When India achieved Independence, nearly half of its territory consisted of “Indian States” under princely rule. It took more than one year before all these semi-independent States were merged with the Union. In the process of integration the Rulers were able to negotiate the continuation of their privileges as well as the payment of annual Privy Purses. It was only 20 years later that this arrangement was questioned by the left-wing “young turks“ of the Congress Party, who considered Privy Purses and privileges as inconsistent with their idea of a socialist pattern of society. The former Rulers, on the other hand, maintained that their Purses were sanctioned by the merger agreements and guaranteed by the Constitution. Their unilateral cancellation by the Government amounted — in their view — to sacrificing historic treaties and covenants for doubtful ideological manoeuvres. The Bill introduced into Parliament received a slight majority in the Lok Sabha, but failed in the Rajya Sabha. Immediately thereafter all the former Rulers were derecognized by the President. The Presidential Order in turn was successfully challenged in the Supreme Court and the Government finally resorted to amending the Constitution in order to terminate the Privy Purses. The issue involved all the relevant constitutional bodies: both Houses of Parliament, the Government, the President and the Supreme Court. Still, the most decisive factor was the attitude of the Congress Party led by Indira Gandhi.