Ram Padarath Mahto Vs. Mishri Singh
& ANR [1960] INSC 202 (17 November 1960)
GAJENDRAGADKAR, P.B.
SARKAR, A.K.
WANCHOO, K.N.
CITATION: 1961 AIR 480 1961 SCR (2) 470
ACT:
Election--Disqualification-Contract with
Government for stocking foodgrains-Whether for Performance of services
undertaken by Government-Representation of the People Act, 1951 (43 of 1951) S.
7(d).
HEADNOTE:
The appellant was a member of a joint Hindu
family which carried on the business of Government stockists of grain under a
contract with the Government of Bihar. His nomination for election to the Bihar
Legislative Assembly was rejected on the ground that he was disqualified under
s. 7(d) of the Representation of the People Act, 195T, as he had an interest in
a contract for the performance of services undertaken by the Bihar Government.
The appellant contended that the service undertaken by the Government was the
sale of foodgrains under the Grain Supply Scheme and the contract was not for
the sale of such foodgrains and did not attract the provisions of S. 7(d).
Held, that the contract was not one for the
performance of any service undertaken by the Government and the appellant was
not disqualified under s. 7(d). A contract of bailment which imposed on the
bailee the obligation to stock and store the foodgrains in his godowns was not
a contract for the purpose of the service of sale of grain which the Government
had undertaken. The Government had undertaken the work of supplying grain but
the contract was not one for the supply of grain. N. Satyanathan v. K.
Subramanyam, [1955] 2 S.C.R. 83 and V. V. Ramaswamy v. Election Tribunal,
Tirunelveli, (1933) 8 E.L.R. 233, distinguished.
CIVIL APPELLATE JURISDICTION: Civil Appeal
No. 388 of 1960.
Appeal by special leave from the judgment and
order dated February 3, 1959, of the Patna High Court in Election Appeal No. 10
of 1958.
S. P. Varma, for the appellant.
L. K. Jha and D. Govardhan, for respondent
No. 1.
L. K. Jha and K. K. Sinha, for respondent No.
2.
1960. November 17. The Judgment of the Court
was delivered by 471 GAJENDRAGADKAR, J.-Is the appellant Ram Padarath Mahto
disqualified for membership of the Bihar Legislature under s. 7(d) of the
Representation of the People Act, 1951 (hereafter called the Act)? That is the
short question which arises for our decision in the present appeal by special
leave. The appellant was one of the candidates for the Dalsinghsarai
Constituency in the District of Darbhanga in Bihar for the State Legislature.
The said Constituency is a Double-Member Constituency; it was required to elect
two members, one for the general and the other for the reserved seat for
scheduled castes in the Bihar Legislative Assembly. It appears that the said
Constituency called upon voters to elect members on January 19, 1957. January
29, 1957 was fixed as the last date for the filing of the nomination papers.
The appellant filed his nomination paper on January 28, 1957, and on the next
day seven other members filed their nomination papers. On February 1, 1957, the
nomination paper filed by the appellant was rejected by the returning officer
on two grounds; he held that the appellant being an Inspector of Co-operative
Societies was a Government servant at the material time and so was disqualified
from standing for election. He also found that the appellant was a member of a
joint and undivided Hindu family which carried on the business of Government as
stockiest of grain under a contract between the Government of Bihar and a firm
of the joint family known as Nebi Mahton Bishundayal Mahto. Thereafter the
election was duly held, and Mr. Mishri Singh and Mr. Baleshwar Ram, respondents
1 and 2 were declared duly elected to the general and reserved seat
respectively. The validity of this election was challenged by the appellant by
his Election Petition No. 428 of 1957. To this petition he impleaded the two
candidates declared to have been duly elected and five others who had contested
in the election. Before the Election Tribunal the appellant urged that he was
not in the employ of the Government of Bihar at the material time. He pointed
out that he had resigned his job on January 13, 472 1957, and his resignation
had been accepted on January 25, 1957, relieving him from his post as from the
later date.
He also contended that there was a partition
in his family and that he had no share or interest in the contract in question.
Alternatively it was argued that even if the appellant had an interest in the
said contract it did not fall within the mischief of s. 7(d) of the Act. These
pleas were traversed by respondents 1 and 2 who contested the appellant's
election petition.
The Election Tribunal found that the
petitioner was not a Government servant on the day he filed his nomination
paper, and so according to it the returning officer was wrong in rejecting his
nomination paper on the ground that he was a Government servant at the material
time. The Election Tribunal rejected the appellant's case that there was a
partition in the family, and held that at the relevant time the appellant
continued to be a member of the joint Hindu family which had entered into the
contract in question with the Government of Bihar. However, in its opinion,
having regard to the nature of the said contract it was not possible to hold
that the appellant was disqualified under s. 7(d), and so it came to the
conclusion that the returning officer was in error in rejecting the appellant's
nomination paper on this ground as well. In the result the Tribunal allowed the
election petition, declared that the nomination paper had been improperly
rejected, and that the election of the two contesting respondents was void.
Against this decision the two contesting
respondents filed two appeals in the High Court at Patna (Election Appeals Nos.
9 and 10 of 1958). The High Court has confirmed the finding of the Tribunal
that the appellant was not a Government servant at the material time. It has
also agreed with the conclusion of the Tribunal that at the relevant time the
appellant was a member of the undivided Hindu family. On the construction of
the contract, however, it differed from the view adopted by the Tribunal, and
it has held that as a result of the said contract the appellant was
disqualified under s. 7(d) of the Act. This finding 473 inevitably led to the
conclusion that the appellant's nomination paper had been properly rejected. On
that view the High Court did not think it necessary to consider whether the
Tribunal was right in declaring void the election of not only respondent 1 but
of respondent 2 as well. It is against this decision of the High Court that the
appellant has come to this Court by special leave; and the only question which
is raised on his behalf is that the High Court was in error in coming to the
conclusion that he was disqualified under s. 7(d). The decision of this
question naturally depends primarily on the construction and effect of the
contract in question.
Section 7 of the Act provides for
disqualification for membership of Parliament or of State Legislatures. Section
7(d), as it stood at the material time and with which we are concerned in the
present appeal provides,, inter alia, that a person shall be disqualified for
being chosen as, and for being, a member of the Legislative Assembly of a
State, 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 supply of goods to, or for the execution of any works or the
performance of any services undertaken by, the appropriate Government. On the
concurrent findings recorded by the High Court and the Tribunal it cannot now
be disputed that the appellant has interest in the contract in question; so
that the first part of s. 7(d) is satisfied. The High Court has found that the
contract attracts the last part of s. 7(d) inasmuch as according to the High
Court the Government of Bihar had undertaken to discharge the service of
supplying grain to the residents of Bihar and the firm of the appellant's
family had entered into a contract for the performance of the said services.
The last part of s. 7(d) postulates that the appropriate Government has
undertaken to perform certain specific services, and it is for the performance
of such services that the contract had been entered into by a citizen. In other
words, if a citizen has entered into a contract with the appropriate Government
for the 60 474 performance of the services undertaken by the said Government he
attracts the application of s. 7(d). This provision inevitably raises two
questions: what are the services undertaken by the appropriate Government? Has
the contract been entered into for the performance of the said services? At
this stage it is necessary to consider the material terms of the contract. This
contract was made on February 8, 1956, between the Governor of Bihar who is
described as the first party and the firm which is described as the second
party. The preamble to the contract shows that the first party had to stock and
store foodgrains in Darbhanga District for sale in pursuance of the Grain
Supply Scheme of the Government for which a proper custodian and bailee for
reward was necessary. It also recites that the second party had applied to
become such custodian and bailee of such stock of foodgrains as the first party
shall deliver to the second party in one lump or from time to time on terms and
in the manner expressly specified under the contract, or as may be necessarily
implied. Clause 1 of the contract provides that the second party shall, at the
direction of the first party, take over foodgrains from the railway wagons or
from any place as directed by the first party;
thereafter the second party had to cause the
grains to be stored in his godown at Dalsinghsarai and had to redeliver the
same to the first party after weighing either at the second party's godown
approved by the first party or at any other place as directed by the first
party. The movement of the grain had to be done by the second party himself or
by a transport contractor appointed by the first party. Clause 2 imposed on the
second party the liability to maintain a register and keep accounts as
prescribed thereunder. Under cl. 3 the second party undertook to keep such
stocks and establishments as may be necessary at his own expense.
Clause 4 imposed upon the second party the
obligation to protect the stock of foodgrains or to make good the losses except
as thereinafter provided: Clauses 5 to 8 are not material for our purpose.
Clause 9 provides that the second party shall deposit the sum of 475 Rs. 5,000
in a Savings Bank account which has been pledged to the District Magistrate,
Darbhanga, and comply with the other conditions specified in the clause. Clause
10 deals with the remuneration of the second party. It provides that the
first-party shall be liable to pay to the second party remuneration for the
undertaking in this agreement at the rate of Re. 1 per( cent on the value of
the stocks moved or taken over from his custody under the orders or directions
of the first party or his agent calculated at the rate fixed by the Government
from time to time for wholesale sales of grain. The clause adds that no
remuneration shall be payable to the second party if the first party takes over
the whole of the balance stock lying with the second party for reasons of the
termination of the agreement. The rest of the clauses need not be recited.
It would thus be seen that the agreement in
terms is one of bailment. The State Government wanted to entrust the work of
stocking and storing foodgrains to a custodian or bailee.
In that behalf the appellant's firm made an
application and ultimately was appointed a bailee. There is no doubt that by
this contract the firm has undertaken to do the work of stocking and storing
foodgrains belonging to the State Government; and if it can be reasonably held
that the service undertaken by the State Government in the present case was
that of stocking the foodgrains the contract in question would obviously
attract the provisions of s. 7(d).
Mr. Varma, however, contends that the service
undertaken by the State Government is the sale of foodgrains under its Grain
Supply Scheme; and he argues that unless the contract shows that it was for
sale of the said goods it cannot attract the provisions of s. 7(d).
Unfortunately the scheme adopted by the State Government for the supply of
grain has not been produced before the Election Tribunal, and so the precise
nature and extent of the services undertaken by the State Government fall to be
determined solely by reference to the contract in question. It is true that the
contract relates to the stocking and storing of foodgrains which the State
Government wanted to sell to the residents of Bihar;
but can it be said 476 that stocking and
storing of foodgrains was such an integral or essential part of the selling of
goods that a contract for stocking and storing foodgrains should necessarily be
regarded as a contract for their sale? In our opinion, it is difficult to
accept the argument that stocking and storing of foodgrains is shown to be such
an essential and integral part of the supply scheme adopted by the State
Government.
Theoretically speaking stocking and storing
foodgrains cannot be said to be essential for the purpose of carrying out the
scheme of sale of foodgrains, because it would conceivably be possible for the
State Government to adopt a scheme whereby goods may be supplied without the
State Government having to store them; and so the work of stocking and storing
of foodgrains may in some cases be conceivably incidental to the scheme and not
its essential part. It is significant that sale of goods under the contract was
never to take place at the godown of the firm. It had always to take place at
other selling, centers or shops; and thus, between the stocking and storing of goods
and their sale there is an element of time lag. The only obligation that was
imposed on the firm by this contract was to be a custodian or bailee of the
goods, keep them in good order and deliver them after weighment as directed by
the first party. It cannot be denied that the remuneration for the bailee has
been fixed at the rate, of Re. 1 per cent on the value of the stocks moved or
taken over from his custody;
but that only shows the mode or method
adopted by the contract for determining the remuneration including rent of the
godowns; it cannot possibly show the relationship of the contract with the sale
of goods even indirectly. Can it be said that the contract entered into by the
State Government for purchasing foodgrains from agriculturists who grow them or
for transporting them after purchase to the godowns are contracts for the sale
or supply of goods? Purchase of goods and their transport are no doubt
preparatory to the carrying out of the scheme of selling them or supplying
them, and yet it would be difficult to hold that contracts entered into by the
State Government with the agriculturists or the transport agency is a contract
for the 477 sale of goods. We have carefully considered the material terms of
this contract, and on the record as it stands we are unable to accept the
conclusion of the High Court that a contract of bailment which imposed on the
bailee the obligation to stock and store the foodgrains in his godown can be
said to be a contract for the purpose of the service of sale of grain which the
State Government had undertaken within the meaning of s. 7(d).
It appears that before the High Court it was
not disputed by the appellant that the service whose performance had been
undertaken by the State Government consisted in the supply of grain to the
people of the State of Bihar; and the High Court thought that from this
concession it inevitably followed that the firm had a share and was interested
in the contract for the performance of the service undertaken by the Government
of Bihar. It seems to us that the concession made by the appellant does not
inevitably or necessarily lead to the inference drawn by the High Court. If the
service undertaken by the State Government is one of supplying grain how does
it necessarily follow that a contract by which the bailee undertook to store
the grain was a contract for the supply of grain? It may sound technical, but
in dealing with a statutory provision which imposes a disqualification on a
citizen it would be unreasonable to take merely a broad and general view and
ignore the essential points of distinction on the ground that they are
technical. The narrow question is: if the State Government undertook the work
of supplying the grain, is the contract one for the supply of grain?; in our
opinion, the answer to this question must be in the negative; that is why we
think the High Court did not correctly appreciate the effect of the contract
when it held that the said contract brought the appellant's case within the
mischief of s. 7(d).
In coming to its conclusion the High Court
thought that its view was supported by a decision of this Court in N. Satyanathan
v. K. Subramanyan (1). In that case the appellant who was a contractor had
entered into an agreement with the Central Government (1) [1955] 2 S.C.R. 83.
478 whereby he had offered to contract with
the Governor-General for the provision of a motor vehicle service for the
transit and conveyance of all postal articles for the period specified in the
contract, and the Governor-General had accepted the offer. As a consideration
for the same the Government had agreed to pay to the contractor Rs. 200 per
month during the subsistence of the agreement "as his remuneration for the
service to be rendered by him". It appears that on this contract two questions
were raised before this Court. First it was urged that it could not be said
that the Central Government had undertaken any service within the meaning of s.
7(d) of the Act when it made arrangements for the carriage of mailbags and
postal articles through the contractor. This contention was rejected on the
ground that though the Government was not bound in the discharge of its duties
as a sovereign State to make provision for postal mail service, it had in fact
undertaken to do so under the Indian Post Offices Act for the convenience of
the public. "It cannot be gainsaid", observed Sinha, J., as he then
was, "that 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"; and he added, "the
present case is a straightforward illustration of the kind of contract
contemplated under s. 7(d) of the Act". This straightforward illustration,
in our opinion, clearly brings out the class and type of contracts which fall
within s. 7(d) of the Act. Government must undertake to render a specified
service or specified services and the contract must be for the rendering of the
said service or services. That was precisely what the contract in the case of
N. Satyanathan (1) purported to do. It is difficult to see how this case can be
said to support the conclusion of the High Court that the contract for stocking
and storing of goods is a contract for rendering the service of supplying and
selling the same to the residents of the place.
In this connection Mr. Jha, for the
respondents, has drawn our attention to a decision of the Madras High (1)
[1955] 2 S.C.R, 83.
479 Court in V. V. Ramaswamy v. Election
Tribunal, Tirunelveli (1). In that case the Court was concerned with four
contracts by which the contracting party agreed "to hold the reserve grain
stock belonging to the Government of Madras, safely store it, and dispose of it
according to the directions of the Government". In other words, it was a
contract not only for the stocking and storing of foodgrains but also of
disposing of it, and that naturally meant that the contract was for service
which the State Government had undertaken to perform. This decision cannot
assist the respondents in the present appeal.
In the result we hold that the High Court was
not justified in reversing the finding of the Tribunal that the contract in
question did not attract the provisions of s. 7(d) of the Act. The appeal must,
therefore, be allowed and the order passed by the High Court set aside. We
cannot finally dispose of the matter, because one question still remains to be
considered, and that is whether the conclusion that the appellant's nomination
paper had been improperly rejected would lead to the decision that the election
of not only respondent 1 but also respondent 2 should be declared to be void.
The Election Tribunal has declared the whole election to be void, and in their
respective appeals filed before the High Court both the respondents have challenged
the correctness of that finding. The High Court, however, thought that since in
its opinion the nomination paper of the appellant had been properly rejected it
was unnecessary to deal with the other point. The point will now have to be
considered by the High Court. We would, therefore, set aside the order passed
by the High Court and remand the proceedings to it in order that it may deal
with the other question and dispose of the appeals expeditiously in accordance
with law. In the circumstances of this case we direct that the parties should
bear their own costs in this Court. Costs in the High Court will be costs in
the appeal before it.
Appeal allowed.
(1) (1953) 8 E.L.R. 233.
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