the State of Punjab. The State raised a preliminary objection to the maintainability of these applications, arguing that the State is not a 'person' against whom a claim can be made under Section 13. The Tribunal at Amritsar and Hissar overruled these objections, leading to revisions filed by the State in the High Court of Punjab. A Full Bench of the High Court held unanimously that the applications were maintainable, overruling earlier contrary decisions. The Supreme Court had to consider whether a displaced creditor could make a claim against the Government under Section 13, subject to the one-year limitation.2. Definition of 'Debt' under the Act:The appellant contended that the claims made against the State do not constitute a 'debt' within the definition provided in the Act. According to Section 2(6), 'debt' means any pecuniary liability due to a displaced person from any other person, whether a displaced person or not, ordinarily residing in the territories to which the Act extends. The appellant argued that the State does not fall within this definition as it does not 'actually and voluntarily reside' or 'carry on business' or 'personally work for gain.' The Court had to determine whether the sums claimed by the respondents could be considered 'debts' under the Act.3. Interpretation of 'Person' under Section 13:The primary contention was whether the State of Punjab could be considered a 'person' under Section 13 of the Act. The appellant argued that the State is not expressly named or implied within the Act and therefore is not bound by its provisions. The rule of construction, which states that the Crown (or State) is not bound by a statute unless expressly named or by necessary implication, was invoked. The Supreme Court examined whether the legislative intent and the provisions of the Act indicated that the State was meant to be included within the scope of 'person.'Detailed Analysis:1. Maintainability of Application:The Supreme Court noted that the Full Bench of the High Court had correctly interpreted the Act to include claims against the State. The Act was designed to provide relief to displaced persons who had suffered due to the partition of India. The Court emphasized that the legislative intent was to provide a comprehensive remedy for displaced persons, which would be frustrated if the State were excluded from the Act's scope.2. Definition of 'Debt':The Court examined the definition of 'debt' in Section 2(6) and concluded that it includes pecuniary liabilities due to displaced persons. The Court reasoned that the term 'debt' should be interpreted broadly to fulfill the Act's purpose of providing relief to displaced persons. The Court also noted that the procedural and substantive provisions of the Act, such as Sections 5, 32, and 47, support the inclusion of debts owed by the State within the Act's ambit.3. Interpretation of 'Person':The Supreme Court held that the State could be considered a 'person' under the Act by necessary implication. The Court referred to the rule of construction that the State is not bound by a statute unless expressly named or by necessary implication. However, the Court found that the Act's purpose and provisions indicated a clear legislative intent to include the State within its scope. The Court emphasized that excluding the State would frustrate the Act's beneficent purpose and render its provisions unworkable.Conclusion:The Supreme Court concluded that the applications under Section 13 of the Displaced Persons (Debts Adjustment) Act, 1951, against the State of Punjab were maintainable. The claims made by the displaced creditors constituted 'debts' within the meaning of the Act, and the State of Punjab could be considered a 'person' under Section 13. The appeals were dismissed, and the judgment of the High Court was upheld.