The principles determining the extent to which our courts can enforce the legal consequences of actions and rights from previous legal regimes has been laid down by the Privy Council and adopted by Supreme Court after Independence.

In Secretary of State Council in India v Kamachee Boye Sahaba,[1] the Rajah of Tanjore died on 29 October 1855 without a legal heir, causing the East India Company to declare that the Raj had lapsed to the colonial government. A letter was sent by the colonial government, as the ‘new sovereign of Tanjore’, requesting a list of the private and public property held by the former ruler in order to decide any claims made against this property. When no response was received, a company official, ‘taking advantage’ of the presence of the 25th Regiment of Infantry, took possession of the property of the Raja, placed it under seal and stationed sentries to guard the property.

A suit was brought before the Supreme Court of Madras by the eldest widow of the erstwhile Raja with respect to the private property of the former ruler. It was contended that upon the lapse of the Raj, it was only the public property of the Raja that was acquired by the new ruler while the private property of the Raja was to be distributed in accordance with the Hindu law of succession.

The respondents contended that the seizure of the Raja‘s property was an ‘act of State’ on behalf of the colonial government as the new sovereign. The lapse of the Raj and the subsequent seizure involved only the Raja and the colonial government – two sovereign powers, and consequently, the court had no jurisdiction to entertain the matter.

Accepting this contention, Lord Kingsdown, speaking for the Privy Council held:

“But, whatever may be the meaning of this letter…It shows that the [colonial] Government intended to seize all the property which actually was seized, whether public or private, subject to an assurance that all which, upon investigation, should be found to have been improperly seized, would be restored.

But, even with respect to property not belonging to the Rajah, it is difficult to suppose that the Government intended to give a legal right of redress to those who might think themselves wronged, and to submit the conduct of their officers, in the execution of a political measure, to the judgement of a legal tribunal. …

The result, in their Lordships’ opinion, is, that the property now claimed by the respondent [eldest widow] has been seized by the British Government, acting as a Sovereign power, through its delegate the East India Company; and that the act so done, with its consequences, is an act of State over which the Supreme Court of Madras has no jurisdiction. Of the propriety or justice of that act, neither the Court below nor the Judicial Committee have the means of forming, or the right of expressing, if they had formed any opinion.

It may have been just or unjust, politic or impolitic, beneficial or injurious, taken as a whole, to those whose interests are affected. They are considerations into which their Lordships cannot enter. It is sufficient to say that, even if a wrong has been done, it is a wrong which no Municipal Court of justice can afford a remedy.”

The action of the colonial government in seizing the Raja’s property was an action between two sovereign actors – the colonial government and the State of Tanjore embodied by the Raja. The suit was instituted before the Supreme Court of Madras, a court of the colonial government drawing on the colonial government‘s sovereignty.

The Privy Council held that the actions of the colonial government vis-à-vis another sovereign entity (the Raja of Tanjore) were acts of State and the municipal courts could not entertain matters questioning the legality of those acts unless the colonial government itself recognised that the matter was justiciable.

The Privy Council held that there was no evidence to support the claim that the colonial government recognised that legal redress was to be given to claimants of the Raja‘s property. Absent a recognition by the colonial government that the consequences of the act of State were legally enforceable in municipal law, municipal courts could not entertain suits with respect to the act of State.

In 1899, this principle was followed by the Privy Council in its decision in Thomas and James Cook v Sir James Sprigg.[2] The respondents in appeal had challenged certain agreements made by a Native Chief of Pondoland granting concessionary rights over lands and forests to the appellants, as delegates of the British Sovereign. The respondents contended that the agreements were contrary to the laws of Pondoland at the time.

The Privy Council held the grant of lands and rights to the British Sovereign to be an act of State between the ‘Paramount Chief of the Pondos’ and the British Sovereign and could not be challenged before a municipal court on the grounds of violating Pondo law. Lord Halsbury, speaking for the Privy Council, held:

“The taking possession by Her Majesty whether by cession or by any other means by which sovereignty can be acquired was an act of State and treating Sigcau [the Pondo Chief] as an independent Sovereign – which the Appellants are compelled to do in deriving title from him – it is a well-established principle of law that the transactions of independent States between each other are governed by other laws than those which municipal courts administer.

It is no answer to say that by the ordinary principles of International Law private property is respected by the Sovereign which accepts the cession and assumes the duties and legal obligations of the former Sovereign with respect to such private property within the ceded territory…if there is either an express or well-understood bargain between the ceding Potentate and the Government to which the cession is made that private property shall be respected that is only a bargain which can be enforced by Sovereign against Sovereign in the ordinary course of diplomatic pressure.”

The common law principle which the Privy Council adopted was that municipal courts cannot enforce the law applicable between two sovereign states. The Privy Council clarified that irrespective of what international law had to say on whether the new sovereign was subrogated into the shoes of the old sovereign with respect to the legal obligations of the latter, a municipal court cannot enforce such legal obligations in the absence of express recognition of the legal obligations by the new sovereign.

Where there is a change of sovereignty from a former sovereign to a new sovereign, the municipal courts of the new sovereign will not enforce the legal rights of parties existing under the former sovereign absent an express recognition by the new sovereign of such legal rights.

The applicability of the above principles to the question of proprietary rights existing under a former regime was discussed in a 1915 decision of the Privy Council in Secretary of State of India in Council v Bai Rajbai[3].

The respondent in appeal, being part of a group called Kasbatis, had been given a grant to collect rent from certain villages by the Gaekwar rulers of Ahmedabad. In 1817, the district of Ahmedabad was ceded by the Gaekwars to the British Government. However, the settlement of the territories ceded was not practically implemented until 1822-23.

When the territory was ceded, the respondents were in possession of seventeen villages, but refused to pay the requisite tax to the colonial Bombay government on the ground of their grant by the former ruler. A settlement proposed by a Mr Williamson was also rejected by the respondent and the Bombay government eventually executed a series of leases granting the Kasbatis the villages ‘at the pleasure of the government’.

The respondent filed a suit claiming that upon the expiry of the leases, she was legally entitled to be granted a new lease. Lord Atkinson, speaking for the Privy Council, observed:

“Before dealing with the action of which the Government of Bombay took in reference to this village of Charodi on receipt of these reports, it is essential to consider what was the precise relation in which the Kasbatis stood to the Bombay Government the moment the cession of their territory took effect, and what were the legal rights enforceable in the tribunals of their new Sovereign, of which they were thereafter possessed.

The relation in which they stood to their native Sovereigns before this cession, and the legal rights they enjoyed under them, are, save in one respect, entirely irrelevant matters. They could not carry in under the new regime the legal rights, if any, which they might have enjoyed under the old. The only legally enforceable rights they could have as against their new Sovereign were those, and only those, which that new Sovereign, by agreement expressed or implied or by legislation, chose to confer upon them.

Of course, this implied agreement might be proved by circumstantial evidence, such as the mode of dealing with them which the new Sovereign adopted, his recognition of their old rights, and express or implied election to respect them and be bound by them, and it is only for the purpose of determining whether and to what extend the new Sovereign has recognised these ante-cession rights of the Kasbatis, and has elected or agreed to be bound by them, that the consideration of the existence, nature, and extent of these rights become relevant subjects for inquiry in this case. This principle is well established…”

… In their Lordships’ view, putting aside legislation for the moment, the burden of proving that the Bombay Government did so consent to any, and if so, to what extent, rests, in this case upon the respondent. The Kasbatis were not in a position in 1822 to reject Mr. Williamson‘s proposal, however they might have disliked it, or to stand upon their ancient rights. Those rights had for all purposes of litigation ceased to exist, and the only choice, in point of law, left to them was to accept his terms or to be dispossessed.”

The cession of the territory of Ahmedabad by the Gaekwars to the colonial government was an act of State between two sovereigns. Upon the cession of the territory, the rights of the citizens within the territory of their new sovereign, and consequently in the municipal courts of the new sovereign, were only those expressly recognised by the new sovereign. Unless the new sovereign recognised the rights of the citizens which existed in the old regime, the municipal courts of the new sovereign could not enforce those ancient rights.

This includes the right to property of the citizens within the territory. Whether or not the new sovereign should recognise the property rights of citizens is a contention to be urged between the two sovereigns at a supra-national plane and a municipal court would not entertain such contentions.

The recognition of property rights previously recognised in the old regime by the new sovereign need not be explicit and may be implied through the conduct of the new sovereign and established through circumstantial evidence. However, the burden of proving the existence of the right in the previous regime and the recognition of the right by the new sovereign rested on the party claiming such a right.

The principles enunciated by Lord Atkinson have been adopted by Supreme Court after Independence. A significant number of disputes arose out of the rights granted to individuals by former princely rulers prior to the cession of their territories to the Republic of India. The Court was called upon to determine whether such rights were enforceable after the change of sovereignty from the princely rulers to the Republic of India.

In Promod Chandra Deb v State of Orissa[4] a batch of writ petitions were heard by a Constitution Bench of the Court. The facts of the petitions were largely analogous to each other: the petitioners had received certain cash grants, or Khor Posh grants, from princely rulers prior to these rulers ceding their territories to the Republic of India (then the Dominion of India). A question arose as to whether the State of Orissa, as a delegate of the Central Government, was required to enforce the old laws of the princely states including the providing of the Khor Posh grants. Referring to the Privy Council decisions discussed above, Chief Justice B P Sinha speaking for the Constitution Bench laid down certain principles applicable when the municipal courts of a new sovereign must enforce rights accruing to parties from the legal regime of a previous sovereign:

“17. On an examination of the authorities discussed or referred to above, the following propositions emerge.

(1) ‘Act of State’ is the taking over of sovereign powers by a State in respect of territory which was not till then a part of its territory, either by conquest, treaty or cession, or otherwise, and may be said to have taken place on a particular date, if there is a proclamation or other public declaration of such taking over.

(2) But the taking over of full sovereign powers may be spread over a number of years, as a result of a historical process …

(5) As an act of State derives its authority not from municipal law but from ultra-legal or supra-legal means, Municipal Courts have no power to examine the propriety or legality of an act which comes within the ambit of ‘act of State’.

(6) Whether the act of State has reference to public or private rights, the result is the same, namely, that it is beyond the jurisdiction of Municipal Courts to investigate the rights and wrongs of the transaction and to pronounce upon them and, that, therefore, such a Court cannot enforce its decisions, if any.

It may be that the presumption is that the pre-existing laws of the newly acquired territory continue, and that according to ordinarily principles of International Law private property of the citizens is respected by the new sovereign, but Municipal Courts have no jurisdiction to enforce such international obligations. …

(8) The Municipal Courts recognised by the new sovereign have the power and jurisdiction to investigate and ascertain only such rights as the new sovereign has chosen to recognise or acknowledge by legislation, agreement or otherwise.

(9) Such an agreement or recognition may be either express or may be implied from circumstances and evidence appearing from the mode of dealing with those rights by the new sovereign. Hence, the Municipal Courts have the jurisdiction to find out whether the new sovereign has or has not recognised or acknowledged the rights in question, either expressly or by implication, as aforesaid.

(1) In any controversy as to the existence of the rights claimed against the new sovereign, the burden of proof lies on the claimant to establish the new sovereign has recognised or acknowledged the right in question.”

The Constitution Bench accepted the legal principles laid down by the Privy Council in determining the method in which the legal consequences of acts of a previous legal regime are recognised. Crucially, it does not matter that the acts pertain to public or private rights. Municipal courts will only recognise those rights and liabilities which have been recognised by the new sovereign either expressly or impliedly through conduct established by evidence. The municipal courts of the new sovereign can embark upon an inquiry as to whether the new sovereign has expressly or impliedly recognised the rights and liabilities existing under a former regime. However, the burden to establish the existence and recognition of such rights and liabilities remains on the party claiming them.

The principles laid down in Promod Chandra Deb were affirmed by a seven-judge Bench of the Court in State of Gujarat v Vora Fiddali Badruddin Mithibarwala.[5] The seven-judge Bench also expressly rejected the contention that grants given by a former sovereign are merely voidable until expressly revoked by the new sovereign.

The court held that such grants are not enforceable by the municipal court of the new sovereign unless expressly or impliedly recognised by the new sovereign. These principles have also been affirmed by subsequent benches of the Court in Pema Chibar v Union of India[6] Union of India v Sudhansu Mazumdar[7].

The evidence and arguments submitted before this Court have canvassed four distinct legal regimes. The legal consequences of actions taken, proprietary rights perfected, or injuries suffered in previous legal regimes can only be enforced by this Court if they received implied or express recognition by subsequent sovereigns. Absent such recognition, the change of sovereignty is an act of State and this Court cannot compel a subsequent sovereign to recognise and remedy historical wrongs.

[1] (1857-60) 7 Moo IA (476)

[2] (1899) AC 572

[3] ILR (1915) 39 Bom 625

[4] 1962 Supp (1) SCR 405

[5] (1964) 6 SCR 461

[6] (1966) 1 SCR 357

[7] (1971) 3 SCC 265