P L D 1961 (W (PLP)

WAHIDUDDIN AHMAD, J. This is a first appeal against the judge ment of Syed Iftikhar Hussain, the then 1st. Additional District Judge, Karachi, in suit No. 87 of 1957 dated 29th September 1958 missing the appellants' claim amounting to Rs. 13,312/12 as their share in the Provident Fund left by their deceased father with the North Western Railway. One Anthony Lobo,' Loco Foreman in the North Western Railway died at Karachi on the 1st of February 1947 leaving behind Mrs. E. H. Lobo, a widow, Daphne Lobo a daughter, and two minor sons, the two appellants, namely Kenneth Thomas Lobo and Ainsley John Lobo. Under the Departmental Rules of the North-Western Railway a sum of Rs. 26,625/6 was lying to the credit of the deceased and payable to the above-mentioned family members. On the 20th of August 1947 the- respondent paid Rs. 13,312/10 to the above-mentioned widow and daughter of the deceased and promised to-pay the balance of Rs. 13,312/12 to the appellants, who were minors at that time, on the production of a guardianship certificate under the Guardian and Wards Act. The appellants' mother obtained a guardianship certificate from the former Chief Court of Sind and called upon the respondents to pay the amount due to the appellants in respect of the balance of the Provident Fund lying with them, but the respondents failed to pay this amount in spite of repeated demands, Consequently on the 17th of November 1956 the appellants served a notice on the res pondents under section 80, C. P. C., but in spite of this notice they failed to pay the amount due from them. Thereupon the appellant filed suit No. 87 of 1957 in the Court of the Fourth Sub-Judge First Class, Karachi. The suit was resisted inter alia on the ground that it was barred by limitation, that it was not maintainable against the respondents as it related to a pre-partition claim and was not the liability of the respondents in view of the Inter -Dominion Agreement between the Pakistan and Indian Govern ments, that it was bad for non joinder of proper plaintiffs and was also bad for want of a proper notice under section 80, C. P. C. The suit was transferred to the Court of the 1st Additional District Judge Karachi. The learned counsel for the parties have not challenged the findings of the learned Ist Additional District Judge on issues Nos. 1, 2 and 3 and the only question argued in this appeal is whether the respondents are liable to pay the amount in dispute in view of the provisions of the Indian Inde pendence Rights, Property and Liabilities Order, 1947. It was urged before the learned First Additional District Judge that the respondent-railway was not liable to pay the amount claimed as the claim arose out of a contract the purpose of which as from the appointed day was not exclusively for the purposes of the Dominion of Pakistan and since the suit did not relate to an actionable wrong the respondents were not liable under Art. 10 of the above-mentioned Order of 1947. These pleas were accepted by the learned subordinate Court. The learned Additional District Judge in this connection observed as under "

8. This next 7 issues depend on the question whether the liability for the payment of the plaintiffs' share of the Provident Fund devolved on the Pakistan Government. The defendant has not disputed the amount of the claim but only the liability for payment. Devolution of liabilities as between India and Pakistan is controlled by the Indian Independence (Rights, Property and Liabilities) Order, 1947. The liability of the defendant to pay apparently arose out of a contract for mutual contribution for the benefit of the plaintiffs' father. The liability of the defendant to pay became due on 1st February, 1947,when the contract was completed and no further contribution could be made by either of the contracting parties. On that date the State of Pakistan having not come into existence the contract could not be deemed, for purposes which would be exclusively the purposes of the Dominion of Pakistan. The purpose of the Federation of Pakistan had no existence till 15th August, 1947. The liability would be deemed to have been incurred by the dominion of India, vide Article 8(b): P L D 1957 Dacca page 261 refers.

9. Apart from the fact that the liability for payment devolved on the Government of India under the provisions of the fore mentioned order, a press-note of the Government of Pakistan Ministry of Finance Exh. D/7 was also produced before me This press-note is based on an agreement between the Govern ments of Pakistan and India. It lays down the procedure for the Government servants who have migrated from India to Pakistan. It asserts that the claims would ultimately be payable by the authorities concerned in India but provisional payment was being authorised on submission of certain data by the Accountant General, Pakistan Revenues in Pakistan so that the claimants may be given interim relief. It is thus clear that by agreement also the Government of India had conceded that they would pay the claims of persons who had immigrated to Pakistan on Partition. The claim of the plaintiffs does not stand on as sound basis as the claims of the actual immigrants because their father was never faced with the opinion of migration.

10. Article 10 is also inapplicable since the suit does not relate to an actionable wrong. As regards the implications of Article 9, it has been held in P L D 1957 Kar. 424 that the expression other financial obligations in Article 9 should be read ejusdern generis of loans and guarantees. "Since the claim of the plaintiffs is based on a contractual relationship and not a financial obligation in the nature of a State loan security or State promissory note Article 9 would not apply to the case." Therefore, the learned Subordinate Court on this view dismissed the appellant's claim. The appellants have challenged these find ings in this appeal. Mr. Faridi, the learned counsel for the appellants, has urged before us that the appellants' claim is either covered by Art. 8 or Art. 10 of the aforesaid order. On the other hand, Mirza Mukhtar Ahmad, the learned counsel for the respondents, has strongly supported the view of the learned Additional District Judge in this appeal and further urged that Art. 11 of the aforesaid order also applies to the facts of this case. Before we proceed to deal with the respective contentions of the learned counsel for the parties, it may be 'Mentioned here that under section 9 (1) of the independence Act, 1947, the Governor-General promulgated the Indian Independence (Rights, property and liabilites) Order, 1947,'which deals with "the initial distribution of rights, property and liabilities consequent on the setting up of the Dominions of India and Pakistan and on the partition of some of the old Provinces". Articles 4 and 5 of the Order deal with land; Article 6 with goods, coins, bank notes and currency notes and Article 7 with all other properties subject to the specific provisions of the Order (vide Art. 8 for certain con tractual rights). Art. 8 deals with pre-partition contractual rights and liabilities : Art. 9 with liabilities in respect of outstanding loans and guarantees and other financial obligations and Art. 10 with liabilities in respect of an actionable wrong other than breach of contract. Art. 11 deals with the claim in respect of the payment of any pension. The other Articles are not relevant for the decision of this appeal and therefore it is not necessary to refer to them. Mr. Faridi, the learned counsel for the appellants, argued the appeal before us on the basis of two alternative pleas. His first contention is that the claim in dispute is in respect of a contract, the purposes of which as from the appointed day are exclusively for the purposes of the Dominion of Pakistan and under Art. 8 of the aforesaid Order it should be deemed to have been made on behalf of the Dominion of Pakistan instead of the Governor-General-in Council. The learned counsel pointed out that though the North Western Railway was a State railway but after partition it has come to the share of Pakistan and as such the contract of service with the deceased is a purpose which from the appointed day is exclusively for the purposes of the Dominion of Pakistan and all rights and liabilities which have accrued under the said contract to the extent to which they would have been rights and liabilities of the Governor-General-in-Council are now the rights and liabilities of the Dominion of Pakistan. But this contention is not well-founded because admittedly the territories of the North Western Railway before partition were not only confined to the areas in which it is now functioning in West Pakistan but extended to the territories of East Punjab, Delhi and other places. Thus, it is quite obvious that any contract- of service with the North Western Railway of pre-partition India cannot be a contract the purposes of which from the appointed day, can be considered exclusively for the purposes of the Dominion of Pakistan. This .,1' view was taken in a decision of the Lahore High Court reported in T. Andrews v. The Federation of Pakistan (P L D 1953 Lah.266) and finally con cluded by a decision of their Lordships of the Federal Court in the Federation of Pakistan v. All Ahmad Hussain Shah and another (P L D 1955 F C 522). Both these cases are in respect of the servants of the N. W. R. In the last mentioned case the services of an employee of the N. W. R were terminated long before the partition of India. The employee filed a suit against the N. W. R. for a declaration that his services were wrongly terminated and he was still the servant of the N. W. R. Though their Lordships of the Federal Court granted him a declaration to this effect yet they repelled the contention of the employee that the liability in respect of the arrears of salary was on the Dominion of Pakistan because they were of the opinion that it was impossible to regard the contract as being exclusively for the purposes of the Dominion of Pakistan after the date of partition since it was not subsisting on that day. Cornelius, J. as he then was, in this connection observed as under: "It is in my opinion reasonable to hold that the relationship between the Governor-General-in-Council and the plaintiff ' which was created by the agreement concluded between them at the time of his permanent appointment to service was a contract of service, of which certain of the incidents were prescribed by specific provisions in the Constitution Act, which provisions it was not necessary to mention in the agreement of service of which a copy has been exhibited on the record as Exh. P. W. .1/16. Viewing this agreement as a contract of service, it seems that the ease must fall clearly within the provisions of Article 8 of the aforesaid Order which provides in its first subsection that, with the exception of contracts which are `for purposes which as from that day (i.e., the day of Partition) are exclusively purposes of the Dominion of Pakistan', all contracts made on behalf of the Governor-General-in-Council should as from the date of Partition be deemed to have been made on behalf of the Indian Dominion. In the present case, the contract of service was terminated, by unilateral act of the Governor-General-in- Council, on a date seven years in advance o-f the date of Partition. It is impossible to regard the contract as being exclusively for the purposes of the Dominion of Pakistan after the date of Partition, since it was not subsisting on that day. It therefore becomes clear that the liability in the present case must fall on the Indian Dominion, in the first instance, subject to any agreement which might be made between the two countries as to the source from which the liability is to be met." In the light of the above observations of their Lordships of the Federal Court, if the claim in dispute is considered to have arisen out of the contract of service entered into by the deceased with the respondents, it is quite clear that the deceased having died in February 1947, the contract came to an end much earlier before partition and the claim in dispute on that basis cannot be considered to have arisen out of a contract from the appointed day exclusively for the purposes of the Dominion of Pakistan. In our opinion, in view of the observations .of their Lordships of the Federal Court, the view of the learned Additional District Judge on this point cannot be upset. This contention therefore fails. It was next urged by Mr. Faridi, the learned counsel for the appellants, that Article 10 of the above-mentioned Order applies to the facts of this case. He argued that Article 9 of the above mentioned Order also relates to contractual obligations not cover ed by Article 8 and the financial obligations mentioned therein are only confined to those which arise from State finances. The learned counsel in this connection referred us to a decision of this Court in Ramchand Thawardas v. Governor-General-in-Council (P L D 1957 Kar. 424) to which one of us was a party. It was held in that case that the words "other financial obligations" in Article 9 of the Indian Independence (Rights, Property and Liabilities) Order, 1947, should be read ejusdem generis with loans and guarantees, and Article 9 deals with the same kind of financial obligations, namely State borrowings, such as Indian Government securities, or pro missory notes, and guarantees of private railways. This view finds support in a decision of the Indian Supreme Court in the State of West Bengal v. Serajuddin (AIR 1954 S C 193) and some other Indian decisions pronounced later on. Mirza Mukhtar Ahmad, the learned counsel for the respondents, contended that the view taken by this Court in the above-mentioned decision is not sound, but has not drawn our attention to any contrary view on this question. The above-mentioned decision was the subject-matter of an appeal before their Lordships of the Supreme Court in the State of Pakistan v. Ramchand Thawardas (PLD 1961 S C 61), but the Government of Pakistan on appeal did not dispute the decision of this Court on this question before their Lordships of the Supreme Court. We are in complete agreement with the view expressed by this Court in the above-mentioned decision and hold that the provisions of Article g of the said Order read with sub-Article (b) of Article 8 leave no doubt that it refers to loans, guarantees and other C financial obligations in so far as they are not covered by Article

6. Now Article 10 of the Indian Independence (Rights, Property and Liabilities) Order, 1947 reads as under: "10 (1) Where immediately before the appointed day the Governor-General-in-Council is subject to any liabilities in respect of an actionable wrong other than breach of contract, that liability shall,- (a) where the cause of action arose wholly within the territories which, as from that day, are the territories of the Dominion of India, be a liability of that Dominion ; (b) where the cause of action arose wholly within the territories which, as from that day, are the territories of the Dominion of Pakistan, be a liability of that Dominion ; and (c) in any other case, be a joint liability of the Dominions of India and Pakistan. (2) Where immediately before the appointed day the Province of Bengal is subject to any such liability as aforesaid, that liability shall, (a) where the cause of action arose wholly within the territories which, as from that day, are the territories of the Province of East Bengal, be a liability of the Province ; (b) where the cause of action arose wholly within the terri tories which, as from that day, are the territories of the Province of West Bengal, be a liability of that Province ; and (c) in any other case, be a joint liability of the Provinces of East and West Bengal. (3) Where immediately before the appointed day the Province of the Punjab is subject to any such liability as aforesaid, that liability shall, (a) where the cause of action arose wholly within the terri tories which as from that day, are the territories of the Province of West Punjab, be a liability of that Province ; (b) where the cause of action arose wholly within the terri tories which, as from that day, are the territories of the Province of East Punjab, be a liability of that Province : and (c) in any other case, be a joint liability of the Provinces of East and West Punjab. "(4) Where immediately before the appointed day the Province of Assam is subject to any such liability as aforesaid, then if the cause of action arose wholly within the territories which, as from that day, are the territories of East Bengal, the liability shall, as from that day be a liability of the Province of East Bengal." It was urged by Mr. Faridi that the present case falls within the Provisions of this Article. He argued that if the liability is not contractual and not covered by Articles 8 and 9, it is an actionable wrong inasmuch as the respondents have failed to carry out their statutory liabilities under the rules framed by the Governor General-in-Council under section 240 of the Government of India Act in respect of Railway servants about Provident Fund and the provisions of the Provident Fund Act of 1925. The learned counsel argued that "actionable wrong" in this Article is wide enough to embrace a breach of statutory duty. In support of this contention he also relied on the above-mentioned decision of this Court reported in P L D 1957 Kar.

424. Constantine, J. on this question observed as under "The question therefore arises whether the present case can be brought under the provisions of any article. The liability was not contractual nor do we think that any actionable wrong had been committed, and we have had held that Article 9 does not apply. The Supreme Court of India considered that the residuary Article was Article 10, namely, actionable wrong and certainly we think that these words are wide enough to embrace a breach of statutory duty." But on facts, the Division Bench of this Court in that case came to the conclusion that as the claim in question was not based on any breach of any statutory duty, the case did not fall under Article 10 and therefore Article 12 was applied as the matter in dispute was in respect of a pending proceeding. But it will be noticed that this Court did observe in the above-mentioned case that the words "actionable wrong" in Article 10 are wide enough to embrace a breach of statutory duty. Mr. Faridi, the learned counsel for the appellants, has further referred us in this connec tion to: (1) The State of Tripura v. East Bengal A I R 1951 S C 23. (2) State of West Bengal v. Brindaban Chandra A I R 1957 Cal. 44. (3) Suresh Chandra v. Union of India A I R 1959 Cal. 44 and (4) Rahimuddin v. State of West Bengal A I R 1959 Cal.

753. In the Supreme Court decision the words "actionable wrong" used in Article 10 of the said Order were given a wide meaning and it wa3 held that the word "liability" in respect of an action able wrong should, not be considered to be used in a restricted sense of a liability for damages for tortious acts. Patanjali Sastri, J. observed that "the words are apt to cover the liability to be restrained by injunction from completing what on the plain tiff's case was an illegal or unauthorised act already commenced". Fazl Ali, J., gave it a narrow meaning and held that it refers to liability for a tort in the nature of damages. Mukherjea, J., how ever, agreed with Patanjali Sastri, J. and observed at page 39 of the report that- "The word `wrong' in ordinary legal language means and signifies `privation of right'. An act is wrongful if it infringes the legal right of another, and `actionable' means nothing else than that it affords grounds for action in law." This decision was followed in the above mentioned Indian decision reported in A I R 1957 Cal.

44. In that case some paddy was requisitioned under the Defence of India Rules and in pursuance of statutory notice of requisition, one thousand maunds and twenty seers were duly delivered to the Civil Supplies Department of the then Province of Bengal. The Government Authorities concerned accepted the claim of the owner of the paddy in the sum of Rs. 7,253-10-0, but the amount was not paid till 8th December 1948. It was found that Articles 8 and _ 9 were not applicable to the facts and the question arose whether Article 10 was applicable. It was held that the expression "actionable wrong" is not used in any technical sense but means all infringements of rights.which are actionable, and the conditions required to bring them under Article 10 are that they must be infringements of non-contractual rights ; because if they are infringements of con tractual rights they fall either under Article 8 or Article

9. A statutory liability cannot be treated as contractual because the element of mutual consent is lacking. A statutory debt cannot be said to be a species of constructive, contract. But even if it is so treated the expression "actionable wrong other than breach of contract" in Article 10 does not mean "other than breach of cons tructive contract". It was further held that the failure to pay such statutory compensation is an actionable wrong under Article 10, and was a liability of the Government of West Bengal. In the latter two decisions of the Calcutta High Court the dispute arose in respect of certain acquisition of land under the Defence of India Rules, and Article 10 was applied to them. Thus, it will be noticed that the view taken in the above-mentioned decision is in accord with the observations made by this Court in P L D 1957 Kar.

424. We have further examined the question. It seems to us that according to the scheme of the order under consideration, contractual liabilities of the new Dominions can only be determines; within the provisions of Article 8 or

9. But if the claim is in the nature of breach of non-contractual obligations, it will fall within Article 10, which appears to us to be a residuary Article: The words "actionable wrong other than breach contract" are not confined to tortious acts but refer to all wrongful acts which infringe the legal right of private parties arising out of matters other than breach of contract. In our opinion, on the language of this Article, any breach of the statutory obligation whereby a party is deprived of his right in respect of any property is nothing else but an actionable wrong. The only question that now remains for consideration is whether the claim in the present case can be considered to be a statutory liability of the respondents. It was not disputed by Mr. Mirza Mukhtar Ahmad that the deceased at the time of his death was a Loco Foreman in the North-Western Railway at Karachi. Under the State Railway Provident Fund and Gratuity Rules reproduced in Advance Chapter No. 14 of Personnel Manual E an employee of this class under paragraph 4 is a compulsory subscriber of the Provident Fund. Paragraph 4 reads as under: "(4) Compulsory subscribers.-All permanent non-pension able railway servants except- (i) those appointed on probation to services other than Pakistan Railway Services, Class I ; (ii) those employed in workshops or sheds other than in a supervisory or clerical capacity, and (iii) inferior (Class IV) servants shall, if their monthly emolu ments are not less than Rs. 45, subscribe to the fund in accord ance with these rules: Provided that a person, other than a military pensioner of the rank of a Pakistani Soldier and Pakistani Commissioned Officer, who has retired from Government service before completing his full service for pension and is re-employed after the 22nd December 1931 as a railway servant shall not be eligible to subs cribe to the Fund or to receive the special contribution under Rule 14 save with the sanction of the Railway Division, if he is re-employed in a non-gazetted post with the sanction of the Controlling Officer." The case of the deceased falls under paragraph 4(ii) because he was employed in the workshop or sheds of N.-W. R. and weal working in a supervisory capacity. Now under these rules read with the provisions of the Provident Fund Act of 1925, it is the duty of the officer who maintains the Provident Fund to pay the c amount of the Provident Fund to the dependants of the deceased. This appears to us to be a statutory duty. The Provident Funci Act of 1925 specifically applies to State Railways. It was admitted by Mirza Mukhtar Ahmad that the rules prescribed in the Per sonnel Manual of N. W. R. were also enforceable in pre-partition days and were contained in the Indian Railway Establishment Code, Vol. I. These rules were framed by Governor-Generals under section 240 of the Government of India Act and are clearly conditions of a service. The Controlling Officer under these rules is bound to follow and distribute the Provident Fund amongst the dependants of the deceased in accordance with the rules and provisions of the Provident Fund Act. The respondents' liability therefore in this case in respect of the balance of the Provident Fund is statutory and clearly falls within the four corners of Article 10 on their refusal to pay the amount to the appellants who admittedly are the dependants of the deceased and are entitled to the amount in dispute. It was however urged by Mirza Mukhtar Ahmad that the balance of the amount due to the deceased has been transferred to the Indian Railways and the responsibility to pay it under the agreement is on the Indian Government. The evidence produced in this case does not disclose any agreement between the two Governments in respect of the payment of Provident Fund. The documents produced show that only book entries have been made and the amount in question has also been added to the amount due from the Indian Government, but the evidence recorded in this case clearly shows that the balance amount of Provident Fund due to the deceased was credited to the dead account of the N. W. R. in Pakistan. In our opinion, in these circumstances, the argument of the learned counsel for the respondents that the liability for the payment of this amount has devolved on the Indian Government, cannot be accepted. Lastly, it was urged by Mirza Mukhtar Ahmad that Article 11 applies to this case because Provident Fund is in the nature of pensions. In this connection the learned counsel referred us to the definition of "pension" in section 19 of the Indian Indepen dence Act. He contended that it should be read with Article 11, but a reference to the definition shows that it applies only to the word "pension" referred in the Act and not in any order passed under it. This contention therefore also fails. After considering the facts of this case, it appears to us that the fact that the respondents paid a sum of Rs. 13,312-10-0 to the widow and daughter of the deceased after partition and the further fact that they called upon the appellants to produce the guardianship certificate for payment of the balance of the amount makes it abundantly clear that the respondents accepted their liability to pay the amount in question and cannot go back on their representation. At any rate we are satisfied that the liability for payment of the amount in dispute under Article 10 of the Indian Independence (Rights, Property and Liabilities) Order, 1947, is on the respondents. Accordingly we set aside the judg ment of the Court below and grant the appellants a decree in the sum of Rs. 13,312-12-0 as prayed. The respondents are also ordered to bear the costs throughout. K. M. A. Appeal accepted.