1953 (11) TMI 29 - SC - Indian Laws

State of West Bengal liable for pre-1947 rent and taxes under Indian Independence Order

The Supreme Court affirmed the Calcutta High Court's decision, holding that the State of West Bengal is liable for the payment of rent and taxes for the ... - Issues Involved:1. Interpretation of Articles 8 and 9 of the Indian Independence (Rights, Property and Liabilities) Order, 1947.2. Liability for payment of rent and taxes for a period prior to 15th August, 1947.Issue-wise Detailed Analysis:1. Interpretation of Articles 8 and 9 of the Indian Independence (Rights, Property and Liabilities) Order, 1947:The primary issue in this appeal is the interpretation of Articles 8 and 9 of the Indian Independence (Rights, Property and Liabilities) Order, 1947. Article 8(2) states that any contracts made on behalf of the Province of Bengal before the appointed day (15th August, 1947) shall be deemed to have been made on behalf of the Province of West Bengal if the contract is for purposes exclusively of West Bengal. Conversely, if the contract is for other purposes, it shall be deemed to have been made on behalf of East Bengal. Article 8(6) stipulates that the provisions of Article 8 are subject to Article 9, which deals with liabilities in respect of loans, guarantees, and other financial obligations.The learned Advocate-General of West Bengal contended that the liability to pay rent under the lease falls within the expression 'other financial obligations' in Article 9. However, the court rejected this argument, stating that 'other financial obligations' should be construed ejusdem generis, implying obligations similar to loans and guarantees. The court emphasized that accepting the Advocate-General's argument would undermine the purpose of Article 8, which was not the intention of the framers.The court referred to previous judgments, including Province of West Bengal v. Midnapur Zemindary Company, Ltd., Sree Sree Iswar Madan Gopal Jiu v. Province of West Bengal, and The State of Punjab v. L. Mohan Lal Bhayana, which supported the ejusdem generis interpretation. The court concluded that 'financial obligations' in Article 9 refers to obligations arising from arrangements or agreements relating to State finance, not all pecuniary obligations under contracts.2. Liability for Payment of Rent and Taxes for a Period Prior to 15th August, 1947:The respondent had leased premises to the Governor of the undivided Province of Bengal for a term of three years starting from 1st February, 1947. The lease included a monthly rent of Rs. 1,800 and a quarterly payment of Rs. 150 towards municipal taxes. After the partition of India on 15th August, 1947, the Province of Bengal was divided into West Bengal and East Bengal. The respondent claimed arrears of rent and taxes for the period from February 1947 to January 1948, totaling Rs. 22,723-9-3.The appellant, State of West Bengal, paid the arrears from 15th August, 1947, but denied liability for the period before that date. Sinha J. of the Calcutta High Court held that the lease was for purposes exclusively of West Bengal and that under Article 8(2)(a), the appellant was liable for the rents accrued before the appointed day. The Division Bench of the Calcutta High Court affirmed this judgment.The Supreme Court upheld the High Court's decision, stating that the liability to pay rent under the lease does not come within the expression 'financial obligations' in Article 9. The court affirmed that the State of West Bengal is liable for the rent and taxes for the period prior to 15th August, 1947, as per Article 8(2)(a).Conclusion:The Supreme Court affirmed the decision of the Calcutta High Court, holding that the State of West Bengal is liable for the payment of rent and taxes for the period prior to 15th August, 1947, under Article 8(2)(a) of the Indian Independence (Rights, Property and Liabilities) Order, 1947. The appeal was dismissed with costs.