http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 16  

PETITIONER: DR. P. NALLA THAMPY TERAH

       Vs.

RESPONDENT: UNION OF INDIA & ORS.

DATE OF JUDGMENT08/05/1985

BENCH: CHANDRACHUD, Y.V. ((CJ) BENCH: CHANDRACHUD, Y.V. ((CJ) BHAGWATI, P.N. DESAI, D.A. SEN, AMARENDRA NATH (J) ERADI, V. BALAKRISHNA (J)

CITATION:  1985 AIR 1133            1985 SCR  Supl. (1) 622  1985 SCC  Supl.  189     1985 SCALE  (1)1148  CITATOR INFO :  R          1987 SC1577  (21)

ACT:      Constitution of India 1950, Art. 14 & Representation of People  Act   1951,  S.  77  (1),  Explanation  1-Scope  of- Explained-Political  parties  spending  unlimited  money  in election of  their  party  candidates-conferment  of  power- Whether violative of Art. 14 and unconstitutional.      Conduct of  Election Rules,  1961, Rule  90.  Election- Expenditure-Incurrence of-Applicability  of  ceiling-whether prevalent.

HEADNOTE:      Section 77(1)  of the Representation of the People Act, 1951 provides  that every  candidate at  an election  shall, either by  himself or by his election agent, keep a separate and correct  account of  all expenditure  in connection with the election  incurred  or  authorised  by  him  or  by  his election agent,  between the  date  of  publication  of  the notification  calling   the  election   and  the   date   of declaration of  the result  thereof, both  dates  inclusive. Section  77(3)   provides  that   the  total   of  the  said expenditure  shall   not  exceed   such  amount  as  may  be prescribed by  the Rules  framed under the Act. In Kanwarlal Gupta [1975]  2 SCR  259 the  Court observed  that when  the political party sponsoring a candidate incurs expenditure in connection  with   his  election,   as  distinguished   from expenditure on  general party  propaganda, and the candidate knowingly takes  advantage of  it  or  participates  in  the programme or activity or fails to disavow the expenditure or consents to  it or  acquiesces in it, it would be reasonable to infer,  save in  special circumstances, that he impliedly authorised the political party to incur such expenditure and he cannot escape the rigour of the ceiling by saying that he has not  incurred the  expenditure, but  his political party has done  so. In order to get over the judgment in Kanwarlal Gupta,   the   Representation   of   the   People(Amendment) Ordinance,  1974  was  issued  which  was  replaced  by  the Representation of  the People (Amendment) Act, 1974. Section

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 16  

2 of  the Amending  Act added  two Explanations  to  section 77(1).  Explanation  1  provides  that  notwithstanding  any judgment, order  or decision  of any  court to the contrary, any expenditure  incurred or  authorised in  connection with the election  of a  candidate by a political party or by any individual (other  than the candidate or his election agent) shall not  be deemed  to be, and shall not ever be deemed to have been,  expenditure  in  connection  with  the  election incurred or  authorised by  the candidate or by his election agent for the purpose of sub-Section (1) of Section 77. 623      In the  writ petition  under  Art.  32  the  petitioner challenged the validity of Explanation 1 to section 77(1) of the Representation  of the  People Act, 1951 on the grounds: (i) that  it enables  political parties  to spend  unlimited monies for the election of the candidates sponsored by them, (ii) that this is arbitrary and violative of Art. 14 because it sanctions  serious discrimination  between one  political party or  individual and  another  on  the  basis  of  money power,(iii) that  it not  only permits  but  encourages  and legitimises the  influence of  big money  in  the  electoral process and  thus militates  against the fairness and purity of the electoral process, (iv) that it denies to the citizen right to  have  full  and  effective  participation  in  the electoral process  and (v)  that it  nullifies the  salutary object of imposing a ceiling on a candidate’s expenditure.      On behalf  of the  respondent-Union  of  India  it  was contended: (i)  that Explanation  1 to  section 77(1) of the Act was  introduced to  restore the  law as expounded in the decisions of  this Court  prior to the decision in Kanwarlal Gupta, (ii)  that  the  expenditure  incurred  by  political parties in  connection with the election of their candidates do not  fall within  the mischief of section 77(1) read with section 123(6)  of the  Act, (iii) that Explanation 1 is not violative of  Art. 14  and (iv)  that  legislative  policies bearing upon  matters governing  elections are  not open  to judicial review.      Dismissing the Writ Petition and C.M.Ps., ^      HELD:  1.   Explanation  1  to  section  77(1)  of  the Representation of  the People Act, 1951 neither suffers from any  constitutional  infirmity  nor  it  violates  Art.  14. Explanation  1   classifies   all   political   parties   or associations in  one group and confers upon them the same or similar  advantage.   Political  parties   or,   politically motivated associations  or bodies of persons or, individuals interested in  political happenings,  are  characterised  by common attributes,  the dominant  attribute being  that they engage themselves  in  activities  of  a  political  nature. Elections  constitute   the  core   of  such  activities.  A classification of  this nature bears reasonable relationship with the  object of  the statute  that expenses  incurred by those who  fall within  the particular  group should  not be regarded  as  expenditure  incurred  or  authorised  by  the candidates or  his election  agent. Classification has to be broadly reasonable  in order  to sustain  the  challenge  of unconstitutionality. One  cannot dissect  that  process  and discover shades within shades to nullify it on the ground of inequality. [636 G-H; 637 A;C]      2. Explanation  1 to section 77(1) of the Act says that a  political   party  or   any  other   association  or  any individual, other  than the candidate or his election agent, can incur  expenses, without  any limitation  whatsoever, in connection with  the election  of a candidate. Such expenses are not  deemed to  be expenditure  in connection  with  the

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 16  

election incurred  or authorised  by the candidate or by his election agent for the purpose of section 77(1). [636 E-F]      3. As  independent candidate  who contests  an election without  the   support  of   a  political  party,  is  at  a considerable  disadvantage   as  compared   with  candidates supported by  political parties.  But, that does not violate the rule  of equality.  It is  not the  election  law  which creates such inequalities. Inequalities 624 exist apart  from that  law and  are implicit in the unequal positions in  which the  citizens find  themselves. What the law does  is to  allow, in  an equal  measure, all political parties, associations  or bodies  or persons  or individuals (other than  the candidate  or his  election agent) to incur expenses in connection with the election of candidate, which need not  be included  in the  return of  election  expenses which the candidate is required to file. [637 C-E]      4. Preferring  political parties for exclusion from the sweep of  monetary limits  on election  expenses, is  not so unreasonable or arbitrary as to justify the preference being struck down  upon that  ground because  the statute  neither makes the  affluence of  a  political  party  and  electoral standard  for   acquiring  eligibility   prescribed  by  the Explanation nor  is it an unwise policy to ensure reasonable reduction in  the number of contesting candidates, which can be done  by conferring  special  privileges  upon  political parties. In  any democratic  system of  government political parties occupy  a distinct  and unique  place. It is through them that  the people  attempt to  voice or  ventilate their grievances. Considering  the power  which they  wield in the administration of governmental affairs, a special conferment of benefits  on them  in the  matter of modalities governing the election  process cannot  be regarded as unreasonable or arbitrary. [637 G-H; 638 B-C]      5. In  Kanwarlal Gupta  the Court  drew  a  distinction between  the   expenses  incurred   by  a   political  party specifically in connection with the election of a particular candidate and  the expenditure  incurred by  it  on  general party propaganda,  the latter  not being  includible in  the return of election expenses which the candidate has to file. The rationale  of that  decision is  that by  reason of  the important position  which political  parties occupy they are entitled  to   incur  expenditure   for   projecting   their programmes and  popularising their  policies. Explanation  I obliterates the  dividing  line  drawn  in  Kanwarlal  Gupta between expenses  incurred "in connection with’ the election of a  particular candidate and expenses incurred on ’general party propaganda’. All persons, except the candidate and his election agent,  are now  free to  incur expenditure  of the former kind  too, without the constraints of ceiling imposed upon election expenditure by section 77(3) read with Rule 90 of the Conduct of Election Rules, 1961. [638 C-E]      6. Whether  Explanation I  restores the  law as  it was understood before Kanwarlal Gupta or, it makes an innovation is irrelevant  for deciding  upon its  validity. Every  law, whether restorative  or innovative,  has to be tested on the touchstone of the Constitution. [638 G]      7. Election  laws are  not designed to produce economic equality amongst  citizens. They  can, at  best, provide  an equal opportunity  to all  sections of  society  to  project their  respective   points  of   view  on  the  occasion  of elections. [639 B]      8. If  it is  correct that  different political parties have  been   treated  equally   though  they   are  situated unequally,  or  that  individuals  have  been  discriminated

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 16  

against either  inter se or in relation to political parties and associations,  the only method which would measure up to the required constitutional standard is 625 the one in which the State would have to allocate funds from its own  exchequer in order to enable the various candidates to contest  elections. That  would be  the fairest  form  of fairness. [639 D-E]      9. Explanation  I would not become unconstitutional for the reason  that it allegedly renders the main provisions in section 77(1)  nugatory by taking away with one hand what is given by  the other.  The Explanation  does not  denude  the section of  its meaning  and make  it  purposeless.  Section 77(1) deals  with the expenditure incurred or authorised by’ a candidate  or his  election agent,  in connection with the election. It  is obligatory  to keep  a separate and correct account of  such expenditure.  Explanation I  deals with the expenditure incurred  or authorised  by a political party or any other association or body of persons or by an individual other than  the candidate  or his  election agent. It is not obligatory for the candidate or his election agent to keep a separate and  correct account  of such  expenditure, because such expenditure  is  not  incurred  or  authorised  by  the candidate or  his election  agent and  that such expenditure cannot be  deemed  to  be  incurred  or  authorised  by  the candidate or  his election  agent. Section  77(1) on the one hand and Explanation 1 on the other, deal with two different situations wherefore,  the latter  cannot render  the former meaningless. [639 F-H; 640 A-B]      10. If  an expenditure  which  purports  to  have  been incurred, for example, by a political party has in fact been incurred by the candidate or his election agent, Explanation I will not be attracted. It is only if the expenditure is in fact incurred  or authorised  by a  political party  or  any other association  or body  of persons  or by an individual, (other than  the candidate  or his  election agent) that the Explanation will  come into  play.  For  seeking  protection under Explanation  I it must be shown that the source of the expenditure incurred  was not  the candidate or his election agent. Explanation  I does  not create  a fiction.  It deals with the  realities of  political situations.  It  does  not provide that expenditure in fact incurred or authorised by a candidate or  his election  agent, shall not be deemed to be incurred or authorised by them, if the amount is defrayed by a political  party. The  object of  the  Explanation  is  to ensure that  the expenditure  incurred, by a political party on  its  own,  without  using  the  funds  provided  by  the candidate or  his election  agent shall  not be deemed to be expenditure incurred  or authorised  by the candidate or his election agent.  If the  expenditure is incurred from out of the funds  provided by  the candidate  or his election agent section 77(1) and not Explanation 1 would apply. [640 C-H]      11. The  reason why the expression ’shall not be deemed to be’ is used in Explanation 1 is that Parliament wanted to get over  the effect  of  the  judgment  of  this  Court  in Kanwarlal Gupta’s case. Similarly, the expression ’shall not ever be  deemed to have been’ is used in the Explanation, to get over the effect of that judgment retrospectively, except to the  extent mentioned  in clauses  (a)  and  (b)  of  the Proviso to the Explanation. [641 B-C]      12. The  limited range of Explanation I ought not to be enlarged. The ceiling placed on election expenses is a basic commandment of the Act, not a 626 pious  edict.   Its  object  is  to  keep  a  check  on  the

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 5 of 16  

expenditure incurred  by candidates  on their own elections, directly or  through their  election agents.  They cannot be permitted to  resort to  subterfuges in  order to  evade the restraint imposed  by section  77(1) and  77(3) of  the Act. Homage to the principle of free and fair elections has to be real, not formal. [641 C-D]      13. The  Court is  not to  lay down policies in matters pertaining to  elections. The  Court cannot  negate a law on the ground  that it  does not  approve of  the policy  which underlies it.  The Court  might have its own preferences and perceptions but,  they cannot be used for invalidating laws. [641 E-F]      14. The  right to  contest an election or to vote at it is not a Common Law right. [641 G]      15. The question as regards the constitutional validity of Explanation  1 has  to be  determined regardless  of  the consideration as  to whether  the said  Explanation restores the law  as it  stood before  the decision  of this Court in Kanwarlal Gupta  or whether  it introduces  a new  provision altogether. [642 E]      16. Influence  of big  money on the election process is regarded universally as an evil of great magnitude.      Kanwar Lal  Gupta v.  Amar Nath Chawla [1975] 2 SCR 259 explained.      Rananjaya Singh v. Baijnath Singh [1955] 1 SCR 671; Ram Dayal v.  Brijraj Singh  [1970] 1 SCR 530; Magraj Patolia v. R.K. Birla  [1971] 2  SCR 118;  Smt. Indira  Gandhi  v.  Raj Narain [1976]  2 SCR 347; Lok Sabha Debates Vol. XLVII, Nos. 21-27, 12-20  December, 1974  page 279;  Vatal Nagaraj v. R. Dayanand Sagar  [1975] 2 SCR 384, 399; Tata Iron & Steel Co. Ltd. AIR  1958 Bombay 155; Indian Iron and Steel Co. Ltd AIR 1958 Calcutta  234; Report  of the  Santhanam  Committee  on Prevention of  Corruption 1962, Section 11, ’Social Climate’ Paragraph 11.5; Report of the Expert Committee on ’Companies and MRTP  Acts’ 1978,  Chapter XIII pages 99-104; Jyoti Basu v. Debi  Ghosal [1982] 3 SCR 318, 326, 327; Halbury’s Law of England, Fourth  Edition, Volume 15, Paragraph 721, referred to.

JUDGMENT:      ORIGINAL JURISDICTION: Writ Petition No. 1177 of 1979.      Under Article 32 of the Constitution of India.      Soli J. Sorabjee, Harish N. Salve and Laxmi Kant Pandey for  the Petitioner.      K. Parasaran,  Attorney General, T.S. Krishnamurty Iyer and Miss A. Subhashini for the Respondents. 627      The Judgment of the Court was delivered by      CHANDRACHUD C.J.  The petitioner,  Dr. P.  Nalla Thampy Thera, is  not an intermeddler or busy body. He is a public- spirited citizen  whose motives  in filing this petition are to  be  admired  even  if  his  contentions  may  not  merit acceptance.  By  this  petition  under  Article  32  of  the Constitution, he challenges the validity of Explanation I to section 77(1)  of the Representation of the People Act, 1951 (hereinafter referred  to as  "the Act") which gives a carte blanche to  political parties  to spend unlimited monies for the  election  of  the  candidates  sponsored  by  them.  In practice, insofar  as  our  little  knowledge  of  political affairs goes,  sky is  the limit  for such expenditure: Some call it millions, some call it billions.      The particular  provision of the statute which is under consideration here, has a short, though significant history.

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 6 of 16  

A  judgment  of  this  Court  led  to  its  enactment.  That judgment, to  which one  of us, Bhagwati J, was a party, was delivered on  October 3,  1974 in  Kanwar Lal  Gupta v. Amar Nath Chawla.  Section 77(1)  of the  Act, as  it stood then, read thus:           "Every candidate  at an  election shall, either by      him self  or by his election agent, keep a separate and      correct account  of all  expenditure in connection with      the election  incurred or  authorised by  him or by his      election agent,  between the date of publication of the      notification calling  the  election  and  the  date  of      declaration  of   the  result   thereof,   both   dates      inclusive." Section  77(3)   provides  that   the  total   of  the  said expenditure  shall   not  exceed   such  amount  as  may  be prescribed, that  is to  say, the  amount prescribed  by the Rules framed under the Act. The expenditure prescribed for a Parliamentary constituency  in the  Union Territory of Delhi was Rs.  10,000. The question before the Court in Kanwar Lal Gupta  was  whether  the  successful  candidate,  Amar  Nath Chawla, had incurred or authorised expenditure in connection with his  election exceeding  the  ceiling  of  Rs.  10,000. Noting that  what section  77(1) prohibited was not only the incurring but  also the authorising of excessive expenditure and that  such authorising  may be  implied or  express, the Court observed: 628           "When the  political party  sponsoring a candidate      incurs expenditure  in connection with his election, as      distinguished  from   expenditure  on   general   party      propaganda, and the candidate knowingly takes advantage      of it  or participates  in the programme or activity or      fails to  disavow the  expenditure or consents to it or      acquiesces in it, it would be reasonable to infer, save      in special  circumstances, that he impliedly authorised      the political  party to  incur such  expenditure and he      cannot escape  the rigour of the ceiling by saying that      he has  not incurred the expenditure, but his political      party has  done so.  A party  candidate does  not stand      apart from  his political  party and  if the  political      party  does   not  want  the  candidate  to  incur  the      disqualification, it  must exercise  control  over  the      expenditure which  may be  incurred by  it directly  to      promote the  poll prospects  of the candidate. The same      proposition must  also held good in case of expenditure      incurred  by   friends  and   supporters  directly   in      connection with  the election of the candidate. This is      the only  reasonable interpretation  of  the  provision      which would  carry out  its object  and intendment  and      suppress  the   mischief  and  advance  the  remedy  by      purifying our  election process  and ridding  it of the      pernicious and baneful influence of big money."      On  November   7,  1974,  Bill  No.  104  of  1974  was introduced in  the Lok  Sabha  in  order  to  get  over  the judgment in  Kanwar Lal  Gupta. The Statement of Objects and Reasons of that Bill reads thus:           "STATEMENT OF OBJECTS AND REASONS           Section 77  of the  Representation of  the  People      Act, 1951 provides that the total of the expenditure in      connection with  an election  incurred or authorized by      the candidate or his election agent between the date of      publication of  the notification  calling the  election      and the date of declaration of the result thereof shall      not exceed such amount as may be prescribed. Rule 90 of      the Conduct of Elections Rules, 1961, seeks to lay down

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 7 of 16  

    the  maximum  election  expenses  for  a  parliamentary      constituency and an Assembly constituency in respect of 629      various States and the Union territories. Clause (6) of      section 123 of the Representation of the People Act has      specifically included  the incurring  or authorizing of      expenditure in contravention of section 77 as a corrupt      practice, which, if established, would not only vitiate      the election,  but also  result  in  disqualifying  the      candidate for a period of six years under section 8A of      the said Act.           In the  Election Law,  the emphasis  has  been  on      imposing a  curb on an individual incurring expenditure      in connection  with  his  election  in  excess  of  the      prescribed limit. The provision contained in section 77      of the  Act is  very specific  in this  respect and the      intention that  the curb is on the expenditure incurred      or authorized by the candidate has found support in the      judicial pronouncements  on the  point. The  expression      "incurred or  authorized" had  not been construed so as      to bring within its purview the expenditure incurred by      a political  party in  its campaign  or by  any  person      other than  the candidate unless incurred by such third      person as  the candidate’s  agent. In  other words, the      provisions of  section 77 and clause (6) of section 123      have been  intended and  understood to be restraints on      the candidate’s  election expenditure  and not  on  the      expenditure of a political party.           However, in the recent case of Kanwar Lal Gupta v.      A.N. Chawla  and Others  (Civil Appeal No. 1549 of 1972      decided on  3rd October,  1974), the  Supreme Court has      interpreted the  aforementioned expression "incurred or      authorized" as  including  within  its  scope  expenses      incurred by  a political party or other person referred      to  above.   In  view   of  the   effect   which   such      interpretation might  have particularly  with reference      to the  candidates against  whom election petitions are      pending, it  became urgently  necessary to  clarify the      intention  underlying   the  provisions   contained  in      section 77  of the  Representation of  the People  Act,      1951, namely,  that in  computing  the  maximum  amount      under  that   section  any   expenditure  incurred   or      authorized by  any other  person or  body of persons or      political parties  should not be taken into account. As      Parliament was not in session, the President 630      promulgated on  19th October,  1974, the Representation      of the People (Amendment) Ordinance, 1974.           The Bill seeks to replace this Ordinance."      By section  2 of the Amending Act, which is called. The Representation of  the People  (Amendment)  Act,  1974,  two Explanations were  added to  section  77(1),  out  of  which Explanation 1  is directly  relevant for  our purpose. Those Explanations read thus:           "Explanation  1.-  Notwithstanding  any  judgment,      order or  decision of  any court  to the  contrary, any      expenditure incurred  or authorized  in connection with      the election  of a candidate by a political party or by      any other  association or  body of  persons or  by  any      individual (other  than the  candidate or  his election      agent) shall not be deemed to be, and shall not ever be      deemed to have been, expenditure in connection with the      election incurred  or authorized by the candidate or by      his election agent for the purposes of this subsection:           Provided that nothing contained in the Explanation

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 8 of 16  

    shall affect-           (a) any judgment, order or decision of the Supreme      Court whereby  the election of a candidate to the House      of the People or to the Legislative Assembly of a State      has  been   declared  void  or  set  aside  before  the      commencement  of   the  Representation  of  the  People      (Amendment) Ordinance, 1974;           (b) any  judgment, order  or decision  of  a  High      Court whereby  the election  of any  such candidate has      been declared void or set aside before the commencement      of the  said Ordinance  if no appeal has been preferred      to the  Supreme Court  against such  judgment, order or      decision of the High Court before such commencement and      the period  of limitation  for filing  such appeal  has      expired before such commencement. 631           Explanation 2.-  For the  purposes of  Explanation      1, "political  party" shall have the same meaning as in      the Election Symbols (Reservation and Allotment) Order,      1968, as for the time being in force."      The argument  of Mr. Sorabjee, who appears on behalf of the petitioner, may be summed up thus: (1) It is the essence of fair  elections that  any  individual  or  any  political party,  howsoever  small,  should  be  able  to  contest  an election on  a footing of equality with any other individual or political  party, howsoever rich and well financed it may be, and  no individual  or political party should be able to secure an  advantage over  others by  reason of its superior financial strength. (2) The rationale of imposing a limit on expenditure incurred  or authorised  by a  candidate  in  an election is to eliminate, as far as possible, the pernicious influence of  big money in the electoral process which leads to the  worst form  of political  corruption. Limitation  on election expenditure  is imperative  for ensuring the purity of the  electoral  process.  (3)  It  is  indisputable  that availability of  large funds  and resources to an individual backed by  a political  party supporting  him  would  confer greater and undue advantage on him over an individual who is without any  links with  affluence or  wealth.  (4)  Such  a consequence is  anti-democratic because  it  denies  to  the citizen the  right to  have full and effective participation in the electoral process. (5) Explanation 1 to section 77(1) strikes at  the very  heart of  democracy inasmuch as is not only permits but encourages and legitimises the influence of big money  in  the  electoral  process  and  thus  militates against the  fairness and  purity of  the electoral process. Furthermore,  it  makes  a  mockery  of  and  nullifies  the salutary object  of imposing  a  ceiling  on  a  candidate’s expenditure,  which  provision  is  a  beneficent  provision enacted in  the interests  of purity  and genuineness of the democratic  process.   The  impugned   provision,  far  from suppressing the  mischief of  baneful influence of big money directly promotes  it and  thereby sullies the purity of the electoral process.  Consequently, it goes against the ’basic requirement of  the Constitution’  and violates  a basic and essential feature  of the Constitution and, consequently, is arbitrary. (6)  The impugned  provision is further violative of article  14, because  it sanctions serious discrimination between one political party or individual and another on the basis of  money power.  It makes  the wealth of affluence of the political  party supporting  the candidate  the decisive factor in the outcome of elections. It introduces wealth and affluence as  a measure  of a  candidate’s qualifications or prospects of 632

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 9 of 16  

success, which  is to  ’introduce a capricious or irrelevant factor’.  (7)   Once  the   franchise  is   granted  to  the electorate,  provisions  may  not  be  made  nor  conditions imposed which  are  inconsistent  with  article  14  of  the Constitution, irrespective  of the  fact that  the right  of franchise is  not a fundamental right guaranteed in Part III of the Constitution.      Shri Krishnamoorthy  Iyer, who appears on behalf of the Union of India, contends that Explanation 1 to section 77(1) of the  Act was  introduced in  order to  restore the law as expounded in  the decisions  of this  Court,  prior  to  the decision in  Kanwar Lal Gupta. Those decisions, according to learned counsel, are: Rananjaya Singh v. Baijnath Singh, Ram Dayal v.  Brijraj Singh and Magraj Patolia v. R.K. Birla. It is urged that though these decisions have been considered in Kanwar Lal  Gupta, the  Court was  not right in holding that the view  taken in  those decisions was not at variance with the view  taken by  it. In  support of  this  argument,  our attention was  drawn to  the observations  made by Beg J. in Smt. Indira Gandhi v. Raj Narain to the following effect:           "After examining  the catena  of cases,  I  think,      with great  respect, that the decision of this Court in      Kanwar Lal Gupta’s case could be understood to point in      a direction  contrary to  that in  which  the  previous      cases were  decided. Hence,  it appears  to me that the      amendment  made  by  Act  58  of  1974  by  adding  the      Explanation 1  to  Section  77  of  the  Act  could  be      justified as merely an attempt to restore the law as it      had been  understood to  be previous to the decision of      the Court in Kanwar Lal Gupta’s case." Counsel also  relies on various decisions of the High Courts in  which   it  was  held,  prior  to  the  introduction  of Explanation 1  to section  77(1), that the expenses incurred by political  parties in  connection with  the  election  of their candidates  do not fall within the mischief of section 77(1) read  with section  123(6) of  the Act.  The provision contained in  Explanation 1  is attempted to be justified by the respondents  on the  ground that  political parties have come to stay in our 633 country,  that   they  are   indispensable  for  the  proper functioning of democracy and, therefore, no exception can be taken if  a political party incurs expenditure to ensure the success of  the candidates  sponsored by  it. Explanation  1 treats all  political parties  equally and  no violation  of Article 14  is  involved.  Counsel  contended  finally  that legislative  policies   bearing   upon   matters   governing elections are not open to judicial review.      The principal  theme of  the petitioner’s  argument  is ’purity  of  the  election  process’.  All  other  arguments converge upon  that theme  and are intended to give strength and succour  to it.  There is a vast amount of literature on the need  to preserve  the purity  of elections.  There is a perceptible awareness  amongst political  observers, if  not amongst active  politicians, that  one of the ways to ensure that elections  are  free  and  fair  is  to  weed  out  the influence of big money which, to use an expression which has become a  household word,  is more black than white. The Lok Sabha Debates,  while  Explanation  1  was  being  added  to section 77(1)  of the  Act, show  that there was a consensus amongst the Members of the House that election expenses must be effectively  controlled, which  was also reflected in the fact that  in  almost  all  countries  of  the  world  where representative form of Government prevails, provisions as to election expenses  are invariably made. On October 18, 1979,

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 10 of 16  

the Election  Commission of India circulated a letter to all recognised national and State parties, proposing revision of the maximum  limits of  election expenses.  In  the  ’Notes’ appended to  that  letter,  the  Commission  says  that  the election "expenditure should be at such reasonably low level as not  to defeat  the very  purpose of  fixing a ceiling on election expenses,  i.e. curbing  the  influence  of  ’money power’ on  elections". While  the Janata  Government was  in power, it  had introduced  Bill No. 153 of 1977 to amend the Act  by  deleting,  inter  alia,  Explanation  1  which  was introduced in  Section 77(1) by Amending Act 58 of 1974. The Statement of Objects and Reasons of that Bill, insofar as it relates to  the proposed deletion of Explanation 1 says: "It is considered that the amendments made in the Representation of  People  Act,  1951  far  from  ensuring  free  and  fair elections may  have the effect of increasing money power. It is, therefore,  proposed to  amend the  Act to  restore  the position that obtained earlier". The Bill eventually lapsed.      In Kanwar Lal Gupta one of us, Bhagwati J., observed: 634           "The other objective of limiting expenditure is to      eliminate, as  far as  possible, the  influence of  big      money in  the electoral process. If there were no limit      on expenditure,  political parties would go all out for      collecting  contributions  and  obviously  the  largest      contributions would  be from  the rich and affluent who      constitute  but  a  fraction  of  the  electorate.  The      pernicious influence  of big  money would  then play  a      decisive role  in controlling the democratic process in      the country.  This would  inevitably lead  to the worst      form of  political corruption  and that  in its wake is      bound to produce other vices at all levels." (P. 266) In Vatal  Nagaraj v.  R.  Dayanand  Sagar  Krishna  Iyer  J, speaking for the Court, observed:           "Money  power  casts  a  sinister  shadow  on  our      elections and the political payoff of undue expenditure      in the  various  constituencies  is  too  alluring  for      parties  to  resist  temptation.  ........  The  likely      evasion of the law by using big money through political      parties  is   a  source  of  pollution  of  the  Indian      political process.  To channel  funds into the campaign      for specific candidates getting around the requirements      of the  law by establishing party committees is all too      familiar in this and some other countries."      The decision  of the  Bombay High  Court in Tata Iron & Steel Co.  Ltd. exhibiting  "considerable uneasiness of mind and a sinking feeling in the heart", expressed the view that any attempt  on the  part of any business house to finance a political party  is likely to contaminate the very spring of democracy. In  Indian Iron  and Steel Co. Ltd., the Calcutta High Court  pointed out  the dangers  involved in  political parties  being  financed  for  election  purposes  by  large business houses.  The High  Court observed:  "in the bid for political favouritism  by the bait of money, the company who will be  the highest  bidder  may  secure  the  most  unfair advantage  over   the  rival  trade  companies".  The  Court lamented that such a state of affairs 635 will mark  the advent  of the  voice of  the big business in politics and pollute the political life of the country.      The Report  of the Santhanam Committee on Prevention of Corruption says:           "The public belief in the prevalence of corruption      at high  political levels  has been strengthened by the      manner  in  which  funds  are  collected  by  political

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 11 of 16  

    parties, especially  at the  time  of  elections.  Such      suspicions attach  not only  to the ruling party but to      all parties,  as often  the opposition can also support      private  vested   interests  as  well  members  of  the      Government party.  It is, therefore, essential that the      conduct of  political parties  should be  regulated  in      this  matter   by  strict  principles  in  relation  to      collection of  funds and  electioneering. It  has to be      frankly recognised that political parties cannot be run      and elections  be fought without large funds. But these      funds  should   come  openly  from  the  supporters  or      sympathisers of the parties concerned.           If even  one family in three pays one rupee a year      to a  political party,  the total  annual  contribution      will be  more than  what is  needed for  all legitimate      purposes of  all political  parties in India. It is the      reluctance and inability of these parties to make small      collections on a wide basis and the desire to resort to      short cuts through large donations that constitutes the      major source  of corruption  and even more of suspicion      of corruption."      The Report  of the  Expert Committee  headed by Justice Sacher on  ’Companies and  MRTP Acts’ deals extensively with the evils  flowing out  of the  donations made  to political parties by  big business  houses and  points out the dangers involved in  allowing the  money power to play a role in the electoral process  of our  country. (paragraph  13.12).  The Committee recommended that section 293A of the Companies Act which prohibited  contribution  by  companies  to  political parties  should   be  further  strengthened  in  the  manner indicated by it in paragraph 13.18. 636      In England, before the passing of the Representation of the People  Act, 1949,  the view  had  been  expressed  that expenses incurred  without the authority of the candidate or election agent  for promoting or procuring the election of a candidate might  not require  to  be  returned  as  election expenses, provided the expenses were incurred by persons who were outsiders  not agents, and accordingly did not have any part in the conduct or management of the election. It is now provided by  the aforesaid  Act that certain expenses with a view to  promoting or  procuring the election of a candidate at an election must not be incurred by any person other than the candidate,  his election agent and persons authorised in writing by  the election  agent. If  any person  incurs,  or aids, abets, counsels or procures any other person to incur, any expenses  in contravention  of  this  provision,  he  is guilty of  a  corrupt  practice.  (See  Halsbury’s  Laws  of England, Fourth Edition, Volume 15, paragraph 721).      We have  referred to  this large  data in order to show that the  influence of  big money on the election process is regarded universally  as an  evil of  great  magnitude.  But then, the  question which we, as Judges, have to consider is whether the  provision contained  in Explanation  1  suffers from any constitutional infirmity and, particularly, whether it  violates  Article  14.  On  that  question  we  find  it difficult, reluctantly though, to accept the contention that Explanation 1  offends against  the right to equality. Under that provision,  (i) a  political party  or (ii)  any  other association or  body of  persons or  (iii)  any  individual, other than  the candidate  or his  election agent, can incur expenses, without  any limitation  whatsoever, in connection with the  election of  a candidate.  Such expenses  are  not deemed to  be expenditure  in connection  with the election, incurred or  authorised by  the candidate or by his election

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 12 of 16  

agent for  the purposes  of section 77(1). It is urged that, by reason  of this provision, affluent political parties get an unequal  and  unfair  advantage  over  other  parties  or associations which  do not  command the same money power and therefore, the guarantee of equality is violated. The answer to this  contention is  that Explanation  1  classifies  all political parties  or associations  in one group and confers upon them  the same  or similar advantage. Political parties or, politically  motivated associations or bodies of persons or, individuals  interested  in  political  happenings,  are characterised by  common attributes,  the dominant attribute being  that  they  engage  themselves  in  activities  of  a political nature.  Elections constitute  the  core  of  such activities. A classification of this nature bears reasonable relationship with the 637 object of  the statute  that expenses  incurred by those who fall within  the particular  group should not be regarded as expenditure incurred  or authorised  by the candidate or his election agent.  It is  then  no  answer  to  say  that  all political parties  are not  equally situated  in the  wealth which they  command. Were  such an  argument open, the limit set upon  election expenses by Rule 90 shall also have to be regarded as  violative of the guarantee of equality because, a fairly large number of contesting candidates, particularly the independents,  would not  be in  a position  to spend as large an amount as rupees one lakh, which is the permissible limit in  large constituencies.  Classification  has  to  be broadly reasonable  in order  to sustain  the  challenge  of unconstitutionally. One  cannot  dissect  that  process  and discover shades within shades to nullify it on the ground of inequality. It  is a  stark fact of life that an independent who contests  an election  on his  own, that is, without the support  of   a  political   party,  is  at  a  considerable disadvantage  as   compared  with  candidates  supported  by political parties.  But, that  does not  violate the rule of equality. It  is not  the election  law which  creates  such inequalities. Inequalities  exist apart  from that  law  and are, unfortunately,  implicit in  the unequal  positions  in which the  citizens find themselves. What the law does is to allow,  in   an  equal   measure,  all   political  parties, associations or bodies of persons or individuals (other than the candidate  or his  election agent)  to incur expenses in connection with  the election of a candidate, which need not be included  in the  return of  election expenses  which the candidate is required to file.      Though Explanation  1  clubs  associations,  bodies  of persons and  certain  individuals  together  with  political parties, it  is plain  that the  benefit conferred  by  that provision goes  largely, though not exclusively to political parties.  It   is  the   political  parties   which  sponsor candidates, that  are in  a position to incur large election expenses which  often run  into astronomical  figures. We do not consider that preferring political parties for exclusion from the  sweep of  monetary limits on election expenses, is so unreasonable  or arbitrary  as to  justify the preference being struck  down upon that ground. In the first place, the statute does  not make the affluence of a political party an electoral standard  for acquiring  eligibility prescribed by the Explanation.  Secondly, it  is not  an unwise policy, to the extent  that we  can examine  the wisdom  of legislative policies, to  ensure reasonable  reduction in  the number of contesting candidates,  which  can  be  done  by  conferring special privileges upon political parties. It is a matter of common knowledge that in the

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 13 of 16  

638 recent elections  to  the  Lok  Sabha  and  the  Legislative Assemblies, the  printing  of  the  ballot  papers  posed  a serious problem to the Election Commission since, the number of  contesting  candidates  in  certain  constituencies  was absurdly large.  In any  democratic  system  of  Government, political parties  occupy a  distinct and unique place. They are looked  upon as guardian angels by their members though, occasionally, they  fail to  discharge the  benign role of a guardian, leave  alone the angelic part of it. It is through them that  the generality  of people  attempt  to  voice  or ventilate their  grievances. Considering,  also,  the  power which they  wield  in  the  administration  of  Governmental affairs, a  special conferment  of benefits  on them  in the matter of  modalities governing  the election process cannot be regarded as unreasonable or arbitrary. That may, perhaps, help explain  why  in  Kanwarlal  Gupta  the  Court  drew  a distinction between  the expenses  incurred by  a  political party specifically  in connection  with the  election  of  a particular candidate  and the  expenditure incurred by it on general party propaganda, the latter not being includible in the return  of election  expenses which the candidate has to file. The  rationale of  that decision, though not expressed in so  many words,  is  that  by  reason  of  the  important position which  political parties  occupy in  the democratic set  up,   they  are   entitled  to  incur  expenditure  for projecting their programmes and popularising their policies. Explanation 1  only takes  one step ahead, important though. It obliterates  the dividing  line drawn in Kanwarlal Gupta, between expenses  incurred ’in connection with’ the election of a  particular candidate and expenses incurred on ’general party propaganda’. All persons, except the candidate and his election agent,  are now  free to  incur expenditure  of the former kind  too, without the constraints of ceiling imposed upon election expenditure by section 77(3) read with Rule 90 of the  Conduct of Election Rules, 1961. Whether Explanation I restores  the law  as it  was understood  before Kanwarlal Gupta or,  it makes an innovation is irrelevant for deciding upon  its   validity.  Every  law,  whether  restorative  or innovative, has  to be  tested  on  the  touchstone  of  the Constitution.      It is  evident that  a certain class of individuals has been included  in Explanation  1 out of abundant caution, so as to  avoid the challenge that they have been discriminated against   in   comparison   with   political   parties   and associations  or   bodies  of   persons.  It  is  true  that individuals cannot match their spending ability with the 639 financial prowess of political parties or trade unions. But, that takes one back to the same point, though in a different garb: All  political parties  are not  equally affluent  and therefore  those  that  command  big  money  get  an  unfair advantage over the others. Election laws are not designed to produce economic  equality amongst  citizens. They  can,  at best, provide  an  equal  opportunity  to  all  sections  of society to  project their  respective points  of view on the occasion of  elections. The method, somewhat unfortunate, by which law  has achieved  that purpose,  is  by  freeing  all others except  the candidate and his election agent from the restriction on  spending, so  long  as  the  expenditure  is incurred or  authorised by  those others. The argument, that individuals are  not able to reap the benefit of Explanation 1 effectively  by reason  of  the  paucity  funds  at  their command, has  the same  answer as  the argument  that  every contesting candidate  cannot afford  to spend as large a sum

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 14 of 16  

as rupees  one lakh and, therefore, those who can spend that much have  an unfair advantage over those who cannot. If the argument that  different political parties have been treated equally  though   they  are   situated  unequally,  or  that individuals have  been discriminated against either inter se or in  relation to  political parties  and  associations  to correct, the  only method  which would  measure  up  to  the required constitutional  standard is  the one  in which  the State would have to allocate funds from its own exchequer in order to enable the various candidates to contest elections. That would  be the  fairest form of fairness. But, that is a far cry.      Counsel for  the petitioners  urged that  Explanation 1 renders the  main provision  in section  77(1) nugatory,  by taking away  with one  hand what  is  given  by  the  other. Assuming that  this is  so, the Explanation would not become unconstitutional for  that reason. The argument really hears upon the  interpretation of the section and the Explanation, and not  upon the  validity of  the Explanation.  We do  not agree that  the  Explanation  denudes  the  section  of  its meaning and  makes it  purposeless. Section 77(1) deals with the expenditure  ’incurred or  authorised by’ a candidate or his election  agent, in  connection with the election. It is obligatory to  keep a  separate and  correct account of such expenditure.  Explanation   1  deals  with  the  expenditure incurred or  authorised by  a political  party or  any other association or  body of  persons or  by an  individual other than  the  candidate  or  his  election  agent.  It  is  not obligatory for the candidate or his election agent to keep a separate and  correct account  of such  expenditure. That is because of two reasons. In the first 640 place, such expenditure is not incurred or authorised by the candidate or  his election  agent and therefore, in the very nature of  things, they  cannot  keep  an  account  of  that expenditure. Secondly,  the argument that expenditure of the kind described  in  Explanation  1  must  be  deemed  to  be incurred or  authorised by  the candidate  or  his  election agent, is  met by  the provision  in the Explanation that it shall not  be so  deemed. Section  77(1) on the one hand and Explanation  1   on  the  other,  deal  with  two  different situations wherefore,  the latter  cannot render  the former meaningless.      While we  are on  this question, we would like to point out that  if an  expenditure which  purports  to  have  been incurred, for  example, by  a political  party, has  in fact been incurred  by  the  candidate  or  his  election  agent, Explanation 1  will not  be attracted.  It is  only  if  the expenditure is in fact incurred or authorised by a political party or  any other association or body of persons, or by an individual (other  than the candidate or his election agent) that the  Explanation will  come into  play.  The  candidate cannot place  his own  funds in the power or possession of a political party,  or a  trade union or some other person and plead for  the protection  of Explanation  1. The  reason is that, in  such a  case, the  incurring of the expenditure by those others,  is a mere facade. In truth and substance, the expenditure is  incurred by  the candidate  himself because, the  money   is  his.   What  matters  for  the  purpose  of Explanation 1 is not whose hand it is that spends the money. The essence  of the matter is, whose money it is. It is only if the  money expended by a political party, for example, is not laid  at its  disposal by  the candidate or his election agent that  Explanation 1  would apply.  In other  words, it must be  shown, in  order that Explanation 1 may apply, that

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 15 of 16  

the source of the expenditure incurred was not the candidate or his  election agent. What is important is to realise that Explanation 1  does not  create a fiction. It deals with the realities of  political situations. It does not provide that the  expenditure   in  fact  incurred  or  authorised  by  a candidate or  his election  agent, shall not be deemed to be incurred or authorised by them, if the amount is defrayed by a political  party. That  would be  tantamount to creating a fiction. The object of the Explanation is to ensure that the expenditure incurred,  for example,  by a political party on its own,  that is,  without using  the funds provided by the candidate or  his election  agent shall  not be deemed to be expenditure incurred  or authorised  by the candidate or his election agent.  If the  expenditure is incurred from out of the funds provided by the candidate or his election agent 641 section 77(1)  and not  Explanation I  would  apply.  It  is necessary to  make this  clarification  since,  the  use  in Explanation 1  of expressions  which are generally used when the legislative  intent is  to create  a fiction,  is apt to cause confusion  and misunderstanding.  The reason  why  the expression  "shall   not  be   deemed  to  be"  is  used  in Explanation 1  is that the Parliament wanted to get over the effect of  the judgment  of this  Court in Kanwar Lal Gupta. Similarly, the  reason why the expression "shall not ever be deemed to  have been" is used in the Explanation is that the intention of  the Parliament  was to  get over the effect of that  judgment   retrospectively,  except   to  the   extent mentioned in  clauses (a)  and (b)  of the  Proviso  to  the Explanation.      It is essential that the limited range of Explanation 1 ought not  to be  enlarged. The  ceiling placed  on election expenses is  a basic  commandment of  the Act,  not a  pious edict. Its  object is  to keep  a check  on the  expenditure incurred by  candidates on  their own elections, directly or through their  election agents.  They cannot be permitted to resort to  subterfuges  in  order  to  evade  the  restraint imposed by  sections 77(1)  and 77(3)  of the Act. Homage to the principle of free and fair elections has to be real, not formal.      The petitioner  is not  unjustified in  criticising the provision  contained   in  Explanation  1  as  diluting  the principle  of   free  and   fair  elections,  which  is  the cornerstone of  any democratic polity. But, it is not for us to lay  down policies in matters pertaining to elections. If the provisions  of the  law violate  the Constitution,  they have to  be struck down. We cannot, however, negate a law on the ground  that we  do not  approve  of  the  policy  which underlies it.  Can the  Court, for example, strike down Rule 90 on  the ground  that the  limit of rupees one lakh is too high in the Indian context ? We may have our own preferences and perceptions  but, they  cannot be  used for invalidating laws.      In so  far as election laws are concerned, there is yet another impediment to contend with. The right to contest and election or  to vote  at it  is not  a Common  Law right. As observed by  Chinnappa Reddy,  J.  in  Jyoti  Basu  v.  Debi Ghosal:           "A right  to elect,  fundamental though  it is  to      democracy, is, anomalously enough, neither a funda- 642      mental right  nor a  Common Law  Right. It  is pure and      simple, a  statutory right.  So  is  the  right  to  be      elected. So  is  the  right  to  dispute  an  election.      Outside of  statute, there  is no  right to  elect,  no

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 16 of 16  

    right  to  be  elected  and  no  right  to  dispute  an      election. Statutory  creations they are, and therefore,      subject to  statutory limitation.  Concepts familiar to      Common Law and Equity must remain strangers to Election      Law unless  statutorily embodied.  A Court has no right      to resort  to them  on considerations of alleged policy      because policy in such matters as those relating to the      trial of  election disputes,  is what  the statute lays      down... We  have already  referred to the Scheme of the      Act. We  have noticed the necessity to rid ourselves of      notions based  on Common  Law or Equity. We see that we      must seek  an answer  to the  question within  the four      corners of the Statute. What does the Act say ?" What does  the Act  say ? It says through Explanation 1 that persons other  than the candidate or his election agent may, on their own, release their purse strings and never tie them again.      We have  already said  that the question as regards the constitutional  validity   of  Explanation   1  has   to  be determined regardless of the consideration as to whether the said Explanation  restores the  law as  it stood  before the decision of  this Court  in Kanwar  Lal Gupta  or whether it introduces a  new provision altogether. We have decided upon the constitutionality  of the  Explanation on its own terms. It  is,   therefore,  unnecessary   to  consider   the  pre- Explanation decisions  of this  Court in  Rananjaya Singh v. Baijnath Singh,  Ram  Dayal  v.  Brijraj  Singh  and  Magraj Patolia v.  R.K. Birla, except to extract a passage from the last of these three cases, which reads thus:           "Now coming  to the  corrupt practice of incurring      expenditure beyond  the prescribed  limit,  in  several      decisions  this   Court  has   ruled  that  it  is  not      sufficient for the petitioners to prove merely that the      expenditure more  than the  prescribed limit  had  been      incurred in  connection with  the election,’ he must go      further and prove that the 643      excess expenditure  was incurred  with the  consent  or      under the  authority of  the returned  candidate or his      election agent."      In  the   result,  the  Writ  Petition  and  the  Civil Miscellaneous Petitions  are dismissed.  There  will  be  no order as to costs. A.P.J.     Petition dismissed. 644