CHOUDHRY JAWAHARLAL & ORS. vs STATE OF MADHYA PRADESH

The Supreme Court held that the State of Madhya Pradesh was not liable to honor the promissory note executed by the Maharaja of Surguja, as the new State did not expressly or impliedly undertake to meet the liability post-merger. The Court clarified that the request for details by the State did not constitute acceptance of liability, and the defense of 'Act of State' was applicable. The ruling established that a successor State is not bound by the liabilities of a merged princely state unless it explicitly assumes such obligations.