Bhagwan Singh Vs. Rameshwar Prasad
Sastri & Ors  INSC 34 (14 April 1959)
SINHA, BHUVNESHWAR P.
CITATION: 1959 AIR 876 1959 SCR Supl. (2) 535
Election Dispute-Disqualification for
membership-Election to State Legislature-Interest in contracts-Contract entered
into as Mukhiya of Panchayat-Representation of the People Act, 1951 (43 Of
1951), ss. 7(d), 81, 100(1)(a).
The election of the appellant as a member of
the Bihar State Assembly was challenged under s. 7(d) of the Representation of
the People Act, 951, by the first respondent who was also a candidate for
election for the same constituency, on the ground that at the date of the
nomination the appellant had an interest in contracts for execution of works
undertaken by the Bihar Government, and that his nomination had been improperly
accepted. The appellant's plea inter alia was that he had executed the
contracts not in his individual capacity but as the Mukhiya of the Village
Panchayat and therefore the disqualification imposed by s. 7(d) of the Act
could not be invoked against him. The contracts in question related to
community projects undertaken in pursuance of the Second Five Year Plan, under
which the execution of different works adopted under the plan was to be by
popular local agencies like Village Panchayats. The contracts were all in the
prescribed form and the appellant, at the commencement of the contract,
described himself by his name, stating that he belonged to the village. The
preamble to the contract showed that the appellant undertook to carry out the
construction of the development project under local works programme mentioned
in the contract as per estimate attached thereto, that he agreed to execute the
according to and subject to the terms and
conditions contained therein and that he undertook to contribute 50% of the
cost in cash and labour. At the end of the contract he signed as Mukhiya,
giving his address as the Gram Panchayat.
The Election Tribunal found in favour of the
appellant and dismissed the election petition, but, on appeal, the High Court
took the view (1) that the description of the appellant given by him at the
time when he signed the contracts was not a term of the contract and could not
therefore support his plea that he had executed the contract as Mukhiya of the
Panchayat, and (2) that the fact that he undertook liability to execute the
contracts as required and to become liable for payment of any fine imposed by the
local government officer in case of his default showed obligations of a
personal character inconsistent with his plea.
Held, that, on a proper construction of the
contracts taking into account all the terms and conditions as a whole and
considering them in the light of the background of the Second Five Year Plan,
when the appellant signed the contracts as the Mukhiya of the Village Panchayat
he acted as its agent and not as an individual acting in his personal capacity.
CIVIL APPELLATE, JURISDICTION: Civil Appeal
No. 139 of 1959.
Appeal by special leave from the judgment and
order dated January 8, 1959, of the Patna High Court in Election Appeal No. I
of 1958, arising out of the judgment and order dated November 30, 1957, of the
Election Tribunal, Patna, in Election Petition No. 353 of 1957.
B. K. P. Sinha and D. P. Singh, for the
appellant. G. C.
Mathur and Dipak D. Choudhri, for respondent
R. H. Dhebar, for respondent No. 3.
1959. April 14. The Judgment of the Court was
delivered by GAJENDRAGADKAR, J.-This appeal by special leave arises from the'
election petition filed by respondent I (No. 353 of 1957) in which he claimed a
declaration that the election of the appellant as a member of the 537 Bihar
Legislative Assembly Maner Constituency should be declared to be void. In the
last General Election for the said constituency which was held in
February-March 1957, there were three candidates, the appellant, respondent I
and respondent 2. The last date for filing nomination papers at the said election
was January 29, 1957; the 'said papers were scrutinised on February 1, 1957.
Respondent I had challenged the validity of the appellant's nomination paper at
the said scrutiny but the returning officer had overruled the objection raised
by respondent I and had accepted the nomination paper of the appellant along
with 'those of the two other candidates. After the counting of votes was done
on March 3, 1957, the appellant was declared duly elected at the election
inasmuch as he had got 9,826 votes while respondents I and 2 had got 7,526 and
49 votes respectively.
Thereupon respondent I filed his election
petition under s. 81 of the Representation of the People Act, 1951 (hereinafter
called the Act).
In his petition respondent 1 challenged the
election of the appellant on several grounds all of which were controverted by
the appellant. On the allegations of the parties the tribunal had framed
several issues and parties had led evidence on them. At the stage of arguments,
however, only a few issues were pressed by respondent I and all of them were
found against him and in favour of the appellant. In the result the tribunal
dismissed the election petition on November 30, 1957.
Against the said decision of the tribunal
respondent I preferred an appeal in the High Court of Judicature at Patna; and
in his appeal he pressed only issue No. 1. This issue was whether the
nomination of the appellant was hit by the provision of s. 7(d) of the Act and
as such whether the said nomination had been improperly accepted. On this issue
the tribunal had found in favour of the appellant but the High Court reversed
the said finding and accepted the plea of respondent 1. As a result of this
finding the High Court allowed the appeal preferred by respondent I and 68 538
declared on January 8, 1959, that the election of the appellant was void under
s. 100(1)(a) of the Act.
The validity of the appellant's nomination
has been challenged under s. 7(d) of the Act on the ground that at the date of
the nomination he had an interest in a contract for the execution of works
undertaken by the Bihar Government. There is no doubt that if a person is
interested in a contract for the execution of any work undertaken by the
appropriate Government he is disqualified for membership of the State Legislature
in question. The appellant, however, denied that the disqualification imposed
by S. 7(d) could be invoked against him. His case was that the contracts in
question had not been undertaken by the Bihar Government but they bad been
undertaken by the Central Government; and he also urged that he had not taken
the said contracts individually in his personal capacity, but as the Mukhiya of
the Jeorakhan Tola Gram Panchayat. On both these issues the Election Tribunal
and the High Court have differed; and it is the said two issues that arise for
our decision in the present appeal. It is clear that if the appellant succeeds
in showing that he had entered into the impugned contracts not individually but
on behalf of the Panchayat of which he was the Mukhiya it would be unnecessary
to consider whether the works covered by the said contracts had been undertaken
by the Government of Bihar.
Let us therefore first consider that point.
The impugned contracts are five in number.
They were for the execution of works under local development works programme
envisaged under the Second Five Year Plan formulated by the Government of
India. These contracts are evidenced by five documents, Exs. 16-A, B, C, D
& E. The first is for the construction of Beyapore- Jeorakhan Tola Road,
the second for the construction of the Beyapore M. E. School, the third for the
construction of a Dispensary at Jeorakhan Tola, the fourth for the construction
of the Gram Panchayat building, and the last for the construction of a well at
the said village. It is admitted by the appellant that these contracts had not
been completed at the time of his nomination.
539 In considering the appellant's plea that
he had executed these contracts as a Mukhiya of the Village Panchayat of his
village, it would be necessary to bear in mind the background of the scheme in
pursuance of which these works were undertaken. The Second Five Year Plan
published by the Planning Commission in 1956 shows that the programme of'
starting these' works was treated as a part of the cooperative movement and the
Commission had therefore recommended that the States were to sponsor and assist
actively in the Organisation and development of Village Panchayats which was an
important constituent of the programme of fostering corporate life in the rural
areas as it would promote among the rural community active interest in the
development programmes of the villages. The object of this programme which
would operate in areas not yet reached by the National Extension Service was to
enable village communities to undertake works of local benefit mainly with
their own labour. The Commission realised that the resources of all the States
taken together would fall far short of the requirements of this Plan and so it
recommended large transfers of resources from the Centre to the States. In this
connection the conclusion of the Commission was that out of Rs. 200 chores
sanctioned for the year 1957-58, 12 cores would be required for the Centre for
schemes undertaken or directly sponsored by the Community Project
Administration and 180 crores were to form part of the balance for the States.
Thus it is obvious that the basic idea underlying the Plan was to evoke popular
response to the community projects undertaken in pursuance of the Plan and to leave
the execution of different works adopted under the Plan to be fulfilled by
popular local agencies like Village Panchayats.
This policy was emphasised by the Secretary
of the Planning Commission in his communication to all State Governments, No.
PC/Pub/52/53 dated August 11, 1953 (H. 1). This communication set out the seven
categories of work which were most suitable for assistance and it said that the
local contribution in cash or kind or through voluntary labour together 540
with any contribution that the State Government or a local body might make
should be a minimum of 50% of the total cost of each work. The intention was to
spread the benefit over as wide an area and to as many people as possible. The
State Governments were accordingly requested to arrange for a detailed scrutiny
of the schemes before they were accepted and for making adequate provisions
providing for their proper execution. They were also required to nominate a
liaison officer for each district or other suitable unit for the purpose of
checking the execution of the works and for maintenance of such initial
accounts as might be necessary.
This communication makes detailed provisions
about financing and accounting procedures to be followed and required the State
Governments to make progress reports from time to time.
It appears that the Government of India was
aware that the District Boards whose primary responsibility it was to sponsor
these undertakings would find the project beyond their financial resources and
so it accepted the recommendation of the Planning Commission to contribute 50%
of the cost of each of the schemes on the condition that the remaining half had
to be found by the District Board or by the public to be benefited by it in the
form of cash or voluntary labour.
The five impugned contracts related to
community projects of the kind envisaged by this programme. By its letter dated
February 27, 1954 (H. 2) the Bihar Government had advised all the District
Local Boards to assist the execution of such projects and to afford all
facilities to and co-operate with the district officers in the execution of the
programmes undertaken by these projects without charging any remuneration for
the same. The idea clearly was that if the Village Panchayats sponsored works
undertaken under these programmes they should encourage people to contribute
labour and even money. The result would be that the works undertaken would
benefit the community at large and if any saving was made in executing the
contract it would enure for the benefit of the village Panchayats that were
usually expected to be the sponsoring units.
541 It is in the light of this background
that we have to consider the question whether the contracts in question had
been executed by the appellant in his individual capacity as contended by
respondent I or in his capacity as the Mukhiya of the Village Panchayat as
urged by the appellant.
The four contracts evidenced by Exs. 16A, C,
D and E are all similarly executed whereas contract 16-B which is in respect of
the construction of the Beyapore M. E. School is somewhat differently worded.
With regard to this latter contract both the Election Tribunal and the High
Court are agreed that it had been executed by the appellant as the Secretary of
the Beyapore Madhyamik Vidyalaya and that in this contract the appellant was
not personally interested. The Election Tribunal took the view that the other
contracts are substantially of the same character whereas the High Court has
held that they are entirely different and that the appellant has personally
executed them. The question which we have now to decide is whether this view of
the High Court is right.
We would take Ex. 16-A as typical of the
remaining four contracts. The material terms of this contract are 8 in number
and they are all in the prescribed form. At the commencement of the contract
the appellant has described himself by his name and he has stated that he
belongs to the village of Jeorakhan Tola and that his profession is
cultivation. The preamble to the contract shows that the appellant undertook to
carry out the construction of the development project under local works
programme mentioned in the contract as per estimate attached thereto and he
agreed to execute the work according to and subject to the terms and conditions
contained therein, and he also undertook to contribute 50% of the cost in cash
and labour. At the end the appellant has signed as Mukhiya and has given his
address as Jeorakhan Tola Gram Panchayat. The High Court took the view that the
description of the appellant given by him at the time when he signed the
contract was not a term of the contract and could not therefore support his
plea that he had executed the contract as Mukhiya of 542 the Panchayat. It is
on this ground that the High Court distinguished this and the other three
allied contracts from the school contract, Ex. 16-B. In this latter contract
the appellant has described himself as the Secretary, Madhyamik Vidyalaya, both
at the commencement of the document and at the end where the appellant has
signed. In our opinion, the distinction made by the High Court between the two
sets of contracts is not valid. We do not see any reason to take the view that
the description given by the appellant about his status while he signed the
contract is no part of the contract itself. Incidentally we may observe that
the contract is accepted by the officer who signs as the S. D. O., Dinapore.
The designation of the officer given by him while signing the acceptance of the
contract indicates the character in which the officer has accepted the
Similarly the description given by the
appellant about his status and character when he signed the contract should be
taken to denote the character in which he executed the contract.
The High Court also thought that cls. 4 and 7
by which the appellant undertook liability to execute the contract as required
and to become liable for payment of any fine imposed by the local government
officer in case of his default clearly showed obligations of a personal type
which were inconsistent with his plea that he had entered into the contract as
the Mukhiya of the Panchayat. We think that this argument has no force. If the
nature of the liability undertaken by these two clauses necessarily involves
the conclusion that the execution of the contract must be by an individual
person, then it is significant that the same two clauses occur in the school
contract and yet the High Court has held that the said contract has been
executed by the appellant not in his individual capacity but as the Secretary
of the Madhyamik Vidvalava. Therefore too much reliance cannot be placed upon
these two clauses to support the view that the contract has been executed by
the appellant personally.
Besides, the High Court has not properly
considered the term of the contract by which the contracting 543 party
undertakes to contribute 50% of the cost of the work in cash or labour. In
other words, the contracting party becomes a sponsoring agent of the contract
and agrees to undertake 50% of its cost. It is very difficult to appreciate the
suggestion that the appellant personally and in his individual character agreed
to contribute 50% of the cost in cash or labour. In' ordinary course a person
who undertakes to carry out a building contract expects to make profit and
would never agree to contribute 50% of the cost of the contemplated work. This
clause clearly indicates that the sponsoring of the contract was really done by
the Village Panchayat which agreed through its Mukhiya that it would contribute
50% of the cost either in cash or in labour. Consistently with the general
policy of Plan the Village Panchayat became a sponsoring agent and hoped and
expected to obtain popular response from the villagers who would contribute
their labour and thus make up the 50% of the cost of the intended work.
Therefore, in our opinion, if the contract in question is considered in the
light of the background of the Plan of which it forms one item, and all its
conditions are taken into account together, there can be no doubt that the
appellant as the Mukhiya of the Village Panchayat acted as its agent when he
signed the contract., and not as an individual acting in his personal capacity.
This position is also corroborated by the
record kept by the Village Panchayat in respect of these contracts. This record
consists of the several proceedings before the Village Panchayat, the budgets
adopted by it and the resolutions passed by it from time to time in respect of
these contracts. It had been alleged by respondent 1 that the whole of this
record had been fabricated for the purpose of the present proceedings. The
Election Tribunal has made a definite finding against respondent I on this
point. It has considered the oral evidence given by the appellant and other
witnesses in proving the said record. It has examined the entries themselves on
their merits and has taken into account the fact that some of the exhibits
showed that they had been signed and 544 approved by the District Panchayat
Officer from time to time. The tribunal, therefore, thought that it was
impossible to believe that all persons who purported to sign the record had
helped the appellant to manufacture it simply because the appellant was the
Mukhiya of the village. The judgment of the High Court shows that it was not
prepared to reverse this finding in terms. It has, however, made certain
observations in respect of this record which would show that it was not
prepared to attach any importance to it. " The papers ", says the
judgment, " do not inspire much confidence and cannot be relied upon in
proof of, the facts disclosed by them ". It is unfortunate that when a
serious allegation was made against the whole of the record alleged 'to have
been kept by the Village Panchayat and it had been categorically rejected by the
Election Tribunal, the High Court should not have made its own finding on the
point in clear and unambiguous terms.
The oral evidence led by the appellant in
support of the record and the other material circumstances considered by the
Election Tribunal do not appear to have been properly taken into account by the
High Court in dealing with this point. The High Court was, however, impressed
by what it called two defects in respect of this record-. It observed that the
accounts had not been audited as required by r. 20 of the Bihar Gram Panchayat
Account Rules, 1949, and that the cash balance had not been kept by the Mukhiya
in the nearest Post Office Savings Bank or in any recognised Cooperative Bank
or a Government Treasury in the name of the Panchayat as required by r. 8.
These two defects may undoubtedly suggest that the officers of the Panchayat
including the appellant had not acted properly and had not complied with the
obligations imposed by the said rules; but it is difficult to understand how the
said two defects can have a material and direct bearing on the question as to
whether the record had, been fabricated. If the High Court intended to hold
that the record bad in fact been fabricated it should have considered the
relevant evidence and the material circumstances 545 more carefully and should
have made a definite finding in that behalf. To say that the record bore only
the signatures of the appellant and his clerk and to seek to draw an adverse
inference from that fact is, in our opinion, adopting a wrong approach to the
question. If the appellant was the Mukhiya he was bound to sign the record, and
so was the clerk bound to write it; that cannot therefore be treated as a
suspicious circumstance by itself We have carefully examined this question and
we do not see any reason why the well-considered finding of the Election
Tribunal on this point should not have been accepted.
Therefore, we must assume that the Panchayat
record produced by the appellant is not shown to have been fabricated.
Besides, the High Court itself appears to
have assumed that this record showed that there was an understanding between
the appellant and the Village Panchayat in regard to the financial obligations
involved in the execution of the impugned contracts. " It might well be
", says the judgment, " that the loss or the profit was ultimately to
be borne or pocketed by the Gram Panchayat itself " ; but that, according
to the High Court, " does not take away the effect of the contract itself
which on the face of it was entered into by the appellant himself ". If
the Panchayat agreed to bear the loss or take the profit flowing from the
performance of the contract then it clearly supports the appellant's case that
he had executed the contract as the Mukhiya of the Panchayat. The arrangement
to which the High Court refers, if genuine, would be wholly inconsistent with
the case set up by respondent I that the contract had been executed by the
The High Court has also held that the
appellant had not made out this specific case either before the returning
officer when his nomination was challenged or in the present proceedings when
he filed his written statement. The appellant had no doubt stated in reply that
he had no interest in any contract undertaken by the State Government.
According to the 69 546 High Court his
failure to add the further particular that the contract had been executed, by
him on behalf of the Panchayat shows that the said plea is an afterthought. We
are unable to see the force of this criticism. But apart from it, the question
raised by the appellant relates to the construction of the contract and we do
not see how the construction of a document can be prejudicially affected by the
failure of the party to make a more specific and more precise plea in his
written statement. We have no doubt that, if the contract is considered as a
whole, it would show that the appellant had executed it as the Mukhiya of the
Village Panchayat and this conclusion cannot be affected by the alleged defect
in the plea taken by him in the written statement.
The High Court has also relied on the fact
that if the contract was intended to be executed by the appellant on behalf of
the Panchayat it should have been executed in the name of the corporate body as
required by s. 6 of the Bihar Panchayat Raj Act (Bihar Act 7 of 1958). It may
be that the Gram Panchayat is a body corporate by the name specified in the
notification under sub-s. (1) of s. 3 and has a perpetual succession and a
common seal, and so has power to contract in the name of the body corporate;
but as the judgment of the High Court itself points out the invalidity of the
contract would not affect the merits of the issue raised under s. 7(d) of the
Act. That is the view taken by this Court in Chatturbhuj Vithaldas Jasani v.
Moreshwar Parashram (1), and that in fact is the point made by the High Court
in rejecting the appellant's contention that since the contract was invalid he
could not be said to be interested in it under s. 7(d) of the Act. Therefore, the
invalidity of the contract cannot help us in deciding the question as to
whether, on its true construction, the contract can be said to have been
executed by the appellant in his personal capacity or as the Mukhiya of the
Village Panchayat. Our conclusion, therefore, is that the four impugned
contracts have been executed by the appellant as the Mukhiya of the Village (1)
 S.C.R. 817.
547 Panchayat just in the same way as he had
executed the school contract as the Secretary of the Vidyalaya in question.
That being so, s. 7(d) cannot be invoked
against him. In view of this conclusion it is unnecessary to decide whether the
works in question had been undertaken by the Government of Bihar or by the
The result is that the appeal must be
allowed, the order passed by the High Court set aside and that of the tribunal
restored ; respondent I shall pay the costs of the appellant throughout; and
the Election Commission shall bear their own.
We would like to add that, after this appeal
was argued before us on April 2, 1959, we had announced our decision that the
appeal would be allowed and that the judgment would be delivered later on in
due course. It is in pursuance of that order that the present judgment has been