The Supreme Court of India in The State of Saurashtra v. Memon Haji Ismail Haji [1960(1) SCR 537] examined whether the resumption of immovable property by the Administrator of Junagadh State in 1948 constituted an “act of State” and was therefore beyond the jurisdiction of municipal courts. The case arose after Junagadh’s Nawab, having not acceded to India post-independence, left for Pakistan, and the Government of India assumed administration of the State on November 9, 1947, at the request of the Nawab’s Council. During the transitional period before formal annexation on January 20, 1949, the Administrator ordered the resumption of the disputed property, which had been gifted by the Nawab to a private individual and later sold to the respondent. The trial court and the Saurashtra High Court found the order illegal. The Supreme Court, however, held that since at the time of resumption the people of Junagadh, including the respondent, were aliens and the administration was under the sovereign authority of the Dominion of India without formal incorporation, the act was a sovereign act not subject to municipal law. The Court reiterated that acts of State are arbitrary exercises of sovereign power against aliens, outside or paramount to municipal law, and are non-justiciable unless the sovereign expressly or impliedly recognises the pre-existing rights.

Keywords: Act of State, sovereignty, municipal law, Junagadh, resumption of property, alien status, post-independence integration, Extra-Provincial Jurisdiction Act.

B) CASE DETAILS

i) Judgement Cause Title: The State of Saurashtra v. Memon Haji Ismail Haji

ii) Case Number: Civil Appeal No. 185 of 1955

iii) Judgement Date: 4 August 1959

iv) Court: Supreme Court of India

v) Quorum: S.R. Das, C.J., N.H. Bhagwati, M. Hidayatullah, JJ.

vi) Author: Justice M. Hidayatullah

vii) Citation: [1960(1) SCR 537]

viii) Legal Provisions Involved: Section 7, Indian Independence Act 1947; Sections 3(2) & 5, Extra-Provincial Jurisdiction Act; Section 4(2), Ordinance No. 72 of 1949; Section 423, Junagadh State Civil Procedure Code (corresponding to Section 80 CPC, 1908).

ix) Judgments overruled by the Case: None expressly overruled.

x) Case is Related to which Law Subjects: Constitutional Law, International Law (Acts of State), Property Law, Civil Procedure.

C) INTRODUCTION AND BACKGROUND OF JUDGEMENT

This case emerged during the politically sensitive phase of India’s post-independence integration of princely states. Junagadh, unlike most princely states in Saurashtra, did not execute an Instrument of Accession immediately after the lapse of paramountcy under Section 7 of the Indian Independence Act, 1947. The Nawab’s decision to align with Pakistan and his subsequent departure created a governance vacuum. On November 9, 1947, the Government of India assumed administration at the invitation of the Nawab’s Council. However, the formal integration into Saurashtra occurred only on January 20, 1949. In the intervening period, the Administrator functioned under sovereign authority to stabilise administration. This case examines whether an administrative act during this transitional phase could be challenged in municipal courts, raising deep questions about the scope of the “act of State” doctrine, the status of Junagadh residents during interim governance, and the interplay between sovereignty and private property rights. The decision draws upon established precedents, both from Indian and English jurisprudence, regarding the immunity of sovereign acts from judicial scrutiny when exercised against aliens during a period of territorial acquisition or transition.

D) FACTS OF THE CASE

The dispute concerns a plot of land in Junagadh purchased in 1939 by Ameer Ismail Khokhar from the Junagadh State and later gifted by the Nawab to Abu Umar Bin Abdulla Abu Panch in 1941. Initially, the gift deed restricted alienation. In 1944, the Nawab amended the order to allow sale, validating Abu Panch’s earlier transaction in 1943 with the respondent, Memon Haji Ismail Haji, for ₹30,000. Following India’s assumption of Junagadh’s administration in November 1947, S.W. Shiveshwarkar was appointed Administrator. On October 1, 1948, he issued Secretariat Order No. R/3289, declaring the original gift an unauthorised grant of public property, cancelling it, and resuming the property as state property. The Administrator immediately took possession. The respondent served notice under Section 423 of the Junagadh State CPC and sued for a declaration that the order was illegal and against natural justice, alternatively seeking refund of consideration and expenses. The Civil Judge, Senior Division, Junagadh decreed in his favour; the Saurashtra High Court upheld the decision. The State of Saurashtra, substituted for Junagadh, appealed to the Supreme Court, relying solely on the defence that the Administrator’s action was an “act of State” immune from judicial review.

E) LEGAL ISSUES RAISED

i) Whether the resumption of property by the Administrator of Junagadh in 1948 constituted an “act of State” performed on behalf of the Government of India.
ii) Whether such an act, involving an alien and occurring before formal integration, was justiciable in municipal courts.

F) PETITIONER/ APPELLANT’S ARGUMENTS

i) The Solicitor-General, appearing for the State of Saurashtra, abandoned reliance on powers derived from the Nawab or statutory bars under the Extra-Provincial Jurisdiction Act and Ordinance No. 72 of 1949. The sole contention was that the Administrator’s action in October 1948 was an act of State, taken during a period when Junagadh residents were aliens to the Dominion of India. The Government of India had assumed administration following the Nawab’s departure, but formal annexation had not occurred. Sovereign acts against aliens during territorial acquisition were not subject to municipal court jurisdiction, as settled in Salaman v. Secretary of State for India (1906) 1 KB 613, Secretary of State v. Kamachee Boye Sahaba (1859) 13 MIA 22, and Vaje Singh Ji Joravar Singh v. Secretary of State for India (1924) LR 51 IA 357. The act, though possibly arbitrary, was a sovereign act outside municipal law until the process of acquisition was completed.

G) RESPONDENT’S ARGUMENTS

i) Counsel for the respondent argued that the State Council had invited the Government of India’s intervention, that local laws continued in force, and that the Administrator was bound by them in dealing with private property. Amendments to the Saurashtra Civil Procedure Code in July 1948 illustrated that municipal laws were operational. Therefore, the Administrator’s order should be judged within the framework of those laws. The act could not be treated as a sovereign “catastrophic change” but as an administrative decision subject to legal challenge.

H) RELATED LEGAL PROVISIONS

i) Section 7, Indian Independence Act 1947 – lapse of paramountcy and sovereignty of princely states.
ii) Sections 3(2) & 5, Extra-Provincial Jurisdiction Act – powers and jurisdiction in territories under foreign administration.
iii) Section 423, Junagadh State CPC – notice requirement before suit against the State.
iv) Section 4(2), Ordinance No. 72 of 1949 – exclusion of jurisdiction of civil courts.

H) JUDGEMENT

a. Ratio Decidendi
The Supreme Court held that an act of State is the exercise of sovereign power against an alien, neither intended nor purported to be legally founded, and beyond municipal court jurisdiction until the sovereign recognises existing rights. Between November 9, 1947, and January 20, 1949, Junagadh residents, including the respondent, were aliens vis-à-vis the Dominion of India. The resumption of property by the Administrator was a sovereign act during the ongoing process of territorial acquisition and thus non-justiciable.

b. Obiter Dicta
The Court observed that the continuation of local laws after a change in sovereignty does not bind the new sovereign unless it acts within those laws. Recognition of old rights must be expressly or impliedly shown; otherwise, all rights are held at the sovereign’s pleasure.

c. Guidelines

• An act of State exists when sovereign power is exercised against aliens during territorial acquisition.

• Municipal courts cannot review the propriety or legality of such acts.

• Recognition of pre-existing rights by the new sovereign ends the act of State and subjects subsequent actions to municipal law.

I) CONCLUSION & COMMENTS

The ruling reinforces the classical doctrine of act of State, limiting judicial scrutiny over sovereign acts in transitional governance of newly acquired territories. It underscores that sovereignty transitions create a legal hiatus where residents are deemed aliens, and their rights under previous regimes have no force unless adopted by the new sovereign. While the decision aligns with precedent, it also highlights the vulnerability of private property rights during such political changes. The Court’s reliance on established Privy Council and Indian authorities gives the judgment a strong doctrinal footing but also raises enduring concerns over balancing sovereign immunity with individual rights during state integration.

J) REFERENCES

a. Important Cases Referred
i. Salaman v. Secretary of State for India, (1906) 1 KB 613.
ii. Johnstone v. Pedlar, (1921) 2 AC 262.
iii. Secretary of State v. Kamachee Boye Sahaba, (1859) 13 MIA 22.
iv. Vaje Singh Ji Joravar Singh v. Secretary of State for India, (1924) LR 51 IA 357.
v. Dalmia Dadri Cement Co. v. Commissioner of Income-tax, [1959] SCR 729.
vi. Forester v. Secretary of State for India, 18 WR 349 (PC).
vii. Campbell v. Hall, 1 Comp. 204; 98 ER 1045.
viii. Secretary of State for India v. Bai Rajbai, LR 42 IA 229.

b. Important Statutes Referred
i. Indian Independence Act 1947, Section 7.
ii. Extra-Provincial Jurisdiction Act, Sections 3(2), 5.
iii. Ordinance No. 72 of 1949, Section 4(2).
iv. Junagadh State Civil Procedure Code, Section 423 (equivalent to Section 80 CPC).