THE STATE OF KARNATAKA BY ITS CHIEF SECRETARY v. STATE OF TAMIL NADU BY ITS CHIEF SECRETARY & ORS.

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(1) Whether the Ordinance and the provisions thereof are in accordance with the provisions of the Constitution; (2) (i) Whether the Order of the Tribunal constitutes a report and a decision within the meaning of Section 5(2) of the Act; and (ii) Whether the Order of the Tribunal is required to be published by the Central Government in order to make it effective; (3) Whether a Water Disputes Tribunal constituted under the Act is competent to grant any interim relief to the parties to the dispute.”

32Copy pinpoint32. To deal with the reference, the Constitution Bench narrated the factual background that had led to the reference. After analyzing various aspects, the opinion was expounded in the following terms:- “Question No.1: The Karnataka Cauvery Basin Irrigation Protection Ordinance, 1991 passed by the Governor of Karnataka on July 25, 1991 (now the Act) is beyond the legislative competence of the State and is, therefore, ultra vires the Constitution. Question No. 2: (i) The order of the Tribunal dated June 25, 1991 constitutes report and decision within the meaning of Section 5(2) of the Inter-State Water Disputes Act, 1956; (ii) the said Order is, therefore, required to be published by the E Central Government in the official Gazette under Section 6 of the Act in order to make it effective. Question No. 3: (i) A Water Disputes Tribunal constituted under the Act is competent to grant any interim relief to the parties to the dispute when a reference for such relief is made by the Central F Government; (ii) whether the Tribunal has power to grant interim relief when no reference is made by the Central Government for such relief is a question which does not arise in the facts and circumstances under which the Reference is made. Hence we do not deem it G necessary to answer the same.”

33Copy pinpoint33. The aforesaid decision also noted a certain aspect which has been highlighted by the State of Karnataka in the course of arguments and we shall be dealing with it in extenso at a later stage. In paragraph 4 of the judgment, the Court stated:- H

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A “4. There were two agreements of 1892 and 1924 for sharing the water of the river between the areas which are predominantly today comprised in the States of Karnataka and Tamil Nadu, and which were at the time of the agreements comprised in the then Presidency of Madras on the one hand and the State of Mysore on the other. The last agreement expired in 1974….” B Again in paragraph 11, the Court observed:- “…… In the said letter, Tamil Nadu primarily made a grievance against the construction of works in the Karnataka area and the appropriation of water upstream so as to prejudice the interests C downstream in the State of Tamil Nadu. It also sought the implementation of the agreements of 1892 and 1924 which had expired in 1974.”

34Copy pinpoint34. The State of Karnataka, still undaunted by such reverses, filed an application before the Tribunal to recall its order dated 25.06.1991 D citing several grounds justifying such review. The Tribunal, vide its order dated 07.04.1992, however, declined to interfere with its earlier order dated 25.06.1991 with the observation that in case, thereafter, there was any change in circumstance or undue hardship in a particular year to any party, it would be open to such party to approach it for appropriate orders. The stage being thus set, following the submissions of the E respective statements of cases, counters and rejoinders, the Tribunal framed the following issues:- “(1) Are both the Agreements of 1892 and 1924 or either of them, invalid?

F (2) Are both the Agreements of 1892 and 1924 or either of them invalid because of the alleged oppression or because the same were between the “unequal Riparian States” as claimed by the State of Karnataka? (3) Are both the Agreements of 1892 and 1924 binding and enforceable upon all the parties to the present reference G (dispute)? (4) Are both the Agreements of 1892 and 1924, in so far as the river Cauvery and its tributaries are concerned invalid, on the ground that the then Chief Commissioner’s Province of H

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Coorg, Podukottai State, Travancore State and the French A settlement of Pondicherry and Karaikal, were not parties to the said Agreement? (5) Whether the circumstances, that, the Agreements of 1892 and 1924 were not executed also on behalf of the then Chief Commissioner’s Province of Coorg, Podukottai State, B Travancore State and the French settlement of Pondicherry and Karaikal, made the said Agreements not binding and unenforceable against parties to the present reference. (6) Is the State of Karnataka estopped from challenging both the Agreements of 1892 and 1924 or either of them, on the C ground that it had said to have been acted upon? (7) Is the State of Karnataka entitled to contend that in any view of the matter the State of Tamil Nadu had waived the rights claimed by it under the Agreements of 1892 and 1924? (8) Has there been any breach of both the Agreements of 1892 D and 1924 or either of them, by any of the States. If so, what is the effect of any such breach upon the rights of the parties to the present reference? (9) Did both the Agreements of 1892 and 1924 or either of them provide for a fair and equitable distribution of waters of the E river Cauvery and its tributaries to the parties of these Agreements? (10) (i) Could there be prescriptive rights as claimed by the State of Tamil Nadu/Union Territory of Pondicherry, in their pleadings. F (ii) If the answer to (i) is in affirmative, what was the nature of such prescriptive rights, and (iii) Whether the Agreements of 1892 and 1924 or either of them, were in recognition of the prescriptive rights as claimed by the State of Tamil Nadu? G

(11) Have both the Agreements of 1892 and 1924 or either of them ceased to be operative and enforceable and binding because of subsequent events including enactment of various laws and happening of changed circumstances? H

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A (12) What would be the true and proper construction of both the Agreements of 1892 and 1924, and their legal consequences? (13) Were the Rules of Regulation in Annexure I to the Agreement of 1924 arbitrary, unconscionable and excessive to the requirements of the areas which then formed part of the B Province of Madras? (14) Whether the Rules and Regulation in Annexure I to the Agreement of 1924, are arbitrary and inequitable on the ground that the same were excessive to the requirements of the areas which now form the part of the State of Tamil C Nadu? (15) Does the entire Agreement of 1924 stand terminated at the expiry of 50 years from the date of its execution? Does not the said agreement continue to subsist even after the expiry of the period of 50 years, subject to the modifications to be D made to it in accordance with clause 10(xi) of the same Agreement? What is the true scope and effect of clause 10(xi) of the Agreement? (16) If the answer to the first part of issue 15 is in the affirmative, whether the 1892 Agreement ought to continue in force until E a new Agreement is entered into or the respective rights of the basin States are determined in accordance with law? (17) What is the present relevance and also the effect of the deliberations of the Cauvery Fact Finding Committee, and of the Study Team conducted by Shri CC Patel, Additional F Secretary to the Government of India, and also of reports, measures and surveys conducted by other agencies? (18) Upon a true and proper assessment made according to the reliable and scientific method, what would be the approximate available surface waters of the Cauvery basin including the delta region? G (19) Whether the Agreement of 1892 was operative and enforceable also in respect of those tributaries of the river Cauvery which were not specifically mentioned in the Schedule ‘A’ to the said Agreement? H

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(20) What is the extent of additional/alternative means of water A resources available in the Cauvery basin by appropriate exploitation of ground water potentials and by trans-basin diversion? (21) What is the approximate volume of ground water in each one of the States/Union Territory which are parties to the B Reference and whether the said availability of ground water, if any, should be relevant in making fair and equitable distribution of the Cauvery river waters? (22) What should be the basis on which the availability of waters be determined for apportionment, namely, dependability or on percentage basis? If it is on percentage basis, what ought to be the said percentage? (23) Whether there is wastage of waters in appreciable volume or quantity, either in the basin or in the delta areas of the Cauvery river? If so, what is its effect, if any, on the fair and equitable distribution of waters of the river Cauvery? (24) Whether directions need be issued to the parties for ensuring that the cropping patterns are compatible with the rainfall and the river flows and other relevant factors and whether such directions, if any, would be feasible and germane for making equitable and fair distribution of the waters of the river Cauvery? (25) What is the extent of the return flow of water used in irrigation by the different parties and what would be its effect on the apportionment of Cauvery waters among them? F

(26) What is the extent of drought prone/affected areas in the Cauvery basin region in each of the party States, and what is its effect, if any, in making equitable apportionment of waters? G (27) Should trans-basin diversion of the water of rivers Kabini and Bhavani be permitted for generation of power and for irrigation and water supply by the State of Kerala? If so, to what extent and subject to what conditions and with what safeguards? H

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A (28) Whether generation of power by trans-basin diversion of water by the parties would be legal and justified, particularly, if a part of such power would be utilised by the people of the river basin itself?

(29) Are the States of Karnataka and Tamil Nadu resorting to trans-basin diversion of the waters of river Cauvery? If so, whether those States can be permitted to object to the proposed trans-basin diversion of the water by the State of Kerala? (30) Should any preference or priority be given to utilization of water in a manner such that it can generate power as well as meet the needs of irrigation and water supply within the basin/outside the basin area? (31) What is the extent of the contribution by the different States to the total flow in the Cauvery river and what would be its relevance for equitable apportionment of waters to the party States? (32) Whether directions are required to be issued to ensure that the waters of the Cauvery and its tributaries maybe developed by each of the States, singly or jointly, to generate maximum hydroelectric power without detriment to irrigation uses? (33) Is the State of Karnataka entitled to compensation for the loss suffered as averred in paragraphs 18.9 to 18.11 of the Statement of Case of Karnataka and as per averments in paragraphs 34 to 41 of the Counter of Karnataka to the Statement of Case of Tamil Nadu? (34) Whether any order/direction should be issued upon any one or more of the States for regulated release of the Cauvery waters and whether in that event compensation is to be awarded in favour of the parties, prejudicially affected thereby?

(35) To what extent should Kerala be permitted to utilise the waters generated in Kerala when such utilisation in Kerala H

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would secure either more or equal benefit for the country A and its people than by its utilisation in any of the other States?

(36) Whether the State of Kerala requires a part of Cauvery water for generation of power, and, if so, to what extent?

(37) Whether shortage of food in any of the States would be a B relevant factor to be taken into consideration in making the apportionment of the Cauvery water?

(38) Whether the backwardness, under-developed and allegedly neglected area of a particular State would be relevant matters in making a fair and equitable distribution of the water of the Cauvery river?

(39) Whether the construction works executed by the State of Tamil Nadu in the Upper Bhavani, Vargarpallam West and Vargarpallam East, have unreasonably deprived the rights of the State of Kerala in the natural flow of the waters of the river Cauvery and, if so, to what effect? (40) Whether the executive action taken by Karnataka in constructing Kabini, Hemavathi, Harangi, Suvarnavathy and other projects and expanding its ayacuts has prejudicially affected the interests of Tamil Nadu and Pondicherry, materially diminished the supply of waters to Tamil Nadu and Pondicherry and materially affected the prescriptive rights claimed by Tamil Nadu and Pondicherry on behalf of their ayacutdars? F (41) Whether the above said executive action taken by Karnataka is in violation of 1892 and 1924 Agreements? (42) Whether the State of Tamil Nadu is entitled to compensation for the loss, damage and injury caused by the failure on the part of Karnataka to implement the terms of 1924 Agreement G after 1974? (43) If the answer to the above issue No.42 is in the affirmative, what is the amount of compensation to which Tamil Nadu is entitled? H

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A (44) What is the equitable share of the Union Territory of Pondicherry in the waters of the inter-State river Cauvery?

(45) Is the understanding reached between the then Governor of French Settlement in India Pondicherry and the then Governor of Madras on 6thSeptember, 1926 to maintain B adequate supply of water to the French Territory still subsisting and as such enforceable against the State of Tamil Nadu?

(46) Whether the projects executed by the States of Karnataka C and Tamil Nadu have unreasonably impaired the free flow of water of the river Cauvery into the Union Territory of Pondicherry?

(47) On what basis should the available waters be determined?

D (48) How and on what basis should the equitable apportionment be made?

(49) What directions, if any, should be given for the equitable apportionment and for the beneficial use of the waters of the river Cauvery and its tributaries? E (50) What directions, if any, are required to be given regarding the sharing of distress and surplus among the concerned parties to the reference in the event of the waters of the Cauvery falling short of the allocated quantum or being surplus to the same?” F

35Copy pinpoint35. Subsequent thereto, evidence was recorded. However, prior to the arguments, the issues, for the purpose of convenience, were regrouped finally as hereunder:- “Sl.No. Subject Issue No. G

1. Agreements of 1892 and 1924 a) Arbitrary and inequitable 9, 13 & 14 b) Prescriptive rights and other claims 10 & 40 c) Construction and review of agreements 12, 15 & 16 H

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d) Breach of agreements and A Consequences 8, 33, 40 to 43 e) Constitutional and legal 1 to 7,11 & 19 validity and enforceability

2. Availability of water – B surface flows, additional/ 18, 20 to 22, 25, alternative resources 27, 29, 31 & 47

3. Equitable apportionment and 26, 31, 34,37, related subjects: 38, 47 to 50 i) Cropping pattern C ii) Trans-basin diversion iii) Relevant date of apportionment iv) Relevance of projects completed or otherwise.”

36Copy pinpoint36. Reverting to the sequence of events, the Central Government D finally, to give effect to the interim order dated 25.06.1991 passed by the Tribunal, by notification dated 11.08.1998, framed a scheme titled “The Cauvery Water (Implementation of the Interim Order of 1991 and all subsequent Related Orders of the Tribunal) Scheme, 1998 which, amongst others, provided for the constitution of the Cauvery River Authority, delineated its role, powers and functions. E

37Copy pinpoint37. The Cauvery River Authority (Conduct of Business) Rules, 1998 were also framed and given effect to from 14.07.2000 in order to regulate the conduct of business of the Cauvery River Authority as provided in Clause 3(2) of the Cauvery Water (Implementation of the Interim Order of 1991 and all subsequent Related Orders of the Tribunal). F G. The genesis of the controversy

38Copy pinpoint38. Having stated the issues framed before the Tribunal, we would have proceeded to deal with the primary legal issues. However, it is requisite to state the genesis of the reference to the Tribunal. Having G narrated the facts to this extent, we think it appropriate to go to the narration of events which have been graphically exposited before us. It goes back to the year 1799. We do not intend to refer to the unnecessary facets except those which had been expounded to espouse the legal aspect. The first agreement between the Madras Presidency and the State of Mysore was entered into in the year 1892. Prior to entering into H

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A the said agreement, there was correspondence between the British Resident in Mysore and the Government of Madras. It is worthy to note here that after the defeat of Tipu Sultan by the British, the Wadiyars, Rulers of the State of Mysore, were decored with the crown under Subsidiary Alliance Treaty in 1799. The State of Mysore undertook certain works in its territory pertaining to restoration of river which was B protested by the Collector of Tanjore in the Madras Presidency. The correspondence continued which is not necessary to be referred to. In the year 1881, the Viceroy and the Governor General of India, by an Instrument of Transfer 1881, restored the administration of the Princely State of Mysore to another scion of the Wadiyar family by signing the C “Sanad” described as “Instrument of Transfer”. Be it stated here, the State of Karnataka asserts that it was not a treaty but a “Sanad” as is reflected from the communication made by the British Foreign Secretary in his dispatch of 1874. The relevant part reads as follows:- “He is in reality the recipient of favours - the person who benefits D by the avowedly liberal policy of Government - and it seems to me to be in every way more becoming that the Government should attach its own conditions to its gift, and that these should be set forth in a Sanad or patent to be granted by Government to the Maharaja.”

39Copy pinpoint39. As contended by the State of Karnataka, the “Instrument of Transfer” of 1881 placed the Maharaja in possession of the territories of Mysore and in the administration thereof, and declared that he would be entitled to hold possession thereof and administer them only so long as he fulfilled the conditions prescribed in the Instrument of Transfer. Emphasis has been laid on paragraphs 22 and 23 of the said instrument. F After the year 1881, the British Government of Madras Presidency raised objections as regards the fact that there was continued implementation of the schemes for restoration of tanks in Mysore by stating that the Presidency of Madras had a right to uninterrupted natural flow in the river. On 13th June, 1889, the British Resident in Mysore thought it G appropriate to remind the Dewan of Mysore that the British Resident could not accept the Dewan’s stand and that Mysore had the right to utilize to the fullest extent the natural water forces flowing through its territory. The relevant part of the letter reads thus:- “In the first place international law is not applicable to a feudatory H State like Mysore in its dealings with the paramount power. Even

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if it were so, international law would not give Mysore the right claimed. Its position with reference to Madras territory is something similar to that of Switzerland ... The principle which should be taken as your guide in this important question is that no scheme for stopping the flow of water from Mysore into Madras territory will be permitted if it can be shown to be detrimental to the interests of the latter.”

40Copy pinpoint40. On 20.11.1889, the British Government of Madras Presidency issued the following order:- “The Mysore Government cannot claim to improve its irrigation works by impounding or diverting the supply of streams which feed works in British territory and to the water of which the British Government has acquired a prescriptive right.”

41Copy pinpoint41. As the factual matrix would unroll, on 10.05.1890, a conference was held at Ooty where the Princely State of Mysore put forward its claim for the restoration of irrigation works which had been inaugurated during the British Government Administration in Mysore (1831-1881), but the claim was rejected by the then British Resident who formally expressed the opinion that the assertion of unlimited rights of Mysore was extreme and untenable. The minutes, among other things, recorded thus:- E “... After some argument the Diwan stated his position as follows: ...Madras rights extend only to the supply which has been actually turned to account for irrigation...” “Mr. Stokes said that ...He refused to admit that the Madras rights to the flow in the rivers was limited to the amount actually turned F to account for irrigation, and contended that Madras is entitled by prescription to the whole flow allowed to pass the frontier, at which point Mysore loses all right or interest in it...”

42Copy pinpoint42. As the time passed, the Government of India, on 21st August, 1891, clarified in a publication in the Official Gazette of India No. 1700/ G E the relationship between the Government of India as represented by the Queen Empress of India on the one hand and the “native States” in India on the other. It read as follows:- “The principles of International Law have no bearing upon the relations between the Government of India as representing the H

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A Queen Empress on the one hand, and the native States under the suzerainty of her Majesty on the other. The paramount supremacy of the former, presupposes and implies the subordination of the latter.” [emphasis is supplied]

43Copy pinpoint43. On 21.01.1892, the order was passed by the British Government of Madras directing that the consent of Madras Government should be obtained before the new reservoir is constructed within the Mysore State and in the event of disagreement between the two Governments, the matter has to be settled by arbitration.

44Copy pinpoint44. In view of the above, the agreement was entered into between the Madras Government and State of Mysore on 18.02.1892. Clause 1 defines New Irrigation Reservoirs. Clause 3 defines Repair of Irrigation Reservoirs. Clause 4 states that any increase of capacity other than what falls under “Repair of Irrigation Reservoirs” as defined shall be regarded as a “New Irrigation Reservoir”. Clauses 2, 3 and 5 are D reproduced below:- “II. The Mysore Government, shall not, without the previous consent of the Madras Government, or before a decision under rule 4 below, build (a) any “New Irrigation Reservoirs” across any part of the fifteen main rivers named in the appended Schedule E A; or across any stream named in Schedule B below the point specified in Column 5 of the said Schedule B, or in any drainage area specified in the said Schedule B, or (b) any “new anaicut” across the streams of Schedule A, Nos. 4 to 9 and 14 and 15, or across any of the streams of Schedule B, or across the following F streams of Schedule A, lower than the points specified hereunder: Across 1. Tungabhadra – lower than the road crossing at Honhalli, Across 10. Cauvery – lower than the Ramaswami anaicut, and Across 13. Kabani – lower than the Rampur anaicut.

G III. When the Mysore Government desires to construct any “New Irrigation Reservoir” or any new anaicut the previous consent of the Madras Government under the last preceding rule, then full information regarding the proposed work shall be forwarded to the Madras Government and the consent of that Government shall be obtained previous to the actual commencement of work. The H Madras Government shall be bound not to refuse such consent

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except for the protection of prescriptive right already acquired A and actually existing, the existence, extent and nature of such right and the mode of exercising it being in every case determined in accordance with the law on the subject of prescriptive right to use of water and in accordance with what is fair and reasonable under all the circumstances of each individual case. B V. The consent of the Madras Government is given to new irrigation reservoirs specified in the appended Schedule C, with the exception of the Srinivasasagara new reservoir across the Pennar, the Ramasamudram new reservoir across the Chitravati and the Venkatesasagara new reservoir across Papaghni. Should, owing to the omission of the Mysore Government to make or C maintain these works in a reasonable adequate standard of safety, irrigation works in Madras, themselves in a condition of reasonably adequate safety, be damaged, the Mysore government shall pay to the Madras government reasonable compensation for such damage. D As regards the three new reservoirs excepted above the admissibility of any compensation from Mysore to Madras on account of loss accruing to Madras irrigation works from diminution of supply of water caused by the construction of the said works, will be referred to the Government of India whose E decision will be accepted as final and should such compensation decided to be admissible, the decision of the Government of India as to the amount thereof will be accepted, after submission to them of the claims of Madras which would be preferred in full detail within a period of five years after the completion of said works.” F

45Copy pinpoint45. As stated in Clause 2, there are two Schedules, namely, Schedule A and Schedule B which do not require any reference. We may note here that on 18.02.1924, another agreement was entered. The prefatory note to the said agreement contains reference to the 1892 agreement, Clause 2 refers to Clause 3 of the 1892 agreement and certain G disputes that had arisen between the two States and the reference to arbitration and the award in the year 1914, rectification of the award by the Government of India and the decision in appeal with the Secretary of State for India who had reopened the question. It is necessary to state what had been mentioned in the said reopening of the question:- H

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A “6. Whereas thereupon the Mysore Government and the Madras Government with a view to an amicable settlement of the dispute entered into negotiations with each other; and

7. Whereas as the result of such negotiations, certain Rules of Regulation of the Krishnarajasagara reservoir were framed and agreed to by the Chief Engineers of the Mysore and Madras Governments on the 26th day of July of the year 1921, such Rules of Regulation forming Annexure I to this agreement; and

8. Whereas, thereafter, the technical officers of the two Governments have met in conference and examined the question of extension of irrigation in their respective territories with a view to reaching an amicable arrangement; and

9. Whereas as the result of such examination and conference by the technical officers of the two Governments, certain points with respect to such extension were agreed to respectively by the Chief D Engineer for Irrigation, Madras, and the Special Officer, Krishnarajasagara Works, at Bangalore, on the 14 th day of September 1923, such points forming Annexure III to this agreement.”

46Copy pinpoint46. In the said backdrop, the Mysore Government and the Madras E Government entered into the 1924 agreement. We think it appropriate to reproduce the entire part of the said agreement as that is the fulcrum of the stand of the State of Tamil Nadu:- “(i) The Mysore Government shall be entitled .to construct arid the Madras Government do hereby assent under clause III of the F 1892 agreement to the Mysore Government constructing a dam and a reservoir across and on the river Cauvery at Kannambadi, now known a6 the Krishnarajasagara, such dam and reservoir to be of a storage capacity of not higher than 112 feet above the sill of the under-sluices now in existence corresponding to 124 feet above bed of the river before construction of the dam, and to be G of the effective capacity of 44,827 million cubic feet, measured from the 6ill of the irrigation sluices constructed at 60 feet level above the bed of the river up to the maximum height of 124 feet above the bed of the river; the level of the bed of the river before the construction of the reservoir being taken as 12 feet below the sill level of the existing under-sluices; and such dam and reservoir H

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to be in all respects as described in schedule forming Annexure II A to this agreement. (ii) The Mysore Government on their part hereby agree to regulate the discharge through and from the said reservoir strictly in accordance with the Rules of Regulation set forth in the Annexure I, which Rules of Regulation shall be and form part of this agreement. B (iii) The Mysore Government hereby agree to furnish to the Madras Government within two years from the date of the present agreement di-mensioned plans of anicuts and sluices or open heads at the off-takes of all existing irrigation channels having their source in the rivers Cauvery, Lakshmanathirtha and Hemavathi, showing thereon in a distinctive colour all alterations that have been made subsequent to the year 1910, and further to furnish maps similarly showing the location of the areas irrigated by the said channels prior to or in the year 1910. (iv) The Mysore Government on their part shall be at liberty to carry out future extensions of irrigation in Mysore under the Cauvery and its tributaries to an extent now fixed at 110,000 acres. This extent of new irrigation of 110,000 acres shall be in addition to and irrespective of the extent of irrigation permissible under the Rules of Regulation forming Annexure I to this agreement, viz, 1,26,000 acres plus the extension permissible under each of the existing channels to the extent of one-third of the area actually irrigated under such channel in or prior to 1910. (v) The Madras Government on their part agree to limit the new area of irrigation under their Cauvery Metur project to 301,000 acres, and the capacity of the new reservoir at Metur, above the lowest irrigation sluice to ninety-three thousand five hundred million cubic feet. Provided that, should scouring sluices but constructed in the dam at a lower level than the irrigation sluice, the dates on which such scouring sluices are opened shall be communicated to the Mysore G Government. (vi) The Mysore Government and the Madras Government agree, with reference to the provisions of clauses (iv) and (v) preceding, that each Gov-ernment shall arrange to supply the other as soon after the close of each official or calendar year, as may be H

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A convenient, with returns of the areas newly brought under irrigation, and with the average monthly discharges at the main canal heads, as soon after the close of each month as may be convenient. (vii) The Mysore Government on their part agree that extensions of irrigation in Mysore as specified in clause (iv) above shall be carried out only by means of reservoirs constructed on the Cauvery and its tributaries mentioned in Schedule A of the 1892 agreement. Such reservoirs may be of an effective capacity of 45,000 million cubic feet, in the aggregate and the impounding therein shall be so regulated as not to make any material diminution in supplies connoted by the gauges accepted in the Rules of Regulation for the Krishnarajasagra forming Annexure I to this agreement, it being understood that the rules for working such reservoirs shall be so framed as to reduce to within 5 percent any loss during any impounding period, by the adoption of suitable proportion factors, impounding formula or such other means as may be settled at the time. (viii) The Mysore Government further agree that full particulars and details of such reservoir schemes, and of the impounding therein, shall be furnished to the Madras Government to enable them to satisfy themselves that the conditions in clause (vii) above will be fulfilled. Should there arise any difference of opinion between the Madras and Mysore Governments as to whether the said conditions are fulfilled in regard to any such scheme or schemes, both the Madras and Mysore Governments agree that such difference shall be settled in the manner provided in clause (xv) below. F (ix) The Mysore Government and the Madras Government agree that the reserve storage for power generation purposes now provided in the Kriahnaraja sagra may be utilized by the Mysore Government according to their convenience from any other reservoir hereafter to be constructed, and the storage thus released from the Krishnarajasagra may be utilized for new irrigation within the extent of 110,000 acres provided for in clause(iv) above. (x) Should the Mysore government so decide to release the reserve storage for power generation purposes from the Krishnarajasagra, the working tables for the new reservoir from which the power water will then be utilized shall be framed “after taking into

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consideration the conditions specified in clause (vii) above and the altered conditions of irrigation under the Krishnarajasagara. (xi) The Mysore Government and the Madras Government further agree that the limitations and arrangements embodied in clauses (iv) to (viii) supra shall at the expiry of fifty years from the date of the execution of these presents, be open to reconsideration in the light of the experience gained and of an examination of the possibilities of the further extension of irrigation within the territories of the respective Governments and to such modifications and additions as may be mutually agreed upon as the result of such reconsideration. C (xii) The Madras Government and the Mysore Government further agree that the limits of extension of irrigation specified in clauses (iv) and (v) above shall not preclude extensions of irrigation effected solely by improvement of duty, without any increase of the quantity of water used. D (xiii) Nothing herein agreed to or contained shall be deemed to qualify or limit in any manner the operation of the 1892 agreement in regard to matters other than those to which this agreement relates or to affect the rights of the Mysore Government to construct new irrigation works on the tributaries o the Cauvery in Mysore not included in Schedule A of the 1892 agreement E

(xiv) The Madras Government shall be at liberty to construct new irrigation works on the tributaries of the Cauvery in Madras and, should the Madras Government construct; on the Bhavani, Amaravati or Noyil rivers in Madras, any new storage reservoir, the Mysore Government shall be at liberty to construct, as an offset, a storage reservoir in addition to those referred to in clause (vii) of this agreement on one of the tributaries of the Cauvery in Mysore, of a capacity not exceeding 60 per cent of the new reservoir in Madras. Provided that the impounding in such reservoirs shall not diminish or affect in any way the supplies to which the Madras Government and the Mysore Government respectively are entitled under this agreement, or the division of surplus water which, it is anticipated, will be available for division on the termination of this agreement as provided in clause (xi). H

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A (xv) The Madras Government and the Mysore Government hereby agree that, if at any time there should arise any dispute between the Madras Government and the Mysore Government touching the interpretation or op-eration or carrying out of this agreement, such dispute shall be referred for settlement to arbitration, or if the parties so agree shall be submitted to the Government of India.” B

47Copy pinpoint47. As is noticeable, Clause 10(ii) provided that the Mysore Government had agreed to regulate the discharge through and from the concerned reservoir strictly in accordance with the Rules of Regulation set forth in Annexure I, which Rules of Regulation shall be and form part of that agreement. The relevant part of Annexure I is reproduced C below:- “7. The minimum flow of the Cauvery that must be ensured at the upper anicut before any impounding is made in the Krishnarajasagara, as connoted by the readings of the Cauvery dam north gauge, shall be as follows:- D Month Readings of the Cauvery Dam North gauge. June .. Six and a half feet.

E July and August .. Seven and a half feet September .. Seven feet. October .. Six and a half feet. November .. Six feet. F December .. Three and a half feet. January .. Three feet.

8. The discharges connoted by the gauge readings set forth in rule 7 shall, in the case of regulation during the irrigation season (vide rule 9) of 1921, be deducted from the average discharge curve derived from the joint gaugings of the Cauvery at the Cauvery dam made in the four years ending 1920. The said discharges shall be revised, if necessary, after completion of the joint gaugings of 1921 and shall be used for the purpose of regulation for the five years ending 1926. The said discharges shall be finally revised and adopted for all subsequent regulation,

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at the conclusion of the joint gauging of the year 1926, on the basis of the joint gaugings of the ten years ending 1926.

9. The south-west monsoon shall, for the purpose of these rules be considered to extend from the 1st June to the 30th September, both days inclusive, and the north-east monsoon from the1st October to the 31st January, both days inclusive. The irrigation season shall be taken to extend from the 1st June to the 31st January, both days inclusive. All dates in this rule shall have reference to the Upper Anicut.”

48Copy pinpoint48. Annexure III of the agreement pertains to the extent of irrigation of Mysore and Madras. The relevant part is as follows:- C “2.The extent of future extension of irrigation in Mysore under the Cauvery and its tributaries mentioned in Schedule A of the 1892 agreement shall be fixed at 110,000 acres, and Madras shall have their Cauvery-Mettur project as revised in 1921 with their new area of irrigation fixed at 301,000 acres, …” D

49Copy pinpoint49. It is worthy to note here that another agreement was entered into between both the governments in the year 1929 to clarify Rules 7 and 8 of the Rules of Regulation pertaining to the Krishna Raja Sagara reservoir which is as follows:- “AGREEMENT E WHEREAS on the 18th February 1924 an agreement between the Governments of Mysore and Madras was signed and whereas by clause 10(2) of the said agreement the Mysore Government agreed to regulate the discharge through and from the Krishnarajasagara reservoir strictly in accordance with the Rules F of Regulation being Annexure I to the said agreement; and WHEREAS disputes had arisen between the two Governments in regard to the interpretation, operation and carrying out of rules 7 and 8 of the said Rules and Regulation; G And WHEREAS both the Governments have submitted the matters in dispute to the Arbitration of the Honourable Mr. Justice Page with Messrs. Howley and Forbes as assessors. H

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A Now the two Governments have agreed in lieu of an award in that behalf to adopt finally for all Regulation subsequent to 1st July 1929, the following discharges for the respective months in place of the averages referred to in clause 8 of Annexure I:- June for 61/2 feet gauge .. 29,800 cusecs. B July and August for 71/2 ft. gauge .. 40,100 “ September for 7 feet gauge .. 35,000 “ October for 6 1/2 feet gauge .. 29,800 “ November for 6 feet gauge .. 25,033 “ C December for 31/2 feet gauge .. 8,913 “ January for 3 feet gauge .. 6,170 “ and in rule 10, defining the impounding formula, C will denote the said above mentioned discharges. D THIS agreement is without prejudice to the other questions outstanding between the parties in regard to the clauses of the agreement other than clauses 7 and 8 of the Rules of Regulation. 17th June 1929. (Signed) R. RANGA RAO) (Signed) A.G. LEACH, E Officiating Chief Secretary Secretary to the Government to the Govt. of Mysore Public Works and Labor Department, Madras.”

50Copy pinpoint50. In 1934, a new reservoir at Mettur which was constructed by Madras became operational pursuant to Clause 10(v) of the agreement of 1924 and the Madras Government had agreed to limit “the new areas of irrigation under their Cauvery Mettur project (Project Report of 1921) to 301,000 acres” and the capacity of “the new reservoir at Mettur” to 93.5 TMC. In the said order, the State of Madras started planning of Nhawan reservoir under Clause 10 (xiv) of the agreement of 1924 and, as a result, Mysore became entitled to construct a reservoir of 60% of the capacity planned by Madras and, accordingly, Mysore proposed Kabini Reservoir as an offset reservoir under Clause 10(xiv) of the said agreement. In this regard, the finding of the Tribunal is as follows:- “Regarding Kabini project, the objection of Madras was that the proposal of Mysore for transfer of half of power storage from H

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Krishnarajasagar to Kabini was not permissible although according A to the State of Karnataka it was permissible under Clasue 10(ix) of the agreement. Apart from objection regarding the transfer of power storage with regard to Kabini other objections had also been raised. From the notes of discussion between the then engineers of the two States on 11th and 12th March, 1940 (Tamil B Nadu Vo,VII/Exh.445 page 148) it appears that the two Chief Engineers of Madras and Mysroe Governments finally agreed on the impounding in reservoir to be built on Kabini during the critical months from June to January, applying the Rule 10 of Rules of Regulation of KRS (Annexure I to the Agreement). The notes of discussions and agreements between the two Chief Engineers C were duly signed by them, and no further action was taken by the State of Madras. Any agreement between the two chief engineers was subject to the approval of the State of Madras and the Government of Mysore. Then by letter dated 21st May. 1945 the Secretary to Maharaja of Mysore made a request to the Resident D in Mysore to obtain the concurrence of the Madras Government. There was no reply from Madras Government although the contents of the aforesaid letter had been communicated to the Government of Madras. No explanation was furnished as to why when the Chief Engineers of two States had fixed and settled the impounding formula in terms of the agreement of 1924. for the E reservoir on Kabini. the State of Madras was not communicating its approval. Because of that the project on Kabini as planned by Mysore in 1933 under clause 10(iv) of the agreement remained unimplemented.”

51Copy pinpoint51. In the year 1935, the British Parliament enacted the F Government of India Act, 1935 (for short, “the 1935 Act”). In the year 1947, the Indian Independence Act, 1947 (for brevity, “the 1947 Act”) came into force. The Maharaja of Mysore had executed an agreement “Instrument of Accession” initially only on two subjects, namely, defence and external affairs and communications which was accepted by the Governor General of India on 16.08.1947. Thereafter, a White Paper G was released on Indian States and “Standstill Agreement” was entered into between the Dominion of India and the Maharaja of Mysore. A supplementary “Instrument of Accession” was executed on 01.06.1949 for all matters enumerated in List I and List II of the Seventh Schedule of the 1935 Act which was contained in the said supplementary H

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A agreement. After coming into force of the Constitution of India, the 1947 Act stood repealed by reason of the provisions contained in Article 395 of the Constitution of India and the erstwhile province of Madras under the 1935 Act became a Part A State of Madras with effect from 26.01.1950. On 01.11.1956, the new State of Mysore was formed by the States Reorganisation Act, 1956 (for short, ‘the Reorganisation Act”). B

52Copy pinpoint52. In August 1972, the State of Tamil Nadu filed a suit OS No. 1 of 1971 against the State of Mysore which was permitted to be withdrawn with liberty to file a fresh suit if necessary. On 29.05.1972, the Chief Ministers of Mysore, Tamil Nadu and Kerala discussed with the Union Minister for Irrigation and Deputy Minister. The relevant part of the discussion reads as follows:- “Note on discussions regarding Cauvery held at New Delhi on 29th May, 1972” “Discussions were held on 29th May, 1972 at New Delhi between the Chief Ministers of Mysore, Tamil Nadu and Kerala. Union Minister for Irrigation and Power and Deputy Ministers were present. The Chief Ministers were assisted by Ministers of respective States, those present were as follows: I. Tamil Nadu:

E 1. Thiru M. Karunanidhi, Chief Minister

2. Thiru S. Madhavan, Minister for Law

3. Thiru SJ. Sadiq Pasha, Minister for Public Works II.Mysore:

F 1. Shri D. Devaraj Urs, Chief Minister

2. Shri M.N. Nanja Gouda, Minister for State for Major Irrigation III. Kerala:

1. Shri C. Achutha Menon, Chief Minister G

2. Shri T.K. Divakaran, Minister for Public Works Union Minister for Irrigation and Power stated that river problems are best settled through negotiations and this was the course the Central Government was adopting for the last few years in settling the differ rences on the use® of waters of Cauvery. Earlier, it H

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was aimed to arrive at an interim agreement to be valid till 1974. A when the earlier agreement of 1924 would have come up for review after 50 years, as provided in the agreement. Now, as 1974 is near, this attempt has been given up in favour of finding an overall approach to solve the problem amicably amongst the several States. (Emphasis supplied) The discussions amongst the B Chief Ministers revealed general consensus on the three following points as in para 2: 2.1 A serious attempt should be made to resolve by negotiations the Cauvery dispute between eh States as eariy as possible. 2.2. The Centre may appoint a Fact Finding Committee C consisting of Engineers, retired Judges and if necessary, Agricultural Experts to collect all the connected data pertaining to Cauvery waters, its utilization and irrigation practices as well as projects both existing, under construction and proposed in the Cauvery basin. The Committee will examine adequacy of the present supplies or excessive use of water for irrigation purposes. The Committee is only to collect the data and not make any recommendations. The Committee may be asked to submit its report in three months time. 2.3 Making use of the data, discussions will be held between the Chief Ministers of the three States to arrive at an agreed allocation of waters for the respective States.

3. Union Government will assist in arriving at such a settlement in six months, and in the meanwhile, no State will take any steps to make the solution of the problem difficult either by impounding or by utilizing water of Cauvery beyond what it is at present.”

53Copy pinpoint53. Pursuant to the above, the Cauvery Fact Finding Committee (CFFC) was set up by the Government of India. The terms of the reference to the CFFC were as follows:- G “(i) To collect all the connected data pertaining to Cauvery waters; its utilization at different points of time: irrigation practices; as well as projects both existing, under construction, and proposed in the Cauvery basin. (ii) To examine adequacy of the present supplies or excessive use of water for irrigation purposes. H

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A (iii) To collect data relevant to the use of water in different States like the physical and other features; cultivated areas; existing and proposed uses for domestic and industrial water supply; hydro- electric power generation, navigation, salinity control and other non-irrigational purposes. B (iv) Any other connected matters.”

54Copy pinpoint54. The CFFC submitted a report on 15.12.1972. The relevant part of the report is reproduced below:- “As desired in the above resolution, we hereby submit our report.

C The data was received from Kerala on 21st September, 1972 from Mysore on 19th October, 1972 and Tamil Nadu on 24th October,

1972. Both Mysore and Tamil Nadu supplemented their data during their discussions with the Committee at New Delhi from 7th to 14th November, 1972. Some clarifications and elucidations had been asked for from the States during the discussions and again D during the visit of the Committee to Mysore and Tamil Nadu from 6th to 8th December, 1972. The replies from the State Governments have not yet been received. The data supplied by the three States runs into 20 volumes. In addition, they have left with the Committee project reports for their study which also run into 36 volumes. As E this voluminous data requires very careful examination and scrutiny, the Committee “had asked for further extension of one month from 15th December, 1972 to 15th January, 1973. But the same has not been agreed to. In view of the above, the Committee had no alternative but to F submit its report on 15th December, 1972, though it has not been possible to do full justice to this important work. In accordance with the note on discussions regarding Cauvery held at New Delhi on 29th May, 1972, between the Union Minister for Irrigation and Power and the Chief Ministers of Kerala, Mysore and Tamil Nadu {a copy of which had been supplied to the G Committee) “the Committee is only to collect the data and not make any recommendations”. As such, the Committee has refrained from making any recommendations.”

55Copy pinpoint55. On 14.08.1973, an additional report was submitted. In October, 1973, the States of Mysore, Tamil Nadu and Kerala desired the H

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Government of India to make a study on the scope of economy in the use of water and in pursuance of the same, the C.C. Patel Committee was constituted. The Committee made various recommendations and an estimate of irrigation water requirement in each State. On 12.08.1976, a Committee with Mr. E.C. Saldhana, Member, Central Water Commission, as Chairman was set up by the Central Government with the following terms of reference:- “(i) To assess the requirement of water of the existing areas under irrigation as well as new areas which are proposed to be brought under irrigation taking into consideration the availability of water from the rainfall within the respective command areas: C (ii) To assess the availability of water for use in a normal year taking into consideration integrated operation of the reservoirs and the demand pattern of releases: (iii) To recommend regulation of supplies in normal or good years for protecting the existing ayacuts as well as for the new areas, taking into consideration the savings to be effected progressively in Tamil Nadu including Karaikal region of Pondicherry and Karnataka.”

56Copy pinpoint56. In March 1977, a draft report was submitted to the Government of India. As is manifest, discussions, deliberations and negotiations went on between the two States and eventually, as stated earlier, on 06.07.1986, the State of Tamil Nadu lodged a complaint under the 1956 Act with the Government of India raising water dispute thereby requesting for adjudication of the water dispute by a tribunal.

57Copy pinpoint57. We have already noted that the State of Karnataka had brought out an ordinance and how the Court has dealt with the same.

58Copy pinpoint58. Having noted the aforesaid and observing what the Constitution Bench had stated, we may proceed to deal with the contentions canvassed on behalf of both the States with regard to the validity of the agreements. G H. Doctrine of Paramountcy and its extinction on coming into force of the Indian Independence Act, 1947

59Copy pinpoint59. Mr. Nariman, learned senior counsel, has attacked both the agreements on two counts, namely, (i) the Maharaja of Mysore was not in a position to enter into an agreement on equal terms with the Madras H

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A Government as the communications would show, and further, (ii) the manner in which the agreements were reached, the status conferred by the British Government and the Maharaja, the orders passed by the British Government from time to time and eventually, the order of the Secretary of State for India who upheld the appeal of the British Government of Madras against the Griffin Award clearly show the subservience of the Maharaja of Mysore to the paramount power of the British Crown. He has drawn our attention to a passage of the Griffin Award which is as under:- “The Secretary of State holds that the Government of Madras were within their rights in appealing to him, firstly because the procedure prescribed in rule IV of the agreement of1892 was varied in the Arbitration Proceedings and, secondly, because, while the Agreement of1892 was and is valid as between the Governments of Madras and Mysore, this does not relieve him (i.e. the Secretary of State) of his genera! responsibility for intervening in any matter in which it seems to him that the public interest is threatened with injury, even if the possible injury would be consequent on action taken under an award given, or purporting to be given, under rule IV”.

60Copy pinpoint60. Relying on the same, it is propounded by Mr. Nariman that a E binding arbitration award between the Indian State and a Province in British Government was not regarded as binding by the Secretary of State and he could refuse to recognize it and from the said, the Doctrine of Paramountcy is manifest and that alone should be treated as sufficient to treat the agreements as absolutely unfair, arbitrary and unreasonable. Learned senior counsel would contend that when in such a situation the agreement had been entered into, the same cannot be regarded as valid in law after India got independence and should be declared as null and void under the Constitution of India that came into force on 26 th January,

1950. It is urged by him that having regard to the regime of paramountcy and taking note of the fact that the Crown had the paramount power and exercised the same in favour of the Madras Government ignoring whatever objection could be raised then by the Dewan of Maharaja of Mysore, the agreement cannot be constituted as valid and acceptable in law. The argument on the factual score by Mr. Nariman has been seriously contested by Mr. Rakesh Dwivedi, learned senior counsel appearing for the State of Tamil Nadu, urging that the agreements were arrived at H

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after several correspondences and proper consideration. He has also A drawn our attention to the letter dated 12.02.1924 from the Dewan of Mysore to the Secretary of the Maharaja. The said letter reads thus:- “I have discussed the whole matter this morning with my colleagues and they entirely approve of my recommendations. I feel relieved and proud that after four years of strenuous fight. I B am able to put up for His Highness approval a settlement which is eminently satisfactory and favourable to Mysore and its future generations. PS. - Sir Visvesvaraya has gone away to Bhadravathi, so, I cannot speak to him. I have already discussed all the main points with him a week ago and he was fully satisfied that we got all we could and had a very satisfactory settlement.”

61Copy pinpoint61. Referring to the language employed in the said letter, it is submitted by Mr. Nariman that the same does not really indicate anything that can be considered as consent or acceptance but instead reflects some kind of resignation. He has emphasized on the words “that we got all we could” to highlight that it is reflective of compulsive surrender having no choice and accepting whatsoever has been given in the absence of any option. He would further submit that the agreement of 1924 only permitted the State of Mysore to undertake irrigation in the Princely State on certain terms. It was because of the unilateral imposition by the paramount power.

62Copy pinpoint62. In this context, it is also necessary to refer to what Mr. Dwivedi, learned senior counsel, has drawn our attention to from the letter of the Dewan of Mysore to the Maharaja of Mysore. The said part reads as follows:- F “I am sending tonight with this letter a complete comprehensive agreement embracing all the points of dispute, bringing forward every clause as agreed to up to date during the past 4years of discussion and signed by the technical officers of the two Governments. It will be seen that we have given a concession to G Madras in regard to the Bhavani Project and have got, in return, a quid pro quo that we shall be entitled to have an additional reservoir. The other points are already settled. The whole case has caused me, during the past few days, considerable anxiety and I honestly now think that with the concession now obtained and with the H

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A finality in regard to the krishnarajasagara, taken together with the possibility of an additional development of 110,000 acres during the next 50 years, Mysore interests are fully safeguarded even though Mysore now agrees to the Metur project slightly enlarged. We have made a very still fight over this question, and as Madras have climbed their other contentions and are prepared to sign the agreement as now submitted, we may, with good grace, yield on this one point so far as only the additional 1,500 m.c. ft. extra storage is concerned, which is negligible and conclude the dispute once for all. I have discussed the whole matter this morning with my colleagues and they entirely approve of my recommendations. I feel relieved and proud that after four years of strenuous fight, I am able to put up for His Highness approval a settlement which is eminently satisfactory and favourable to Mysore and its future generations.”

63Copy pinpoint63. Elaborating the stand of paramountcy, this Court has been apprised of certain factual aspects. In 1929, certain disputes arose between the two Governments pertaining to the interpretation, operation and carrying out of Rules 7 and 8 of the Rules of Regulation of 1921 (Annexure to the Agreement of 1924) and under Clause 10(ii), the matters in dispute were referred to arbitration of Mr. Justice Page of the Calcutta High Court and during the arbitration, both the Governments agreed to adopt the same as final as regards the discharges at the upper Anicut and certain further aspects. In 1934, a new reservoir at Mettur which was constructed by Madras became operational pursuant to clause 10(v) of the Agreement of 1924 and the Madras Government agreed to limit the new areas of irrigation under the Cauvery-Mettur project to 301,000 acres and the capacity of the new reservoir at Mettur to 93.5 TMC. It is the stand of the State of Karnataka that when the Mettur Dam became operational with effect from 1934, the natural flow for upper Anicut which was at a considerable distance below Mettur could not be maintained at the stipulated six and a half to seven and a half ft. equal to 29800 cusecs to 40100 cusecs since the water of the upstream flowed into Mettur reservoir. Despite the same, as urged by Mr. Nariman, clause 10(ii) of the Agreement of 1924 required strict observance of Rule 7 of the Rules of Regulation and was not altered and it was so because of the paramount power exercised by the authority and it did not desire the H

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anomaly to be corrected. Various other aspects have been stressed upon to highlight that the State of Mysore had no authority to bargain and it was compelled to succumb to the paramount exercise of power. We are at present not referring to the specific reservoirs as that shall be dealt with at a later stage.

64Copy pinpoint64. The legal validity of the agreement of the year 1924 was challenged before the Tribunal and it has addressed whether the agreement has become constitutionally invalid. Adverting to the same, the Tribunal has opined that when the 1924 Agreement was entered into, the Government of India Act, 1919 was in force. Section 30 of the said Act enabled the Governor General in Council to make any contract for the purpose of that Act. The Government of India Act, 1919 was repealed by the Government of India Act, 1935.

65Copy pinpoint65. On behalf of the State of Tamil Nadu, reliance was placed on Section 177 of the Government of India Act, 1935 to sustain the contention that the 1924 Agreement continued to be in force and when British paramountcy lapsed on 15th August, 1947, the agreement did not lapse automatically due to the proviso to Section 7(1) of the Indian Independence Act, 1947. It is further put forth that the agreement continued to be in force in the absence of denouncement of those agreements by either party or by superseding them by any fresh agreement. That apart, the State of Mysore which was a Princely State E at the time of its accession to the Dominion of India executed both the “Instruments of Accession” and the “Standstill Agreement” under which the agreement continued between the State of Madras and the then State of Mysore. After the Constitution came into force, the liabilities and obligations arising out of the said agreements under Articles 294-B and 295(2) devolved on the two States and after the reorganization of the States in November, 1956, the terms of the agreement made earlier are to be treated as binding on the successor State or States under Section 87(1) of the Reorganisation Act. The contention of the State of Karnataka before the Tribunal was that the Agreement of 1924 is not covered by Section 177 of the Government of India Act, 1935 and as such, it lapsed after coming into force of the said Act.

66Copy pinpoint66. The Tribunal referred to Section 177(1), noted the submissions of the learned counsel for the parties and held thus:- “7. On a plain reading of Section 177(1) of the Government of India Act 1935 aforesaid it is apparent that it conceived contract H

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A to be made by or on behalf of the Secretary of State in Council. On the facts furnished on behalf of the State of Karnataka itself it appears that the Agreement which had been initially signed by the Dewan of Mysore and Secretary to the Government of 88 Madras on 18th February 1924 was also signed by the Maharaja of Mysore as well as the Governor of Madras. It was also approved by the Secretary of State and that approval was communicated by telegram dated 18th June 1924. Thereafter, the Government of India approved and confirmed the said agreement on 11th July 1924 which is apparent from the note made on the photo copy of the agreement by the Political Secretary. In this background, it shall be deemed that the said agreement had been executed on behalf of the Secretary of State in Council. Merely because in the agreement it had not been mentioned that it was being executed on behalf of the Secretary of State in Council, shall not make the agreement invalid. It is well known that in such matters a presumption has to be raised that official acts have been performed by complying with the requirement of the law. According to us after lapse of about 80 years from the date of the execution of the agreement it shall be a futile attempt to examine the legal validity of the execution of the agreement of the year 1924 which had been acted upon by the then State of Madras and the Government of Mysore in respect of sharing of the water of Cauvery and its tributaries including in respect of construction of reservoirs over Cauvery and its tributaries by two States. Pursuant to that agreement KRS was constructed and became functional in the year 1931 within Mysore and Mettur was constructed by Madras which became functional in the year 1934. The reservoirs on tributaries within the States of Mysore/Karnataka and Madras/ Tamil Nadu have also been constructed and they are functioning. No dispute was raised at any stage on behalf of the Mysore or Karnataka till 89 the expiry of the period of 50 years in 1974, in respect of any defect in the execution of the agreement of the year 1924 or that it was not binding on Mysore/Karnataka.”

67Copy pinpoint67. The submission was structured on the basis of the 1947 Act and the judgment rendered in Dr. Babu Ram Saksena v. State3. The Tribunal analyzed the said decision and the views of Patanjali Sastri, J. who delivered his opinion on behalf of M.H. Kania, CJ and himself and H 3 1950 SCR 573 : AIR 1950 SC 155

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the opinion rendered by B.K. Mukherjee, J. Be it noted, Fazal Ali, J. A agreed with both Sastri, J and Mukherjee, J. and opined that the appeal deserved to be dismissed. Mahajan, J. concurred with Mukherjee, J. After noting the facts, the Tribunal observed thus:- “16. It appears that three remaining Hon’ble Judges Fazl Ali, J, Mahajan,J, and Das,J, agreed with the opinion aforesaid expressed by Hon’ble Justice Mukherjea. The majority of the Judges in the aforesaid Supreme Court case dismissed the appeal taking special facts and circumstances of that particular case, i.e. the merger of the Tonk State along with several other States and giving rise to the United State of Rajasthan. In the process of merger Tonk had lost its identity and had relinquished its life. As such a treaty previously concluded had lapsed.”

68Copy pinpoint68. After so stating, the Tribunal distinguished the said decision as the factual matrix is different. It has been held by the Tribunal that the State of Mysore was a ruling State and after accession, it became a Group B State under the Constitution of India and at no stage, there has been any merger of the said State with any other State by which the Ruling State of Mysore stood extinguished or relinquished as in the case of State of Tonk which was the subject matter of controversy in Dr. Babu Ram Saksena (supra). Thereafter, the Tribunal has held:- “According to us the aforesaid judgment of the Supreme Court is of no help to the State of Karnataka. No other decision or provision was brought to our notice in support of the contention that the Agreement of the year 1924 ceased to exist after the Indian Independence Act 1947 came into force. The result will be that it shall be deemed that the said Agreement of 1924 survived and continued even after the coming into force of the Indian Independence Act 1947 and the Constitution of India.”

69Copy pinpoint69. Mr. Nariman, learned senior counsel, has assiduously and astutely canvassed about the doctrine of paramountcy. For the said purpose, he has drawn our attention to Section 7 of the 1947 Act. The G said provision reads as follows:- “7. (1) As from the appointed day(a) His Majesty’s Government in the United Kingdom have no responsibility as respects the government of any of the territories which, immediately before that day, were included in British India; H

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A (b) the suzerainty of His Majesty over the Indian States lapses, and with it, all treaties and agreements in force at the date of the passing of this Act between His Majesty and the rulers of Indian States, all functions exercisable by His Majesty at that date with respect to Indian States, all obligations of His Majesty existing at that date towards Indian States or the rulers thereof, and all powers, rights, authority or jurisdiction exercisable by His Majesty at that date in or in relation to Indian States by treaty, grant, usage, sufferance or otherwise; and (c) there lapse also any treaties or agreements in force at the date of the passing of this Act between His Majesty and any persons having authority in the tribal areas, any obligations of His Majesty existing at that date to any such persons or with respect to the tribal areas, and all powers, rights, authority or jurisdiction exercisable at that date by His Majesty in or in relation to the tribal areas by treaty, grant, usage, sufferance or otherwise: D Provided that, notwithstanding anything in paragraph (b) or paragraph (c) of this subsection, effect shall, as nearly as may be, continue to be given to the provisions of any such agreement as is therein referred to which relate to customs, transit and communications, -posts and telegraphs, or other like matters, until E the provisions in question are denounced by the Ruler of the Indian State or person having authority in the tribal areas on the one hand, or by the Dominion or Province or other part thereof concerned on the other hand, or are superseded by subsequent agreements.

F (2) The assent of the Parliament of the United Kingdom is hereby given to the omission from the Royal Style and Titles of the words “ Indiae Imperator “ and the words “ Emperor of India “ and to the issue by His Majesty for that purpose of His Royal Proclamation under the Great Seal of the Realm.”

70Copy pinpoint70. According to Mr. Nariman, after coming into force of the said provision, the agreements lapsed and the finding of the Tribunal that they continued because of the “Standstill Agreement” or the constitutional provisions as enshrined under Article 295(2) is absolutely erroneous. In this context, we may refer to the “Standstill Agreement” which is a part of the White Paper on Indian State issued by the Government of India, H Ministry of States. In part 4 of the said White Paper, accession of the

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States to the Dominion of India is mentioned and it refers to the lapse of A paramountcy. Paragraph 82 deals with “Standstill Agreement”. It reads as follows:- “Standstill Agreements, the acceptance of which was made by the Government of India conditional on accession by the States concerned were also entered into between the Dominion B Government and the acceding States. The Standstill Agreements (Appendix IX), provided for the continuance for the time being of all subsisting agreements and administrative arrangements in matters of common concern between the States and the Dominion of India or any part thereof.” C

71Copy pinpoint71. It is submitted by Mr. Nariman that the “Standstill Agreement” dated 09.08.1947 which was actually executed by the Maharaja of Mysore stipulated that nothing in the said agreement could include the exercise of any paramountcy function and, therefore, the “Standstill Agreement” will not cover the State of Mysore. Learned senior counsel would contend that with the coming into force of the Constitution of D India on 26.01.1950, the 1947 Act passed by the Parliament stood repealed by reason of the provision of Article 395 of the Constitution and Mysore became a Part B State under the Constitution and the erstwhile province of Madras became a Part A State. According to him, even if the “Standstill Agreement” executed between the Maharaja of Mysore and the E Dominion of India was operative and existing, it came to an end. According to him, the 1947 Act did not survive beyond the final accession of the State of Mysore to the Union of India and “Standstill Agreement” entered into by the Government of India with various Indian States including the provincial State of Mysore were purely temporary arrangements designed to maintain status quo in respect of administrative matters. He has seriously criticized the finding of the Tribunal and contended that the Tribunal has failed to take proper note of the decision in Dr. Babu Ram Saksena (supra). He has commended us to certain passages to bolster the argument:- “The Attorney-General appearing for the Government advanced three lines of argument in answer to that contention. In the first place, the standstill agreement entered into with the various Indian States were purely temporary arrangements designed to maintain the status quo ante in respect of certain administrative matters of common concern pending the accession of those States to the H

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A Dominion of India, and they were superseded by the Instruments of Accession executed by the Rulers of those States. Tonk having acceded to the Dominion on the 16th August, 1947, the standstill agreement relied on by the appellant must be taken to have lapsed as from that date. ….. B As we are clearly of opinion that the appellant’s contention must fail on this last ground, we consider it unnecessary to pronounce on the other points raised by the Attorney General especially as the issues involved are not purely legal but partake also of a political character, and we have not had the views of the Governments concerned on those points.” C

72Copy pinpoint72. We have already referred to the decision in Dr. Babu Ram Saksena (supra) and how the Tribunal has dealt with the same. The emphasis of Mr. Nariman is on the words “partake also of a political character”. Stress is laid that when an agreement partakes a political character, the doctrine of paramountcy clause melts into insignificance D by virtue of Section 7 of the 1947 Act. In this regard, he has placed reliance on Hemchand Devchand v. Azam Sakarlal Chhotamlal4. The effort of the learned senior counsel is to draw a distinction between categories of political cases and those which fall in the other categories. The relied upon passages from the said judgment read as follows:- E “The real question is whether in cases like those now before their Lordships the action of the tribunals in Kathiawar, and of the Governor in Council on appeal from those tribunals, is properly to be regarded as judicial or as political. And at this point a distinction arises between the two cases under appeal; because F the first of them has been disposed of as a civil, the second as a political, case. xxxxx The further appeal to the Secretary of State in Council is a fact of clearer import. In Lord Salisbury’s Despatch of the March G 23, 1876, the practice of such appeals is dealt with as a thing at that date already fully established, and it continues to the present day in civil as well as in political cases. This system of appeal to the Secretary of State affords strong evidence that the intention of Government is and always has been that the jurisdiction 4 (1905) 33 IA 1 : (1906) ILR 33 Cal 219 H

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exercised in connection with Kathiawar should be political and not judicial in its character.” And again:- “Such cases can only be justly disposed of on principle of equity in the fullest sense of the term, and not in the circumscribed sense, which is familiar to the practice of the High Courts; and sometimes consideration must be given to the political expediency which underlies the relation in which the Government stands to the protected States.’’

73Copy pinpoint73. Placing reliance on the said passages, it is urged by him that when the Secretary of State was dealing with such a case, the said case was regarded as “political” and not “judicial” in character as was later authoritatively stated in the letter of the Viceroy of India – that is, Lord Reading’s letter dated 27.03.1926 to the Nizam of Hyderabad – which set out the doctrine of paramountcy in classical terms. Elaborating further, it was contended by him that the appeal preferred by the Government of D Madras against the Griffin Award which was in favour of the Maharaja of Mysore was allowed and the Maharaja of Mysore was described as the head of a “Vassal State”, and hence, he was not in a position to negotiate or bargain with the paramount power on equal terms and was compelled to go for amicable settlement on compulsion. In this regard, inspiration has been drawn from the decision in H. H. Maharajadhiraja E Madhav Rao Jivaji Rao Scindia Bahadur of Gwalior and others v. Union of India and another5. Shah, J., speaking for the majority, observed:- “100. In the era before 1947 the term “State” applied to a political community occupying a territory in India of defined boundaries F and subject to a single Ruler who enjoyed or exercised, as belonging to him, any of the functions and attributes of internal sovereignty duly recognised by the British Crown. There were in India more than 560 States: forty out of those States had treaty relations with the Paramount Power: a larger number of States G had some form of engagements or Sanads, and the remaining enjoyed in one or the other form recognition of their status by the British Crown. The treaties, engagements and Sanads covered a wide field, and the rights and obligations of the States arising 5 (1971) 1 SCC 85 H

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A out of those agreements varied from State to State. The rights that the British Crown as the Paramount Power exercised in relation to the States covered authority in matters external as well as internal. The States had no international personality, the Paramount Power had exclusive authority to make peace or war, or to negotiate or communicate with foreign States. The B Paramount Power had the right of intervention in internal affairs which could be exercised for the benefit of the head of the State, of India as a whole, or for giving effect to international commitments.”

74Copy pinpoint74. Further, the Court referred to the Cabinet Mission which C announced its Plan on May 16, 1946 for the entry of the States into the proposed Union of India and simultaneously declared that the paramountcy of the British Crown could neither be retained nor transferred to the new Government. The Court also took note of the Indian (Provisional Constitution) Order, 1947 which extensively amended D Sections 5 and 6 of the Government of India Act, 1935. The Court dwelt upon the inheritance of the paramountcy power of the British Crown and, in that context, held:- “131. We are unable to agree with the Attorney-General that the “old unidentified concept of paramountcy of the British Crown” E was inherited by the Union, by reason of the instruments of accession and merger agreements and that “recognition of Rulership was a ‘gift of the President’, and not a matter of legal right, existing as it did in the area of paramountcy and remaining with the Government of India”. The British Crown did not acquire paramountcy rights by any express grant, cession or transfer, it exercised paramountcy because it was the dominant power. Paramountcy had no legal origin, and no fixed concept: its dimensions depended upon what in a given situation the representatives of the British Crown thought expedient. Paramountcy meant those powers which the British authorities by the might of arms, and in disregard of the sovereignty and authority of the States chose to exercise. But that paramountcy lapsed with the Indian Independence Act, 1947: even its shadows disappeared with the integration of the States with the Indian Union. After the withdrawal of the British power and extinction of paramountcy of the British power the Dominion Government H

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of India did not and could not exercise any paramountcy over the States. In clause 3 of the Standstill Agreement it was expressly recited that.... Nothing in the agreement includes the exercise of any paramountcy functions”. The relations between the States and the Dominion Government were strictly governed by the instruments executed from time to time. Subject to the power conferred in respect of certain matters of common interest to legislate and exercise executive authority the Princes had sovereignty within their territories. With the advent of the Constitution the States ceased to exist, and the Princes and Chiefs who were recognized as Rulers were left with no sovereign authority in them. It is difficult to conceive of the government of a democratic Republic exercising against its citizens “paramountcy” claimed to be inherited from an imperial power. The power and authority which the Union may exercise against its citizens and even aliens spring from and are strictly circumscribed by the Constitution. D

132. The fundamentals on which paramountcy rested i.e. the compulsion of geography and the essentials for ensuring security and special responsibility of the Government of India to protect all territories in India survived the enactment of the Indian Independence Act, for between August 15, 1947 and the date of integration of the various States, the Government of India was E the only fully sovereign authority. But paramountcy with its brazen- faced autocracy no longer survived the enactment of the Constitution. Under our Constitution an action not authorised by law against the citizens of the Union cannot be supported under the shelter of paramountcy. The functions of the President of F India stem from the Constitution — not from a “concept of the British Crown” identified or unidentified. What the Constitution does not authorise, the President cannot grant. Rulership is therefore not a privilege which the President may in the exercise of his discretion bestow or withhold.” G

75Copy pinpoint75. Relying upon the said authority, it is canvassed by Mr. Nariman that the agreements of 1892 and 1924 were relatable to paramountcy functions and, therefore, the “Standstill Agreement” of Mysore could not be held to have continued the said two agreements since they are relatable to paramountcy and, in fact, after the lapse of suzerainty of the H

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A British Crown under the 1947 Act, both the agreements are bound to be treated to have been lapsed. In this context, he has drawn inspiration from certain passages of the book “Integration of Indian States” by Mr. V.P. Menon who has commented on the provisions of Section 7 of the 1947 Act. The comments of the learned author in this regard are as follows:- B “The next question was whether, even if paramountcy lapsed, all agreements of a commercial, economic or financial character between the States on die one hand and the British Government, the Secretary of State, and the Governor-General on the other, would cease to be legally effective. I pointed out that there were C several important agreements which had been entered into for the common benefit of the States and British India where paramountcy did not enter, such as the agreement of 1920 with Bahawaipur and Bikaner regarding the Sutlej Valley canals project, and the Government of India agreement on salt with D Jaipur and Jodhpur. The mutual rights and obligations- of parties under such agreements could not be regarded as lapsing on the withdrawal of paramountcy. On the commencement of the Government of India Act of 1935, the Crown’s rights and obligations had become for all practical and constitutional purposes the rights and obligations of the Central Government E and were secured as such by the provisions of the Act. The financial commitments of the Central Government under agreements of this type were considerable. I therefore took the view that it would be best that these agreements should continue to be binding both on the States and on the successor F Governments. Sir Conrad Corfield. on behalf of the Political Department contested my point of view. He referred to a meeting between himself and Lord Pethick-Lawrence at which it had been agreed that the abolition of the Crown Representative would G automatically cause paramountcy to become void, together with any subsisting agreements between the Crown and the States. Sir Conrad did not agree with the view that paramountcy did not enter into the Sutiej Valley Canals Agreement of 1920 and the Jaipur and Jodhpur Salt Agreements. The first of these had been entered into on behalf of Bahawaipur by a Council of Regency H

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controlled by the paramount power while the ruler was a minor. A The Jaipur and Jodhpur Salt Agreements wee typical of those which States had been required to conclude with the paramount power during the latter half of the nineteenth century in the interests of the central revenues. The Political Adviser was unable to entertain the view that the agreements should be continued after the lapse of paramountcy. Lord Mountbatten did not take sides in this conflict of opinion. He merely forwarded both my view as well as that of the Political Department to the India Office. It was about this time that the Secretary of State intimated that the Indian Independence Bill should include a specific denunciation of the treaties with the Indian States. Normally speaking, treaties were terminated by ‘acts of State’, but there was no reason why, on an occasion of this importance and in the peculiar circumstances, this should not be done by an Act of Parliament which would emphasize the legal position whereby paramountcy did not pass to the new Indian Dominions. This was considered by the Viceroy’s advisers; they deprecated any such formal denunciation of treaties. Meanwhile the Secretary of State’s opinion in regard to the continuance of existing agreements was received. He stated that E His Majesty’s Government fully appreciated the importance attached by the Reforms Commissioner to the avoidance if possible of complete severance of relations with the States and the necessity for negotiations between parties over the whole field. But he considered that the views of the Political F Department must prevail, as they were in line with His Majesty’s Government’s policy as stated in the Cabinet Mission memorandum. It was impossible to distinguish between agreements freely negotiated and those imposed. In any case, all had been made under the authority of the Crown and not of the executive Governments - central or G provincial - of British India....” [Emphasis supplied]

76Copy pinpoint76. He has also drawn strength from the other Water Disputes Tribunals, namely, Narmada, Krishna and Godavari. His principal H

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A emphasis is on the fact that the agreements entered into between the two States were for political considerations as the State of Mysore was a princely State under the British suzerainty and the State of Madras was a province of British India and the disputes were never settled by application of international law but through authoritative decision of the British Crown. In essence, the submission is that after coming into force B of the 1947 Act, the agreements became extinct by operation of law.

77Copy pinpoint77. In this regard, we may usefully refer to the authority in State of Tamil Nadu v. State of Kerala and another6 which was dealing with the water level of Mullaperiyar Dam after it was solved by this Court on 27.02.2006 in Mullaperiyar Environmental Protection Forum C v. Union of India and others7. The controversy had arisen because the Kerala State legislature had enacted the law immediately thereafter fixing and limiting full reservoir level to 136 ft. The Constitution Bench referred to the Periyar Lake Lease Agreement dated 29.10.1886 which allowed the masonry dam to come up across Periyar reservoir. The agreement stipulated many aspects. In 1979, the Government of Kerala had entered into a correspondence with the Tamil Nadu Government to take immediate steps to strengthen the dam keeping in view the safety of the Mullaperiyar Dam. Simultaneously, the Kerala Government also requested the Central Government to depute a team from the Central Water Commission (CWC) to inspect the Dam and suggest strengthening measures. In pursuance of the request from the Kerala Government, the CWC held meeting and three level measures, (i) emergency, (ii) medium, and (iii) long term were suggested to strengthen the Dam. In the meantime, it was recommended that the water level in the reservoir be kept at 136 ft. In the second meeting held on 29.04.1980, it was opined that after the completion of emergency and medium-term strengthening measures, the water level in the reservoir can be restored up to 145 ft. In the year 1998, the State of Tamil Nadu had a grievance that despite the measures being suggested by CWC, no consensus could be reached between the State Governments, that is, Tamil Nadu and Kerala, to raise the water level in the Mullaperiyar Reservoir beyond G 136 ft. Various writ petitions were filed in both the High Courts and, eventually, the matters stood transferred to this Court and some directions were issued in Mullaperiyar Environmental Protection Forum (supra). The Expert Committee, after discussion, opined that the water level in 6 (2014) 12 SCC 696 H 7 (2006) 3 SCC 643

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the Mullaperiyar Reservoir could be raised to 142 ft as that would not A endanger the safety of the main Dam, including spillway, Baby Dam and earthen bund. The Constitution Bench referred to the first litigation before this Court, the Kerala Irrigation and Water Conservation Act, 2003, the Kerala Irrigation and Water Conservation (Amendment) Act, 2006, the second litigation before this Court, grounds of challenge to the 2006 B (Amendment) Act and the defence put forth by the State of Kerala. Certain issues were framed by the Court out of which four questions being relevant for the present purpose are reproduced below:- “4. (b) Whether the pleas relating to validity and binding nature of the deed dated 29-10-1886, the nature of Periyar River, structural safety of the Mullaperiyar Dam, etc. raised by the first defendant in its defence, are finally decided by the judgment of this Court dated 27-2-2006 in Mullaperiyar Environmental Protection Forum v. Union of India and consequently first defendant is barred from raising or reagitating those issues and pleas in this suit, by the principle of res judicata and constructive res judicata?

5. Whether the suit based on a legal right claimed under the lease deed executed between the Government of the Maharaja of Travancore and the Secretary of State for India on 29-10- 1886, is barred by the proviso to Article 131 of the Constitution E of India?

6. Whether the first defendant is estopped from raising the plea that the deed dated 29-10-1886 has lapsed, in view of subsequent conduct of the first defendant and execution of the supplemental agreements dated 29-5-1970 ratifying the various provisions of F the original deed dated 29-10-1886?

7. Whether the lease deed executed between the Government of the Maharaja of Travancore and Secretary of State for India on 29-10-1886 is valid, binding on first defendant and enforceable by plaintiff against the first defendant?” G

78Copy pinpoint78. Be it noted, initially, the matter was heard by a three-Judge Bench and later on, it was referred to the Constitution Bench as some of the issues framed in the suit involved decision on certain substantial questions of law concerning interpretation of the Constitution. Dealing with the issues on the 1886 lease agreement, the Court posed the H

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A question – whether it is an existing contract under the 1935 Act. Reference was made to Section 177 of the 1935 Act and interpreting the same, the Court held:- “41. Section 177 of the 1935 Act, omitting the unnecessary part reads, B “177. (1) … any contract made before the commencement of Part III of this Act by, or on behalf of, the Secretary of State- in-Council shall, as from that date— (a) if it was made for the purposes which will after the commencement of Part III of this Act be purposes of the C Government of a Province, have effect as if it had been made on behalf of that Province….” By virtue of this provision, the existing contracts of the Secretary of State-in-Council would have the effect as if they had been made on behalf of the Province. When we see the 1886 Lease D Agreement in the light of Section 177 of the 1935 Act, there remains no doubt at all that lease that was executed by the Secretary of State-in-Council for the Presidency of Madras (Madras Province) had the effect as if it had been made on behalf of the Presidency of Madras or for that matter Madras E Province. To put it differently, by legal fiction created under Section 177(1)(a), the Presidency of Madras (Madras Province) became lessee under the 1886 Lease Agreement. We have, therefore, no hesitation in accepting the submission of Mr Vinod Bobde, learned Senior Counsel for Tamil Nadu that by virtue of Section 177 of the 1935 Act, as from the commencement of the F 1935 Act, the Government of the Province of Madras is deemed to be substituted as the lessee in the 1886 Lease Agreement.”

79Copy pinpoint79. Thereafter, the Court addressed the issue of the effect and impact of the events between 18.07.1947 and 26.01.1950 which relate to the 1947 Act and the Constitution of India. The Court referred to the G “Standstill Agreement” which was entered into between the State of Travancore and the Dominion of India, the omission of Section 177 of the 1935 Act and the merger of two States – Travancore and Cochin. Analysing further, the Court referred to Section 7 of the 1947 Act and observed thus:- H

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“45. As noted above, the 1947 Act came into effect from 15-8- A

1947. Section 7 deals with the consequences of the setting up of the new dominions. Clause (b) of sub-section (1) of Section 7 declares that suzerainty of His Majesty over the Indian States lapses. On lapsing of suzerainty, it provides for lapsing of all treaties and agreements in force between His Majesty and the B Rulers of Indian States from that date. The proviso appended to sub-section (1), however, continues such agreements unless the provisions in such agreement are denounced by the Ruler of the Indian State or are superseded by a subsequent agreement.

46. It is the contention of Mr Harish N. Salve that firstly, 1886 Lease Agreement lapsed by virtue of main provision of Section 7(1)(b) of the 1947 Act as it comprehends all treaties and agreements and secondly, the Maharaja of Travancore denounced all agreements including the 1886 Lease Agreement. D

47. It is true that Section 7(1)(b) of the 1947 Act uses the expression “all treaties and agreements” but, in our opinion, the word “all” is not intended to cover the agreements which are not political in nature. This is clear from the purpose of Section 7 as E it deals with lapsing of suzerainty of His Majesty over the Indian States and the consequence of lapsing of suzerainty. Obviously, the provision was not intended to cover the agreements and treaties other than political. We, accordingly, hold that Section 7(1)(b) concerns only with political treaties and agreements.” F And again:- “53. It is argued by Mr Harish N. Salve that the Standstill Agreement, which is between parties different from those who had executed the 1886 Lease Agreement, is a fresh agreement which brought into force, for the time being, contractual obligations G between the Maharaja of Travancore and the Dominion of India. As the parties were different and the 1947 Act provided for the lapse of the British suzerainty over the Princely States, the question of continuance of the 1886 Lease Agreement does not arise. In any case, the learned Senior Counsel for Kerala argues H

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A that the Standstill Agreement could not survive after the deletion of Section 177 of the 1935 Act. We find no merit in these arguments. The Standstill Agreement is not a fresh agreement between the Dominion of India and the State of Travancore as suggested by Mr Harish N. Salve. The Standstill Agreement was intended for the benefit of the parties who were parties to B the agreements and arrangements, which were matters of common concern existing between the Crown and the State of Travancore. In the background of Instrument of Accession, it became necessary to have some arrangement so that the existing agreements and arrangements between the Crown and the Indian C States continued. We do not think that the Standstill Agreement is political in nature as contended on behalf of Kerala.

54. The argument that the Standstill Agreement could not survive after the deletion of Section 177 with effect from 15-8-1947 by virtue of India (Provisional Constitution) Order, 1947 is also without substance. Section 177 was deleted because it could no longer work and because the Dominion of India was to come into being with provinces as part of the Dominion and there was to be no Secretary of State-in-Council. We are in agreement with Mr Vinod Bobde, learned Senior Counsel for Tamil Nadu that deletion of Section 177 was prospective and it did not affect the deeming that had already taken place in 1935. The Standstill Agreement, in our view, cannot be said to have been wiped out by the deletion of Section 177. xxxxx

F 56. The argument that there is no successor of Crown is irrelevant because by virtue of Section 177, the Government of Province of Madras had already become lessee in the 1886 Lease Agreement by deeming in 1935 itself. The Standstill Agreement continued the 1886 Lease Agreement between the Province of Madras and the State of Travancore. The 1886 Lease Agreement G did not lapse under the main provision of Section 7(1)(b) of the 1947 Act. There was no unequivocal and unambiguous denouncement of the 1886 Lease Agreement by the Ruler of Travancore under proviso to Section 7(1)(b). The Province of Madras was beneficiary of the Standstill Agreement. Surely, deletion H of Section 177 has not affected the rights of Province of Madras.”

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