Pre-appointed-day contract classification under the Independence Order turns on purpose at the appointed day, not later control arrangements.

Article 8(1) of the Indian Independence (Rights, Property and Liabilities) Order, 1947 applies to pre-appointed-day contracts whether the consideration is executed or executory, because it covers rights and liabilities that had accrued or may accrue under such contracts. The contract is tested as at the appointed day and is classified by its purpose on that date; if it would then be exclusively for the Dominion of Pakistan, it falls within the provision. On that basis, a contract to supply fodder to the Military Farms at Lahore was treated as exclusively for Pakistan, and the later disposal of goods or control over military stores did not change that allocation. The Joint Defence Council Order, 1947 preserved only limited control powers and did not alter the contractual distribution of rights and liabilities.

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Issues: Whether the contract made before the appointed day was, by virtue of the Indian Independence (Rights, Property and Liabilities) Order, 1947, to be treated as a contract exclusively for the Dominion of Pakistan, and whether the Joint Defence Council Order, 1947 altered the allocation of rights and liabilities arising under that contract.

Analysis: Article 8(1) of the Indian Independence (Rights, Property and Liabilities) Order, 1947 applies to contracts made before the appointed day whether the consideration is executed or executory, because it speaks of all rights and liabilities which have accrued or may accrue under such contracts. The test is an artificial one: the contract must be viewed as on the appointed day and judged by whether, on that date, it would be exclusively for the purposes of the Dominion of Pakistan. On that test, a contract to supply fodder to the Military Farms at Lahore was for a purpose exclusively belonging to Pakistan, since the purpose of the contract is not altered by the later disposal of the goods or by powers of control over military stores. The Joint Defence Council Order, 1947 preserved only powers of control over specified military plant, machinery, equipment and stores, and did not alter the contractual rights and liabilities distributed by the Independence Order.

Conclusion: The contract fell within Article 8(1)(a) of the Indian Independence (Rights, Property and Liabilities) Order, 1947, the Union of India had no liability under it, and the earlier finding in favour of the appellant was correct.

Final Conclusion: The appeal succeeded, and the High Court's view was set aside in favour of the appellant on the governing contractual liability question.

Ratio Decidendi: A pre-appointed-day contract must be classified under Article 8(1) by reference to the purpose it would have had on the appointed day, and powers of control over military stores do not change the contractual allocation of rights and liabilities fixed by the Independence Order.

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