The court established that jurisdiction is barred under Article 363 of the Constitution regarding disputes arising from agreements of merger.

1. This appeal, by the plaintiff, against a decree and judgment of the learned Senior Subordinate Judge, Mandi has arisen out of a suit, for possession of land, measuring 7 bighas 10 biswas and 1 biswansi, comprised in Khasra Nos. 5, 6 and 43/34, situated in village Bhangauhli, a suburb of Mandi Town, in Tehsil Sadar, District Mandi, after demolishing the buildings, standing thereon, or in the alternative for the recovery of Rs. 25,050 / as value of the land. The suit was founded on the following allegations :

2. The plaintiff was the Ruler of Mandi State, now merged in Himachal Pradesh, since Ist May, 1948. The land, in suit, was acquired by the plaintiff, in 1946, from its former owners, for his personal requirement for starting and housing a private dairy farm. The land was considered as a part of the Bijai Palace Estate, the personal and private property of the plaintiff. The land remained in possession of the plaintiff even after the merger of Mandi State with Himachal Pradesh.

3. In February 1955, it was discovered by the plaintiff's agent and private secretary that the Government P.W.D Contractors, under the orders of the Government officers, had illegally entered upon the land and had begun to collect building materials for starting construction on the land. The plaintiff's private secretary approached the Executive Engineer, Mandi, asking him not to proceed with the construction work, unless the matter was settled with the plaintiff. The Executive Engineer, Mandi and the Deputy Commissioner, Mandi had assured the private secretary that due compensation, under the law, would be paid for the land. But later on, the authorities backed out of their promise to pay the compensation. The Superintending Engineer, Ist Circle, Himachal Pradesh P.W.D. informed the plaintiff's private secretary, on the 28th January, 1968 that no compensation would be paid to the plaintiff until and unless his title to the land was decided by the Government of India.
In the meanwhile, several buildings were constructed upon the land, despite repeated protests from the plaintiff's private secretary. Having failed to get the matter settled, the plaintiff, on the 28rd June 1958, served a notice, under S.80 of the Code of Civil Procedure, on the Secretary, Ministry of Home Affairs. The plaintiff was informed by the Chief Secretary, Himachal Pradesh, on the 30th October, 1959, that the Government of India regretted their inability to concede that the land in suit was the private property of the plaintiff. Thereupon, the plaintiff instituted the suit, against the Union of India, praying for possession of land and Rs. 5000/- as damages, for taking illegal and forcible possession, by the officers of the defendant, or in the alternative for the recovery of compensation of Rs. 25,050 as the value of the land and interest at the rate of 6 per cent per annum, from February 1955.

4. The suit was contested by the Union of India. The written statement was filed on 12th September 1960. It was, later on, got amended. The Union of India denied that the land, in suit, was the personal and private, property of the plaintiff or that it formed part of Bijai Palace Estate. It was pleaded that the land was purchased, by the erstwhile Mandi State, for constructing a State dairy farm and belonged to the State. It was, further, pleaded that after merger of the Mandi State, the land belonged and was in possession of the Union of India. It was denied that the Deputy Commissioner, or any other officer of the Government, had admitted to pay compensation for the land to the plaintiff. It was