15 February 1954
Supreme Court


Case number: Appeal (civil) 155 of 1953






DATE OF JUDGMENT: 15/02/1954


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 dstes, 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.

JUDGMENT: 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.ment. 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 theTransition 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 meruit 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,sued 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 readmittance 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  outcasting,  neither outcasting  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 outcasted  from the Mahars for that reason; and as the  sect is said to be over 1000 years old, therehas 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-exami- nation  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.