State of Saurashtra vs Thakkar Vallabhdas Tulsidas

Baxi, J.—The Saurashtra Government was subsequently advised that grams could be imported without a permit and under instructions of

the Saurashtra Government, conveyed through the Import Export Trade Controller, the Collector cancelled the previous order of confiscation and

ordered) delivery of the grams to be given to the Plaintiff.

By that time the grams had become unfit for human consumption and the Plaintiff firm claims by this suit compensation for the loss sustained by the

illegal order of confiscation and the inordinate delay in returning them to the Plaintiff. On behalf of the State the Plaintiff''s claim was denied in toto.

It was contended infer alia by the written statement that the loss was due to the Plaintiff''s refusal to take delivery and the Saurashtra Government

could not be made liable for it. The learned Civil Judge held that the order confiscating the goods was illegal as the import of grams from abroad

was not prohibited and the Collector Customs was negligent in not making up his mind to confiscate the grams for about 10 months after their

arrival and in not taking proper care of preserve them.

He held that the Collector of Customs was a servant of the Government of India and a3 the Oovernment of India was acting as the agent of the

Saurashtra Government in this matter and the Saurashtra Government was liable to comiflmsate the Plaintiff for the loss arising1 out of the

negligence of the Collector of Customs.

He assessed damages at Rs. 6,070-10-0 and passed a decree in favour of the Plaintiff firm for that amount with interest from the date of the ituit till

realisation and costs. The State has preferred this appeal against the above decree.

The Advocate-General argued before us that the suit as framed was not maintainable. The Plaintiff firm has two partners and Vallabhdas is its

managing partner. In the plaint, the Plaintiff has been described as ""The Vallabhdas Tdsidas Managing Partner of the firm carry-tog on business in

the name of Shri Hari Oil Mills und Ginning Factory"".

The contention of the learned. Advocate-''General was that this was not a suit in the name of the firm under Order 30, Rule 1, but a suit by one of

its partner The other parftier was a necessary party and as he was not joined in the suit he suit must fall for non-Joiner of the other partners. This

ground was not urged in the trial Court. By the written statement filed on behalf rtf the State the allegation that Vallabhdas was the managing

partner of the firm was denied'', but no objection was taken against the frame of the nult on the ground of non-jointer of the other partner. The

objection is taken for the first time M the memo of appeal.

The entire correspondence, howevor, was carried on in the name of the firm and the suit appears to have been treated by the parties all along as

suit in the name of the firm of Shri Hari Oil Mills and Ginning Factory under Order 30, Rule 1, Code of Civil Procedure. The Defendant State

cannot therefore IJB allowed to contend at the appellate stage that the suit is by one partner only.

As no one appears to have doubted for a ,moment that the suit was by the firm, the defect, in the title of the plaint, if any, must be treated ad a

misdescription of the Plaintiff and the suit cannot be allowed to be defeated on a technical objection at this late stage,, particularly, because he

Plaintiff cannot now amend the plaint by aiding his partner as co-Plaintiff without raising up the question of limitation.

Before discussing the material points arising in this appeal, it is necessary to notice certain Central and Saurashtra enactments. The; first of these

enactments is the Imports ''and'' Ex? ports (Control) Act, 1947. The Act was enacted by the Central Government to continue the controls over

imports and exports of goods from and to foreign countries By Sub-section Al) of S. 3 the Central Government was autlflorised by order to make

provision inter alia for prohibiting or restricting import of goods of any specified description in British India. By Sub-section (2) all goods of which

import was prohibited are deemed to be the goods of which the import or export was prohibited u/s 19, Sou Customs Act, 1878 with the result

that such got did became liable to confiscation by the Collector of Customs and the importer became also liable to a fine u/s 167 (8), Sea Customs

Act. . -But Imports of all kinds of goods were IJO5 prohibited or restricted and certain goods were allowed to be freely imported into the

Provinces of India, these goods being covered by the Open General Licence. Grams were included in the -Open General Licence at the relevant

date and consequently their imoprt was free in the Provinces of India and. no licence was required for their import from abroad

The Imports and Exports (Control) Act, 1947 and all orders and notifications made or deemed to have been made or issued there under by the

Central Government were applied ''mutatl mutandis'' to Saurashtra in March, 1948 by the Saurashtra Ordinance No. 7 of 1948. By Anr.

Ordinance, via., Ordinance No. 35 of 48, the Sea Customs Act, 1878, was applied to Saurashtra on 13-7-1948.

Section 4 provided that the Saurashtra Government may, by notification, entrust to the Government of India all or any of its functions, powers and

duties in relation to any matter under the Act, which were exercisable by the Government of India, in the Provinces in India.

A notification dated 14-7-48 was accordingly issued by the, Saurashtra Government by which this entrustment was effected for there,"" years and

the functions, powers and duties in relation to the'' Sea Customs Act became, as from that date, the functions, powers 2nd duties of the

Government of India - which were performed by the officers of the Government of India.

The combined effect of the two Ordinances is that the import and export of goods to and from Saurashtra became subject to the same controls

and penalties to which they were subject in the Provinces in India, except of course goods covered by the Open General Licence.

The learned Advocate-General stated that the Imports and Exports (Control) Act, 1C47, provided ""for the Control of exports and imports of

good, while the Sea Customs Act provided the machinery for giving effect to these controls. Broadly speaking this is true. But technically the

Imports and Exports (Control) Act, 1947, not only provides for controlling the Imports and exports, but creates its own machinery also for

enforcing the controls. Sub-section (1) of Section 3 of the Let authorises the Government to control imports and exports and Sub-section (2) lays

down that the goods of which import or export has been prohibited shall be ""deemed"" to be goods of which import >''''Y export has been

prohibited u/s 19, Sea Customs Act, 187S and the provisions of that Act shall have effect accordingly.

This is more convenient than reproducing the sections of the Sea Customs Act containing provisions for enforcing prohibitions or restrictions.

Therefore the machinery of the Sea Customs Act, when used for enforcing the controls under the Imports and Exports (Control) Act, is in reality a

distinct machinery created under that Act and when dealing with goods imported or exported in contravention of that Act the Collector of Custom?

(s acting under that Act and not under the SVA Customs Act.

This distinction may not be material in the Provinces in India, where both the Acts are administered by the same authority, viz., the Central

Government, and the machinery for enforcing these is also under the same authority. But the distinction assumes importance when the

administration of the two Acts is by two different Governments.

In Saurashtri'' the administration of Exports and Imports (Control) Act being by the Saurashtra Government the machinery for enforcing the

controls under that Act was under the control of the Saurashtra Government and the Government of India, to which the functions, powers and

duties .in relation to the Sea Customs Act only were transferred, had nothing to do with the administration of the Imports and Exports (Control)

Act.

Consequently the Collector of Customs, who is a servant of Government of India, was a servant of the Saurashtra State, when exercising his

functions '''' under the Imports and Exports (Control) Act and took his orders, not from the Government o"" India, but from the Government of

Saurashtra and his orders in respect of the goods dealt with under the Imports and Exports (Control) Act of 6? Sasurashtra were virtually the

order? of the SauKuhtrft Government.

The above discussion will make it clear that the Civil Judge is not right in holding that the action .of the Collector Customs in confiscating the

grama was the act of the Government of India or that the Government of India stood in the relation of an agent of the Saurashtra Government. Tae

Government of India had no concern in the matter.

It was an independent authority exercising delegated powers in Saurashtra under the Sea Customs Act only and not under the Imports and Ex-

iwrts (Control) Act and no action taken under the latter Act etui be said to have boon taken on Its behalf. Even if the confiscation of the grams by

the Collector of Customs is considered to be under the Sea Customs Act, in his capacity as the servant of the Government of India, the Saurashtra

Government cannot be made responsible by importing principles of agency.

The Government of India when discharging its functions under the Sea Customs Act was in no way accountable to the Saurashtra Government nor

amenable to its orders, and was acting independently under the authority delegated to it by jaw. These essential attributes of agency, viz., the

accountability and amenability of the agent to the principal, .are therefore lacking in this case and the Government of India cannot be regarded as

the agent of the Saurashtra Government.

But as explained by us and as the orders end correspondence, to which we shall presently refer further show that the Collector -of Customs was

anteing under the direct orders of the Saurashtra Government and this appeal has to be decided on that footing.

Turning to the appeal, the questions, which require to be determined, are whether ''here was any negligence in detaining and cornicing the grams

and in taking a long time in releasing them, and if so, whether the Saurashtra Government is liable for such nellgence.

Before going into these questions, we shall briefly refer to the relevant ordain and cor despondence produced in the suit, it approw from the

order of the Collector of Customs dated 24-9-49, Ex. 18, that the consignment was shipped from Mombasa on or about 23-11-48 and was

landed in Porbandar in due. course.

The consignment was to be cleared by (.the Plaintiff firm. The Deputy Superintendent Customs at Porbandar, feeling doubtful whether the

consignment was covered, by a valid permit under the Imports and Exports (Control) Act, 1947, as applied to Saurashtra, referred the question to

the Import and1 Export Trade Controller, Saurashtra, for orders and in the meanwhile ''detained the consignment.

Tills started off a long correspondence between the Plaintiff and the Saurashtra Government. We shall, however, refer only to material letters and

orders. By his letter dated 11-1-49, Ex. 48, the Deputy Director of Food Supplies, Saurashtra Government, wrote to the Plaintiff firm that;

clarification was sought from the Ministry of Food, Government ""of India, and further communication will follow in due course.

This was followed) by the letter dated ll-4-4ft Ex.'' 57, from the; Under Secretary, Communication Department, Saurashtra Government, stating

that the Government was advised by the Government of India that private traders could not be permitted to import grams on their own account

and in view of these instructions the Import and Export Trade Controller had been, requested to confiscate the consignment.

The letter further stated that the question of payment for the consignment would be considered by the Food Department of the Saurashtra

Government and the Plaintiff firm was asked to address further correspondence to that department. The instructions of the Imports and Exports

Trade Controller to the Collector of Customs are not produced, but the Collector''s order of confiscation, Ex. 18, refers to the Controller''s order

dated 16-3-48, which was the basis of his order.

These letters show that the decision to confiscate the goods under the Imports and Exports (Control) Act, though, of course, taken under the

advice of the Government of India, wan the decision of the Saurashtra Government. Another letter of the Deputy Superintendent of Customs dated

22-4-49, Ex. 58, refers to a letter of the Collector of Customs No. 1314 dated 13-4-1949, by which the grams were confiscated by him. This

order is not produced nor was it served on the Plaintiff firm and comes to light only incidentally.

The Plaintiff''s attorneys thereupon addressed two letters dated 26-5-49 one to the Minister of Pood and the other to the Communication Minister,

Saurashtra State, Exs. 59 and 60. To these letters the Deputy Director, of Pood Supplies, Saurashtra, sent a reply reiterating the Saurashtra

Government''s decision set out in the previous letter of the Under Secretary, Communication Department, Ex. 57.

Tho next important document is the order of the Collector of Customs, dated 24-9-49, Ex. 18, sotting out the facts of the case and the order of

the Import and Export Trade Controller dated l(i-3-49, to which'' reference has been already made, and formally ordering confiscation of the

grams. The surprising thing about this order is that the Collector took six mouths (from 16-3-49 to 24-9-49) UOne is left wondering What he was doing for ail these six months and how it is that he totally lest sight of his previous order of confiscation dated

13-4-49, and what was the need for passing the second order of confiscation. The Plaintiff''s attorneys thereafter wrote to the Under Secretary,

Communication Department, on 4-10-49, Ex. 69, to which a reply dated 11-10-49, Ex. 71, was received from the Under Secretary, Pood and

Agricultural Department advising them that the Collector of Customs at Jamnagar was asked to instruct the Deputy Superintendent of Customs at

Porbandar U, give immediate delivery of''''the consignment to the Plaintiff.

In the meanwhile the Collector, by his order dated 14-10-49, Ex. 19, cancelled his previous order oi confiscation, Ex. 18, and directed the Deputy

Superintendent of Customs, Porbandar, to deliver the grams to the Plaintiff firm on compliance with the usual Customs formalities. This order refers

k the letter of the Import and Export Trade Controller dated 5-10-49.

The instructions to release the grams ''must, therefore, have been transmitted to the Controller a little before that date, The Plaintiff firm, however,

refused to take delivery and insisted upon a Jcint survey, but as this proposal was not accepted, Villabhdas, the managing partner, got samples

surveyed by local prain dealers, who declared the grams to be unfit for human consumption.

Tho Certificate Ex. 20#is dated 3-11-49. Subsjuently, the Plaintiff firm was asked to take delivery, of the grams, but it Insisted upon payment

pehsfttioh and |refused to take delivery and flimately served a notice dated 1-4-150, on the Government u/s 80 (a), Civil P. O., Ex. 21. The

Saurashtra Government wanted to cpme to a settlement, but the Plaintiff firm refused to discuss any nettlement except on the basirt of receiving the

amount of compensation claimed by it.

On 11-9-50, the Deputy Superintendent of Customs of a notice to the Plaintiff firm, Ex. 45, calling upon it to take delivery within a week and

intimating that steps would otherwise be taken u/s 88, Sea Customs Act, and the grains will be sold at a public auction. We were informed that

they were sold by public auction, but it is not clear whether the proceeds were credited to the Saurashtra Government or to the Central

Government.

The above summary of the corresporid-""ic3 and orders brings into light several important facts. The correspondence conclusively p was that the

decision to confiscate the goods .was that of the Saurashtra Government and the Collector of Customs merely gave effect to its orders. In our

opinion as he was acting under the Imports and Exports (Control) Act, 1947, an applied to Saurashtra, he had no discretion, in the matter.

But whether this is so or not, his orders, Exs. 18 and 19 show that he had completely surrendered his discretion to the Saurashtra Government and

never troubled to inquire even if he was competent to die so, whether the grams were covered by the Open General Licence. The correspondence

further shows that by the letter dated 18-4-49, Ex. 57, tie Saurashtra Government accepted Its liability to pay for the grams, though in this matter,

as in other matters, clarification - was being awaited from the Government of India.

The grams were sold by public auction and in the absence of any evidence that the proceeds were credited to the Central Government, we would

be justified In inferring that as their detention and confiscation and their ultimate release were mafia under the orders of the Saurashtra Government,

they were held by the Customs Collector on behalf of the Saurashtra Government and their proceeds also must have been credited to that

Government. All these facts support our conclusion that the Collector was amenable to the orders of the Saurashtra Government and was carrying

out its orders.

The goods were landed in November, 1948 and were ultimately ordered to be released in October, 1949. They were thus detained for about

11 months. It is therefore to be decided whether there was any negligence in detaining and confiscating the goods in the first place, and in taking so

much time in releasing them, and if so, who was responsible for that negligence.

The initial orders of detention and confiscation were admittedly erroneous and rifiould net have been passed. But the Saurashtra Government was

undoubtedly acting in good faith a making these orders, because it was acting under the advice of the Government of India, the Saurashtra

Government not being sure of the position.

But it cannot escape the imputation of negligence in delaying the release of toe grams after realising its mistake nor again can it be exonerate ed for

the negligence which, as we shall show later, its officials showed in not taking proper steps to preserve the grams while in their custody.

This mistake in detaining the grams and conflscating them must have been realised at least dated 1-9-49, as the order of the Port Officer dated 1-

9-49 Ex. 66 shows. However, the order was given to a wrong officer instead of to the Import and Export Trade Controller, which was being done

till now. The delay of 11/2 months in getting the Collector to cancel his order could have been avoided, if care had been taken to send orders to

the proper officer.

Besides the Government as well as the Collector of Customs ought to have known that grams were perishable goods. At least ore monsoon must

have passed, while they were in the Collector of Customs'' custody, and it should have been realised that they were bound to become unfit for

human consumption, unles3 they were speedily sold ""away pr unless measures were taken to preserve them.

Neither of these courses was adopted. The learned Advocate General referred us to the Statement in paragraph 19 of the Plaintiff Vallsbftdar

deposition, Ex. 16, that the grams were stored In a godown as other goods were stored and argued that the Plaintiff''s admission showed that-the''

grams were treated with the care which was usually bestowed on goods stored in the Government godown and there was no negligence in storing

them. '' Now if food grains become unfit for human'' consumption during their storage -in a godown, a presumption of negligence arises, unless it is

shown that measures were taken to preserve them. This presumption is not displaced by merely proving that they were stored like other goods.

The reason is that we do not know what the other goods were tmdj how long they were kjjpt stored in the godown. KMX perlshablo goods, if not

kept stored too long, xiuiy not demand the same care, which foodgrain stored for about 11 months may require.

Therefore mere proof that other ""goods were ai;.o stored in the Collector''s godowns without any information about their nature and trie length of

their storage is not sufficient to rebut the presumption of negligence arising in respect of the Plaintiff''s grams. In our opinion the Saurashtra

Government was negligent in not taking proper steps to release the grams immediately after realising its mistake.

Similarly though the Collector of Customs may not be charged with negligence in not selling the grams, as he had a discretion in the matter, was

certainly negligent in not taking proper precautions to prevent avoidable deterioration and the Saurashtra Government is responsible for the

damage caused by his negligence.

The learned Advocate General argued that the Collector of Customs was acting in the exercise of his statutory duties and the State cannot be

made responsible for the tort committed by him in the performance of those duties. He referred to the following proposition enunciated by Fazal

All J. in his dissenting judgment in The State of Tripura Vs. The Province of East Bengal, .

(1) The principles of law of torts have been consistently applied in all cases dealing with the liability of the Secretary of State for wrongs committed

by the servants or agents of the Crown or the Government. (2) That it was settled law that the Secretary of State could not be held liable for

wrongs committed by the servants of the Crown in the performance of duties imposed by the Legislature (3) That it was also, well settled that

where a statute specially authorises a certain act to be done by a certain person, which would otherwise Be unlawful or actionable, no action will

lie for the doing of the act.

Tlie learned Advocate General also referred to District Board of Bhagalpur Vs. Province of Bihar, , Rahimbux Haji Ka-rimbux v. Secretary of

State, AIR 1938 Sind 6 ( v. 25) (C), Kader Zailani v. Secretary of State AIR 1931 Rang. 294 (AIR v. 18) (D), Rose v. Secy. of State AIR 1916

Mad. 1157 ( v. 3) (E)f and to a Bench decision of this Court in Abdul Kadir Ibrahim v. Saurashtra State AIR 1956 Sau. 62 ( v. 43) (F). All these

decisions are Instance."" of application of the above propositions. But there are certain well-known exceptions enumerated by Ahmed J. in State of

Bihar Vs. Rani Sonabati Kumari, .

The learned Judge''s observations in the folic wing passage of his judgment at p. 518 of the Report are pertinent to the case before us and we

therefore reproduced them:

But from the very princip''es stated above it is manifest that there it is proved that the lm-

pugned act has been expressly authorised by the State or that the State has been profited by its performance, the State will not be left immune from

an action for the liability arising from them - A. M. Ross v. Secy. of State, AIR 1915 Mad. 434 ( v. 2) (H). They, therefore, constitute the third

exception to the general rule of immunity applicable in favour of the State.

It is abundantly shown that the entire process of detention of the grams, their confiscation and release was expressly authorised by the Saurashtra

Government and no discretion was left to its officers. A soon as it was discovered that it order were unjustified, the Saurashtra Government should

have returned the grams or accounted for them.

To hold otherwise would be tantamount ''to allowing it co retain the benefit, which accrued to it by the confiscation of the grams. If the grams were

lost while in the custody of its officers, it cannot be allowed to throw the loss on the plainti0 firm, unless it is shown that the loss could not be

avoided inspite of taking reasonable cure in storing them, which an ordinary prudent man is expected to bestow under similar circumstances. Ixi

other words, the State cannot escape liability for the loss in the absence of proof that there wan no negligence in storing them.

In AIR 1956 Sau 62 ( v. 43) (F), servants in; the Nawanagar State had wrongfully seized sheep and goats belonging to the Plaintiff from foreign

territory. The animals were brought into the Nawanagar State territory and detained by State servants, whose duty it was to detain them. All the

animals except a few perished while under detention and the Plaintiff was offered the price of the surviving animals, which were sold by the State,

The plainitff claimed the price of all the animals but we disallowed the claim and ordered payment of the price of animals actually sold, on the

ground that the State had not made any profit out of the animals that had died. In the course of judgment, which was written by me, I had observed

that:

It may be that those servants of the State, who had the custody of the animals, might be negligent in not selling them away before they perished; but

in detaining the animals they were acting in the exercise of powers conferred upon them by the Municipal Law, and the Nawanagar State clearly

cannot be held responsible for the loss of the animals for it cannot be said that they had profited by the loss of animals.

The learned Advocate-General relying on these observations argued that if the goods perished, while in the custodv of it servant; the State would

not be liable even if the State servants acted negligently in not selling them away before they perished.

With respect to the learned Advocate-General, I venture to say that he has not properly appreciated the point of the above observations. The

point was that though there might be negligence on the part of the State servants in not selling the animals, that negligence was not directly

responsible for the Plaintiff''s loss. The loss was the direct result of death which no one could predict or prevent and the State having lost the

animals by what may be called ''vis major'', it could not be said to have made any profit out of the, wrongful detention of the animals.

In this case any one could have foreseen that the grams would inevitably be lost, if proper measures for preserving them were not taken during their

storage. There is no evidence that any measures with therefore, a by the confi was lost to wants, This lot not be throi in 1866 8a application (11) It

tution the ment in res dovernmenl of the Com argued that the Saurast 295 had no Mr, Article 295 do Constitutior Governmen covered by the

Govern We hov ral on the'' g tra Governt destruction J5(l)(b) h continued lGovernmei a State sp whether a; shall be tl the Goverr Buch right tlons wen will there;-India relat in the Un tered into India with (2) Seach State

dule, shal Constitute of the eoi property: obligation: otherwise, (1).

Trade and of the ite the seven purpose l Saurashti commerce would no India imIf on bility wa: with Ion not apply be''the lie od by tin? ted by its t tomuno from them 1.434 (AIR the third nity appljk process of .on and re-

Saurashtra to its offl-�j its orders:;ovcrnment counted for jo mount to accrued to the grams cers, it can-he Plaintiff �ould not be are in stor-

man is ex-istances. In liability for , there was servants of - eized sheep .om foreign o the Nawa- State ser All the uder deten-price of the y the

State. tlic animals:red payment n the ground lit out of the n:;t; of judg-aad observed of the State,, might be ne-before they lis they were nferred

upon e Nawanagar .sible for the aid that they on these ob-erished, while ale would not jicted ncgll-before they Bcate-Oeneropfrly apprb

negligence If in not selling ji t directly resloss was the could predict ,''t the animals could not bo the wrongful foreseen that if proper meataken

during nee that and were taken to preserve them. This Is, therefore, a case in which the State .had benefited Ijy the confiscation of the grams,-but

that benefit was lost to It through, the negligence of its servants.

This loss must be borne by the State and cannot be thrown on the Plaintiff firm. The decision in AIR 1956 Sau 62 ( v. 43) (F) has thus no

application to the facts of this case.

It was lastly urged that after the Constitution the liability of the Saurashtra Government in respect of these grams devolved upon the

Government of India by virtue of Article 295(1) (b) of the Constitution. Mr. Joshi for the Respondent argued that as the liability had been incurred

by the Saurashtra State before the Constitution Article 21had no application.

Mr. Joshi''s contention is not tenable because Article 295 deals exactly with the devolution of pre-Constitution liabilities and obligations of the

Government of a Part B State and if they are covered by sub-Art. (1) (b) they would devolve upon the Government of India after the Constitution.

We however hold against the Advocate-General on the ground that the liability of the Saurashtra Government to compensate the Plaintiff for the

destruction of the grams is not covered by Article 295(1) (b) but by Article 295(2) and consequently it continued to be the liability of the

Saurashtra Government after the Constitution and must be discharged by it.

The relevant provisions of the Article are as under:

(1) As from the commencement of this Constitution-

(b) all rights, liabilities and obligations of the '' Government of any Indian State corresponding to a State specified in Part B of the First Schedule,

whether arising out of any contract or otherwise, shall be the rights, liabilities and obligations of the Government of India, if the purposes for which

mirji rights worn acquired or liabilities or obligations were Incurred before such commencement will thereafter be purposes of the Government of

India relating to any of the matters enumerated in the Union List, subject to any agreement entered Into in that behalf by the Government of India

with the Government of that State.

(2) Subject as aforesaid,- the Government of State specified in Part B of the First Schedule, shall as from the commencement of this Constitution,

be the successor of the Government of the corresponding Indian State as regards all property and assets and all rights liabilities and obligations

whether arising out of any contract or otherwise, other than those referred to in clause (1).

Triifto and Commsree with forelan countries is one of the items (item No. 41) in the Union List In the seventh Schedule to the Constitution. If the

purpose for which liability was incurred by the Saurashtra State was in relation to trade and commerce with foreign countries, such liability would

no doubt devolve upon the Government of India under this Article and, after the Constitution, it will be the liability of the Government of India.

If on the other hand the purpose of that liability was not in relation to trade and commerce with loreign countries, then Article 295(1Mb) does not

apply to it and .the, liability would continue to be the liability of the Sauraatra State under Article

295(2). We have therefore to examine the actual purpose of the liability which is sought, to be forced by this suit, The purpose underlying the initial

uetentioji and confiscation of the1 grams was no doubt the control of trade with a foreign-country and the liability incurred by the Saurashtra State

In detaining and confiscating the grams would after the Constitution be the liability of the Government of India.

But it Is impossible to conceive how after deciding that the import of grams was free and they should be returned to the Plaintiff, any purpose in

relation to trade with foreign countries would be even remotely served by negligently delaying delivery and allowing the grams to deteriorate. The

Saurashtra ''State''s liability for this negligence therefore continued to be its liability after the Constitution under Article 295.(2). Nothing was urged

against the quantum of damages awarded by the learned Civil Judge.

The appeal, therefore, fails on all grounds and is accordingly ordered to be dismissed with costs and the decree of the learned Civil Judge is-

confirmed.

Shah, C.J.

I agree.