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TMI Blog1982 (2) TMI 124X X X X Extracts X X X X X X X X Extracts X X X X ..... not pass under any of the provisions of the Estate Duty Act on the death of the Maharaja and that the Maharaja of Cochin was a corporation sole or, in the alternative, the holder of an office coming within the ambit of section 7(4) of the Act. It was also contended that the Maharaja of Cochin lost his political and administrative powers as a result of the integration of the States in July, 1949 ; his personal rights, privilges and dignities were guaranteed by the Covenant and, therefore, the possession and enjoyment of the Palliyara Muthalpidi properties were the personal rights and privileges attached to the rulership of Cochin. Further, it was urged that the Ministry of States has also ruled that these properties will be considered as belonging to His Highness, the Maharaja of Cochin, and will devolve intact on his successors. 3. The Assistant Controller did not accept these contentions. He equated the Maharaja to a sthani and relied on the decision of the Madras High Court in the case of the S.C. Sree Manavikraman Raja, Zamorin Raja of Kozhikode v. CED [1957] 32 ITR 1 for the proposition that a sthani is not a holder of an office nor a corporation sole, but the sthanam is mere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ties of any individual reigning sovereign of the Cochin, that the monarch had no power of disposal over the properties, that they belonged to the office of kingship and not to the king himself, that they were immutable, indivisible, impartible and inalienable and that, therefore, these properties did not pass on the death of the ruler as contemplated in section 5(1) of the Act, nor could be deemed to have passed on his death under section 6 or 7(1). The contention that the Maharaja is a corporation sole and that, therefore, the Palliyara Muthalpidi properties are saved by section 7(4) was reiterated. It was urged that the Maharaja of Cochin cannot be equated to the Zamorin of Calicut or considered as a sthani. 7. The Appellate Controller examined these contentions in the light of the materials produced and noticed the nature and incidents of the estate and stated thus in the order : "It would be useful to go into the nature and incidents of Palliyara Muthalpidi properties. The origin of Palliyara Muthalpidi is lost in antiquity. It is probably as old as the throne of Cochin State itself. It consisted of both the corpus of movable as well as immovable properties and the accreti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from 1-7-1949, the Maharaja lost his sovereignty in the State, and his ruling and political powers. By virtue of article 14 of the Covenant of Integration, the ruler became entitled to an annual privy purse. Article 17 guaranteed the personal privileges, dignities and titles of the ruler. From article 15(1) and (2) and the D.O. letter dated 19-2-1954, from the Ministry of States addressed to the Maharaja, the Appellate Controller concluded that with the loss of sovereignty and the political power and with the recognition of the Government of India that the Palliyara Muthalpidi properties became private properties, the Maharaja ceased to be a corporation sole and the Palliyara Muthalpidi properties were no longer properties attached to the reigning monarch for the time being. Reliance was also placed on the decisions of the Supreme Court reported in AIR 1961 SC 1260 and Vir Rajendra Singh v. Union of India AIR 1970 SC 1946. Ultimately, it was held that the movable and the immovable properties of the deceased, Shri Rama Varma Pareekshit Thampuran including the Palliyara Muthalpidi properties, are dutiable under sections 5(1), 6 and 7(1) and that section 7(4) has no application. Thus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e extent to which a benefit accrues or arises by the cesser of such interest. Sub-section (4) of section 7 provides that the provisions of sub-section (1) shall not apply to the property in which the deceased or any other person had an interest only as holder of an office or recipient of the benefits of a charity, or as a corporation sole. The Explanation thereunder is, however, to the effect that the holder of a sthanam is neither the holder of an office nor a corporation sole within the meaning of this sub-section. 14. The claim of the appellant is that there is no passing of the estate as stated in section 5 on the death of the Maharaja. It is stated that since the Maharaja, as the ruler of the State of Cochin, is holding the estate, the rulership continues and when one Maharaja dies the properties get vested in the succeeding Maharaja, such passing to his successor in office is not what is contemplated by the provisions of the Act. It is said that the Palliyara Muthalpidi Estate is not alienable and cannot, therefore, be property deemed to pass under section 6. The nature of the property is said to be such that the Maharaja for the time being had only the right to enjoy the i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the revenue. 16. Shri Sankara Menon, the learned counsel for the appellant, however, maintains that even after integration the rulership continued as an institution. The Maharaja had been holding the estate, thereafter, as the holder of an office or as corporation sole and, therefore, the estate is not chargeable to duty. The terms of the Covenant entered into between the rulers of Travancore and Cochin, on integration of the two States with the concurrence and guarantee of the Government of India, and the constitutional provisions contained in articles 291, 366(15), 366(16) and (22) are referred to in this context. Article 8(d) of the Covenant vests the administration of temples and devaswoms in a Board, providing that the regulation and control of all rituals and ceremonies in the temple specified shall continue to be exercised by the Maharaja of Cochin. Article 8(e) enables the Maharaja to nominate a member to the Cochin Devaswom Board. Article 14 entitles the ruler of each State to receive annually from the revenue of the State for his privy purse amounts specified in the Schedule. The succession, according to law and custom, to the Gadi of each covenanting State and to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the time being is recognised by the President as the ruler of the State and includes any person who for the time being is recognised by the President as the successor of such ruler. This definition, according to the appellant's learned counsel, recognised the rulership as an institution and succession to the office of rulership. The decision of the Supreme Court in H.H. Maharajadhiraja Madhav Rao Jivaji Rao Scindia Bahadur v. Union of India AIR 1971 SC 530 was referred to, in support of the contention that rulership is an institution recognised under the Constitution. In that case it had been held that the institution of rulership is an integral part of the constitutional scheme. The Maharaja of Cochin died in November 1964 before the Constitution (26th Amendment) Act, 1971. It is, therefore, maintained that the position was the same on that date, that the deceased was thus holding the estate only as holder of an office and on his death it devolved on the succeeding Maharaja who was holding the office and, therefore, the estate is not chargeable to duty. 18. As rightly pointed out by Shri N.R.K. Nair, the learned counsel for the revenue, this claim of the appellant cannot be a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evaswoms and the remission of the capital sentence are also, in the context, privileges and not official duties. It is clear that the institution of rulership recognised under the Constitution for the purpose of identifying the person entitled to the benefits guaranteed under the Covenant is only an office of dignity or status and that the position of the ruler is analogous to that of a sthani. The properties attached to such an office had the attributes of sthanam properties and the person holding the properties is only a sthani. 21. Shri Sankara Menon attempted to draw the distinctions between the Maharaja's palace estate and sthanam properties. Even though the ruling powers are lost, the Maharaja had certain other powers and duties, namely, the power to nominate to the Devaswoms Board, control over the Devaswoms, succession to the Gadi, etc. As Palliyara Muthalpidi is a private property which devolves, intact, on the successor, it is argued that the estate cannot be compared to the estate of Zamorin and the decision of the Madras High Court reported in Manvikraman Raja v. CED is distinguishable. The incidents of the institution of sthanam are that the senior-most member of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to recognition of rulership is either purely a matter of inheritance or a matter of descent by devolution. Nor can claim to recognition of rulership be based only on covenants and treaties." The Gujarat High Court in Pratapsinhji N. Desai v. CIT [1981] 22 CTR (Guj.) 233 reviewed the position of the ex-ruler with particular reference to the terms of the covenant and the provisions of the Constitution and held that the Covenant guarantees only that law and custom of succession which was applicable to the Gaddi of the covenanting States and it did not recognise the rule of succession to all other properties. 23. The foregoing discussion leads us to the following conclusions: The Palliyara Muthalpidi estate was an impartible estate which, under the custom and law of succession governing the former ruling family of Cochin, devolved on the senior-most male member of the family on his succeeding to the Musnad, and the Maharaja of Cochin was holding the estate as a corporation sole until the integration of the State in July 1949. Thereafter, the Maharaja had no sovereign powers. He was no longer a corporation sole or a holder of an office. The office of the Maharaja was only a position ..... X X X X Extracts X X X X X X X X Extracts X X X X
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