JUDGMENT

M. M. PUNCHI, 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 straightway to come to grips with some basic facts of the case along side the historic backdrop influencing 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 suzerainty of the British Crown over the Indian States lapsed simultaneously because of Section 7 of the Indian Independence Act, 1947. It is a matter of history that immediately thereafter all but three of the Indian States acceded to the new Dominion by the executing Instruments 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 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, authority 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 transferred to the Central Government of the new Dominion.

2. 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 Vindyha 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 fraction of the sovereignty of each Ruler to the newly created 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 Communications. Despite the readjustment, the sum total of the sovereignties 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.

3. The articles of the covenant, so far as they are relevant for our purposes, are Articles VI and Xl, 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 Government of the Covenanting 524 State shall vest in the United State and shall hereafter be exercisable 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