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PETITIONER: VISHNU PARTAP SINGH

       Vs.

RESPONDENT: STATE OF MADHYA PRADESH & ORS.

DATE OF JUDGMENT12/01/1990

BENCH: PUNCHHI, M.M. BENCH: PUNCHHI, M.M. RANGNATHAN, S. KULDIP SINGH (J)

CITATION:  1990 AIR  522            1990 SCR  (1)  43  1990 SCC  Supl.   43     JT 1990 (1)    20  1990 SCALE  (1)15

ACT:     Constitution of India: Article 363 and Covenant of Ruler of  states in Bundelkhand and Baghelkhand--Whether Ruler  of Chhatarpur  had  set aside the demised property  as  private property?

HEADNOTE:     The question is whether the property in dispute was  the private  property owned by the Ruler or State  property?  On August  25, 1948 the then Maharaja of  erstwhile  Chhatarpur State  made a gift of the house in dispute in favour of  his father-in-law  Dewan Shankar Partap Singh, now deceased  and represented by his legal representative appellant. This gift became  the subject-matter of dispute in the suit  filed  by the State of Madhya Pradesh in 1962. The Trial Court’s clear findings  were that the property in dispute was not that  of the  Maharaja as it had been gifted away by him to  the  de- fendant and was mistakenly shown later as ’State  Property’. The  High  Court allowed the appeal of the State  of  Madhya Pradesh on the view taken by it that the property in dispute had vested in the United State of Vindhya Pradesh on May  1, 1948 and thereafter no valid gift could be made by the Ruler in  favour of the defendant; and whatever rights  and  power the  Ruler had as a sovereign ceased to exist after  May  1, 1948 and the gift made thereafter could not give the defend- ant a valid title to the property. Allowing the appeal, this Court,     HELD:  The Ruler of Chhatarpur lost none of  his  sover- eignty by integrating his State with other States except  to the  extent  in which it was arranged or  re-distributed  on some  of  its aspects. It is in exercise of  that  sovereign power that the Ruler, had set apart the property in  dispute as  one of his private properties in the list  submitted  on July 5, 1948. [52F]     The  High  Court committed an error that the  Ruler  had lost his sovereign right to earmark the property in  dispute as  his private property after May 1, 1948 or that the  said property  vested in the State with effect from that date  or that the letter Exhibit P-9 of Shri N.M. Buch 44

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and  the lists attached thereto had the effect of  divesting the  appellants of the title to the property in  dispute  in favour of the State with effect from that date. [53E]     Virendra Singh & Ors. v. State of Uttar Pradesh,  [1955] I SCR 415, referred to.

JUDGMENT:     CIVIL    APPELLATE   JURISDICTION:  Civil   Appeal   No. 509(N)of 1975.     From  the  Judgment  and Order dated  25.7.1973  of  the Madhya Pradesh High Court in First Appeal No. 118 of 1966. A.K. Ganguli and C.N. Sreekumar for the Appellant. R.B. Misra and S.K. Agnihotri for the Respondents. The Judgment of the Court was delivered by     M.M. PUNCHHI, J. This appeal by special leave is against a judgment and decree in reversal passed by a Division Bench of the High Court of Madhya Pradesh at Jabalpur.     One  has straightaway to come to grips with  some  basic facts of the case alongside the historic backdrop  influenc- ing their course. The property in dispute is a  medium-sized house  bearing No. 494/1, Partap Sagar Ward, known as  Gulab Rai  Wala  House, in the city of Chhatarpur. In  the  plaint filed  by the District Collector, Chattarpur, dated  May  5, 1962, it was valued at Rs.40,000 and its rental value barely as  Rs.114.77 NP. In British days, the State of  Chattarpur, like other such States, was an independent State, under  the paramountcy of the British Crown. The British Crown was  the suzerain  power as acknowledged by the Indian  States  which owed a modified allegiance to it, but none to the Government of  India. On India having obtained independence the  suzer- ainty  of  the British Crown over the Indian  States  lapsed simultaneously because of section 7 of the Indian  Independ- ency  Act, 1947. It is a matter of history that  immediately thereafter all but three of the Indian States acceded to the Dominion  by executing Instrument of  Accession.  Chattarpur was one such State. The new Dominion of India was  empowered to  accept such like accessions by a suitable  amendment  in the  Government of India Act, 1935. The sovereignty  of  the acceding  States was expressly recognised  and  safeguarded. The identical Instrument of Accession, which each Ruler 45 signed,  was in the exercise of his sovereignty in and  over his State and clause 8 provided: "Nothing  in this Instrument affects the continuance  of  my sovereignty in and over this State, or, save as provided  by or  under this Instrument, the exercise of any  powers,  au- thority and rights now enjoyed by me as Ruler of this  State or  the  validity  of any law at present in  force  in  this State." To  put it differently, the effect of the accession  was  to retain full autonomy and sovereignty to the Rulers in  their respective States except on three subjects, namely, Defence, External Affairs and Communications. These alone were trans- ferred to the Central Government of the new Domimon.     On March 13, 1948, thirty-five States in Bundelkhand and Baghelkhand  regions  agreed to unite  themselves  into  one State  which  was to be called the United State  of  Vindhya Pradesh. Chattarpur being one such State in Bundelkhand area was  a  party thereto. The signing  thirty-five  Rulers  had brought about the new State into being purely as a  domestic arrangement between themselves and not as a treaty with  the Dominion of India. Obviously there was surrender of a  frac- tion  of the sovereignty of each Ruler to the newly  created

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State but there was no further surrender of sovereign powers to the Dominion of India beyond those already surrendered in 1947  relating to Defence, External Affairs  and  Communica- tions. Despite the readjustment, the sum total of the sover- ignties  which had resided in each before the covenant  then resided in the whole and its component parts; none of it was lost to the Dominion of India.     The  articles of the covenant, so far as they are  rele- vant  for  our purposes, are articles VI and XI,  which  are reproduced hereafter: "ARTICLE VI      (1) The Ruler of each Covenanting State shall, as  soon as  may be practicable, and in any event not later than  the 1st May, 1948, make over the Administration of his State  to the Raj Pramukh;       (a)  all rights, authority and jurisdiction  belonging to  the  Ruler  which appertain, or are  incidental  to  the Govern- 46 ment of the Covenanting State shall vest in the United State and  shall hereafter be exerciable only as provided by  this Government or by the Constitution to be framed thereunder:      (b) all duties and obligations of the Ruler  pertaining or  incidental to the Government of Covenanting State  shall devolve on the United State and shall be discharged by it;       (c) all the assets and liabilities of the  Covenanting State  shall  be the assets and liabilities  of  the  United State. XXX                         XXX                          XXX XXX ARTICLE XI       (1)  The  Ruler  of each Covenanting  State  shall  be entitled  to  the full ownership, use and enjoyment  of  all private  properties  (as  distinct  from  State  Properties) belonging to him on the date of his making over the Adminis- tration of the State to the Raj Pramukh.       (2) He shall furnish to the Raj Pramukh before the 1st May,  1948  an inventory of all  the  immovable  properties, securities  and  cash balances held by him as  such  private property.       (3)  If any dispute arises as to whether any  item  of property  is  the  private property of the  Ruler  or  State Property,  it shall be referred to a Judicial Officer to  be nominated  by the Government of India, and the  decision  of that  person shall be final and binding on all parties  con- cerned."     Despite  the distinction drawn in Article XI, there  was in  reality  no distinction between State property  and  the property privately owned by a Ruler, since the Ruler was the owner of all the property in the State. For the purposes  of arrangement  of  finance, however, such  a  distinction  was practically  being  observed  by all  Rulers.  The  apparent effect  of  the covenant was that all the  property  in  the State  vested in the United State of Vindhya Pradesh  except private property which was to remain with the Rulers. As  is evident, the Ruler was required 47 under Article XI to furnish to the Raj Pramukh before May 1, 1948  an inventory of all immovable  properties,  securities and  cash  balances held by him as  such  private  property. Conceivably, on a dispute arising as to whether any item  of property  was or was not the private property of  the  Ruler and hence state property, it was required to be referred  to a  Judicial  Officer to be nominated by  the  Government  of India  and the decision of that officer was to be final  and

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binding on all parties concerned. Despite the stern language of Article XI, requiring a Ruler to furnish the list of  his private  properties  by May 1, 1948, the  covenant  did  not contain  any clause or article providing penal  consequences which would or were likely to follow in the event of a Ruler not  furnishing the list of private properties  before  that date.  Nothing  is available in the covenant  and  none  was pointed  out  to  us that if a Ruler failed  to  furnish  an inventory  of his private properties before May 1, 1948,  he was  debarred from furnishing it at a later stage  and  that failure of his part had the effect of divesting him of title to his private properties.     The House in dispute was built by the then Ruler Mahara- ja Sir Vishvanath Singh Ju Deo to accommodate Gulab Rai, his Private  Secretary and that is how it acquired its  name  as Gulab Rai Wala house. The parties were at variance about the subsequent  user of the house whether it was for State  pur- poses or private purposes of the Ruler. The factual undenied positioin  is that the Ruler of Chattarpur on July  5,  1948 (vide Exhibit D-13-5) submitted a list to the Raj Pramukh of the  United State of Vindhya Pradesh of his private  proper- ties,  and  in the said list the house in  dispute,  namely, Gulab  Rai Wala house, was shown as the private property  of the Ruler (by the then Maharaja Shri Bhawani Singh Ju  Deo). In the following month, on August 25, 1948, the said Mahara- ja  Shri  Bhawani Singh Ju Deo made a gift of the  house  in dispute in favour of his father-in-law Dewan Shanker  Partap Singh (now deceased and represented by his legal representa- tives-appellants). His gift has become the subject matter of dispute  in the suit, out of which this appeal  has  arisen, for  grounds  to be taken note of later  at  an  appropriate stage.     By  means of another agreement dated December 26,  1949, between the Governor General of India and the Rulers of  the States  forming  the United State of  Vindhya  Pradesh,  the covenant entered into on March 13, 1948, was abrogated.  The articles  of this agreement, in so far as they are  relevant for our purposes, read as under: 48 "ARTICLE I As from the first day of January, 1950, the Covenant entered into  in March, 1948 by the Ruler of certain States in  Bun- delkhand  and  Baghelkhand for the formation of  the  United State  of Vindhya Pradesh (hereinafter referred to  as  "the Covenant") shall stand abrogated. ARTICLE II As  from  the  aforesaid day, the United  State  of  Vindhya Pradesh  shall cease to exist and all the  property,  assets and  liabilities of that State, as well as its right  duties and obligations shall be those of the Government of India. ARTICLE III The Ruler of each of the States specified in the Schedule to this  agreement (hereinafter referred to as the  Covenanting States’)  hereby  cedes  to the Government  of  India,  with effect from the aforesaid day, full and exclusive authority, jurisdiction and powers for, and in relation to, the  gover- nance of that State; and thereafter the Government of  India shall  be competent to exercise the said  powers,  authority and  jurisdiction in such manner and through such agency  as it may think fit. XXX                 XX                 XX                  X XX ARTICLE VII (1) The Ruler of each Covenanting State shall be entitled to the full ownership, use and enjoyment of all private proper-

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ties (as distinct from State Properties) belonging to him on the date of his making over the Administration of the  State to   the   Raj  Pramukh  in  pursuance  of   the   Covenant. -          (2) If any dispute arises as to whether any item of property  is  the  private property of the  Ruler  or  State property,  it shall be referred to a judicial officer to  be nominated  by the Government of India, and the  decision  of that  officer  shall  be final and binding  on  all  parties concerned. ’ ’ 49 This  Agreement of the year 1949 paved the way for the  Cen- tral  Government appointing a Chief Commissioner as Head  of the  Administration  of  Vindhya Pradesh,  followed  by  the Parliament  making  it a Part ’C’ State in the year  195  1, followed  by the creation of the State of Madhya Pradesh  in the year 1956 under the States Reorganisation Act. And  such position continues till date.     As  is prominent, under the covenant of March 13,  1948, and  as repeated in the agreement of December 26, 1949,  any dispute  arising, whether any item of property was the  pri- vate  property  of the Ruler or State property,  was  to  be referred  to a Judicial Officer to be nominated by the  Gov- ernment of India and the decision of that officer was to  be final  and  binding on all parties  concerned.  It  appears, however, that a letter dated January 22, 1950 (copy  whereof was  Exhibit P-9) was sent by Shri N.M. Buch,  Secretary  in the  Ministry of States, New Delhi, to the Ruler  suggesting that  a  Conference was held between him and  the  Ruler  at Naugong  from 16th to 18th September, 1949, and  some  deci- sions  were taken with regard to the private  properties  of the Ruler and the list of such property as finally  emerging was Exhibit P-10 attached with the letter Exhibit P-9.  Item No.  22 in that list, being Gulab Rai Wala house, was  shown to  be  State  property as per decision taken  in  the  said Conference.  From these documents, the High Court  when  re- solving the claims of the State and the donee has taken  the view that originally the property in dispute was claimed  by the  ruler as his private property but on agreement  it  was decided  that  it be State property, and further  the  legal effect  thereof was that with effect from May 1,  1948,  the date  of agreement of merger, the property in dispute  stood vested  in  the new Union. The second factor  which  weighed with the High Court to conclude in the aforesaid manner  was that  listing of properties, whether State or  private,  was open to objection and could be settled by a Judicial Officer to  be  nominated  by the Government of India,  as  per  the articles  aforereferred  to, and a raiseable  dispute  could otherwise  be settled amicably mutually, Mr.  Buch’s  letter being indicative of that. On that basis, the gift deed dated August  25, 1948, was held by the High Court to be  ineffec- tive,  the said property having already vested in the  State with  effect  from a prior date on May 1,  1948.  And  since after that date, the Ruler was incompetent to effect a valid gift deed in favour of anyone, the State’s claim of  posses- sion and mesne profits was held irresistable.     Undeniably,  the Dewan Shanker Partap Singh was in  pos- session of the house in dispute when the suit was instituted by the State of Madhya Pradesh on May 5, 1962. The suit  was filed almost 14 years of 50 the gift in his favour. The gift was challenged as null  and void and ineffective for the reasons: (i) the gift deed  was written  on an ordinary paper; (ii) was unregistered,  (iii) was not signed by any witness, (iv) did not bear the seal of

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the Maharaja, (v) prior to the date of the gift the power of the  Maharaja was transferred to Vindhya Pradesh  Government and  the said house was not his private property,  and  (vi) the house in dispute was already declared to be the property of the Vindhya Pradesh Government as per terms of the  cove- nant  between the ex-Ruler of Chattarpur and the  Government of India, and the Civil Court was not competent to  question the legality of the conditions of the said covenant. On that basis,  possession of the house was claimed from  the  donee Dewan  Shanker  Partap Singh as also arrears  of  rent  from August 25, 1949 onwards at the rate of Rs.114.77 NP, totall- ing Rs.18,866, before the trial court.     The  suit was contested by the defendant-Shanker  Partap Singh  contending that (i) the gift of August 25, 1948,  was not  void  and inoperative and that there was no  legal  re- quirement to use a particular kind of paper for executing  a gift deed; (ii) non-registration thereof had no legal effect as  the  executant had admitted execution of  the  document, (iii) the Transfer of Property act was not applicable at the relevant time, (iv) the deed was signed by the Ruler and the absence of seal was of no consequence, (v) the property  was the  private property of the Maharaja, and (vi) finally  the Ruler  had every right to make such gift. Besides, a  number of  other  pleas were raised, which are  unnecessary  to  be dealt with for the present purposes. Similarly, the pleas in the replication, countering the pleas in the written  state- ment,  also need not require any attention for  the  present purposes, for the way in which we propose to deal with  this appeal.     The trial Court framed a number of issues which attract- ed voluminous evidence to be led by the parties. The Mahara- ja  of  Chhatarpur was examined as defendant’s  witness  and owned making of the gift in favour of his father-in-law.  He admitted, however, that Shri Buch had met him in  connection with  the covenant, but he denied that he had  received  any letter  Exhibit P-9 from Shri Buch or the lists Exhibits  P- 10 to P- 12 regarding his private and State properties, were a  part thereof. His evidence was suggestive of there  being no agreement between him and Shri Buch to change the list of properties.  The trial Court’s clear findings were that  the property in dispute was not that of the Maharaja but that of the defendant, as it had been gifted to hun by the  Maharaja on August 25, 1948, and that the house was mistakenly  shown later  as ’State property’. In that view of the matter,  the trial 51 Court dismissed the suit. The appeal of the State of  Madhya Pradesh was, however, allowed by the High Court on the  view taken that the property in dispute had vested in the  United States of Vindhya Pradesh on May 1, 1948, and that  thereaf- ter  no valid gift could be made by the Ruler in  favour  of the  defendant.  The High Court further held  that  whatever rights  and  powers the Ruler had as a sovereign  ceased  to exist  after  May 1, 1948, and the said date was  fixed  not later than May 1, 1948, and the gift deed made thereafter on August 25, 1948, could not give the defendant a valid  title to  the property on that basis. With regard to damages,  the High  Court took the view that the rate of Rs.56 per  mensem as at one time demanded initially by the State should be the basis for assessment of damages. In that view of the matter, the  suit  of  the State of Madhya  Pradesh  Government  was decreed   for  possession,  but  reducing  the  damages   to Rs.16,735.35  paise. And this has given rise to the  present appeal.     History  of the covenant entered into by the Rulers  and

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the  final integration finds recognition in  Virendra  Singh and others v. State of Uttar Pradesh, [1955] 1 SCR 415.  The significant passage as available at page 4 19 of the report, is worthy of reproduction here: "After  this,  on 13th March, 1948, thirty  five  States  in Bundelkhand and Baghelkhand (including Charkhari and Sarila) agreed  to unite themselves into one State which was  to  be called the United State of Vindhya Pradesh. In pursuance  of this  agreement  each  of the thirty five  Rulers  signed  a covenant  on 18th March, 1948, which brought the  new  State into  being. It is important to note that this was a  purely domestic  arrangement  between themselves and not  a  treaty with  the Dominion of India. Each Ruler necessarily  surren- dered  a fraction of his sovereignty to the whole but  there was no further surrender of sovereign powers to the Dominion of  India beyond those already surrendered in 1947,  namely, Defence,  External Affairs and Communications.  Despite  the readjustment,  the sum total of the sovereignties which  had resided in each before the covenant now resided in the whole and its camponentparts: none of it was lost to the  Dominion of India." (Emphasis supplied) Only a fraction of sovereignty to the whole was  surrendered by  the  Ruler--not  his total sovereignty.  Though  it  was expected  by  Article  XI of the covenant of  the  Ruler  to submit a list of his private properties 52 before  May 1, 1948, his individual sovereign power did  not stand taken away after May 1,  1948. He was still sovereign, as  is  our view, to submit the list beyond  that  date  and there  was no penal clause in the covenant to  penalise  him for  belated observance or to treat belated  observance  non est.  It  is the admitted case that factually the  Ruler  of Chattarpur  had  in  his list of July 10,  1948,  shown  the property in dispute to be his private property and this  was followed  by a gift of it in writing on August 25, 1948,  in favour  of his father-in-law. It is in the assertion of  his sovereign  power  that  he gave his list  on  July  5,  1948 (Exhibit  D-13-5) and it is in assertion of the same  sover- eign  power as also individual that he made the gift of  the house in dispute to his father-in-law. Support for such view is  available  in  Virendra Singh’s case  (supra)  from  the following passage occurring at page 429 of the report; "  .....  The Rulers of Charkhari and Sarila retained at the moment  of  final cession, whatever measure  of  sovereignty they had when paramountcy lapsed, less the portion given  to the  Indian  Dominion by their Instruments of  Accession  in 1947;  they lost none of it during the interlude  when  they toyed  with  the experiment of integration. There  was  then redistribution  of  some  of its aspects but  the  whole  of whatever  they possessed before the integration returned  to each when the United State of Vindhya Pradesh was brought to an  end and ceased to exist. Thereafter each acceded to  the Dominion of India in his own right." (Emphasis supplied).     It is thus plain that the Ruler of Chhatarpur lost none. of  his  sovereignty  by integrating his  State  with  other States  except  to the extent in which it  was  arranged  or redistributed  on some of its aspects. It is in exercise  of that sovereign power that the Ruler, in the manner indicated above,  had set apart the property in dispute as one of  his private  properties, in the list submitted on July 5,  1948. It is nobody’s case that he could not submit such a list  on July 5, 1948. Further, in exercise of his sovereign as  also individual  right over his private property, that he  trans- ferred  the house in dispute to his father-in-law on  August

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25,  1948. In these circumstances, the suggested  Conference which  took place later in September, 1949 between  him  and Shri  N.M.  Buch, Secretary in the Ministry of  States,  New Delhi,  evident  from letter Exhibit P-9 dated  January  22, 1950, and the lists Exhibits P- 10 to P-12, appended  there- with,  is not of much significance. In the first place,  the Ruler  denied  when appearing as a witness in the  trial  as having received any such letter or the lists appended there- with, sug- 53 gestive  of  the fact that he had  reconverted  the  donated property  to be a State property. In the second  place,  but for  the said letter, purportedly issued at a time when  the State  of  Chhatarpur  had otherwise ceded  to  the  Central Government  vide agreement dated January 1, 1950, there  was no direct evidence forth-coming for such conference. In  the third  place,  even if such Conference had  taken  place  in September 1949, as suggested, the minutes thereof cannot  be treated  as amounting to a divestiture of the gift  made  in favour  of  the father-in-law. Fourthly, the  Ruler  had  no sovereign  power towards administering his State  which  had become  part  of  the integrated United State  in  terms  of Article  VI of the covenant, and during the  integration  he could  not  exercise such a sovereign power, so as  to  take away the property of a private person and treat it as  State property because the property in dispute having once  vested in  the  defendant-appellants could not be divested  in  the manner  suggested. And lastly, there was no raiseable  ques- tion or issue which the Ruler could, while sitting with Shri Buch, decide amicably without the aid of the Judicial  Offi- cer nominated by the Government entering upon such  dispute, because  before  integration  he owned  his  State  and  its properties and there could legitimately not arise a  dispute as  to which was his private property or State property  and thus  its  settlement  by a mutual consent  did  not  arise. Taking thus the totality of these circumstances in view,  we are  driven to the conclusion that the High Court  committed an error that the Ruler lost his sovereign right to ear-mark the property in dispute as his private property after May 1, 1948,  or  that the said property vested in the  State  with effect from that date or that the letter Exhibit P-9 of Shri N.M. Buch and the lists attached thereto, had the effect  of divesting  the  appellants of the title to the  property  in dispute  in favour of the State with effect from that  date. In that strain, factual position having not been denied, the validity of the gift dated August 25, 1948, cannot be  ques- tioned  on  the  grounds enumerated in the  plaint,  due  to exercise of sovereign power of the Ruler in the grant there- of  at that point of time. Once that is held the  claim  for damages too caves in. We hold it accordingly.     For  the  view above taken, we allow  this  appeal,  set aside the judgment and decree of the High Court and  dismiss the suit of the State of Madhya Pradesh with costs. R.N.J.                                          Appeal   al- lowed. 54