Indian Kanoon - Search engine for Indian Law

M. Fatima Beebi, Judicial Member

1. This appeal is directed against the order of the Appellate Controller of Estate Duty, Ernakulam, dated 19-12-1977, in ED Appeal No. 6/1972-73/EKM, relating to the assessment on the death of Shri Rama Varma Pareekshit Thampuran, the Maharaja of the erstwhile State of Cochin, on 11-12-1964.

2. In pursuance of a notice under Section 55 of the Estate Duty Act, 1953 ("the Act"), the accountable person, Shri Rama Varma Kunjikidavu Thampuran, filed a statement before the Assistant Controller on 22-11-1971. A contention was raised that the estate of the Maharaja of Cochin is not assessable to estate duty in respect of the properties attached to the Maharaja and that the accountable person was, therefore, not liable to submit the account called for. It was further contended that the properties belonging to the Maharaja of Cochin, compendiously known as the Palliyara Muthalpidi Estate, did 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.

4. The Assistant Controller noticed that after the integration of States, the Maharaja lost his political and administrative powers ; he was not a holder of an office to which duties of a public character were attached and he can only be treated as the holder of a sthanam and the Palliyara Muthalpidi properties are the properties attached to the sthanam. These properties are considered as the private properties of the Maharaja and devolved on his successor. The decision of the Supreme Court in CIT v. M.E.H. Mir Osman Alt Bahadur [1966] 59 ITR 666 was followed for concluding that the privileges granted to the Maharaja under Article 15 of the Covenant of Integration were only personal privileges which did not justify any claim to the immunity from taxation.

15. Shri Rama Varma Pareekshit Thampuran, the Maharaja of Cochin, was the ruling chief of the State of Cochin till the integration of the Travancore and Cochin States in July 1949. In terms of the Covenant entered into, the Palliyara Muthalpidi was declared as the private property of the Maharaja. In the plaint filed by the junior members of the former ruling family of Cochin as O.S. No. 29 of 1976 in the Subordinate Judge's Court, Ernakulam, this estate is described as sthanam property. Therein it is stated that as per the customary law of succession in Cochin State, the senior most male member of the family succeeds to the Gadi of Cochin, that the Karanavan of the family invariably becomes the ruler, i.e., the Maharaja. It is urged in para 4 of the plaint that, as in the case of other aristocratic families in Malabar, there was a sthanam in the erstwhile Cochin ruling family attached to the Karanavanship of the family. This was originally known as Pettipoottu and in later years came to be known as the Palliyara Muthalpidi ; the legal incidents of the Palliyara Muthalpidi estate is purely that of the institution known as sthanam in customary Malabar law. These averments are not accepted as correct by the appellant. It is, however, clear from what has been stated by the Full Bench of the Travancore High Court in the case of Mooply Valley Rubber Co. Ltd. 13 TLJ 297 that Palliyara Muthalpidi was an impartible estate which, under the customary law governing the former ruling family of Cochin, devolved on the senior male member of the family who ascended to the "Musnad", that the Maharaja of Cochin, as a corporation sole, was the holder of the estate and that the estate was in the absolute control and enjoyment of the reigning sovereign for the time being. It is, therefore, clear that the estate was held by the deceased Maharaja as a corporation sole until the integration of the State in 1949. This position is conceded by the revenue.

17. It is pointed but that under Article 15 of the Covenant the two rulers are entitled to continue in possession and enjoyment of their private properties as distinct from State properties. The Palliyara Muthalpidi estate has been included as the private property of the Maharaja of Cochin as distinguished from State properties. This, it is said, will go to show that the Palliyara Muthalpidi is not the personal private property of the Maharaja. The letter, dated 19-2-1954, issued by the Government of India to the Maharaja stated that, in accordance with the law of succession in Cochin and the customary law relating to the ruling family, the properties declared as private properties and included in the inventory will be considered as belonging to His Highness in his capacity of Maharaja of Cochin and would devolve intact on his successors. The argument advanced is that the capacity of the Maharaja means as ruler and not his personal private capacity, that these are the private properties of the ruler of Cochin and not of the person who becomes the ruler for the time being. It is said that "devolve intact" on the successor means that the whole property as such, without being alienated or transferred, devolves not on the legal representative or legal heirs of the Maharaja but on his successor in office. The argument is that the fact of succession to a particular office has been thus taken into consideration by the Government of India in passing the above order, thereby recognising and acknowledging succession to the office of the rulership of Cochin. According to Article 366(22) of the Constitution, "ruler", in relation to an Indian State, means the Prince, Chief or other person by whom the Covenant was entered into and who for 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.