N. Satyanathan Vs. K. Subramanyan
& Ors  INSC 22 (29 March 1955)
SINHA, BHUVNESHWAR P.
BOSE, VIVIAN JAGANNADHADAS, B.
CITATION: 1955 AIR 459 1955 SCR (2) 83
Representation of the People Act, 1951 (Act
XLIII of 1951), s. 7(4)-Appellant entered into agreement with Central
Government for conveying postal articles and mail bags through Motor Vehicle
Se?-vice on certain remuneration Appellant whether disqualified for election to
the House of People under s. 7(d) of the Act.
The question for determination in this appeal
was whether the appellant was disqualified under s. 7(d) of the Representation
of the People Act, 1951 for election to the House of the People.
The material portion of s. 7(d) of the Act
reads as follows:
"A person shall be disqualified for
being chosen as and for being, a member of either House of
(b) if, whether by himself or by any person
or body of persons in trust for him or for his benefit or on his account, he
has any share or interest in a contract for............ the performance of any
service undertaken by the appropriate Government".
The appellant (a contractor) had entered into
an agreement with the Central Government. The relevant portion of the said
agreement was as follows:"The contractor has offered to contract with the
Governor General for the provision of a Motor Vehicle Service for the transit
conveyance of all postal articles and mail bags from December 15, 1949 to
December 14, 1952 and the Governor General has accepted the offer.
"The Government agrees to pay to the
contractor Rs. 200 per month during the subsistence of the agreement 'as his
remuneration for service to be rendered by him' ".
Held that on the face of it the agreement was
between two competent parties with their free consent, and there was a lawful
cash consideration for it. The Appellant entered into the agreement with his
eyes open knowing full well his rights and liabilities under the same.
84 The case was a straightforward
illustration of the kind of contract contemplated by s. 7(d) of the Act. At all
material times the appellant had been directly concerned, for his own benefit,
in the contract of carrying mail bags and postal articles entered into by him
with the Government in the Postal Department.
Section 7 of the Act is clearly intended to
avoid a conflict between public duty and private interests.
CIVIL APPELLATE JURISDICTION: Civil Appeal
No. 252 of 1954.
Appeal by Special Leave from the Judgment and
Order dated the 22nd January 1953 of the Election Tribunal, Vellore in Election
Petition No. 35 of 1952.
N.C. Chatterjee (A. N. Sinha and N. H.
Hingorani, with him), for the appellant.
C. V. L. Narayan, for respondent No. 1.
1955. March 29. The Judgment of the Court was
delivered by SINHA. J.-The only question for determination in this appeal by
special leave is whether the appellant is disqualified-under section 7(d) of
the Representation of the People Act, 1951 (hereinafter called the Act) for
election to the House of the People, as held by the Election Tribunal, North
Arcot, Vellore, by its orders dated the 20th January, 1953 in Election Petition
No. 35 of 1952.
The facts of this case are not in dispute and
lie within a narrow compass. The appellant and respondents I to 3 contested the
last general elections from the Dharmapuri Parliamentary Constituency in the
district of Salem in the State of Madras. Respondents 4 to 10 who were added
subsequently by an order of the Tribunal were also candidates for election. Their
nominations also had been held to be valid but they ultimately withdrew their
candidature before the polling took place. The appellant was in due course
declared to have been elected to the House of the People. Thereafter, on the
5th March, 1952 the 1st respondent filed an election petition before the
Election Commission contesting the appellant's election 85 on the ground that
the appellant was disqualified under section 7(d) of the Act as, from the date
of his nomination and until the date of election and after, the appellant had a
contract with the Government of India in the Postal Department for the
transport of postal mail which was a service undertaken by the Government of
India. At this stage it is necessary to state that it is admitted that the appellant
is and has been the holder of a stage carriage service permit (Ex. B-2) dated
the 26th April 1949, issued by the Regional Transport Authority, Salem, Madras.
It was one of the conditions of the said permit that if called upon the
appellant will enter into an agreement with the Government of India for the
transport of postal articles and mail bags. In pursuance of that obligation the
appellant entered into a registered agreement with the Government of India on
the 16th November 1949 (Ex. A-3) to be noticed in detail hereinafter. After the
appellant had filed his nomination paper, the 1st respondent by his petition
dated the 28th November 1951 raised the objection to the effect that his
nomination should be rejected on the ground that he had entered into a contract
with the Government of India for his own benefit for the transport of mail
between Salem and Yercaud. The Returning Officer for the Dharmapuri
Parliamentary Constituency, Salem, by his orders (Ex. A-2) of the same date
overruled the objection holding that the service rendered by the appellant of
carrying mail is not under an agreement but on an imperative order of the
Government under Rule 160-B of the Madras Motor Vehicles Rules. Apparently the
registered agreement (Ex. A-3) had not been placed before him.
To the election petition filed by the 1st
respondent the appellant filed his written statement on the 28th May 1952
denying that he was disqualified for election as a member of Parliament by
virtue of the provisions of section 7(d) of the Act. His contention was that
"it is the exclusive privilege of the Government of India to convey all
postal articles from one place to another and it is a normal function of the
Government statutorily reserved to itself.
There is no justification to regard the
carrying of mails from one place to another as the performance of any service
undertaken by the Government". It was further averred on behalf of the
appellant that it was not justifiable to regard him as having any interest in a
contract for the performance of any service undertaken by the appropriate
Government within the mischief of section 7(d) of the Act; and that he had been
only carrying out the obligations imposed upon him by Rule 160-B of the rules
framed under the Motor Vehicles Act. It was also contended that under article
103 of the Constitution of India the question as to the disqualification of a
member has to be decided by the President whose decision shall be final.
On those pleadings the following issues were
framed by the Election Tribunal:1.Is the nomination of the 1st respt. invalid
because of the prohibition contained in section 7(d) of the Representation of
the People Act, 1951, or for any of the reasons set forth in paras. 9 to 11 of
the petition? 2.Has this Tribunal no jurisdiction to decide the question as
regards the disqualification of the returned candidate, because of article 103
of the Constitution of India? It is not necessary to refer to the additional
issue bearing on the question of limitation arising from an interlocutory
application for impleading those candidates (respondents 4 to 10) whose
nomination had been accepted but who had withdrawn from the contest. Both these
issues were decided against the appellant. The Tribunal on a very elaborate
discussion of the points raised before it, held that the postal service
including the transport of mails is a service undertaken by the Central
Government within the meaning of section 7(d); that at the date of the
nomination the appellant was a contractor under the Central Government;
that the agreement between the Government and
the appellant involved mutual obligations which could not be referable to a
bare statutory duty on the part of the appellant but that it was the result 'of
mutual assent based upon a free 87 offer and acceptance; and that the agreement
was supported by valid consideration. The Tribunal also held that article 103
of the Constitution was not a bar to its jurisdiction to decide, the
controversy. Accordingly it allowed the election petition and held the
appellant's election to be void in terms of section 100(1)(c) of the Act, with
costs to the respondent. Hence this appeal.
In this appeal the contentions raised before
the Election Tribunal, except the objection to the Tribunal's jurisdiction in
view of the provisions of article 103 of the Constitution, have been pressed
before us by the learned counsel for the appellant. It is manifest that the
determination of this case must depend upon the true construction and legal
effect of the agreement (Ex. A-3) admittedly entered into by the appellant with
the Central Government. It is therefore necessary to set out in some detail the
relevant clauses of the agreement. The appellant (called the
"contractor") is of the one part and the Governor-General of India of
the other. The preamble says-"Whereas the said contractor Sri. N.
Sathianathan has offered to contract with Governor-General for the provision of
a Motor Vehicle Service for the transit conveyance and delivery of all postal
articles and mail bags as defined in the Indian Post Office Act, 1898, as
amended from time to time,................ from the 15th day of December 1949
to the 14th day of December 1952 and the Governor-General has accepted such
offer upon the terms and Conditions hereinafter appearing..............
Now this indenture witnesseth that the
contractor in pursuance of the said agreement and in consideration of the
premises and of the payments hereinafter agreed to be made to
It is hereby mutually agreed and declared between
and by the parties hereto as follows:1.Contract to carry:-The contractor shall
during the continuance of this contract, that is to say, from the 15th day of
December 1949 until the 14th day of December 1952 or until the said contract
shall be determined by such notice as is hereinafter mentioned or otherwise in
(hereinafter referred to as the said contract period) duly and safely
convey............ by means of motor vehicles of good and reliable manufacture
all postal articles and mail bags................." By clause 4 the
contractor is permitted to carry passengers and their luggage by bus provided
there is accommodation available and provided that the mail service is not
prejudiced in any way. By clauses 5 and 6 the contractor is required to
-maintain in good order and repair a number of motor buses and their spare
parts at his own expense and to bear all municipal and other taxes payable in
respect of the motor vehicles. Clause 7 contains the schedule of penalties in
the event of non-completion of any journey or of delay in completion thereof in
accordance with the time table, etc.
By clause 8 the contractor is made absolutely
liable and responsible for the due and safe custody and delivery in good order
and condition of postal articles and mail bags.
By clause 10 non gazetted postal and
telegraph officers travelling on duty on the route allotted to the appellant
are declared to be entitled to travel free of all charges and such official
passengers shall have precedence over ordinary passengers. Clause 13 provides
that the contract shall not be transferred by the contractor to any person or
company without the previous consent in writing of the Director-General of
Posts & Telegraphs. By clause 15 the Government agrees to pay to the contractor
Rs. 200 per month during the subsistence of the agreement "as his
remuneration for service to be rendered by him hereunder"'. This monthly
sum of Rs. 200 is liable to be increased or decreased proportionately to the
increase or decrease in the mileage to be covered. Clause 18 is in these terms:"In
the event of the contractor failing to secure a renewal of the permit on the
line this contract will automatically terminate on the date up to which the old
permit shall be valid and in such case no compensation shall be payable to
either party for such termination. This contract may be absolutely determined
and put an end to by either of the contracting 89 parties giving four calendar
months notice in writing to the other of his intention so to determine and put
an end to the same".
Clause 21 contains the usual arbitration
clause to the effect that all disputes and differences arising out of or in any
wise touching or concerning the agreement shall be referred to the sole
arbitration of the Director-General of Posts and Telegraphs or his nominee. It
is also provided that the award of the arbitrator shall be final and binding on
It will be observed that the agreement set
out above is a formally drawn up document which satisfies all the requirements of
a contract. It is not the appellant's case that the contract has been vitiated
by undue influence, fraud or such other cause. But it has been argued that it
was a necessary sequel to the stage carriage permit granted by the Transport
Authority under the Motor Vehicles Act read along with the relevant rules. In
this connection reference was made to rule 160-B of the Madras Motor Vehicles
Rules which is as follows:"It shall be a condition of every stage carriage
permit that the holder of the permit shall, if so required by the transport
authority which granted the permit, carry mails at such rates and on such terms
as the transport authority may fix after consultation with the holder of the
permit and the postal authorities concerned".
The rule quoted above has apparently been
made under the authority of section 48(d) of the Motor Vehicles Act. It is
common ground that the agreement aforesaid between the appellant and the
Central Government is in pursuance of rule 160-B aforesaid; but it has been
argued on behalf of the appellant that though the agreement aforesaid has the
"semblance of a contract", it is lacking in the "essential
ingredients of a free consensus of acceptance and offer".
This argument is based on the further
contention that the appellant has been carrying mail on his buses in
performance of a statutory obligation which cannot come within the mischief of
12 90 section 7(d) of the Representation of the People Act, 1951.
The material portion of the section is in
these terms:"A person shall be disqualified for being chosen as, and for
being, a member of either House of Parliament............................
(b)if, whether by himself or by any person or
body of persons in trust for him or for his benefit or on his account, he has
any share or interest in a contract for.................................... the
performance of any services undertaken by the appropriate Government".
It has further been argued alternatively that
if the agreement has the force of a contract, it is totally lacking in
consideration because the monetary consideration provided for in the agreement
is no more than the subsidy already fixed by the Regional Transport Officer by
his orders dated the 23rd July, 1949; that the agreement in question being with
a third party, namely, the Governor-General, to render service which was
already due to another party, namely, the Transport Authority for the same
consideration cannot amount to a valid contract supported by consideration; and
finally, that the transport of mail is not a "service undertaken by the
In our opinion, there is no substance in any
one of these contentions. It is true that the appellant entered into the
contract aforesaid with the Central Government for the transport of postal
articles and mail bags on the 16th November, 1949. From before that date be had
been carrying on the business of plying buses on the route allotted to him by
the Regional Transport Authority. But he entered into the contract with his
eyes open and knowing full well his rights and liabilities under the same. No
one is compelled to carry on the business of stage carriage service or for the
matter of that, of transporting postal articles and mail bags. In terms of the
permit, it is open to the Government to call upon a permit holder to-undertake
the additional burden of carrying postal articles and mail bags which carries
with it the additional remuneration to be fixed by the Transport Authority
after consultation with the postal authorities and the carrier. It is not every
stage carriage permit holder who is called upon to do so. At the time the
appellant entered into the contract with the, Government in the postal
department he may not have had any idea of standing for election to the House
of the People when in future the general elections came to be held. If he
wished to steer clear of the difficulty created by section 7 of the Act, he
could have given due notice to Government under clause 18 of the contract
referred to above. On the expiry of the term of the notice he would have been
free to stand for election to a State or Central Legislature. Section 7 of the
Act is clearly intended to. avoid a conflict between public duty and private
The Tribunal discussed a number of
authorities with reference to the English and the American Law of Contract for
arriving at the conclusion that the agreement between the appellant and the
Government of India in the Postal Department had all the ingredients of a valid
contract. The Tribunal need not have travelled so far afield, especially when
the provisions of the Indian Con tract Act which govern the case are sufficient
to answer all the contentions raised on behalf of the appellant. On the face of
the transaction the agreement was between two competent parties with their free
consent. There was no question -but that there was lawful consideration, The
permit for the stage carriage had been granted by, the authority under the
Motor Vehicles Act;
and the agreement for transport of postal
articles and mail bags was between the Government of India in the Postal
Department and the appellant for a cash consideration.
But it was argued that the agreement was in
pursuance of a pre-existing obligation imposed by the rule aforesaid framed
under the Motor Vehicles Act. It is true that the permit does contain a
condition that the permit-holder may be called upon to undertake transport of
mail bags and postal articles but that is only a notice to intending applicants
for a stage carriage permit that the grantee of such a permit may have to
render that additional service for an 92 additional remuneration if called upon
to do so by the authorities of the Postal Department. If anyone was not
prepared to undertake that additional responsibility, he was free not to make
an application for such a permit; but that does not mean that the agreement
actually entered into between the Postal Department and the permit holder is
not an independent contract governed by its own special terms.
As indicated above, clause 18 has reserved
the right to either party to terminate the contract on giving four months'
notice. The appellant must be presumed to have known that the agreement that he
had entered into with the Postal Department will stand in the way of his
running as a candidate for election to the Central or the State Legislature.
There was nothing to prevent him from giving the necessary notice to the
department and thus terminate his agreement so as to be free to stand as a
candidate for election to the legislature. Section 7 of the Act is intended to
ensure that there is no occasion for a conflict between public duty and private
interests. The appellant had a clear and free choice before him. If he was
anxious to serve the community as a member of the Central Legislature, he had
to give up his private gains in the shape of the remuneration for carrying
postal articles and mail bags in his buses. It may be that on his terminating
the agreement with the postal department he would have to give up his stage
carriage permit also but not necessarily so. If on the same route a number of
bus services are permitted to different parties, the Postal Department may
choose any one of them to enter into the agreement for the carriage of mail
bags and postal articles. But even if there was only one service for the route
in respect of which the appellant held the stage carriage permit, if he had to
give up his permit, some other party would take his place for running the bus
service and carrying the postal articles and mail bags.
It was further argued that the appellant had
no hand in the fixing of the remuneration to be paid by the Postal Department
for carrying its mails, etc. But it is clear, by a reference to the terms of
the rule 93 quoted above, that the amount of the remuneration had to be fixed
by the department after consultation with the carrier.
It was always open to the latter to demur to
the terms proposed by the department and if he found that the department was
not prepared to accept his terms he was not bound to enter into the agreement.
The fact that he had agreed to carry postal articles and mail bags was possibly
an additional qualification for him to obtain a renewal of his permit and thus
gave him an advantage over his competitors. Hence instead of being an
additional burden or a handicap to him, it was an additional advantage to him
in the matter of getting a renewal of his permit in preference to others. The
agreement was therefore based on mutual promises, by the appellant to carry the
mail bags, etc., and by the Postal Department to pay him suitable remuneration
for the services thus rendered.
It was further contended on behalf of the
appellant that the Central Government could not be said to have 'undertaken'
any 'service' within the meaning of section 7(d) of the Act when it made arrangements
for the carriage of mail bags and postal articles through the appellant.' It
has not been and cannot be contended that the Government is bound in the
discharge of its duties as a sovereign state to make provision for postal mail
service. The provisions of the Indian Post Office Act, VI of 1898, are only
enabling in the sense that they authorize the State agency to have the
exclusive privilege of conveying letters, etc. for the convenience of the
public and for the benefit of the Government, without making it obligatory upon
it to provide every individual and every place with those facilities. It may be
that those facilities are being extended from time to time and are being
brought nearer to every home but that is only evidence of the fact that the State
as a welfare state is anxious to provide for the conveniences of the public in
the matter of communications and correspondence. That is to say, the Government
in the Postal Department has only undertaken a service to be rendered to the
community and that such 94 a service is not an essential function of a
It cannot be gainsaid that the Government in
the Postal Department is rendering a very useful service and that the appellant
has by his contract with the Government undertaken to render that kind of
service on a specified route. The present case is a straightforward
illustration of the kind of contract contemplated by section 7(d) of the Act.
At all material times the appellant has been directly concerned, for his own
benefit, in the contract of carrying mail bags and postal articles entered into
by him with the Government in the Postal Department.
For the reasons aforesaid we have not the
least hesitation in holding that the conclusions arrived at by the Tribunal are
entirely correct. The appeal is accordingly dismissed with costs.