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(49) The cases which have come to courts, with the exception of Ladu Lal Jain were mainly cases of sovereign or regal or executive function. In Binani Bros. an executory contract to purchase pig lead was held to be a governmental function. In Director of Rationing the Supreme Court held that an equitable distribution of food grains was "an elementary duty of a sovereign". In Bakhtawar Singh the contract entered into by the state was a contract in connection with the execution of civil work for modernisation and augmentation of an ordnance factory at Muradnagar. The ordnance factory is a part of military organisation. Every state maintains a military force of great strength to survive in the present day world where governments are piling up armaments despite talks of disarmament. The present day tendency is to speak of the state almost excursively in terms of military power. Likewise a contract for the improvement of water supply at joshimath in the present case is essentially a military engineering contract. It is the primary duty of the state to defend its borders. For that purpose it must maintain military might.

(58) On the hole my conclusion is that the concept of carrying on business cannot be imported into activities of the description with which Anand J. was concerned in Bakhtawar Singh. Modernisation of an ordnance factory engaged in the manufacture of arms and ammunition is undoubtedly a sovereign activity of the state. It is not a known and recognised commercial venture.

(59) On the facts of the present case I must hold that Delhi courts have no jurisdiction to entertain the petition under sections 14 and 17 of the Arbitration Act. The contract was made in U.P. The work was executed in U.P. The Commander Works Engineer has his headquarters and head office in U.P. No part of the cause of action has arisen in Delhi. The Union of India does not carry on business when it enters into a military engineering contract for the improvement of water supply at Joshimath. It is a public service, undertaken in the exercise of the sovereign power of the state.