Constitution of India , Art.3, Art.4, Art.300, Art.295— Act of State - Formation of State of Travancore-Cochin was act of state but not formation of Kerala State - Plaintiff's claim to annuity recognised by State of Travancore-Cochin - Suit for such claim against Kerala State entertainable by municipal Court. The expression 'act of State'not limited to hostile action between rulers resulting in the occupation of territories. It includes all acquisitions of territory by a sovereign State for the first time, whether it be by conquest or cession. It is within the competence of the new sovereign to accord recognition to existing right in the conquered or ceded territories and, by legislation or otherwise, to apply its own laws to them and these laws can, and indeed when the occasion arises must, be examined and interpreted by the municipal courts of the absorbing State. The formation of the United State of Travancore and Cochin was an act of State. It was the result of a covenant entered into by the Rulers of Travancore and Cochin. The United State of Travancore and Cochin recognised the claim of the plaintiff's family to an annuity. It did not stop the payment of the annuity on the formation of the State. Clause 7 of the Ordinance 1 of 1124 and S. 7 of Act 6 of 1125 did not affect such claim. But the formation of the State of Kerala was not an ac....