Chatturbhuj Vithaldas Jasani Vs.
Moreshwar Parashram & Ors [1954] INSC 14 (15 February 1954)
BOSE, VIVIAN MUKHERJEA, B.K.
BHAGWATI, NATWARLAL H.
CITATION: 1954 AIR 236 1954 SCR 817
CITATOR INFO :
RF 1954 SC 587 (10,11) R 1957 SC 242 (6) R
1957 SC 871 (4) R 1959 SC 498 (10) R 1959 SC 876 (19) R 1962 SC 113 (24) D 1962
SC 779 (7) R 1966 SC 580 (6) R 1966 SC1724 (16) R 1967 SC 203 (8) D 1967 SC1445
(11) D 1969 SC 101 (18) F 1969 SC 302 (10) R 1969 SC 447 (4,12,13) E 1971
SC2210 (3) F 1976 SC 939 (12) RF 1981 SC 547 (7,8,23) R 1984 SC 411 (10,12) R
1984 SC 600 (13,15,16,21,24)
ACT:
Representation of the People Act (XLIII of
1951), s. 7(d)-A firm entering into contracts with Central Government for
supply of goods-A candidate seeking election for Parliament, a Partner of the
said firm on the crucial dates- Disqualification-Constitution of India, art.
299(1)-Indian Contract Act (IX of 1872), s. 230(3)Contract with Government not
in proper form-Whether void Ratification-Contract for supply of goods-Subsists
till fully discharged by both sides- And payment made-Person of Scheduled Caste
Mahar converted to Mahanubhava Panth-Whether convert's caste status altered.
HEADNOTE:
A contract for the supply of goods does not
terminate when the goods are supplied, it continues into being till payment is
made and the contract is fully discharged by performance on both sides.
O'Carroll v. Hastings ( [1905] 2 I.H. 590)
and Satyendrakumar Das v. Chairman of the Municipal Commissioners of Dacca
(I.L.R.58 Cal. 180) relied upon.
The firm Moolji Sicka and Company of which
the candidate was a partner had entered into contracts with the Central 106 818
Government for the supply of goods. The contracts subsisted on he crucial dates,
November 15, 1951, and February 14, 1952. November 15, 1951, was the last date
for putting in, nominations and February 14, 1952, was the date on which
results were declared :
Held, that the candidate had both a share and
an interest in the contracts for the supply of goods to the appropriate
Government on the crucial dates and was thus disqualified for being chosen as a
member of Parliament by virtue of the disqualification set out in s. 7(d) of
the Representation of the People Act (XLIII of 1951).
Held further, that the contention that the
contracts in question were void because the Union Government could not be sued
by reason of art. 299(1) of the Constitution as the contracts were not
expressed to be made by the President was without force because this was the
type of case to which a. 230(3) of the Indian Contract Act would apply.
When a Government officer acts in excess of
authority Government is bound if it ratified the excess.
The Collector of Masulipatam v. Cavaly
Venkata Narrainapah (8 M.I.A. 529) reliecl upon.
A member of the Mahar caste which is one of
the Scheduled Castes continues to be a member of the Mahar caste despite his
conversion to the tenets of the Mahanubhava Panth as such conversion imports
little beyond @ an intellectual' acceptance of certain ideological tenets and
does not alter the convert's caste status.
Abraham v. Abraham (9 M.I.A. 199) relied
upon.
CIVIL APPEALATE, JURISDICTION: Civil Appeal
No.155 of 1953.
Appeal by special leave from the Judgment and
Order dated the 15th July, 1953, of the Election Tribunal, Nagpur, in Election
Petition No. 3 of 1952.B. Sen and T. P. Naik for the appellant.
Veda Vyas (S. K. Kapur with him) for
respondent No. 1.
1954. February 15. The Judgment of the Court
was delivered by Bose J.-This is an appeal against a decision of the Nagpur
Election "Trbunal. The contest before the tribunal was about two seats in
the Bhandara Parliamentary Constituency.
The elections were held on five days 'in
December, 1951, and January, 1952.
819 Thirteen candidates filed nomination papers,
among them the petitioner. Of these, six contested the seat reserved for the
Scheduled Castes. -One of these was Gangaram Thaware who has since died.
The Scheduled Caste in question is the Mahar
caste.
Objection was taken to Thaware's nomination for
the reserved seat on the ground that he was not a Mahar. It is admitted that he
was born a Mahar, but later in life he joined the Mabanubhava Panth. This,
according to the appellant, is a sect which does not believe in caste, and
alternatively that it forms a separate caste in itself The contention was that
when Gangaram Thaware joined the Panth he ceased to be a member of the Mahar
caste' The objection succeeded and his nomination was rejected.
The nomination of another Scheduled Caste
candidate was also rejected and five others were withdrawn before the election,
among them was the present petitioner. That left six candidates of whom three
were eligible for the reserved seat.
The two who were elected were Tularam
Sakhare, for the Scheduled Caste seat, and chaturbhuj, Jasani, nor the general
seat. Jasani's election was challenged on the ground that he was subject to the
disqualifications set out in section 7 (d) of the Representation of the People
Act (Act XLIII of 1951) as he was interested in a contract for the supply of
goods to the Central Government.
The Election Tribunal held that the rejection
of Gangaram Thaware's nomination was improper as he continued to be a member of
the Mahar caste despite his conversion to the tenets of the Mahanubhava. Panth.
It also held that Chaturbhuj Jasani had a contract with the Central Government,
so he was disqualified. Accordingly it set aside the whole election.
We will deal with Chaturbhuj Jasani's
election first.
Section 7(d) is in these terms :
"A person shall be disqualified for
being chosen as, -and for- being, a member etc.
* * * * 820 (d)if by himself he has any share
or interest in a contract for the supply of goods to the appropriate
Government." Chaturbhuj Jasani was, and still is, a partner in the firm of
Moolji Sicka & Company, and it is said that at all material times the firm
had- a contract for the supply of bidis to the Government for the troops.
Moolji Sicka & Company is a firm of bidi
manufacturers. The Central Government was interested in stocking and purchasing
bidis for sale to its troops through its canteens.
Accordingly, it placed two of the brands of
bidis manufactured by this firm on its approved list and entered into an
arrangement with the firm under which the firm was to sell, and the Government
was to buy from the firm, from time to time, these two brands of bidis. It was
argued that this amounted to a contract for the supply of goods within the
meaning of the section. It was said that the contract was embodied in four
letters.
We do not intend to analyse these letters in
detail. here.
It is enough to say that in our opinion no
binding engagement can be spelt out of them except to this extent :
Moolji Sicka & Company undertook to sell
to the canteen contractors only through the Canteen Stores and not direct and
undertook to pay a commission on all sales. This, in our opinion, constituted a
Continuing arrangement under which the Canteen Stores, i.e., the Government,
would be entitled to the commission on all orders placed and accepted in
-accordance with the arrangement ; and in fact the Canteen Stores did obtain a
sum of Rs. 7,500 'in satisfaction of a claim of this kind. This money was paid
long before the dates which are crucial here but the settlement illustrates
that there was an arrangement of that nature and 'that it was a continuing one.
In our opinion, it continued in being even after that and the mere fact that
there was no occasion for any claim subsequent to the settlement does not
indicate that it was no longer alive.
But except for this, the; letters merely set
out the terms on which the parties were ready to do business with 821 each
other if and when orders were placed and executed. As soon as an order was
placed and accepted a contract arose.
It is true this contract would be governed by
the terms set out in the letters but until an order was placed and accepted
there was no contract. Also, each separate order and acceptance constituted a
different and distinct contract: see Rose and Frank Co. v. J. R. Crompton &
Bros.
Ltd.(1) The crucial dates with which we are
concerned are 15th November, 1951, the last date for putting in the
nominations, and 14th February, 1952, the date on which the results were
declared. The section runs-- "A person shall be disqualified for being
chosen as......
The words which follow, "and for
being", need not be considered as it is enough for our purposes to use
only the former.
Now the words of the section are "shall
be disqualified for being chosen." The choice is made by a series of steps
starting with the nomination and ending with the announcement of the election.
It follows that if a disqualification attaches to a candidate at any one of
these stages he cannot be chosen.
The disqualification alleged in this case is
that Chaturbhuj Jasani had an interest in a contract, or a series of contracts,
for the supply of goods to the Central Government. He had this interest because
the contracts were made with Moolji Sicka & Company a firm of which Jasani
is one of the partners. The fact of partnership is admitted but the other facts
are denied. We have therefore to see whether any contract for the supply of
goods to Government by Moolji Sicka & Company existed at any 'time on or
between the relevant dates.
Exhibit C is a tabular statement which sets
out the dealings between the parties during certain months. It is accepted as
correct by both sides. The following extracts from this statement show that
Moolji Sicka & Company had an interest in a series of contracts for the
sale of bidis to the Canteen Stores at and between the relevant dates.
(1) [1925] A.C. 445.
822 Date of order Date of invoice Price of
Date of by and goods pay- Canteen Stores Despatch. Supplied 8-10-1951
18-10-1951Rs. 1,684-13-919-12-1951.
8-10-195119-10-19513,373- 9-3do 17-
8;195126-10-195112,602- 8-0do 12- 9-195126-10-195111,426-14-6do
11-10-195126-10-19518,411-14-0do 21-10-195130-11-195110,125, 2-9do 9- 8-195129-
8-195125,812-12-024-12-1951 8-10-195118-10-19514,793- 4-9do
14-11-195122-11-1951:1,887- 9-95- I-.1952 17-10-19518-11-195116,534- 2-022-
1-1952 12-11-195120-11-19514,205-15-0do 13-12-195110- 1-195213,97,079- 7-912.
2-1952 14- 1-195222- 1-19521,691-11-9do 21-12-195110- 1-195216,983- 8-018-
2-1952 12-11-195122-11-19518,411-14-013- 3-1952 9- 1-195216- 1-19525,888- 4-9do
23- 1-195228- 1-19528,411-,14-020- 3-1952 This statement reveals that various
contracts aggregating Rs. 15,39,345-6-0 less some small sums for railway
freight, were outstanding at one time or another between the two crucial dates
and that payments in discharge of these liabilities were made at various dates
between 15th November, 1951, and 20th March, 1952.
It also shows that orders were placed and
accepted for goods priced at Rs. 84,659-14-3 before 15th November, 1951, and
that payment was not made till after that date. Therefore, on 15th November,
1951, goods worth Rs. 84,659-14-3 had still to be paid for.
Then between 15th November, 1951, and 14th.
February, 1952, further orders for goods valued at Rs. 39,695-8-9 were placed
And accepted and they were not paid for till after 14th February, 1952.
It was argued that there is nothing to show
that. the goods were, not supplied before 15th November, 1951, and before 14th
February, 1952. It was said on behalf of 'the appellant that these are the only
dates which are crucial, so if Moolji Sicka.& Company hid. fully 823
executed their part of the contracts before the two crucial dates the
disqualification would not apply.
That raises these questions: (1) Does a
person who has fully executed his part of a contract continue to have an
interest in it till the goods are paid for ?; and (2) were these contracts
fully executed so far as Moolji Sicka & Company's part was concerned? The
parties are not agreed about this, so it will now be necessary to examine their
letters in detail to determine the terms of the various contracts.
The correspondence discloses that the Canteen
Stores and Moolji Sicka & Company dealt with each other from time to time
under various arrangements which they called " systems.
The earliest letter we have about the
transactions between these parties is one dated 30th March, 1951. It shows that
the "system" which they called the " Direct Supply System "
was in use at that time. The details of the " system " are set out in
an order dated 17th April, 1951. Under it Moolji Sicka & Company had to
send supplies of bidis direct to the Canteen Stores contractors as and when
ordered. The value of the goods so supplied was to be recovered from the
contractors direct and the Canteen Stores were to be informed of the sales and
were to be paid a certain commission.
This led to some friction and in their letter
of 30th March, 1951, the Canteen Stores complain that information about some of
the sales to the contractors had been suppressed with the result that the
Canteen Stores lost their commission. Moolji Sicka & Company replied to
this on 24th April, 1951, and suggested a slight change in the system, namely
that all orders for the goods should in future be placed through the Canteen
Stores and that there should be no dealings with the contractors direct except
to supply them with the goods ordered by the Canteen Stores; then,' they said,
there would be no complaint about their having been kept in the dark. This
appears to have been agreed to because such of the subsequent order& as are
on record were placed by the Canteen Stores.
824 The order dated 17th April, 1951, to
which we have referred above is a sample.
This was considered unsatisfactory and it was
felt that a change was called for. Moolji Sicka & Company's letter of 24th
April, 1951, shows that their complaint was that the Canteen Stores did not
keep a sufficient stock of bidis on hand. They said- " We feel that you
can stock more of our bidis. And that will mean an added profit to you; since
the rebate you get on supplies made under the Direct Supply System is Rs. 4
only, whereas on supplies made to you we have now offered a much higher
rebate............... We have therefore to request you to kindly 8stock more of
our bidis. " In view of this, two representatives of Moolji Sicka &
Company, met the Chairman of the Board of Administration, who was in charge of
the Canteen Stores Department, on 10th July, 1951. They reached certain
tentative conclusions which were reduced to writing by the Canteen Stores on
11th July, 1951. Their letter of that date shows that the Canteen Stores
proposed to abolish the Direct Supply System in the near future but so far as
Moolji Sicka & Company were. concerned they said that the system could be
abolished. at once (" forthwith " is the word used) provided Moolji
Sicka & Company would agree to supply bidis for the Bombay, Calcutta and
Delhi Depots of the Canteen Stores under a new system which they called the
" Consignment System ". Under this the Canteen Stores were to pay as
they sold. But the new system was intended only for the Bombay, Calcutta and
Delhi Depots of the Canteen Stores. The letter goes on to say that for the
Pathankot and Srinagar Depots the supplies would have to be made on the "
Outright Purchase Basis ". These proposals were embodied under the heading
" Future Business RelationsThen there was a provision for what was called
the Transition Period ". That said that Untilstocks could be placed in our
depots, it was agreed that you would supply your bidis direct against our
orders and on such supplies you would allow us rebate as at present.
825 These proposals were sent to Moolji Sicka
& Company for confirmation.
It will be seen that the' letter makes four
proposals:
(1)That so far as Moolji Sicka & Company
were concerned, " The Direct Supply System " should be terminated at
once though, so far as other manufacturers were concerned, it should continue
in force for some time longer;
(2)That in its place the Calcutta, Bombay and
Delhi Depots were to be supplied under a new system called the "
Consignment System ";
(3)That the Pathankot and Srinagar Depots
were to be supplied under another new system called the Outright Purchase
System ";
(4)That during the "transition
period" the "Direct Supply System" was to continue in operation
" as at present " even with Moolji Sicka and Company.
Moolji Sicka & Company replied on 16th
July, 1951, saying that they were prepared to accept these terms provided the
Canteen Stores confirmed certain modificatioins which Moolji Sicka &
Company proposed. They were as follows:
(1)Regarding the " Transition Period
" they said" "We are pleased to note that you will soon be
abolishing the Direct Supply System. But it should be applied to all suppliers
at the same time. Till then we should be allowed to supply any orders received
from the Canteen Contractors.
You should inform us of the date on which
Direct Supply System will be discontinued.
(2) Regarding the new proposals under the
heading Future Business Relations Moolji Sicka & Company said-- "Goods
sent to your depot on consignment basis must be either returned to us or paid
for fully within three months of the date of supply. We understand that the
system. of supplying goods on consignment basis will be discontinued in about
six months' time. " 107 826 (3) They said- " And for this purpose we
have agreed to offer you Rs. 7,500 in full and final settlement of all your
claims to date and upon the understanding of your acceptance of the terms for
future business.
They concluded- " Upon receiving your
confirmation we shall instruct our Bombay office to send you the cheque for the
amount stated above. " The Rs. 7,500 was what the Canteen Stores claimed
from Moolji Sicka & Company as compensation for breach of the agreement under
which Moolji Sicka & Company had agreed not to sell to the Canteen
Contractors without paying the Canteen Stores a commission. Neither side was
able to produce exact figures but this was the estimate made by the Canteen
Stores of the loss suffered by them by reason of that breach.
It will be seen that the proposal about the
" Consignment System " which the Canteen Stores made was that they
would pay Moolji Sicka & Company only when they sold the stocks with which
Moolji Sicka & Company were to supply them for stocking their depots at
Calcutta, Bombay and Delhi. Moolji Sicka & Company were not satisfied with
this and said that the Canteen Stores must either return or pay for all stocks
supplied, within three months from the date of supply.
The Canteen Stores replied on 19th July,
1951, as follows:
(1) They accepted Moolji Sicka &
Company's suggestion that when the Direct Supply System was abolished the
abolition would apply to all suppliers of bidis.
(2) As regards the " Consignment Account
System they did not turn down the proposals but observed that they were
thinking of doing away with that too in favour of the " Outright Purchase
System" and warned Moolji Sicka & Company that in view of that it
might not be necessary to place any of Moolji Sicka & Company's stocks in
their depots.
827 (3) They wanted a six months' guarantee
period in place of three months.
The letter concludes- "Although under
the system of provisioning, adopted by us, and as explained to you during our
discussions, it may not be that we shall at any time have any stocks surplus to
our requirements or stocks which have not been disposed of within the guarantee
period, but should there be any solitary occasions will you please confirm that
you will replace Such stock with fresh stock without any cost to us? We await
your agreement by return." They also said, "We now await your cheque
for Rs. 7,500.
Moolji Sicka & Company replied on 26th
July, 1951, and commenced by saying- " We agree to all you have said in
page one of your letter under reply. " Regarding the guarantee they said
they could not agree to six months but would agree to three provided the
guarantee was limited to goods found to be defective because of faults in
manufacture. They concluded- "We have also to pay you Rs. 7,500 as per
our' letter, dated 16th July, 1951," and asked how the Canteen Stores
would like the payment to be made.
The Canteen Stores replied on 31st July,
1951, and explained what they meant by the " guarantee period ".
Bidis deteriorate by keeping, so the idea was to have a system under which they
could be returned within six months to prevent their deterioration. They
-explain that this is in the interests of the 'manufacturer because (1) it will
not bring their brands into disrepute, for that would, be the inevitable result
if stale bidis which had deteriorated were sold in the canteens and (2) if the
period is made too short, then "the goods will not stay in our depots and
in the stalls of our canteens and contractors long enough to sell and hence our
depots will always be,, anxious to 828 return these stocks. The result will be
obvious. Your sales will be, lower.
They continue- " We therefore consider
that the period of six months should be the least before the expiry of which
goods may be taken back by you and replaced............... The period of three
months within which you expect us to return your stocks, should we find them
not moving, will be too short. " They conclude by saying that they hope
Moolji Sicka & Company will agree to the six months.
Now it will be seen that all this
correspondence related to the proposals about the " Consignment System
" which were first mooted on 11th July, 1951. Moolji Sicka & Company
complained on 24th April, 1951, that the Canteen Stores were not keeping large
enough stocks of their bidis and they asked the Canteen Stores to stop the
Direct Supply System and purchase stocks direct. The Canteen Stores were
naturally reluctant to keep large stocks on hand because bidis 'deteriorate and
become unsaleable in course of time.
Therefore they proposed the " pay as we
sell " system, that is, they would keep stocks of bidis and pay for
whatever they sold. But the problem of unsold stocks deteriorating still
remained. Who was to be responsible? The obvious answer was that the
manufacturers should take back the unsold stocks before they were too far gone
and in their place send fresh consignments for sale on the " pay as we
sell " basis. We say "obvious" because the manufacturers could
use the stale tobacco by re-curing and blending it, or could use it for other
purposes provided it was not too far gone. The proposal therefore was that the,
Canteen Stores were to keep stocks of Moolji Sicka & Company's bidis in
their depots and canteens, pay for what they sold and return all unsold stocks
within six months. Moolji Sicka & Company were then to replace them with
fresh stocks which would be paid for when sold. This was agreed to in the main
but the point at which they were at issue was the six months. Mooli Sicka &
-Company proposed three months while the 829 Canteen Stores wanted six months.
We think 'the argument used in the letter of 31st July, 1951, that " the
result will be obvious. Your sales will be lower " can only have reference
to an arrangement of this kind, otherwise no question of the sales being lower
could arise. In the case of an outright sale, the sale would be complete when
the order was executed, and except for bidis found to be defective due to
manufacture Moolji Sicka & Company would have no further concern with them.
The sentences the goods may be taken back by you and replaced and " should
we find them not moving " can only refer to these proposals about the
"Consignment System " In any case, it certainly includes this system.
Moolji Sicka & Company's reply is dated
9th August, 1951.
They say- "We are in receipt of your
letter No. 7B/29/-17 1299, dated 31st July, 1951, and are pleased to extend the
guarantee period from three to six months. We are sure this will now enable you
to keep adequate stocks of our bidis. Awaiting your esteemed orders. "
This is an acceptance of the interpretation of the " guarantee period
" as given by the Canteen Stores in their letter of 31st July, 1951. The
words "now" and "adequate" relate to the dispute which
started on 24th April, 1951, when Moolji Sicka & Company complained that
the Canteen Stores were not keeping adequate.stocks of their bidis in their
depots. The ,subsequent correspondence was aimed at finding out ways and means
to meet this objection and at the same time satisfy both sides. It all ended by
Moolji Sicka & Company accepting the terms set out in the letter of 31st
July, 1951. We are accordingly of opinion, that Moolji Sick& & Company
accepted- the " Consignment System " on 9th August, 1951. That
imported a "pay as we sell" arrangement with an obligation to take
back stocks unsold within six months and replace them with fresh stocks which
would be paid for when sold. in the "transition period " the Direct
Supply System was also to continue. That meant that there would be two systems
in force for a time in certain depots: the "Consignment 830 System "
regarding stocks ordered for the stocking up of the Calcutta, Bombay and Delhi
depots of the Canteen Stores and the " Direct Supply System " till such
time as the depots were stocked. The third system of " Outright Purchase
" was limited for the time being to the Pathankot and Srinagar depots.
Both the "Direct Supply" and the
"Consignment" systems were abolished together on list November, 1951
(see the Canteen Stores' letter dated 24th November, 1951). But the obligation
to take back unsold stocks within the six months' period continued to attach to
all contracts for consignment to the Calcutta, Bombay and Delhi depots made
between 9th August, 1951, and 31st October, 1951. The tabular statement shows
that the following contracts for consignment to one or other of these three
depots were made during that period.
The date of the invoice is the date of the
execution of the order and thus of the acceptance of the proposal contained in
the order.
Date of Invoice Depot Price of goodsd date
& despatch supplied payment.
1-10-1951 Bombay. Rs. 5,056-2-0 15-11-1951
13-10-1951 do. 13,536-4,-6 do 18-10-1951 Delhi 1,684-13-919-12-1951 19-10-1951
Calcutta 3,373- 9-3 do 18-10-1951 Bombay 4,793- 4-924-12-1951 The value of
these orders comes to Rs. 28,444-2-3. The obligations under these several
contracts continued from 1st April, 1952 to 18th April, 1952.
It was argued that assuming that to be the
case then there were no longer any contracts for the "supply of
goods" in existence but only an obligation arising under the guarantee
clause. We are unable to accept such a narrow construction.
This term of the contract, whatever the
parties may have chosen to call it, was a term in a contract for the supply of
goods. When a contract consists of a number of terms and conditions, each
condition does not form a separate contract but is an item in the one contract
of which it is a part.
The consideration for each 831 condition in a
case like this is the consideration for the contract taken as a whole. It is
not split up into several considerations apportioned between each term
separately.
But quite apart from that, the obligation,
even under this term, was to supply fresh stocks for these three depots in
exchange for the stocks which were returned and so even when regarded from that
narrow angle it would be a contract for the supply of goods. It is true they
are replacements but a contract to replace goods is still one for the supply of
the goods which are sent as replacements.
But even if all that be disregarded and it be
assumed that Moolji Sicka & Company had fully performed their part of the
contract by placing the goods on rails before 15th November, 1951, we are of
opinion that the contracts were not at an end until the vendors were paid and
the contracts were fully discharged. The words of the sections are
"if...... he has any share or interest in a contract for the supply of
goods to......... the appropriate Government." There can be no doubt that
these various transactions were contracts and there can equally be no doubt
that they were contracts for the supply of the goods. Whether they were
contracts for the supply of goods to the Government is a matter which we shall
deal with presently. But we have no doubt that they were contracts for the
supply of goods. The question then is, does a contract for the supply of goods
terminate when the goods are supplied or does it continue in being till payment
is made and the contract is fully discharged by performance on both sides 9 We
are of opinion that it continues in being till it is fully discharged by
performance on both sides.
It was contended, on the strength. of certain
observations in some English cases, that the moment a contract is fully executed
on one side and all that remains is to receive payment from the other, then the
contract terminates and a new relationship of debtor and creditor takes its
place.
With the utmost respect we are unable to
agree. There is always a possibility of the liability being disputed before
actual payment is made and the vendor may 832 have to bring an action to
establish his claim to payment.
The existence of the debt depends on the
contract and cannot be established without showing that payment was a term of
the contract. It is true the contractor might abandon the contract and sue on
quantum merit but if the other side contested and relied on the terms of the
contract, the decision would have to rest on that basis. In any case, as we are
not bound by the dicta and authority of those cases, even assuming they go that
far, we prefer to hold that a contract continues in being till it is fully
discharged by both sides: see the observations of Gibson J. in O'Carroll v.
Hasting8(1). To use the language of O'Brien L.C.J. in that case at page 599,
these contracts have not been "merged, abandoned, rescinded, extinguished
or satisfied;
and if any demur was made as to payment
before payment was actually made, he could have sued upon the contract
specially; or if he sued for work done at the request of the defendants the
contract would have been. a -part of his necessary proofs" We agree with
the learned Lord Chief Justice in thinking that "it is far-fetched to
contend that a man is not concerned in the contract or security by which he can
enforce payment." The same view was taken, by Costello J. in an Indian
case in Satyendrakumar Das v. Chairman of the Municipal Commissioners8 of
Dacca(2).
Counsel for the appellant relied strongly on
certain English cases. They were all examined and distinguished in the above
decisions. They either turned on special facts or on the words of a statute
which are not the same as ours. The leading case appears to be Royse v.
Birley(3 ). But the decision-turned on the language of the English statute
which the learned Judges construed to mean that the contract must be executory
on the contractor's part before the English Act can apply. Tranton v. Astor(4)
follows the earlier ruling.
The statute with which Darling J. was dealing
(1) (1905) 2 I.R. 590 at 608.
(2) I.L.R. 58 Cal. 180 from p. 193 onwards.
(3) L.R. 4 C.P 296.
(4) 33 T.L.R. 383.
833 in Cox v. Truscott(1) is nearer the
language of our Act. He hesitatingly proceeded on the debtor and creditor
basis. We need not go further than this because, as we have said, if these
decisions cannot be distinguished, then we must with respect differ. We hold
therefore that these contracts which Moolji Sicka & Company had entered
into with the Government subsisted on 15th November, 1951, and on 14th
February, 1952, and that as Chatturbhuj Jasani, the appellant, was a partner in
the firm he also had both a share and an interest in them on the crucial dates.
That brings us to article 299 (1) of the
Constitution. It states:- "All contracts made in the exercise of the
executive power of the Union or of a State shall be expressed to be made by the
President ... and all such contracts... made in the exercise of that power
shall be executed on behalf of the President ... by such persons and in such
manner as he may direct or authorise." The contention was that as these
contracts were not expressed to be made by the President they are void. Cages
were cited tons under the Government of India Acts of 1919 and 1935. Certain
sections in these Acts were said to be similar to article 299. We do not think
that they are, but in any case the rulings ,under section 30 (2) of the
Government of India Act, 1915, as amended by the Government of India Act of
1919 disclose a difference of opinion.
Thus, Krihsnaji Nilkant v. Secrtary of
State(2) ruled that contracts with the Secretary of State must be by a deed
executed on behalf of the Secretary of State for India and in his name. They
cannot be made by correspondence or orally. Secretary of State v. Bhagwandas(3)
and Devi Prasad Sri Krihhna Prasad Ltd. v. Secretary of State(1) held they
could be made by correspondence. Secretary of State V. O.T.
Sarin & Company(1) took an intermediate
vie,* and held that though contracts in the prescribed form could not be
enforced by either side, (1) 21 T.L.R. 319. (4) A.I.R. 1941 All. 377.
(2) A.I.R. 1937 Bom. 449,451. (5) I.L.R. 11
Lah. 375.
(3) A.I.R. 1938 Bom. 168.
108 834 a claim for compensation under
section 70 of the Indian Contract Act would lie. Province of Bengal v. S. L.
Puri(1) took a strict view and held that even letters headed "Government
of India" did not comply with, the rule in section 175 (3) of the
Government of India Act, 1935.
The Federal Court was called upon to construe
section 40 (1) of the Ninth Schedule of the Government of India Act, 1935.
It held that the directions in it were only
directory and not mandatory, and the same view was taken of article 166 (1) of
the present Constitution by this court in Dattatreya Moreshwar Pangarkar v.
State of Bombay(2).
None of these provisions is quite the same as
article 299.
For example, -in article 166, as also in
section 40(1) of the Government of India Act of 1935, there is a clause which
says that "orders" and "instruments" and "other
proceedings" "Made" and "expressed" in the name of the
Governor or Governor-General in Council and "authenticated" in the
manner prescribed shall not be, called in question on the ground that it is not
an "order" or "instrument" etc.
'made" or "executed" by the
Governor or Governor-General in Council. It was held that the provisions had to
be read as a whole and when that was done it became evident that the intention
of the legislature and the Constitution was to dispense with proof of the due
"making" and "execution" when the form prescribed was
followed but not to invalidate orders and instruments otherwise valid. Article
299(1) does not contain a similar clause, so we are unable to apply the same
reasoning here.
In our opinion, this is a type of contract to
which section 236(3) of the Indian Contract Act would apply. This view obviates
the inconvenience and injustice to innocent persons which the Federal Court
felt in J. K. Gas Plant Manufacturing Co., Ltd. v. The King. Emperor (3)and at
the same time protects Government. We feel that some reasonable meaning must
(1) 51 C.W.N. 753.
(2) [1952] S.C.R. 612 at 632, 633.
(3) [1947] F.C.R. 141 at 156, 157, 835 be
attached to article 299(1). We do not think the provisions were inserted for
the sake of mere form. We feel they are there to safeguard Government against
unauthorised contracts. If in fact a contract is unauthorised or in excess of
authority it is right that Government should be safeguarded. On the other hand,
an officer entering into a contract on behalf of Government can always safeguard
himself by having recourse to the proper form. In between is a large class of
contracts, probably by far the greatest in numbers, which, though authorised,
are for one reason or other not in proper form. It is only right that an
innocent contracting party should not suffer because of this and if there is no
other defect or objection we have no doubt Government will always accept the
responsibility. If not, its interests are safeguarded as we think the
Constitution intended that they should be.
In the present case, there can be no doubt
that the Chairman of the Board of Administration acted on behalf of the Union
Government and his authority to contract in that capacity was not questioned.
There can equally be no doubt that both sides acted in the belief and on the
assumption, which was also the fact, that the goods were intended for
Government purposes, namely, amenities for the troops. The only flaw is that
the contracts were not in proper form and so, because of this purely technical
defect, the principal could not have been sued. But that is just the kind of
case that section 230(3) of the Indian Contract Act is designed to meet. It
would, in our opinion, be disastrous to hold that the hundreds of Government
officers who have daily to enter into a variety of contracts, often of a petty
nature, and sometimes in an emergency, cannot contract orally or through
correspondence and that every petty contract must be effect- ed by a ponderous
legal document couched in a particular form. it may be that Government will not
be bound by the contract in that case, but that -is a very different thing from
saying that the contracts as such are void and of no effect. It only means
"that the principal cannot be sued-;
but we take it there would 836 be nothing to
prevent ratification, especially if that was for the benefit of Government.
There is authority for the view that when a Government officer acts in excess
of authority Government is bound if it ratifies the excess: see The Collector
of Masulipatam v. Cavaly Venkata Narrainapah(1). We accordingly hold that the
contracts in question here are not void simply because the Union Government
could not have been used on them by reason of article 299(1).
Now section 7(d) of the Representation of the
People Act does not require that the contracts at which it strikes should be
enforceable against the Government; all it requires. is that the contracts
should be for the supply of goods to the Government. The contracts in question
are just that and so are hit by the section.
The purpose of the Act is to maintain the
purity of the legislatures and to avoid a conflict between duty and interest.
It is obvious that the temptation to place interest before duty is just as
great when there is likely to be some difficulty in recovering the money from
Government (for example, if Government were to choose not to ratify the
contracts) as when there is none.
In our opinion, the Election Tribunal
was-right in disqualifying Chatturbhuj Jasani.
We now turn to Gangaram Thaware. He stood as
a Scheduled Caste candidate and his nomination was rejected on the ground that
he did not belong to the Scheduled Caste in question, namely the Mahars.
The only question here is whether he ceased
to be a Mahar when he joined the Mahanubhava Panth. This gave rise to much
controversy and we have been presented with many conflicting opinions. Thus,
the Imperial Gazetteer of India, Voluime XXI, page 3012 states that the founder
of the sect repudiated the caste system as also a multiplicity of God7f3 and
insisted on the monotheistic principle. At the same time it ,says that he
taught his disciples to eat with none but (1) 8 M.I.A. 529 at 554.
837 the initiated and to break off all former
ties of caste and religion. Russell in Volume IV of his Tribes and Castes of
the Central Provinces says that the Manbhaos (Mahanubhau) is a religious
sect,or order which has " now" (1911) become a caste. The Central
Provinces Ethnographic Survey, Volume IX, says the same thing at page 107 and
at page 110 and adds that members of the sect often act as priests or gurus to
the Mahars.
As against this, the Election Tribunal has
quoted a number of opinions which tend the other way. Thus, V. B. Kolte says at
page 247 of his Shri Chandradhar Charitra that no serious attempt has been made
by them to abolish caste, and Ketkar says at page 76, Volume XVIII of the 1926
edition of his Maharashtriya Dhnyankosh that there are two divisions among the
Mahanubhavas, one of Sanyasig who renounce the world and the other a secular
one. The latter observe the caste system and follow the rituals of their own
caste and carry on social contacts with their caste people and marry among
them. Similar views are expressed by Bal Krishna Mohanubhav Shastri. But we are
not really concerned 'with their theology. What we have to determine are the
social and political consequences of such conversions and that, we feel, must
be decided in a common sense practical way rather than on theoretical and
theocratic grounds.
Conversion brings many complexities in its
train, for it imports a complex composite composed of 'many ingredients.
Religious beliefs, spiritual experience and
emotion and intellectual conviction mingle with more material considerations
such as severance of family and social ties and the casting off or retention of
old customs and observances. The exact proportions of the mixture vary from
person to person. At one extreme there is bigoted fanaticism bitterly hostile
towards the old order and at the other an easy going laxness and tolerance
which makes the conversion only nominal. There is no clear out dividing line
and it is not a matter which can be viewed from only one angle.
838 Looked at from the secular point of view,
there are three factors which have to be considered: (1) the reactions of the
old body, (2) the intentions of the individual himself and (3) the rules of the
new order. If the old order is tolerant of the new faith and sees no reason to
outcaste or ex-communicate the convert and the individual himself desires and
intends to retain his old social and political ties, the conversion is only
nominal for all practical purposes and when we have to consider the legal and
political rights of the old body the views of the new faith hardly matter. The
new body is free to ostracise and outcaste the convert from its fold if he does
not adhere to its tenets, but it can hardly claim the right to interfere in
matters, which concern the political rights of the old body when neither the
dld body nor the convert is seeking either legal or political favours from the
new as opposed to purely spiritual advantage. On the other hand, if the convert
has shown by his conduct and dealings that his break from the old order is so
complete and final that he no longer regards himself as a member of the old
body and there is no reconversion and re-admittance to the old fold, it would
be wrong to hold that he can nevertheless claim temporal privileges and
political advantages which are special to the old order.
In our opinion, broadly speaking, the
principles laid down by the Privy Council in the case of a Hindu convert to
Christianity apply here: not, of course, the details of the decision but the
broad underlying principle. In Abraham v.
Abraham(1), their Lordships say:- " He
" (the convert) " may renounce the old law by which he was bound, as
he has renounced his old religion, or, if -he thinks fit, he may abide by the
old law, notwithstanding he has renounced the old religion. " The only
modification here is that it is not only his choice which must be taken into
account but also the views of the body whose religious tenets he has (1) 9
M.I.A. 199 at 242, 243, and 244.
839 renounced, because here the right we are
considering is the right of the old body, the right conferred on it as a
special privilege to send a member of its own fold to Parliament. But with that
modification the observations which follow. apply in their broad outline.
"The profession of Christianity releases
the convert from the trammels of the Hindu law, but it does not of necessity
involve any change of the rights or relations of the' convert in matters with
which Christianity has no concern, such as his rights and interests in, and his
powers over, property. The convert, though not bound as to such matters, either
by the Hindu law or by any other positive law, may by his course of conduct
after his conversion have shown by what law he intended to be governed as to
these matters. He may have done so either by attaching himself to a class which
as to these matters has adopted and acted. upon some particular law, or by
having himself observed some family usage or custom; and nothing can surely be
more just than that the rights and interests in his property, and his powers
over it, should be governed by the law which-he has adopted, or the rules which
he has observed. " Now what are the facts here ? Whatever the views of the
founder of this sect may have been about caste, it is evident that there has
been no rigid adherence to them among his followers in later years. They have
either changed their views or have not been able to keep a tight enough control
over converts who join them and yet choose to retain their old caste customs
and ties. We need not determine whether the Mahanubhava tenets encourage a
repudiation of caste only as a desirable ideal or make it a fundamental of the
faith because it is evident that present-day Mahanubhavas admit to their fold
persons who elect to retain their old caste customs. That makes it easy for the
old caste to regard the converts as one of themselves despite the conversion
which for all practical purposes is only ideological and involves no change of
status.
840 Now no witness has spoken of any out casting,
neither out casting in general nor in this special case. No single instance has
been produced in which any person who has joined this sect from the Mahar
community has ever been out casted from the Mahars for that reason; and as the
sect is said to be over 1000 years old, there has been time enough for such
instances to accumulate. Further, no instance has been produced of a
Mahanubhava marrying outside his or her old caste whereas there are instances
of Mahanubhavas who have married non-Mahanubhavas belonging to their own caste.
Nene (P. W. 1), Sadasheo (P. W. 3), Sitaram
(P. W. 4) and Haridas (P. W. 5) say that a Mahar 'convert does not lose his
caste on conversion. He is admitted to all caste functions and can marry in the
community. Of these, Sadasheo (P. W. 3) and Haridas (P. W. 5) are Mahars.
There is no evidence to rebut this. The
witnesses on the other side take refuge in theory and, when confronted with
actual facts, evade the issue by saying that Mahanubhavas who do these things
are not real Mahanubhavas. Harendra (R. W. 1) is a Mahanubhava Guru and so
ought to know, but he affects an otherworldly indifference-to mundane affairs
and says that as he does not lead a worldly life he does not know whether
converts retain their caste distinctions and whether there are inter-dinings
and inter-marriages in the Mahanubhava fold itself among those who belonged to
different castes before conversion.
Shankar (R. W. 2) says that a convert loses
his caste on conversion but gives no instance of ostracism from the old fold.
In any case, his evidence is confined to the sanyasi order among the
Mahanubhavas because he says that every person who becomes a convert to this
sect must renounce the world and cannot marry. When pinned down in cross-examination
he had to admit that he did know two or three Mahanubhavas who were leading a
worldly life but he meets that by saying that they are not real Mahanubhavas.
Chudaman (R. W. 3) evades the issue in the
same way. He is a Mahanubhava Pujari and so is 841 another person who ought to
have special knowledge. Despite that he says he cannot give a single instance
of a person belonging to one caste, initiated into the Mahanubhava sect,
marrying a person of another caste initiated into the same Panth. When further
pressed he said the question did not arise as a man lost his caste on
conversion.
On this evidence, and after considering the historical
material placed before us, we conclude that conversion to this sect imports
little beyond an intellectual acceptance of certain ideological tenets and does
not alter the convert's caste status, at any rate,, so far as the householder
section of the Panth is concerned.
So much for the caste consciousness on both
sides. Now considering Gangaram Thaware the individual we find that he was
twice married and on both occasions to Mahar girls who were not Mahanubhavas at
the time of their respective marriages. His first wife was never converted. His
second wife was converted after her marriage. The witnesses say' he was still
regarded as a Mahar after his conversion and always looked upon himself as a
Mahar and identified himself with the caste. No one on the other side denies
this. As we have shown, they took shelter behind generalities and evaded the
issue by saying that in that case he cannot be a real Mahanubhava. If he was
not, then he must have continued a Mahar even on their view.
The evidence also discloses that Gangaram
Thaware led Mahar agitations and processions as a member and leader of the
Mahar caste. In 1936 he contested the election for the Provincial Assembly as a
Mahar candidate. No one appears to have questioned his competency. And lastly,
he declared himself to be a Mahar in the verification to his nomination form in
the present election as also in an affidavit filed before the Returning Officer
who rejected his nomination.
The 'Returning Officer described that as a
"cleverly, worded document. " We have read it and find nothing tricky
or crooked in it., Therefore, applying the test in Abraham v. Abraham(1), we
hold that despite his (1) 9 M.I.A. 199. 199. 109 842 conversion he continued to
be a Mahar and so his nomination form was wrongly rejected. That affects the
whole election.
The other points argued before the Election
Tribunal were not pressed before us. We therefore uphold the decision of the
Tribunal and dismiss the appeal with costs.
Appeal dismissed.
Agent for the appellant: I. N. Shroff.
Agent for the respondent: Ganpat Rai.
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