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Supreme Court of India

MAHARAJA KUMAR KHARAK SINGH (DEAD) THOUGH L.RS. ETC.versusSTATE OF PUNJAB

Citation
1995 INSC 352
Decided
9 May 1995
Disposal
Dismissed

Holding

The covenant merging Nabha into PEPSU and subsequently Punjab is an act of state, and any claim to recover the land is barred under Article 363(1) and cannot be entertained by civil courts.

Summary

The brothers of the former ruler of the princely State of Nabha filed suits in the Patiala Sub‑Judge Court seeking possession of a parcel of land called ‘Bir Bhadson’, relying on a 25 April 1948 letter from Maharaja Pratap Singh that they claimed granted the land to them. The State of Punjab, as the successor to Nabha through the merger into PEPSU and later Punjab, contended that the letter could not divest state property and that the covenant effecting the merger was an act of state. The lower courts dismissed the suits, holding that the claim was barred by the doctrine of act of state and Article 363(1) of the Constitution, a view affirmed by the High Court. On appeal, the Supreme Court upheld this reasoning, stating that disputes arising from the covenant and the transfer of state property are barred from judicial review under Article 363(1) and therefore the suits were not maintainable in an ordinary civil court.

Issues considered

  • Whether the 1948 letter constitutes a valid grant of state property enforceable against the successor State of Punjab.
  • Whether the claim for possession of the land is barred by the doctrine of act of state and Article 363(1) of the Constitution of India.
  • Whether a suit challenging the covenant that merged Nabha into PEPSU and subsequently Punjab is maintainable in an ordinary civil court.

Legislation cited

Subjects

act of stateArticle 363covenantprincely state mergerstate propertycivil suitsuccession of statessovereign immunity

Judgment

 A                   MAHARAJA KUMAR KHARAK SINGH
                        (DEAD) THOUGH L.RS. ETC.
                                   v.
                            STATE OF PUNJAB

                                    MAY 9, 1995
 B
                [KULDIP SINGH AND N. VENKATACHALA, JJ.)

            Constitution of India-Article 363(1}-Bar to inteiference by court.s--
      Merger of State of Nabha--Covenant-Ru/er or State of Nabha allowed state
, C   property to vest in State of PEPSu--Private parties claiming Nabha's State
      property-Suit for recovery of possession-Whether maintainable in an ordi-
      nary Court of law-Held, no.

            With the coming into force of the Indian Independence Act, 1947, the
      State of Nabha along with other princely States in India got out of British
 D    Paramountcy and become a free independent State. The Ruler of Nabha
      and the Rulers of other States who desired to establish a Union of States
      by the name of Patiala and East Punjab States Union (PEPSU), entered
      into a covenant, according to which the territory of Nabha State ceased to
      exist and became a part of the territory of the PEPSU. Subsequently, with
 E    the coming to force of the State Regulation Act, 1956, PEPSU, having got
      merged in the State of Punjab, all its territory which include the territory
      of Nabba State, became a part of the territory of the Punjab State.

            The appellants who were the brother of the then Ruler of erstwhile
      of Nabha State, along after its accession to Indian Dominion and its
 F    subsequent merger in PEPSU in State of Punjab, filed two original suits
      for recovery of possession of 'Bir Bhadson' from the State of Punjab. The
      cause of action for those suits was founded on a letter said to have been
      addressed to the appellant G by the then Ruler of erstwhile Nabha State
      giving grant of the 'Bir Bhadson' in favour of his two brothers, expressing
 G    therein his desire that the 'Bir' could be divided equally between him and
      his brother.

             It was pleaded that both the appellants had become the grantees of
      'Bir' acquiring title thereto and were, therefore, entitled to get possession
      of the same from the State of Nabha before its merger in PEPSU and from
  H   PEPSU after the merger of State of Nabha in it and from the State of
                                           152
           MAHARAJAKR.KHARAKSINGHv. STATE OF PB.                      153

Punjab after the merger of PEPSU in it. Since both PEPSU and the State A
of Punjab did not give possession of the said 'Bir' to plaintiffs despite
several requests made by them, the suit were being filed for recovery of
possession of the same from the State of Punjab, the ultimate successor
of State of Nabha, within a period of 12 years from the date of the letter.
The suits were decreed. Appeals filed against the said decrees were allowed. B
The District Judge held that non-recognition of the rights of the plaintiffs
in regard to the grant of land covered in the letter was in act of state and
hence adjudicaticn by a Municipal Court upon the correctness of such an
act of State was beyond its competence. Consequently, it concluded that
the grant was neither binding nor enforceable against the State. The
plaintiffs filed appeals against the judgments and decrees made by the C
District Judge. The High Court dismissed them agreeing substantially with
the findings of the District Judge. Hence these appeals.

      Dismissing these appeals, this Court

      Held : 1.1. The letter which was claimed by plaintiffs-appellants as D
grant of 'Bir' consisting of land and. building - a State property of Nabha,
made in their favour by its Ruler at the time in exercise of his sovereign
power could not be construed as a grant of the Nabha State's property
when the contents of that letter, which did not say that 'Bir' a state
property of Nabha State sought to be given to Mabaraja Gurbax Singh of E,
Nabha by his brother, Maharaja Pratap Singh, was given as a grant, as
the sovereign Ruler of Nabha State and when Maharaja Pratap Singh.
P.W. 1, the author of the letter did not speak in support of such grant in
his evidence. [158-G-H, 159-A)

      1.2. The letter even if was assumed to constitute grant of 'Bir', the F
State property of Nabha State made by the then Ruler, in favour of bis
brother on April 25, 1948, as was held by courts below, that grant according
to aforesaid categorical admission of the appellant was not accepted by
him till he returned from America to India in November, 1948. Because of
                                                               I
the non-acceptance of the grant of Bir, that 'Bir' continued 10 be the State G
property of Nabha State till May 8, 1948, when covenant for bringing into
existence of State of PEPSU was signed and further uptil August 20, 1948
when the State of Pepsu actually came into existence. [160~B)

      1.3. The Articles of the covenant state that all the rights, authority
and jurisdiction belonging to the Ruler, which appertain or was incidental H
    154                   .SUPREME COURT REPORTS [1995] SUPP. 1 S.C.R.

A to the.Government of Nabha State, also vested in the Union (PEPSU) and
  the same became exercisable thereafter only by Raj Pramukh of PEPSU as
  provided by the covenant; that all assets and liabilities of all the covenant·
  ing States including Nabha State, became the assets and liabilities of the
  Union; that all duties not obligations of the Ruler of Nabha State as was
B the position of other Rulers of State concerned, pertaining or incidental
  to the Governments devolved on the State of PEPSU and was to be
  discharged by it. The Ruler of Nabha State, as was the position with Rulers
  of other States concerned, was entitled to full ownership, use and enjoy-
  ment of only his private properties, as distinct from State or public
  properties, belonging to him on the date of his making over the administra·
C tion of that State to the Raj Pramukh on furnishing to the Raj Pramukh
  before 20th day of September, 1948 an inventory of all the immovable
  properties, securities and cash balances held by him as such private
  property. If any dispute bad to arise as to whether any item of property
  was the private property of the Ruler or State property, it was to be
D referred to such person as the Government of India may nominate in
  consultation with the Raj Pramukh and the decision of that person shall
  be final and binding on all parties concerned, provided that such dispute
  shall be so referable after the 30th June, 1949. (161-F-H, 162-A-C]

          14. When the claim for recovery of the possession of 'Bir' the right
E   to possession of which was the Ruler of Nabba but was vested in the
    PEPSU, any claim to be made fur such possession was with reference to
    such covenant, which in its entirety, was an act of State, and therefore,
    such claim could not be enforced by filing suits in an ordinary Civil Court
    of Law (Municipal Court). (163-D)

F
           Dalmia Dadri Cement Ltd. Anr. v. Union of India and Anr., AIR
     (1958) SC 8160, relied on.

         CIVIL APPELLATE JURISDICTION : Civil Appeal No. 316 of
    1978 Etc.
G
          From the Judgment and Order dated 9.3.77 of the Punjab and
     Haryana High Court in R.S.A. No. 1457 of 1963.

           AK. Sen, M.C. Bhandare, S.K. Jain, AP. Dhamija, Shailendra, H.K.
H Puri and Ranbir Yadav for G.K. Bansal for the Appearing parties.
       MAHARAJA KR KHARAKSINGH v. STATE OF PB. [VENKATACHALA, J.J         155

         The Judgment of the Court was delivered by                             A

          VENKATACHALA, J. These Appeals are filed against the judgments
    and decrees dated 9th March, 1977 made in R.S.A. Nos. 1457/63 and
    1455/63 by Punjab & Haryana High Court. Since common questions are
    raised in them for our consideration, they could be disposed of together. B

           Maharaja Pratap Singh was the Ruler of the princely State of Nabha
    eversince the year 1941, which was then the subject-state of British
    Paramountcy. With the coming into force of the Indian Independence Act,
    1947, when the State of Nabha along with other princely states in India got
    out of British Paramountcy and became a free and independent State, it C
    accepted to the Dominion oflndia created under that very Act on subjects
    -- External Affairs, Defence and Communications, falling in line with
    similar other States in India. Thereafter, the Ruler ofNabha and the Rulers
    of Faridkot, Jind, Kapurthala, Malerkotla, Patiala, Kalsia and Nalagarh
    who desired to establish a Union of States comprising the territories of D
    their respective States with a common executive, legislature and judiciary
    by the name of Patiala and East Punjab States Union (PEPSU), entered
'   into a covenant dated May 5, 1948, which was concurred with by Govern-
    ment of India by guaranteeing enforcement of its provisions. PEPSU when,
    according to the said covenant, came into existence on August 20, 1948 ,
    the territory of Nabha State ceased to exist and became a part of the E
    territory of the PEPSU. Subsequently, with the coming into force of the
    States Reorganisation Act, 1956, PEPSU, having got merged in the State
    of Punjab, all its territory which included the territory of Nabha State,
    became a part of the territory of the Punjab State.
                                                                                F
           Maharaja Kumar Kharak Singh and Maharaja Kumar Gurbax Singh,
    the appellant (since deceased by L.R's.) in each of the present appeals,
    who were the brothers of Maharaja Pratap Singh, the Ruler of erstwhile
    Nabha State, long after its aceession to Indian Dominian and its subsequent
    merger in PEPSU and further merger of PEPSU in State of Punjab, filed
    two original suits of July 13, 1960 in the court of Sub-Judge, First Class, G
    Patiala, for recovery of possession of 'Bir Bhadson' situated in Village
    Agaul, Tehsil Nabha, District Patiala - to be referred to hereinafter as 'Bir'
    from the State of Punjab, since 'bir', once the State property of the State
    of Nabha had become state property of the State of Punjab and was part
    of its State Forest. The cause of action for those suits was founded on a H
    156                   SUPREME COURT REPORTS [1995] SUPP. 1 S.C.R.

A letter dated April 25, 1948 said to have been addressed to Maharaja Kumar
    Gurbax Singh by Maharaja Pratap Singh, while he was the sovereign ruler
    of the State of Nabha.

          The averments in the plaints, of the said suits filed against the State
    of Punjab, as could be gathered from record in the present appeals, were
B   in substance :

            That Maharaja Kumar Kharak Singh (Plaintiff in one suit) and
            Maharaja Kumar Gurbax Singh (Plaintiff in other suit) were
            brothers of Maharaja Pratap Singh who was the Ruler of Nabha
            State.
c
            That on April 25, 1948, Maharaja Pratap Singh addressed a letter
            (P.W.1/1) to Maharaja Kumar Gurbax Singh which read :

                                                    "NABHA 25th April, 1948.
D
            My dear Bhai,
                                                                                    ,
               Just a line to say that it gives me great pleasure to give you the
            Bir Bhadson for you to have it as you farm which I should like you
            to divide equally and have a common house.
E
                I understand that you may be returning to India with Maji or
            else ..... You can instruct Chootaji to do the needful for you. Hope
            you are keeping well and I am asking chhotaji to deliver this letter
            to you with all good wishes from all and love.

F                                                           Your affectionately,
                                                              sd/- Pratap Singh

            Maharaja Kumar
            Gurbax Singh, Nabha
            Algngein Lodge,
G
            526 Stewast Ave,
            Itica N.Y.
            U.S.A.'

          The said letter which was handed over to Maharaja Kumar Kharak
H Singh for being passed on to Maharaja Kumar Gurbax Singh since
    MAHARAJ A KR. KHARAK SINGH v. SfATE OF PB. [VENKATACHALA.J.J           157

amounted to grant of 'Bir' by Maharaja Pratap Singh, the then ruler of A
Nabha State, made as its sovereign in favour of his brother Maharaja
Kumar Gurbax Singh, as his subject, expressing therein his desire that the
'Bir' could be divided equally between him and his brother Maharaja
Kumar Kharak Singh, both of them had become the grantees of 'Bir'
acquiring title thereto and were, therefore, entitled to get possession of B
the same from the State of Nabha before its merger in PEPSU and from
PEPSU after the merger of State of Nabha in it and from the State of
Punjab the merger of PEPSU in it. Since both PEPSU and the State of
Punjab - the defendant in those suits, did not give possession of the said
'Bir' to plaintiffs despite several requests made by them to pepsu and the
State of Punjab, the suits were being filed for recovery of possession of the C
same from the State of Punjab the ultimate successor of State of Nabha,
within a period of 12 years from the date of the letter, i.e., April 25, 1948,
as allowed by law. However, those suits were resisted by the State of
Punjab, the defendant in the suits, by filing written statements in that
behalf. On the basis of the pleadings in those suits, common issues framed D
in them by the Sub-Judge First Class, were the following :

      1.   Whether the claim of the plaintiff is justificable?   O.P.

      2.   Whether the suit of the plaintiff is within Limitation?      O.P.

      3.   Whether in fact the letter of grant or gift dated 25th April, 1948 E
           was ever written by the then Ruler and as such is binding on the
           present defendant? 0 .P.

      4.   Whether the document in dispute is a gift deed or grant and is
           enforceable at law against the present defendant?O.P.                 p
      5.   Relief"

      The Sub-Judge who tried the suits after the framing of the said issues
in them, recorded his findings on all the issues, in favour of the plaintiffs
and against the defendant - the State of Punjab. He decreed the suits            G
accordingly.

     The defendant - State of Punjab presented appeals against the said
decrees in the suits before the District judge, Patiala. The District Judge
who heard those appeals, did not disturb the findings of the trial court
rendered on issues Nos. 1,2 and 4 which had been framed in the suits. But H
    158                   SUPREME COCRTREPORTS [1995] SUPP. 1 S.C.R.

A on issue No. 3 in them, it held that non-recognition of the rights of the
    plaintiffs in regard to the grant of land covered in the letter dated April
    25, 1948 was in 'act of State and hence adjudication by a Municipal Court
    (Court of Sub-Judge) upon the correctness of such an act of Slate', whether
    it had reference to public rights or private rights, was beyond its com-
B   petence as Municipal Court. Consequently, it concluded that the grant in
    the letter was neither binding nor enforceable against the defendant-State
    of Punjab and was not a matter on which Civil Courts (Municipal
    Courts/can pronounce. It, therefore, allowed the appeals and dismissed the
    suits.

C        The judgments and decrees made by the District Judge in appeals
  before him, were taken up by plaintiffs in R.S.A. Nos. 1457/63 and 1458/63,
  before the Punjab & Haryana High Court. A Division Bench of the High
  Court, which heard and said appeals, on reference made to it by a learned
  Single Judge of the same Court, dismissed them agreeing substantially with
D the findings of the District Judge in his judgments under appeals. It is the
  judgments and decrees made in Second Appeals which are now impugned
  in the present appeals by the L. R.'s of the deceased plaintiffs in the said
  suits.

          We have heard Shri A.K. Sen, the learned counsel for appellants, the
E L.R.'s of the deceased plaintiffs in the suits out of which the present
    appeals have arisen and also Shri M.C. Bhandare, the learned counsel for
    the State of Punjab, the respondent in these appeals and the defendant in
    the suits. We have also gone through the written submission filed in the
    appeals and the entire record of the appeals.
F
        As seen from the letter dated April 25, 1948, which was claimed by
  Plaintiffs as grant of 'Bir' consisting of land and building - a state property
  of Nabha State, made in their favour by Maharaja Pratap Singh of Nabha
  State, its Ruler at the time in exercise of his sovereign power is that which
  is sought to be given to Maharaja Kumar Gurbax Singh of Nabha, Plaintiff
G in one of the suits, to have it as his Farm and divide it equally, although it
  is not stated in the letter as to the person with whom it had to be shared
  equally. Whether the said letter could be construed as a grant of the Nabha
  State's State Property 'Bir' by Maharaja Pratap Singh, the sovereign Ruler
  of Nabha State in favour of Maharaja Kumar Gurbax Singh of Nabha,
H becomes very much doubtful when the contents of that letter, which. are
     MAHARAJAKR.KHARAKSINGHv.SfATEOFPB.(VENKATACHALA,J.] 159

 already reproduced, do not say that 'Bir', a State property of Nabha State A
 sought to be given to Maharaja Gurbax Singh of Nabha by his brother,
 Maharaja Pratap Singh, was given as a grant, as the sovereign ruler of
 Nabha State the when Maharaja Pratap Singh, P.W.1, the author of the
 letter (P.W.1/1) does not speak in support of such grant in is evidence
 which is as follows :
                                                                                  B
             "P.W.l.

             His Highness Maharaja Partap Singh on S.A.

             I have seen P.W.1/1. It bears may signatures. I do not know
         after how many days after having it signed this letter it reached        C
         Maharaja Kumar Kharak Singh. Chhotaji is the pet name of
         Maharaja Kumar Kharak Singh.

         XX by G.P.

             Ijlass-e-alia was constituted under my orders in the year 1941. D
         The certain rules must have been framed to regulate the working
         of ijlass-e-alia. The proposal for the grant of land were initiated
         by the ijlass-e-alia, who made relevant recommendations to me.
         Exhibit P.W.1/1 does not bear the signatures of any member of the
         ijlass-e-alia and it also does not show whether the recommendation E
         was made by the ijlass-e-alia. No orders were given to the ijlass-
         e-alia to implement Ex.P.W.1/1 by me. No orders were given by
         me to the revenue authorities to implement Ex.P.W.1/1 (objected
         to the counsel for the plaintiff). Ex. P.W.1/1 does not bear any seal
         of office under my signatures. All officials order given by me used
         to have an official seal or some kind of typewriting to indicate the F
         official capacity. On the eve of merger of Nabha State with Pepsu
         the property mentioned in Ex. P.W. 1/1 was not shown in the list
         of my private property."

        When we come to letter (Exp. P.W. 1/1), addressee of that letter          G
  (Exp. P.W. 1/1) Maharaja Kumar Gurbax Singh, who has given evidence
  as P.W. 3, what he states on oath of the acceptance of grant 'Bir' consisting
. of land and building, the State property of Nabha State, is the following :

         "! accepted this grant made through the above letter, when I came
         back to India about November, 1948."                                     H
    160                   SUPREME COURT REPORTS [1995] SUPP. I S.C.R.

A          Therefore, the letter (Ex.P.W. 1/1) even if is assumed to constitute
    grant of 'Bir', the State property of Nabha State made by Maharaja Pratap
    Singh, the Ruler, in favour of his brother Gurbax Singh on April 25, 1948,
    as is held by courts below, that grant, according to the aforesaid categorical
    admission of Maharaja Kumar Gurbax Singh, was not accepted by him till
B   he returned from America to India in November, 1948. If that be so, Bir
    continued to be the State property of Nabha State till May 6, 1944, when
    covenant for bringing into existence of State of PEPSU was signed and
    further up till August 20, 1948 when the State of PEPSU actually came into
    existence, becomes indisputable.

C       - What then has to be seen is, whether all the State properties of State
    of Nabha, including 'Bir'. which continued to be with Nabha State till date
    of coming into existence of the said covenant and till the further date on
    which PEPSU came into existence pursuant to that covenant, came to vest
    in the state of PEPSU, because Maharaja Pratap Singh, the Ruler of the
    State of Nabha, along with all other Rulers of princely States who were the
D   signatories to ·the said covenant made over the administrations of their
    respective States to Raj Pramukh of PEPSU on August 20, 1948, when the
    State of PEPSU actually came into existence, since could be ascertained
    from the Articles of that very covenant dated May 5, 1948 pursuant to
    which PEPSU State was formed, material Articles of that covenant which
E   bear on vesting of state properties and private properties of the Rulers of
    princely States, including the State of Nabha, which merged in PEPSU, are
    reproduced :

                                     "Article VI

F               (1) The Ruler of each Covenanting State shall, as soon as may
             be practicable, and in any event not later than the 20th of August,
             1948, make over the administration of his State to the Raj
             Pramukh; and thereupon.

                    (a) all rights, authority and jurisdiction belonging to the
G                 Ruler which appertain, or are incidental to the Government
                  of the Covenanting State shall vest in the Union and shall
                  hereafter be exercisable only as provided by this covenant or
                  by the Constitution to be framed thereunder ;

H                    (b) all duties and obligations of the Ruler pertaining or
    MAHARAJA KR. KHARAK SINGHv. STATE OFPB. [VENKATACHALA, J.) 161


              incidental to the Government of the Covenanting State shall A
              devolve on the Union and shall be discharged by it;

                (c) all the assets and liabilities of the Covenanting State
              shall be the assets and liabilities of the Union; and ......."

                                Article XII                                    B

            (1) The Ruler of each Covenanting State shall be entitled to
        the full ownership, use and enjoyment of all private properties (as
        distinct from Stare properties) belonging to him on the date of his
        making over the administration of that State to the Raj Pramukh.       C
             (2) He shall furnish to the Raj Pramukh before the 20th day
         of September, 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 D
        the private property of the Ruler or State property, it shall be
        referred to such person as the Government of India may nominate
        in con~ultation with the Raj Pramukh and the decision of that
        person shall be final and binding on all parties concerned.

           Provided that no such dispute shall be so referable after the E
        30th June, 1949."

        The said article of the covenant, when are seen, make it abundantly
clear that all the rights, authority and jurisdiction belonging to the Ruler,
Maharaja Pratap Singh, which appertain or was incidental lo the Govern-
ment of Nabha State, also vested in the Union (PEPSU) and the same
                                                                                F
became exercisable thereafter only by Raj Pramukh of PEPSU as provided
by the covenant. They also make it clear that all assets and liabilities of all
the covenanting States, including Nabha State, became the assets and
liabilities of the Union. They further make it clear that all duties and
obligations of the Rulers of covenanting States, including the Ruler of G
Nabha State, i.e., Maharaja Pratap Singh, as was the position of other
Rulers of States concerned, pertaining or incidental lo the Governments
devolved on the State of PEPSU and was to be discharged by it. The Ruler
of Nabha State, Maharaja Pratap Singh, as was the position with Rulers of
other Slates concerned, was entitled to full ownership, use and enjoyment H
    162                  SUPREME COURT REPORTS [1995] SUPP. 1 S.C.R.

A of only his private properties, as distinct from State or public properties,
  belonging to him on the date of his making over the administration of that
  State to the Raj Pramukh on furnishing to the Raj Pramukh before 20th
  day of September, 1948 an inventory of all the immovable properties,
  securities and cash balance held by him as such private property. If any
B dispute has to arise as to whether any item of property is the private
  property of the ruler or State Property, it was to be referred to such person
  as the Government of India may nominate in consultation with the Raj
  Pramukh and the decision of that person shall be final and binding on all
  parties concerned, provided that no such dispute shall be so referable after
C the 30th June, 1949.

         What, therefore, cannot be doubted, because of the non-acceptance
  of the grant of Bir by Maharaja Kumar Gurbax Singh till November 1948,
  is that then 'Bir' was allowed by Maharaja Pratap Singh, the Ruler of the
  State of Nabha to become the State property of PEPSU on August 20,
D 1948, under the covenant of May 5, 1948.

         Next question is, if Maharaja Pratap Singh, the Ruler of the State of
  Nabha who had 'Bir' as the State property of Nabha State till he entered
  into the covenant dated May 5, 1948 and, according to the terms of which
E covenant, he had allowed 'Bir' to vest in the State of PEPSU and become
  the State property of PEPSU, is it open to a person, who claims title to
  Bir the State property of Nabha as granted by Maharaja Pratap Singh, to
  recover possession of the same from the successor State of PEPSU of
  Nabha State or the successor State of Punjab of PEPSU although it was
F the subject matter of the said covwant by which PEPSU was formed?

           If the State properties of Nabha for which private parties have a
    claim as in the present case, can they claim Nabha's State property 'Bir',
    by filing a suit in an ordinary civil court (Municipal Court) on the plea that
    the sovereign Ruler of Nabha entering into the covenant with other
G   sovereigns had wrongly transferred that property to the new State of
    PEPSU so as to vest, in it?

          In Dalmia Dadri Cement Ltd, and Another v. Union of India and
    another, AIR (1958) SC 8160, a Constitution Bench of this Court, dealing
H   with the aforesaid very covenant which had been entered into by the Rulers
   MAHARAJAKR. KHARAKSINGHv. STATE OF PB. [VENKATACHALA,J.] 163


of the princely States to form PEPSU, on consideration of the authorities,       A
bearing on the rights and liabilities arising from such covenant, stated thus:

            "The result of the authorities then is that when a treaty is
        entered into by whcreunder sovereignty in territories passes from
        one to the other, clauses therein provided for the recognisation by
        the new sovereign of the existing rights of the residents of those B
        territories must be regarded as invested with the character of an
        act of State and no claim passed thereon could be enforced in a
        court of law. It must follow from this that the Covenant in question
        entered into by the rulers of the Covenanting States is in its entirely
        an act of State......"                                                  C
      Thus when the claim for recovery of the possession of 'Bir' , the right
to possession of which was with the Ruler of Nabha put was vested in the
PEPSU, any claim to be made for such possession is with reference to such
covenant, which in its entirety, is an act of State, and therefore, such claim
cannot be enforced by filing suits in the Court of Sub-Judge. First Class,       D
Patiala, a Court of Law (Municipal Court).

      Again, the bar for filing such suits, which is incorporated in Article
363(1) of the Constitution of India, reads thus :

            "363(1). Bar to interference by courts in disputes arising out of
                                                                                 E
        certain treaties, agreements, etc. - Notwithstanding anything in this
        Constitution out subject to the provisions of article 143 neither the
        Supreme Court nor any other court shall have jurisdiction in any
        dispute arising out of any provision of a treaty, agreement,
        covenant, engagement, sanand or other similar instrument which           F
        was entered into or executed before the commencement of this
        Constitution by any Ruler of an Indian State and to which the
        Government of the Dominion of India or any of its Predecessor
        Government was a party and which has or has been continued in
        operation after such commencement, or in any dispute in respect          G
        of any right accruing under or any liability or obligation arising out
        of any of the provisions of this Constitution relating to any such
        treaty, agreement, covenant , engagement, sanand or other similar
        instrument. 11




      Hence, we are not left in doubt that the district Court was well as H
    164                  SUPREME COURT REPORTS [1995] SUPP.1 S.C.R.

A the High Court were right in reaching the Conclusion that the suits filed
    by plaintiffs (appellants) for recovery of possession of 'Bir' were barred
    being the subject of the covenant between sovereign Rules of independent
    States and also because of the par for filing of such suits envisaged in
    Article 363(1) of the Constitution of India.

B         Jn the result, we dismiss these appeals, However, there shall be no
    order as to costs.

    R.A.                                                   Appeals dismissed.


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