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PETITIONER: N. SATYANATHAN

       Vs.

RESPONDENT: K. SUBRAMANYAN AND OTHERS.

DATE OF JUDGMENT: 29/03/1955

BENCH: SINHA, BHUVNESHWAR P. BENCH: SINHA, BHUVNESHWAR P. BOSE, VIVIAN JAGANNADHADAS, B.

CITATION:  1955 AIR  459            1955 SCR  (2)  83

ACT: Representation of the People Act, 1951 (Act XLIII of  1951), s.  7(4)-Appellant  entered  into  agreement  with   Central Government  for  conveying  postal articles  and  mail  bags through  Motor  Vehicle Se?-vice  on  certain  remuneration- Appellant whether disqualified for election to the House  of People under s. 7(d) of the Act.

HEADNOTE: The  question for determination in this appeal  was  whether the  appellant  was  disqualified  under  s.  7(d)  of   the Representation  of the People Act, 1951 for election to  the House of the People. The material portion of s. 7(d) of the Act reads as follows: "A person shall be disqualified for being chosen as and  for being,  a member of either House  of  Parliament............ (b)  if,  whether  by himself or by any person  or  body  of persons  in  trust  for him or for his  benefit  or  on  his account,  he  has  any  share  or  interest  in  a  contract for............ the performance of any service undertaken by the appropriate Government". The  appellant (a contractor) had entered into an  agreement with  the Central Government.  The relevant portion  of  the said agreement was as follows:- "The  contractor has offered to contract with the  Governor- General for the provision of a Motor Vehicle Service for the transit conveyance of all postal articles and mail bags from December  15,  1949 to December 14, 1952 and  the  Governor- General has accepted the offer. "The Government agrees to pay to the contractor Rs. 200  per month  during  the  subsistence of  the  agreement  ’as  his remuneration for service to be rendered by him’ ". Held  that on the face of it the agreement was  between  two competent  parties with their free consent, and there was  a lawful  cash  consideration for it.  The  Appellant  entered into the agreement with his eyes open knowing full well  his rights and liabilities under the same. 84 The  case was a straightforward illustration of the kind  of contract  contemplated  by  s.  7(d) of  the  Act.   At  all material  times the appellant had been  directly  concerned,

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for  his own benefit, in the contract of carrying mail  bags and postal articles entered into by him with the  Government in the Postal Department. Section 7 of the Act is clearly intended to avoid a conflict between public duty and private interests.

JUDGMENT: CIVIL APPELLATE JURISDICTION: Civil Appeal No. 252 of 1954. Appeal  by Special Leave from the Judgment and  Order  dated the  22nd January 1953 of the Election Tribunal, Vellore  in Election Petition No. 35 of 1952. N.C.  Chatterjee  (A.  N. Sinha and N.  H.  Hingorani,  with him), for the appellant. C. V. L. Narayan, for respondent No. 1. 1955.  March 29.  The Judgment of the Court was delivered by SINHA.   J.-The  only  question for  determination  in  this appeal  by  special  leave  is  whether  the  appellant   is disqualified-under section 7(d) of the Representation of the People  Act, 1951 (hereinafter called the Act) for  election to  the  House  of  the People,  as  held  by  the  Election Tribunal, North Arcot, Vellore, by its orders dated the 20th January, 1953 in Election Petition No. 35 of 1952. The  facts of this case are not in dispute and lie within  a narrow  compass.   The  appellant and  respondents  I  to  3 contested  the  last general elections from  the  Dharmapuri Parliamentary  Constituency in the district of Salem in  the State  of  Madras.   Respondents  4 to  10  who  were  added subsequently   by  an  order  of  the  Tribunal  were   also candidates  for election.  Their nominations also  had  been held  to  be  valid  but  they  ultimately  withdrew   their candidature  before the polling took place.   The  appellant was in due course declared to have been elected to the House of  the People.  Thereafter, on the 5th March, 1952 the  1st respondent  filed an election petition before  the  Election Commission contesting the appellant’s election 85 on  the  ground that the appellant  was  disqualified  under section 7(d) of the Act as, from the date of his  nomination and until the date of election and after, the appellant  had a  contract  with  the Government of  India  in  the  Postal Department  for  the transport of postal mail  which  was  a service  undertaken  by the Government of  India.   At  this stage it is necessary to state that it is admitted that  the appellant  is  and has been the holder of a  stage  carriage service permit (Ex.  B-2) dated the 26th April 1949,  issued by the Regional Transport Authority, Salem, Madras.  It  was one of the conditions of the said permit that if called upon the  appellant  will  enter  into  an  agreement  with   the Government of India for the transport of postal articles and mail  bags.  In pursuance of that obligation  the  appellant entered  into a registered agreement with the Government  of India on the 16th November 1949 (Ex.  A-3) to be noticed  in detail  hereinafter.   After  the appellant  had  filed  his nomination  paper, the 1st respondent by his petition  dated the  28th November 1951 raised the objection to  the  effect that his nomination should be rejected on the ground that he had entered into a contract with the Government of India for his own benefit for the transport of mail between Salem  and Yercaud.    The   Returning  Officer  for   the   Dharmapuri Parliamentary Constituency, Salem, by his orders (Ex.   A-2) of  the same date overruled the objection holding  that  the service  rendered by the appellant of carrying mail  is  not under  an  agreement  but  on an  imperative  order  of  the

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Government  under  Rule 160-B of the Madras  Motor  Vehicles Rules.   Apparently the registered agreement (Ex.  A-3)  had not been placed before him. To  the  election petition filed by the 1st  respondent  the appellant  filed his written statement on the 28th May  1952 denying that he was disqualified for election as a member of Parliament  by virtue of the provisions of section  7(d)  of the  Act.   His  contention was that "it  is  the  exclusive privilege  of the Government of India to convey  all  postal articles  from  one  place to another and  it  is  a  normal function  of the Government statutorily reserved to  itself. There is no justifi- 86 cation  to  regard the carrying of mails from one  place  to another as the performance of any service undertaken by  the Government".   It  was  further averred  on  behalf  of  the appellant  that  it  was not justifiable to  regard  him  as having any interest in a contract for the performance of any service undertaken by the appropriate Government within  the mischief  of section 7(d) of the Act; and that he  had  been only  carrying out the obligations imposed upon him by  Rule 160-B of the rules framed under the Motor Vehicles Act.   It was   also   contended  that  under  article  103   of   the Constitution   of  India  the  question  as  to   the   dis- qualification of a member has to be decided by the President whose decision shall be final. On  those pleadings the following issues were framed by  the Election Tribunal:- 1.Is the nomination of the 1st respt. invalid because of the prohibition contained in section 7(d) of the  Representation of the People Act, 1951, or for any of the reasons set forth in paras. 9 to 11 of the petition? 2.Has  this Tribunal no jurisdiction to decide the  question as  regards the disqualification of the returned  candidate, because of article 103 of the Constitution of India? It is not necessary to refer to the additional issue bearing on the question of limitation arising from an  interlocutory application  for impleading those candidates (respondents  4 to  10)  whose  nomination had been  accepted  but  who  had withdrawn from the contest.  Both these issues were  decided against  the  appellant.  The Tribunal on a  very  elaborate discussion  of  the points raised before it, held  that  the postal service including the transport of mails is a service undertaken  by the Central Government within the meaning  of section  7(d);  that  at  the date  of  the  nomination  the appellant  was  a contractor under the  Central  Government; that the agreement between the Government and the  appellant involved mutual obligations which could not be referable  to a bare statutory duty on the part of the appellant but  that it was the result ’of mutual assent based upon a free 87 offer  and acceptance; and that the agreement was  supported by valid consideration.  The Tribunal also held that article 103 of the Constitution was not a bar to its jurisdiction to decide,   the  controversy.   Accordingly  it  allowed   the election  petition and held the appellant’s election  to  be void in terms of section 100(1)(c) of the Act, with costs to the respondent.  Hence this appeal. In  this appeal the contentions raised before  the  Election Tribunal,   except   the   objection   to   the   Tribunal’s jurisdiction in view of the provisions of article 103 of the Constitution,  have  been pressed before us by  the  learned counsel  for  the  appellant.   It  is  manifest  that   the determination  of  this  case  must  depend  upon  the  true construction  and legal effect of the agreement  (Ex.   A-3)

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admittedly  entered into by the appellant with  the  Central Government.   It is therefore necessary to set out  in  some detail the relevant clauses of the agreement.  The appellant (called  the  "contractor")  is  of the  one  part  and  the Governor-General of India of the other.  The preamble says-- "Whereas  the  said  contractor Sri.   N.  Sathianathan  has offered to contract with Governor-General for the  provision of  a Motor Vehicle Service for the transit  conveyance  and delivery of all postal articles and mail bags as defined  in the  Indian Post Office Act, 1898, as amended from  time  to time,................ from the 15th day of December 1949  to the  14th day of December 1952 and the Governor-General  has accepted   such   offer  upon  the  terms   and   Conditions hereinafter appearing.............. Now  this  indenture  witnesseth  that  the  contractor   in pursuance of the said agreement and in consideration of  the premises  and of the payments hereinafter agreed to be  made to him................ It is hereby mutually agreed and declared between and by the parties hereto as follows:- 1.Contract   to  carry:-The  contractor  shall  during   the continuance of this contract, that is to say, from the  15th day of December 1949 until the 14th day of December 1952  or until  the said contract shall be determined by such  notice as is hereinafter men- 88 tioned or otherwise in (hereinafter referred to as the  said contract period) duly and safely convey............ by means of  motor  vehicles  of good and  reliable  manufacture  all postal articles and mail bags................." By clause 4 the contractor is permitted to carry  passengers and  their  luggage by bus provided there  is  accommodation available  and  provided  that  the  mail  service  is   not prejudiced in any way.  By clauses 5 and 6 the contractor is required  to -maintain in good order and repair a number  of motor buses and their spare parts at his own expense and  to bear all municipal and other taxes payable in respect of the motor vehicles.  Clause 7 contains the schedule of penalties in the event of non-completion of any journey or of delay in completion  thereof in accordance with the time table,  etc. By  clause  8 the contractor is made absolutely  liable  and responsible  for  the due and safe custody and  delivery  in good  order and condition of postal articles and mail  bags. By  clause  10  nongazetted postal  and  telegraph  officers travelling  on duty on the route allotted to  the  appellant are  declared to be entitled to travel free of  all  charges and  such  official passengers shall  have  precedence  over ordinary  passengers.  Clause 13 provides that the  contract shall not be transferred by the contractor to any person  or company  without  the  previous consent in  writing  of  the Director-General  of Posts & Telegraphs.  By clause  15  the Government agrees to pay to the contractor Rs. 200 per month during the subsistence of the agreement "as his remuneration for service to be rendered by him hereunder"’.  This monthly sum  of  Rs.  200 is liable to  be  increased  or  decreased proportionately  to the increase or decrease in the  mileage to be covered.  Clause 18 is in these terms:- "In the event of the contractor failing to secure a  renewal of  the permit on the line this contract will  automatically terminate  on the date up to which the old permit  shall  be valid  and in such case no compensation shall be payable  to either  party  for such termination.  This contract  may  be absolutely  determined  and put an end to by either  of  the contracting 89

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parties giving four calendar months notice in writing to the other of his intention so to determine and put an end to the same". Clause  21  contains  the usual arbitration  clause  to  the effect  that all disputes and differences arising out of  or in  any wise touching or concerning the agreement  shall  be referred to the sole arbitration of the Director-General  of Posts  and Telegraphs or his nominee.  It is  also  provided that the award of the arbitrator shall be final and  binding on the parties. It  will be observed that the agreement set out above  is  a formally   drawn  up  document  which  satisfies   all   the requirements of a contract.  It is not the appellant’s  case that  the  contract has been vitiated  by  undue  influence, fraud  or such other cause.  But it has been argued that  it was a necessary sequel to the stage carriage permit  granted by the Transport Authority under the Motor Vehicles Act read along with the relevant rules.  In this connection reference was  made to rule 160-B of the Madras Motor  Vehicles  Rules which is as follows:- "It shall be a condition of every stage carriage permit that the  holder  of  the permit shall, if  so  required  by  the transport authority which granted the permit, carry mails at such rates and on such terms as the transport authority  may fix after consultation with the holder of the permit and the postal authorities concerned". The  rule  quoted above has apparently been made  under  the authority of section 48(d) of the Motor Vehicles Act. It  is common  ground  that  the agreement  aforesaid  between  the appellant and the Central Governmentis in pursuance of  rule 160-B  aforesaid;  but it has been argued on behalf  of  the appellant  that  though  the  agreement  aforesaid  has  the "semblance  of a contract", it is lacking in the  "essential ingredients  of a free consensus of acceptance  and  offer". This  argument is based on the further contention  that  the appellant has been carrying mail on his buses in performance of  a  statutory  obligation which cannot  come  within  the mischief of 12 90 section 7(d) of the Representation of the People Act,  1951. The material portion of the section is in these terms:- "A person shall be disqualified for being chosen as, and for being,    a    member   of   either   House    of    Parlia- ment............................ (b)if,  whether  by  himself or by any  person  or  body  of persons  in  trust  for him or for his  benefit  or  on  his account,  he  has  any  share  or  interest  in  a  contract for....................................     the  performance of any services undertaken by the appropriate Government". It  has  further  been  argued  alternatively  that  if  the agreement has the force of a contract, it is totally lacking in consideration because the monetary consideration provided for  in  the agreement is no more than the  subsidy  already fixed by the Regional Transport Officer by his orders  dated the  23rd July, 1949; that the agreement in  question  being with a third party, namely, the Governor-General, to  render service which was already due to another party, namely,  the Transport Authority for the same consideration cannot amount to a valid contract supported by consideration; and finally, that  the transport of mail is not a "service undertaken  by the Central Government". In  our opinion, there is no substance in any one  of  these contentions.  It is true that the appellant entered into the contract  aforesaid  with  the Central  Government  for  the

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transport  of  postal  articles and mail bags  on  the  16th November, 1949.  From before that date be had been  carrying on the business of plying buses on the route allotted to him by  the Regional Transport Authority.  But he  entered  into the  contract with his eyes open and knowing full  well  his rights and liabilities under the same.  No one is  compelled to  carry on the business of stage carriage service  or  for the matter of that, of transporting postal articles and mail bags.  In terms of the permit, it is open to the  Government to  call  upon a permit holder to-undertake  the  additional burden  of  carrying  postal articles and  mail  bags  which carries  with it the additional remuneration to be fixed  by the  Transport Authority after consultation with the  postal autho- 91 rities  and  the carrier.  It is not  every  stage  carriage permit holder who is called upon to do so.  At the time  the appellant entered into the contract with the, Government  in the  postal  department  he may not have  had  any  idea  of standing  for  election to the House of the People  when  in future the general elections came to be held.  If he  wished to steer clear of the difficulty created by section 7 of the Act,  he  could have given due notice  to  Government  under clause 18 of the contract referred to above.  On the  expiry of  the term of the notice he would have been free to  stand for  election to a State or Central Legislature.  Section  7 of the Act is clearly intended to. avoid a conflict  between public duty and private interest. The   Tribunal  discussed  a  number  of  authorities   with reference  to the English and the American Law  of  Contract for  arriving at the conclusion that the  agreement  between the  appellant  and the Government of India  in  the  Postal Department had all the ingredients of a valid contract.  The Tribunal  need not have travelled so far afield,  especially when the provisions of the Indian Con tract Act which govern the case are sufficient to answer all the contentions raised on behalf of the appellant.  On the face of the  transaction the  agreement was between two competent parties with  their free  consent.   There was no question -but that  there  was lawful consideration, The permit for the stage carriage  had been granted by, the authority under the Motor Vehicles Act; and the agreement for transport of postal articles and  mail bags  was  between  the Government of India  in  the  Postal Department and the appellant for a cash consideration. But  it was argued that the agreement was in pursuance of  a pre-existing obligation imposed by the rule aforesaid framed under  the Motor Vehicles Act.  It is true that  the  permit does  contain  a  condition that the  permit-holder  may  be called  upon to undertake transport of mail bags and  postal articles  but that is only a notice to intending  applicants for a stage carriage permit that the grantee of such a  per- mit may have to render that additional service for an 92 additional  remuneration  if  called upon to do  so  by  the authorities  of the Postal Department.  If any one  was  not prepared to undertake that additional responsibility, he was free not to make an application for such a permit; but  that does  not  mean  that the agreement  actually  entered  into between  the Postal Department and the permit holder is  not an  independent contract governed by its own special  terms. As  indicated  above, clause 18 has reserved  the  right  to either  party  to  terminate the  contract  on  giving  four months’  notice.   The appellant must be  presumed  to  have known  that the agreement that he had entered into with  the Postal Department will stand in the way of his running as  a

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candidate   for  election  to  the  Central  or  the   State Legislature.   There was nothing to prevent him from  giving the  necessary notice to the department and  thus  terminate his  agreement so as to be free to stand as a candidate  for election  to  the  legislature.  Section 7  of  the  Act  is intended to ensure that there is no occasion for a  conflict between  public duty and private interests.   The  appellant had  a clear and free choice before him.  If he was  anxious to   serve  the  community  as  a  member  of  the   Central Legislature,  he  had to give up his private  gains  in  the shape  of the remuneration for carrying postal articles  and mail  bags in his buses.  It may be that on his  terminating the  agreement with the postal department he would  have  to give  up his stage carriage permit also but not  necessarily so.   If  on  the same route a number of  bus  services  are permitted  to different parties, the Postal  Department  may choose  any one of them to enter into the agreement for  the carriage  of  mail bags and postal articles.   But  even  if there was only one service for the route in respect of which the  appellant held the stage carriage permit, if he had  to give  up his permit, some other party would take  his  place for running the bus service and carrying the postal articles and mail bags. It was further argued that the appellant had no hand in  the fixing  of  the  remuneration  to  be  paid  by  the  Postal Department for carrying its mails, etc.  But it is clear, by a reference to the terms of the rule 93 quoted above, that the amount of the remuneration had to  be fixed by the department after consultation with the carrier. It  was  always  open to the latter to demur  to  the  terms proposed  by  the  department  and  if  he  found  that  the department  was not prepared to accept his terms he was  not bound  to  enter into the agreement.  The fact that  he  had agreed  to carry postal articles and mail bags was  possibly an  additional qualification for him to obtain a renewal  of his permit and thus gave him an advantage over his  competi- tors.   Hence  instead of being an additional  burden  or  a handicap  to him, it was an additional advantage to  him  in the matter of getting a renewal of his permit in  preference to  others.   The agreement was therefore  based  on  mutual promises, by the appellant to carry the mail bags, etc., and by  the Postal Department to pay him  suitable  remuneration for the services thus rendered. It was further contended on behalf of the appellant that the Central  Government could not be said to  have  ’undertaken’ any ’service’ within the meaning of section 7(d) of the  Act when it made arrangements for the carriage of mail bags  and postal articles through the appellant.’ It has not been  and cannot  be  contended that the Government is  bound  in  the discharge  of  its  duties  as a  sovereign  state  to  make provision  for postal mail service.  The provisions  of  the Indian Post Office Act, VI of 1898, are only enabling in the sense  that  they  authorize the State agency  to  have  the exclusive  privilege  of  conveying letters,  etc.  for  the convenience  of  the  public  and for  the  benefit  of  the Government, without making it obligatory upon it to  provide every individual and every place with those facilities.   It may be that those facilities are being extended from time to time and are being brought nearer to every home but that  is only evidence of the fact that the State as a welfare  state is anxious to provide for the conveniences of the public  in the matter of communications and correspondence.  That is to say,  the  Government  in the  Postal  Department  has  only undertaken  a  service to be rendered to the  community  and

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that such 94 a service is not an essential function of a sovereign state. It  cannot  be gainsaid that the Governmentr in  the  Postal Department  is rendering a very useful service and that  the appellant has by his contract with the Government undertaken to  render that kind of service on a specified  route.   The present  case is a straightforward illustration of the  kind of contract contemplated by section 7(d) of the Act.  At all material  times the appellant has been  directly  concerned, for  his own benefit, in the contract of carrying mail  bags and postal articles entered into by him with the  Government in the Postal Department. For  the reasons aforesaid we have not the least  hesitation in  holding that the conclusions arrived at by the  Tribunal are  entirely correct.  The appeal is accordingly  dismissed with costs.                    Appeal dismissed.