HARI CHAND MADAN GOPAL AND OTHERS vs STATE OF PUNJAB

The Supreme Court held that under Clause 8(3) of the Indian Independence (Rights, Property and Liabilities) Order, 1947, the respondent had the right to sue the appellant for the balance due under a contract for services rendered as a clearing agent for the Province of Punjab. The Court clarified that the contract imposed continuing obligations, and the appellant could not deny liability based on the argument that the rights accrued to the Government of West Punjab. The Court upheld the High Court's decision to reduce the amount payable by the appellant to the respondent, affirming the applicability of Clause 2(d) of the Punjab Partition (Contracts) Order, 1947, regarding contracts with continuing obligations.