By TIOL News Service

NEW DELHI, OCT 10, 2018: THE issue before the Bench is - Whether in absence of any material and pre-existent custom to suggest that Kachwaha clans of Jaipur was was governed by the rule of lineal primogeniture i.e Jyeshthaadhikaar, succession to the estate of the ex-ruler would be governed by general law of succession and thus, to be assessed as 'HUF'. And the verdict is YES.

Facts of the case

THE assessee, Sawai Man Singh was former ruler of Jaipur. He ascended the throne (Gaddi) of the erstwhile princely state of Jaipur in 1922 and ruled the Jaipur State as the Maharaja till 1947. With India's independence, British Paramountcy lapsed and the State of Jaipur acceded to India by instrument of accession and accordingly, the erstwhile state merged in the United State of Rajasthan. Thereafter, the properties of Jaipur State were divided into two categories: State properties and private properties. Till the AY 1969-70, the late Sawai Man Singh filed his returns of income in the status of an individual. For the A.Y. 1970-71, a return of income was filed on 30-4-1970 in the status of an individual. Sawai Man Singh died on 24-6-1970.

However, after the death of Sawai Man Singh, his return was filed by his legal heir declaring the return in the status of a HUF. The AO, keeping in view the ancestral history of the late Sawai Man Singh and that he was earlier the ruler of Jaipur State, the quality of the property and the manner of its treatment by him, held the return to be filed by the late assessee, as an individual. In so holding, the AO took note of the history of the case, the ascension to the gaddi, the status of late Sawai Man Singh as ruler, lapse of paramountcy in 1947, merger (of the state of Jaipur) in 1949, and the covenants of the same year. The AO also considered the legal principles which applied the alienation of properties (by the late Sawai Man Singh) which he held, showed his absolute right of disposition.

The status assigned by the AO and the assessment framed, was questioned in appeal before the AAC. The AAC traced the history of the matter and relied on State of U.P. v. Raj Kumar Rukmani Raman Brahma and held that after the merger, the assessee ceased to be the absolute ruler of the State and, therefore, the correct status was that of a HUF. Such decision of the AAC became the subject matter of the Revenue's appeal to the Tribunal. Accordingly, the Tribunal considered the submissions advanced before it and examined the meaning and concept of an impartible estate and whether the erstwhile ruler, who filed income tax returns, held one such estate, and whether the rule of primogeniture which applied to accession to the gaddi was in any manner determinative; if not, what was the rule of succession. Accordingly, the Tribunal held in favour of the assessee.

The High Court held that,

++ there is no material on record to show that the Kachwaha clans (which the Jaipur royal house belonged to) was governed by the rule of lineal primogeniture, where the eldest male member of the family became the exclusive owner of all properties which were impartible. Nor was such special custom proved in relation to the Jaipur royal house. What could be and was established was that succession to the gaddi (the throne) was by lineal primogeniture. Consistent with the law declared by the Privy Council and the principles of those decisions, applied by the Supreme Court in several judgments, the only conclusion that could be drawn therefore, was that though succession to the gaddi was through lineal primogeniture at a time when the monarchy was absolute-which meant that such practice overlaid the right of other members to claim a share in the HUF, upon accession of the princely state of Jaipur, only those properties and privileges which the late Sawai Man Singh retained to himself, were saved. No custom of law, of the kind visualized by Section 5 of the Hindu Succession Act, in relation to lineal primogeniture or impartible properties in relation to these assets were saved. All else became subject to laws of the country. Thus, the late Maharaja had to and did file tax returns, declaring his wealth and income, in accordance with the laws of the land. He was governed by the ordinary rules of inheritance applicable to members of HUF;

++ there is nothing to suggest that the succession to the estate of the ruler- or his family (other than succession to the gaddi) was governed by the principle of primogeniture. In these circumstances, the law on the subject is clear: sans evidence of a preexistent custom with respect to primogeniture (as the overarching rule of succession, to the exclusion of all heirs) the general law of succession, i.e. the rules applicable to HUF, would apply. When it is remembered that people often differ as regards what inferences should be drawn from given facts, it will be meaningless to demand that the assessee must disclose what inferences-whether of facts or law-he would draw from the primary facts…". Therefore, it is now established that regardless of what an assessee claims, if the correct position deducible from primary facts is otherwise, the AO has to adopt that correct position. Consequently, it is held that merely because the late assessee (Sawai Man Singh) repeatedly claimed individual status while filing his returns, the correct legal status was as an individual and not HUF. Therefore, in the opinion of this court, there was no legal impediment for the legal representatives of the assessee to claim that the succession was of the HUF, upon the death of Sawai Man Singh;

++ the Jyeshthaadhikaar (the rule of primogeniture) in the case of a ruler apparently was based on indivisibility of sovereignty (samprabhuta). That the Revenue asserts such a rule, is anachronistic, to say the least. With the accession (to the Indian Republic) of the erstwhile state of Jaipur, the ruler ceased to have any "sovereign" rights. Coming into force of the Constitution-and Article 18 (which abolishes titles) the right to claim to be addressed as a Maharaja ceased, legally. Yet, the Indian Constitution guaranteed to erstwhile rulers, certain privileges and rights, through Article 291. These rights were repealed by the 26th Constitution Amendment Act, 1971. Therefore, the succession to the gaddi (of an erstwhile principality) has no consequence, except as a social custom. In all respects, and for all intents and purposes the erstwhile royal family of the Jaipur state are citizens of the republic. An important facet: which needs to be considered at an appropriate stage is that in such situations, the provisions of the Hindu Succession Act, 1956 will apply; all classes of heirs-male and female, entitled to its benefits would be covered by it. To hold otherwise would be startling, because the incidents of a HUF, at least after the 2005 amendment would then be markedly denied only on the ground of gender (contrary to Article 15 (2) of the Constitution of India), to female heirs. Article 14 guarantees equality before law and equal protection of law. The sequitur to holding that not all members of the family of an erstwhile royal family, but only one class (i.e. male coparceners) would be entitled to share and other interests in the estate is anathema to the Constitution. These observations have been made given the passage of time that has occurred and the march in the understanding of the Constitution of India. There are no "dark corners" of the society or legal space which are immune to its reach and sweep.

(See 2018-TIOL-2122-HC-DEL-IT)