AI Drafter 
TaxTMI 
TaxTMI 
1993 (8) TMI 290
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....he acquisition, whether direct or indirect, by Sovereign or Feudatory princes, of any lands in British Territory, however and from whomever acquired. This policy was communicated to all native States in Punjab including the State of Nabha. 5.Maharaja Ripudaman Singh was the Ruling Chief of Nabha State in the early twenties of this century. His ruling powers were withdrawn by the British Government in the year 1923. Thereafter, he was deposed from the Gaddi in 1928 and was exiled to Kodaikanal in Tamil Nadu. He resided in Kodaikanal till 1942 when he died. He left behind his wife, Sarojini Devi, three sons, Pratap Singh, Kharagh Singh and Gurbaksh Singh and two daughters, Kamla Devi and Vimla Devi. 6.Sarojini Devi, wife of Ripudaman Singh and her children were residing in England from 1934 to 1944. She returned to India when her eldest son, Pratap Singh was to receive administrative training as he was to become the Ruler of Nabha State by the applicability of rule of primogeniture. It also requires to be stated that the entire family came back to India in the year 1945. Gurbaksh Singh, the third son of Ripudaman Singh died in November 1963. He left behind is widow, Chandra Pra....
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.... of suit and the future mesne profits. 10.While the suit was pending, defendants 1 and 2 sold the property in favour of defendants 4 to 8 by a sale deed dated May 1, 1970. The sale consideration was Rs. 1,40,000. 11.Though originally the suit came to be filed before the learned Senior Sub-Judge, Simla, after the merger of the area in Himachal Pradesh, original jurisdiction cannot to be exercised by the Delhi High Court. On the formation of the Himachal Pradesh High Court, the suit (C.S. No. 14 of 1968) was transferred to the original side of that Court. 12. In the written statement of the defendants (other than the third defendant) it was urged that: (1)Pratap Singh was a necessary party and insofar as he had not been joined the suit was bad for non-joinder. (2)Inasmuch as the Central Government refused leave under Section 86 read with Section 87-B of the Code of Civil Procedure against Pratap Singh, the suit could not be filed even against his assignees. (3)The suit was not maintainable for partial partition since there are other properties left by Ripudaman Singh. (4)From 1942 Pratap Singh had remained in possession of the property as full owner for over 20 y....
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....urnarain Singh Gill executed a deed of release in favour of Nabha State. The property continued to be dealt with as belonging to Nabha State even after Pratap Singh ascended the Gaddi. After independence the State of Nabha acceded to the Indian Union. On May 15, 1948, a Covenant was entered into between the Central Government and eight Princely States, all of which merged to form a States Union called Patiala and East Punjab States Union (PEPSU). The plaintiff submitted an inventory of the properties. As per paragraph 2 of Article XII the said inventory included the house in question. On that basis, it was urged by the plaintiff that it became his private property and he was exclusive owner thereof. Thus, the suit for possession. 16.In opposing the claim of the plaintiff the defendants contended that it was a private property of Ripudaman Singh and continued to be so. The Covenant had recognised this position and had accordingly declared. The Covenant did not create or confer a new right. On the contrary, the intention of he Covenant is to receive claims, scrutinise the same and finally put at rest tile controversy, if any, between the Ruler and the Government of the States Unio....
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....ould not have purchased the suit property as State property in the year 1921. 21.During the Rulership Pratap Singh had treated the estate of his father as point family property. Documentary evidence supports this argument. Ex. B dated December 3, 1943 referred to the ornaments and other articles of the widows of the previous Rulers of Nabha State. These properties were private Properties of the Ruler, distinct from State properties. 22.Ex. F is an indemnity bond given by Pratap Singh in favour of the imperial Bank of India against any claim by the legal representatives to the ,state of his father. 23.Ex. PW 3-B is a letter dated October 30, 1956 from the Chief Secretary PEPSU to Deputy Secretary, Government of India in respect of loan of above Rs. 4,00,000 advanced to Pratap Singh in 1947 against the estate of his father. 24.The learned Single Judge had given due importance to these document The Division Bench erred in treating them lightly. 25.In terms of Article XII of the Covenant dated August 20, 1948 Prata Singh had submitted a list of his private properties to Rajpramukh of PEPSU That included Sterling Castle, 34, Alipur Road and 11 other properties. Artiel XII....
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....f relinquishment did not arise. Though Pratap Singh was called upon to produce the original deed of relinquishment he did not do so. It was under these circumstances, a certified copy came to be filed. The Division Bench has clearly overlooked this important aspect of the matter. Further, Dr Tehl Singh, having died even before the evidence was recorded in 1970, his evidence could not be procured. In view of all this, the finding of the Division Bench ill relation to the deed of relinquishment cannot be supported. Article 363 cannot constitute a bat to decide the nature of the ownership with reference to the property in question. 29.In opposition to this, Mr D.D. Thakur, learned counsel would submit that there is absolutely no evidence in this case that Ripudaman Singh was having large funds from Sarfa Khas which came to be utilised by Sarojini Devi for purchase of the suit property. Excepting the oral testimony which has been rightly disbelieved, there is not a single document to prove that the property was purchased benami in the name of Dr Tehl Singh. Right from inception, the property was treated as belonging to the State. The Municipal Registry also bears this out. If really....
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....es the pre-existing rights is wrong both in law and in fact. 34.It is important to note that insofar as 1923-28 period is concerned they are acts of State, there was no death, no succession opened. Therefore, there was no application of Mitakshara. When in 1928 Ripudaman Singh was formally deposed it extinguished every vestige of his title or claim. When Pratap Singh was installed, title thereto came to vest in him and the said title continued and has not been defeased at any point of time subsequently. If this be so, the findings of the Division Bench are liable to be set aside. 35.Countering these submissions, it is argued by Mr Hingorani, learned counsel, that the case of the appellant before the High Court was that even before the date of Covenant an Indian Ruler whose capacity was other than that of a Ruler acted only for the State, being its sovereign. Any property purchased by him, in his own name or in the name of another person, would not be purchased by the State. The High Court has correctly found that such a contention is not acceptable in view of the articles of the Covenant. 36.It is submitted that the Ruler's private property is not governed by any of th....
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....nd possession of the property and custody of the title deeds; (3) motive; (4) relationship between the parties; 1 (1955) 1 SCR 509 : AIR 1954 SC 513 : 10 ELR 30 2 1993 Supp (1) 1CC 233 (5) conduct of the parties in dealing." 42. The points that fill for determination are: ( 1) What is the rule of succession applicable to the State of Nabha? (2)Did Sterling Castle, the suit property, belong to the State of Nabha or was it the private property of Ripudaman Singh?. (3)Whether the judgment of the Allahabad High Court constitutes res judicata? 43.Before we proceed to answer these questions we will briefly set out the historical background. 44.The State of Nabha was formed in 1763 by Hamir Singh a....
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.... in terms of the Covenant, was prepared. 50.In the pre-independence era the Rulers were the princes and although were subject to British paramountcy yet they were absolute monarchs or sovereigns within their own territories. Their word was the law. This aspect of the matter has been dealt with in Revathinnal Balagopala Varma 2 in paragraphs 51 to 61, wherein there is a copious reference to case-law. 51.Being an absolute monarch or sovereign, the Ruler was the owner of all the property in the State. In Vishnu Pratap Singh v. State of M.P.' at page 46 it was held: "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 States of Vindhya Pradesh except private property which was to remain with the Rulers. As is evident, the Ruler was required under Article XI to furnish to the Rajpramukh before May 1, 1948 ....
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....ortedly issued at a time when the State of Chattarpur had otherwise ceded to the Central Government vide agreement dated January 1, 1950, there was no direct evidence forthcoming for such conference. In the third place, even if such Conference had taken place in 3 1990 Supp SCC 43, 46 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 question or issue which the Ruler could, while sitting with Shri Buch, decide amicably without the aid of the Judicial Officer nominated by the government entering upon such dispute, because before integration he owned his State and its properties and there could legitimately not a....
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....in Revathinnal Balagopala Varma case2. 4 12 ER 340, 345 :(1830) 1 Knapp 316, 329- 57. White paper on Indian States in paragraph 157 states its under: "In the past the Rulers made no distinction between private and State property; they could freely use for personal purposes any property owned by their respective States. With the integration of States it became necessary to define and demarcate clearly the private property of the Ruler. The settlement was a difficult and delicate task calling for detailed and patient examination of each case. As conditions and customs differed from State to State, there were no precedents to guide an d no clear principles to follow. Each case, therefore, had to be decided on its merits." 58.In the ruling already referred to, namely, Vishnu Pratap Singh3 this aspect of the matter has been dealt with. However, with regard to one other aspect of the matter in Revathinnal Balagopala Varma2 in paragraph 64, it was observed: "If someone asserts that to a particular property held by a sovereign the legal incidents of sovereignty do not apply, it will have to be pleaded and established by him that the said property was held by the sovereign not a....
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....sp; observed: "It would appear that invariably the Rule of Lineal Male Primogeniture coupled with the custom of adopting a son prevailed in the case of Hindu Rulers who composed of the bulk of this body." 65.Though impartibility and primogeniture, in relation to zamindari estates or other impartible estates are to be established by custom, in the case of a sovereign Ruler, they are presumed to exist. 66.The allied question is whether the rule of primogeniture applies only to the Rulership (Gaddi) and not to the other property? This is precisely the argument of Mr Hingorani. This argument came to be accepted by the learned Single Judge of the High Court of Himachal Pradesh as well as the Division Bench of the Delhi High Court in the judgment under appeal. We have already referred to the observations of Lord Tenterden in Advocate General v. Amerchund4. We may also now refer to the observations of Bhagwati, J. (as he then was) in D.S. Meramwala Bhayavala v. Ba Shri Atarba Jethsurbhai10: "If the Khari-Bagasara Estate was a sovereign Estate, it is difficult to see how the ordinary incidents of ancestral coparcenary property could be....
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....elf-acquired immovable property and thereupon, the property accrues to the estate and is impressed with all its incidents, including a custom of descent by primogeniture. It may be otherwise in the case of an estate granted by the Crown subject to descent by primogeniture." 69.With this, we pass on to the next question whether the primogeniture lapsed in the years 1947-48? It is the contention of the respondents that Pratap Singh ceased to be governed by primogeniture on August 15, 1947 and, in any case, on August 20, 1948 when he ceased to be a sovereign. It is true that there was no Rulership after India became a Republic on January 26, 1950 but if the estate is impartible in nature it would continue to be governed by the rule of primogeniture. We will refer to Thakore Shri Vinayasinghji v. Kumar Shri Natwarsinhji13. At page 134 it is stated thus: "The principle of law that is applicable to a coparcenary property or to the coparceners is inapplicable to an impartible estate or to the holder thereof except that an impartible estate is considered to be a joint family property to the extent of the junior members succeeding to the estate by right of survivorship. When under cer....
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....s is: 'any covenant or agreement entered into by the Ruler'. Naturally, if we have entered into any such agreement only as recently as 1947 or 1948 and much time has not elapsed, it is not proper that by an enactment of a general nature like this we should do something which will set at nought the agreements and the covenants which the Government of India has solemnly entered into with those people and on the strength of which they had consented to allow their States to be integrated with India. of course, I agree that probably it is not entirely a socialist pattern or whatever you call it, but as I have been always saying, I hold the opinion that we have to proceed by the process of evolution. I do not mince matters." 74.Therefore, it can be said with certainty that this rule continued even after 1947-48. 75.Under Article 372 the law of succession relating to primogeniture continues until it is repealed. This is the position of law relating to succession. 76.We will now see the relevant portions of the Covenant entered into between the Rulers of Nabha State and the Government of India on May 15, 1948, which have a bearing on thi s aspect. 77. The relevant provi....
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....n of dispute of succession in regard to a Covenanting State which arises after the inauguration of the Union shall be decided by the Council of Rulers after referring it to a Bench consisting of all the available Judges of the High Court of the Union and in accordance with the opinion given by such Bench." 78.A careful reading of Article XII shows that there is a clear distinction between the private properties and the State properties. Such private properties must be belonging to the Ruler and must be in his use and enjoyment even earlier. Therefore, properties which were recognised even earlier as such private properties alone were to be left out and submitted for the recognition as such. As stated in White Paper (para 157, page 23 supra), the demarcation and the settlement of the list was carried out for the purposes of Integration. If this be the correct position of law, the contrary observations of the learned Single Judge are not correct. 79.The property was purchased on December 21, 1921 benami in the name of Dr Tehl Singh. The sale deed has been marked as Ex. PW 6-A. The benami nature of the transaction is affirmed by the letter of the Prime Minister of Nabha State da....
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....chard Stuart Wortley, Ex. D-6. 20-11-1924- State Engineer writes to Municipal Committee, Simla enclosing copy of lease between the State and Lt. Gen. Sir R. Wortley for Sterling Castle, Ex. D-5. 1926-1948- Simla Municipality Registers record Nabha State (and after 1948, Pratap Singh), as the 'Owner' of Sterling Castle, Ex. D-3. 02-02-1928- Maharaja Ripudaman Singh is formally deposed and detained at Kodaikanal. His son Pratap Singh then minor is installed on the Gaddi as Ruler of Nabha. A Council of Regency, consisting a President and three members is constituted to rule the State during his minority. The State of Nabha and all its properties come to vest in Maharaja Pratap Singh. 06-01-1931- Lt. Col. Coldstream, President, Council of Regency, Nabha State directs the Manager, Nabha Estate, Simla that Insurance Policy of Sterling Castle be obtained in the name of President, Council of Regency. 27-06-1931 to 12-8-1931- Settlement Tehsildar, Simla after inquiries and proceedings conducted on various dates, sanctions mutation in favour of Maharaja of Nabha on August 12, 1931, and also records the Nabha State as being in possession. 21-12-1933- Resolution No. 21 of Coun....
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....luded. Letter is Ex. D-1, while the List is Ex. D-2. 28-06-1950- Secretary to PEPSU Govt. writes to Simla Municipal Committee that Sterling Castle has been declared as private property of Maharaja Pratap Singh and that entry be now made in his name as owner thereof, Ex. D-7. 26-04-1961- Simla Municipality certifies that according to Municipal records Sterling Castle was owned by Nabha State from 1926 to 1949 and from February 25, 1950 the ownership was changed to Maharaja Pratap Singh, Ex. D-11. 80.As to the Municipal Register the documents establish D- 3, D-4, D-5 and D-6. Q. 2: Whether Sterling Castle is the property of State of Nabha? 81. The law relating to benami is stated in Jaydayal Poddar v. Mst Bibi Hazra15: "It is well settled that the burden of proving that a particular sale is benami and the apparent purchaser is not the real owner, always rests on the person asserting it to be so. This burden has to be strictly discharged by adducing legal evidence of a definite character which would either directly prove the fact of benami or establish circumstances unerringly and reasonably raising an inference of that fact. The essence of a benami is the intention of the....
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.... the plaint, was that Ripudaman Singh used to draw a privy purse of Rs. 3,00,000 for his personal funds. He had large personal funds and inherited a lot of funds from his father. There are also funds from personal gifts. All these were kept by him separate from the State funds from out of which this property came to be purchased. The proof regarding this plea rests entirely on the oral evidence of PW 1 who would aver that after purchase the sale deed remained in the custody of his mother. Inasmuch as PW 1 was born in the year 15 (1974) 1 SCC 3, 6-7 : (1974) 2 SCR 90, 91-92 1924 he could not have any personal knowledge as to the purchase and from whom the source of consideration went. The other oral evidence is that of Sarojini Devi who was examined as C.P.W. 1. According to her, the amount was paid in cash to Sardar Sitole by her husband in Nabha. She stated that she was at Nabha at that time and it was she who brought the cash to Sardar Sitole. Concerning this huge amount she candidly admitted that no account of Sarfa Khas was maintained by her husband, nor was any entry about the payment of Rs. 3,00,000 made in any account. Therefore, this oral testimony is hardly sufficient to e....
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.... case was succession relating to Gurcharan Singh's estate in 1942. In deciding the question as to what monies were utilised for the purchase of Ilahi Manzil in 1951 the Court returns a finding of fact that one set of monies that went into the purchase of that house in 1951 was surplus sale proceeds of Rs. 32,000 which were personal to Gurcharan Singh till December 14, 1942. That being so, upon the death of Gurcharan Singh, the proceeds acquired the character of Hindu Joint Family. On December 14, 1942, when succession opened, the property was inherited according to Mitakshara Law. If really, therefore, the funds flowed from Joint Family it stands to reason that it should be held so. But, here not only the facts but also the law which is applicable are totally different. Therefore, it is concluded that the judgment of the Allahabad High Court would not constitute res judicata. 86. In the result, the appeal will stand dismissed. There will be no order as to costs. 87. Now, we go on to Civil Appeal No. 5857 of 1983. This appeal relates to No. 34 Alipur Road, Civil Lines, Delhi. The documents under which the purchase was made were dated April 18, 1922. 88. It was purchased....
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....ds of various properties. 28-12-1923- Administrator Nabha State writes to Gurnarain Singh Gill (benamidar) to seek confirmation of the fact that 34, Alipur Road was property of Nabha State. 31-12-1923- Gurnarain Singh Gill (benamidar) acknowledges 34, Alipur Road as the property of Nabha State. 10-01-1924- Administrator Nabha State writes to Executive Engineer stating that the house belongs to the State. 18-01-1924- Estate Officer writes to Administrator Nabha State for production of the Sale Deed as payment of rent could not be made without proof of ownership. 07-02-1924- Administrator Nabha State despatches the Sale Deed of 34, Alipur Road to the Estate Officer. 23-05-1924- Estate Officer writes to Administrator Nabha State agreeing to pay rent for 34, Alipur Road subject to the condition that claim of Gumarain Singh Gill will be the responsibility of the State. 23-05-1924- Estate Officer writes to Gumarain Singh Gill notifying him that the Government was entering into an agreement with Nabha State believing it to be the owner of the bungalow 34, Alipur Road. 19-06-1924- List of the house properties belonging to the State having been prepared, it enquired from Maharaja Ripu....
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....Nabha State. Same is registered at Delhi on April 30, 1937. 05-03-1941- Maharaja Pratap Singh comes of age and is formally invested with full ruling powers. 12-12-1942- S. Gurcharan (formerly Ripudaman) Singh dies. Succession to his Estate opens. 01-10-1944- Australian High Commission vacates 34, Alipur Road. 27-10-1944- Maharaja Pratap Singh desires possession of the house for himself and officials, (Ex. P-68). 28-10-1944- Central Government to retain 34, Alipur Road house for its own use, (Ex. P-69). 03-11-1944- Chief Minister Nabha State gives consent to Central Government to retain 34, Alipur Road house as a tenant, (Ex. P-71). 15-08-1947- Having been freed of the British paramountcy by the Indian Independence Act, 1947 Nabha State like the other five hundred and odd States, accedes to the Dominion of India on three subjects i.e. External Affairs, Defence and Communication, but the Ruler (Pratap Singh) retains his sovereignty. 19-08-1948- Maharaja Pratap Singh submits the list of properties to the Rajpramukh which he seeks to retain at the time of merger. Alipur Road property is part of this. 20-08-1948- In terms of the Covenant, Nabha State integrates (merges) w....
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....re Budget Estimates prepared for the year 1931-48 as evidenced by Exs. P-73 to P-108. They clearly establish that the funds needed in this regard came from the Government treasury. It is true that Sarojini Devi in her evidence would state that a sum of Rs. 25,000 was left with the plaintiff for the upkeep and the maintenance of the house. But, this only remains on oral evidence. 92. At the time when the house was purchased under lease, the rent realised was hardly Rs. 250 per month. There is no evidence to show that Ripudaman Singh ever received the rent or demanded the rent. Though he was alive for 20 years after the date of purchase he had not evinced any interest with regard to this property. This conduct belies the claim of the defendant that it was purchased by him from out of his personal funds. 93. As rightly held by the learned Single Judge the evidence of Sarojini Devi that Ripudaman Singh purchased the property from his personal funds and this was meant to be the personal property is hard to accept. The bank account is not produced. The evidence of DW 10 is brittle. DW 3's testimony bristles with contradictions. Therefore, that is not helpful. What is more cruci....
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....y seen the scope of Article XII. It is worth repeating the relevant clause of Article XII, clause (1), namely: "(1) The ruler of each Covenanting State shall be entitled to the ownership, use and enjoyment of all private properties (as distinct from State properties) belonging to him on the date of his making over the administration of that State to Rajpramukh." (emphasis supplied) 99. The State properties have been dealt with under Article VI. The language used in the above clause leaves no doubt that the private properties are distinct from State properties which were in the use and enjoyment of the Ruler. Therefore, what is decisive are, the user and enjoyment. Unless and until it is established by such a user and enjoyment the property was private, it cannot be claimed to be so. 100. Concerning the scope of this article, the Division Bench says: "Under Article XII in paragraph (1) it is provided that the Ruler shall be entitled to full ownership, use and enjoyment of all private properties belonging to him on the date of his making over the administration of that State to the Rajpramukh. Paragraph I clearly assumes that the Ruler of each Covenanting State may b e ha....
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.... that the difficulties and inconveniences arising from the possession by native foreign chiefs of lands within British Territories are very serious. So greatly have these evils been felt that it has been the policy of the Government to effect exchanges of territory in such cases, on the basis of giving to the chiefs, land in sovereign right in lieu of their zamindari possession. For these reasons also it has been ruled by the Government of India that grants or sales of land in British Territory should not be made to any native chief who is not a subject of the British Government. 2. The policy of the Government of India is, therefore, to discourage the acquisition whether direct or indirect by Sovereign or Feudatory princes of any lands in British Territory however and from whomever acquired. All the Commissioners of divisions in Punjab have been directed to report all cases in which landed property may be acquired by a ruling chief. All proposed purchases of this nature have to be referred for the orders of the Government of India who will only allow such purchases in special circumstances. These orders refer to all immovable property of every description whether land or houses....