Zelia M. Xavier
Fernandes E. Gonsalves Vs. Joana Rodrigues & Ors.
[Civil Appeal No.
1544 of 2012 arising out of SLP (Civil) No. 26568 of 2009]
R.M. Lodha, J.
question which we have to consider is whether the appellant can be said to have
any indirect share or monetary interest in the contract of her husband with the
Village Panchayat of Raia and if the answer is in the affirmative whether she has
incurred disqualification as a Panch member from Raia Village Panchayat of 1Salcete
Taluka in South Goa District, State of Goa under Section 10(f) of the Goa
Panchayat Raj Act, 1994 (for short, `1994 Act').
appellant was declared as a returned candidate from Ward No. 9 of Raia Village
Panchayat of Salcete Taluka, State of Goa at the election held in May 2007 for
a period 2007-2012.
or about March 18, 2008, the respondent no. 2 Village Panchayat of Raia invited
bids for the collection of market fee within its jurisdiction for 2008-09. Mrs.
Joana Rodrigues (respondent no. 1), Xavier Fernandes (appellant's husband) and
one Bernard Mario Fernandes submitted their bids. On March 28, 2008, the tender
forms were opened in the office of the respondent no. 2 and the bid of the
appellant's husband was accepted as his bid was the highest. Her husband, on
acceptance of his bid, paid the first installment of 1/4th part of the bidding
March 31, 2008, the respondent no. 1 made a representation to the Deputy
Director of Panchayat, Madgaon, Goa bringing to his notice that the appellant
was liable for disqualification under Section 10(f) of the 1994 Act. It appears
that the respondent no. 1 also made an application to the State Election
Commission (for short, `Commission), State of Goa, on which the Commission directed
the respondent no. 1 to file a formal election petition seeking disqualification
of the appellant. Accordingly, the respondent no. 1 filed an election petition
under Section 11 before the Commission for disqualification of the appellant on
the ground that she has directly or indirectly a share or monetary interest in
the above contract given by the respondent no. 2 to her husband.
Commission, on hearing the parties, vide its order dated July 3, 2009 held that
the present appellant had indirectly a share or monetary interest in the contract
executed by the Village Panchayat of Raia with her husband and ordered that the
appellant was disqualified as a Panch Member of Village Panchayat of Raia in Salcete
Taluka in terms of clause (f) of Section 10.
appellant, aggrieved by the above order of the Commission, filed a writ
petition before the High Court of Bombay at Goa. The Single Judge of that Court
on July 22, 2009 dismissed the writ petition. It is from this order of the High
Court that this appeal, by special leave, has arisen.
have heard Mr. R. Sundaravardhan, learned senior counsel for the appellant and
Mr. Arun Francis, learned counsel for the respondent no. 1. The contention of Mr.
Sundaravardhan, 3learned senior counsel for the appellant is that mere
relationship of husband and wife will not create that type of interest which is
contemplated by Section 10(f). He heavily relied upon the decision of this Court
in the case of Gulam Yasin Khan vs. Sahebrao Yeshwantrao Walaskar and another1.
Mr. Arun Francis stoutly supported the view of the High Court.
Sabha -- Constitution of Panchayats - is dealt with in Chapter II of the 1994
Act. Section 7, inter alia, provides that all the members of panchayat shall be
elected. Section 9 provides for qualification for membership while Section 10
makes a provision for disqualification for membership. We are concerned with
Section 10(f) and the said provision reads as follows: "S. 10. Disqualification
for membership.-- A person shall be disqualified for being chosen as, and for being,
a member of the Panchayat if,-- xxx xxx xxx (f) he has directly or indirectly
any share or monetary interest in any work done by or to the Panchayat or any
contract or employment with, under or by or on behalf of, the Panchayat; xxx xxx
xxx"1 AIR 1966 SC 1339
11 provides that if any question arises as to whether a member of a Panchayat has
become subject to any disqualification referred to in Section 10, it shall be referred
to the State Election Commission for decision and its decision thereon shall be
purpose and object of providing for disqualification for membership of the
Panchayat in clause (f) of Section 10 is to ensure that there is no conflict between
the private interest of the member and his duty as a member of the Panchayat. It
is based on general principle of conflict between duty and interest.
as the present matter is concerned, we have to consider the applicability of clause
(f) of Section 10 to the extent, "he has.....indirectly any share or
monetary interest in .....any contract ....by or on behalf of the
Panchayat" in the fact situation noticed above. A similar provision came
up for consideration before a 5-Judge Bench of this Court in the case of Gulam Yasin
Khan1. That was a case where the appellant and the respondent No. 1 therein, namely,
Gulam Yasin Khan and Sahebrao Yeshwantrao Walaskar respectively were candidates
for election as members to the Municipal Committee, Malkapur.
They had filed their nomination
5papers. At the stage of scrutiny, Sahebrao Yeshwantrao Walaskar objected to the
validity of the candidature of Gulam Yasin Khan on the ground that Gulam Yasin Khan's
son Khalildad Khan was a Moharir on Octroi Naka employed by the Committee and
on account of the employment of Gulam Yasin Khan's son by the Municipal Committee,
Gulam Yasin Khan had an interest in the Municipal Committee and so he was disqualified
from standing for election under clause (l) of Section 15 of the Central Provinces
and Berar Municipalities Act, 1922 (for short, `CP Municipalities Act'). Gulam Yasin
Khan disputed the validity of the objection and he stated that his son was not
staying with him and had no connection whatsoever.
The Supervising Officer
overruled the objection raised by Sahebrao Yeshwantrao Walaskar. The order of Supervising
Officer was challenged by Sahebrao Yeshwantrao Walaskar in the writ petition before
the High Court. The High Court allowed his writ petition and set aside the
order of the Supervising Officer and declared Sahebrao Yeshwantrao Walaskar
elected to the Municipal Committee. It is from this controversy that the matter
reached this Court.
This Court in the backdrop
of the above facts considered the question whether by virtue of his relationship
with Khalildad Khan, Gulam Yasin Khan could be said to have any indirect share
or interest in the employment of Khalildad Khan with the Municipal Committee.
The provision under consideration read, "no person shall be eligible for
election, selection or nomination as a member of a committee, if such person has
directly or indirectly any share or interest in any contract with, by or on
behalf of the committee, while owning such share or interest".
light of the above factual and legal position, this Court in Gulam Yasin Khan1 (Pgs.
1341-1342) held as under : "7. .........We are assuming for the purpose of
dealing with this point that the contract to which clause (l) refers, includes
employment, though unlike other similar statutes, the word "employment"
is not specifically mentioned in the said clause. In order to incur disqualification,
what the clause requires is "interest or share in any contract"; it
may either be a share or an interest; and if it is an interest, the interest may
be direct or indirect. But it is plain that the interest to which the clause refers,
cannot mean mere sentimental or friendly interest; it must mean interest which is
pecuniary, or material, or of a similar nature.
If the interest is of
this latter category, it would suffice to incur disqualification even if it is
indirect. But it is noticeable that the clause also requires that the person who
incurs disqualification by such interest must "own such share or interest".
It is not easy to determine the scope of the limitation introduced by this last
sub-clause. Mr. Gauba for respondent No. 1 urged that the clause "owning such
share or interest" is tautologous when it refers to direct interest or share,
and is meaningless when it refers to indirect share or interest. Prima facie,
there is some force in this contention; but whatever may be the exact denotation
of this clause, it does serve the purpose of limiting the character of the
share or interest which incurs disqualification prescribed by the clause and it
would not be easy to ignore the existence of the last portion of the clause
It is quite true that
the purpose and the object of prescribing the several disqualifications enumerated
in clauses (a) to (l) of s. 15 of the Act is to ensure the purity of the administration
of Municipal Committees, and in that sense, it may be permissible to hold that the
different clauses enumerated in S.15 should not receive an unduly narrow or restricted
construction. But even if we were to adopt a liberal construction of S. 15(l),
we cannot escape the conclusion that the interest or share has to be in the contract
itself. When we are enquiring as to whether the appellant is interested directly
or indirectly in the employment of his son, we cannot overlook the fact that the
enquiry is not as to whether the appellant is interested in the son, but the enquiry
is whether the appellant is interested in the employment of the son. The distinction
between the two enquiries may appear to be subtle, but, nevertheless, for the
purpose of construing the clause, it is very relevant. Considered from this point
of view, on the facts proved in this case, we find it difficult to hold that by
mere relationship with his son, the appellant can be said to be either directly
or indirectly interested in his employment. xxx xxx xxx xxx
12. It would, we
think, be unreasonable to hold that mere relationship of a person with an
employee of the Municipal Committee justifies the inference that such a person has
interest, direct or indirect, in the employment under the Municipal Committee. In
the circumstances of this case, what is proved is the mere relationship between
the appellant and his son who is the employee of the Municipal Committee; and on
that relationship the High Court has based its conclusion that the appellant is
disqualified under S. 15(l) of the Act. We are satisfied that this conclusion
is erroneous in law."
Gulam Yasin Khan1 while construing Section 15 (l) of the CP Municipalities Act,
this Court held that the interest or share has to be in the contract itself;
mere relationship of a person with an employee of the Municipal Committee shall
not justify the inference that such a person has interest, direct or indirect. Ordinarily,
there would not have been any difficulty in applying Section 10(f) in the same manner
but we think Gulam Yasin Khan1 is clearly distinguishable and cannot be applied
to the present fact situation which concerns money affairs of husband and wife
governed by the provisions contained in Articles 1098 and 1108 of Portuguese Civil
Code, 1860 (`1860 Code') and Section 5A of the Indian Income Tax Act, 1961
(`Income Tax Act').
1098 and 1108 of the 1860 Code which is applicable in the State of Goa read as
under : 1098. - In the absence of any contract, it is deemed that the marriage is
done as per the custom of the country, except when it is solemnized in contravention
of the provisions of Article 1058 clause 1 and 2; because in such a case it is deemed
that the spouses are married under the simple communion of acquired properties.
x x x x x x x x x 1108. - The marriage as per the custom of the country consists
in the communion between the spouses of all their properties, present and
future, not excluded by law.
5A of the Income Tax Act is as follows : 5A. Apportionment of income between spouses
governed by Portuguese Civil Code. –
1. Where the husband and
wife are governed by the system of community of property (known under the Portugese
Civil Code of 1860 as "COMMUNIAO DOS BENS") in force in the State of
Goa and in the Union territories of Dadra and Nagar Haveli and Daman and Diu, the
income of the husband and of the wife under any head of income shall not be
assessed as that of such community of property (whether treated as an association
of persons or a body of individuals), but such income of the husband and of the
wife under each head of income (other than under the head "Salaries")
shall be apportioned equally between the husband and the wife and the income so
apportioned shall be included separately in the total income of the husband and
of the wife respectively, and the remaining provisions of this Act shall apply accordingly.
2. Where the husband or,
as the case may be, the wife governed by the aforesaid system of community of
property has any income under the head "Salaries", such income shall
be included in the total income of the spouse who has actually earned it.
is no dispute that the respondent no. 4 and the appellant are husband and wife
and are governed by the provisions of the 1860 Code. By virtue of Article 1098
and Article 1108 thereof, in the absence of any contract, the marriage between
the appellant 10and the respondent no. 4 is governed by the system `Communiao Dos
Bens' i.e. community of property. Accordingly, on marriage, the property of the
spouses gets merged. Each spouse, by operation of law, unless contracted otherwise,
becomes 50% shareholder in all their properties, present and future and each
spouse is entitled to a one-half income of the other spouse.
5A(1) of the Income Tax Act provides that where the husband and wife are governed
by the system of "Communiao Dos Bens" in force in the State of Goa
the income of the husband and the wife under any head of income shall not be
assessed as that of such community of property but such income of the husband
and the wife from all sources, except from salary, shall be apportioned equally
between the husband and the wife and the income so apportioned shall be
included separately in the total income of the husband and of the wife
respectively and the remaining provisions of the Income Tax Act shall apply accordingly.
Sub-section (2) of Section 5A provides that where the husband or the wife
governed by system of community of property has any income under the head `salaries',
such income shall be included in the total income of the spouse who has
actually earned it.
P. Ramanatha Aiyar's The Law Lexicon, 2nd Edition (reprint 1999) the term
`interest' is explained thus: "Interest. Legal concern, right, pecuniary stake
the legal concern of a person in the thing or property or in the right to some
of the benefits or use from which the property is inseparable; such a right in
or to a thing capable of being possessed or enjoyed as property which can be
enforced by judicial proceedings. The word is capable of different meanings, according
to the context in which it is used or the subject-matter to which it is
applied. It may have even the same meaning as the phrase "right title and
interest" but it has been said also to mean any right in the nature of property,
but less than title.
The word is sometimes
employed synonymous with estate, or property. Interest means concern,
advantage, good; share, portion, part, or participation. A person interested is
one having an interest; i.e. a right of property or in the nature of property,
less than title. The word `interest' is the broadest term applicable to claims in
or upon real estate in its ordinary signification among men of all classes. It is
broad enough to include any right, title, or estate in or lien upon real
estate. One who holds a mortgage upon a piece of land for half its value is
commonly and truly said to be interested in it. xxx xxx xxx".
word `interest' has a basic meaning of participation in advantage, profit and
responsibility. `Interest' is a right, title or share in a thing.
10(f) speaks of monetary interest. The general rule that the wife's interest is
not necessarily the husband's interest has no application where the husband and
the wife are governed by the system `community of property' because under that system,
on marriage, each spouse is entitled to a one-half income of the other spouse unless
contracted otherwise. During the subsistence of marriage, the husband and the
wife each have a share in the corpus as well as the income of communion
is no doubt that Section 10(f) contemplates that share or monetary interest (direct
or indirect) has to be in the contract itself. The expression `in any contract'
means in regard to any contract. Could it be said that the appellant had no
indirect share or monetary interest in regard to her husband's contract with the
Village Panchayat Raia when, by operation of law, she is entitled to the profits
of that contract?
The answer has to be in
the negative. Money acquired by the appellant's husband from the contract with the
Village Panchayat Raia is `community property' and, therefore, the conclusion
is inescapable that the appellant has indirect share, or, in any case, monetary
interest in the contract awarded to her husband by the Village Panchayat Raia as
the profits from the contract shall be apportioned equally between her and her
husband. There is no evidence of exclusion of the appellant from her husband's assets
The provisions contained
in Articles 1098 and 1108 of the 1860 Code and Section 5A of the Income Tax Act
give the appellant a participation in the profits of the contract and advantages
like the apportionment of income from that contract. The appellant, by operation
of law, becomes entitled to share in the profits of the contract awarded to her
husband by the Village Panchayat. From whatever way it is seen, the appellant's
participation in the profits of the contract does constitute an "indirect monetary
interest" in the contract for collection of market fee awarded to her husband
within Section 10(f) prohibiting the member of the Village Panchayat from
having such an interest.
considering Section 15(l) of the CP Municipalities Act which provided for the disqualifications
to the elections of the Municipal Committees, this Court in Gulam Yasin Khan1
held that the purpose and the object of prescribing several disqualifications
in that provision is to ensure the purity of the administration of the
Municipal Committees and in that sense the different clauses of disqualifications
should not receive unduly narrow or restricted construction. We also hold the
view that the prohibition in Section 10(f) should not receive unduly narrow or
restricted construction. In what we have considered above, the answer to the first
question must be in the affirmative and it must consequently be held that the appellant
has incurred disqualification under Section 10(f) of the 1994 Act. We hold
Appeal is dismissed with no order as to costs.
(H. L. Gokhale)