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CASE NO.: Appeal (civil) 1001 2000

PETITIONER: PRADYUT BORDOLOI

       Vs.

RESPONDENT: SWAPAN ROY

DATE OF JUDGMENT:       02/12/2000

BENCH: R.G.Lahoti, S.V.Paatil

JUDGMENT:

L.....I.........T.......T.......T.......T.......T.......T..J

     J U D G M E N T

     R.C.  Lahoti, J.

     This  is  an  appeal  under   Section  116  A  of  the Representation of the People Act, 1951 (hereinafter, RPA for Short)  from an order of the Guwahati High Court made  under Clause  (b) of Section 98 of the Act declaring the  election of  the  appellant as Member of Legislative Assembly  to  be void.

     Pursuant  to a notification dated 22.4.1998 issued  by the  Election Commission of India by-election in  Margherita Legislative  Assembly  Constituency No.124 was held  in  the months  of May and June, 1998.  Nine persons, including  the appellant  and the respondent filed nomination papers.   One Ananda   Ram  Arandhara,  the   working  President  of   the Margherita  Block  Congress  Committee,  filed  a  complaint against  the  candidature of the respondent submitting  that the  respondent  was an employee of Coal India Ltd.  and  as such was disqualified from contesting election under Article 191  of  the  Constitution of India and Section  10  of  the Representation  of the People Act, 1951 in as much as he was holding  an  office of profit under the Government of  India and  also  performing  managerial  functions  in  a  company wherein  the  Government  of India have not  less  than  25% shares.   The  complaint  so  filed  was  supported  by  the appellant  at the scrutiny of the nomination papers held  on 18.5.1998.   The  Returning  Officer  upheld  the  objection recording  a  finding  that the respondent  was  holding  an office  of  profit in a government company which office  was not  included in the exemptions from disqualifications under the    Assam    Legislative       Members    (Removal    and Disqualifications)  Act, 1950.  The nomination paper of  the respondent  was rejected.  The constituency went to polls on 3.6.1998.   The appellant was declared elected on  6.6.1998. The  respondent  filed an election petition  under  Sections 80/81  of  the  Act  laying  challenge  to  the  appellants election.   On  trial  the  High Court has  found  that  the

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appellant  was neither holding an office of profit under the Government  of India within the meaning of Article 191(1)(a) of  the  Constitution nor was a managing agent,  manager  or secretary  of  any company or corporation in the capital  of which  the Government of India has not less than 25% shares. The High Court has further held that the nomination paper of the respondent could not have been rejected on the ground of disqualification  and  as the same was improperly  rejected, the election of the appellant was void.

     are  :   The  questions arising for decision  in  this appeal  (i)whether  the respondent was holding an office  of profit  under  the  Government of India on the date  of  his nomination?  and,

     (ii)  whether the respondent was disqualified being  a manager  of  any  company  in   the  capital  of  which  the Government of India has not less than 25% shares?

     The  basic  facts are not in controversy.  It  is  not disputed  that  the  respondent  was an  employee  of  Tirap Colliery,  North  Eastern Coal Fields under the  Coal  India Ltd.   holding the post of Clerk Grade-I.  The gross  salary attached  with  the office was around Rs.6,000/- per  month. The  Coal  India  Ltd.  is a Government company  within  the meaning  of  Section 617 of the Indian Companies  Act,  1956 having   come   into    existence    consequent   upon   the nationalisation  of  the  coal mines under  the  Coal  Mines (Nationalisation)  Act,  1973.  Under Section 3 of the  said Act  the right, title and interest of the owners in relation to  the  coal mines came to vest absolutely in  the  Central Government initially and then came to vest in the Government company  under  Section  5 of the said Act.   Memorandum  of Association  and Articles of Association of Coal India  Ltd. framed  in the year 1973 have been brought on record.  These documents,  read in the light of the oral evidence  adduced, go  to  show that the Coal India Ltd.  is a Private  Limited Company incorporated under the Companies Act, 1956 with 100% share  capital owned by the Central Government.  The Company has  not more than 15 members.  The business of the  Company is  entrusted to a Board of Directors consisting of not less than  3 and not more than 15 directors.  The Chairman of the Board is to be appointed by the President of India and other members  of  the Board including the Vice-Chairman shall  be appointed   by  the  President  in  consultation  with   the Chairman.   The President may also from time to time appoint Functional  Directors  who shall be whole-time employees  of the  Company.  Chairman, Vice-Chairman or any whole- time or part-time  Director  is  liable to be removed  from  office, subject  to  certain conditions, by the President.   Certain important  matters including winding up of the Company  must be  reserved  for  the  decision   of  the  President.   The President is empowered to issue directions and instructions, as  may  be  considered necessary, in regard to  conduct  of business  and  affairs  of the Company.  However,  power  to create  posts  in  the scales of pay not  equivalent  to  or higher  than  the  post at the Board level  or  to  appoint, remove  or suspend managers including the General  Managers, Secretaries,   officers,  clerks,  agents   and  all   other categories  of employees are the powers vested in the  Board of Directors.  It is clear that so far as the conduct of the business of the Company and management of day-to-day affairs is  concerned,  it is the Board of Directors of  Coal  India Ltd.   in whom vests the power.  The President of India does not have power or control in the matter of creation of posts

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below  the  Board  level  and in  the  matters  relating  to appointment,  removal  and  disciplinary  control  over  the incumbents  holding  the posts below the Board  level.   The salaries, emoluments and perks of such employees are payable from  the funds of the Company.  The Central Government does not  remunerate  or  augment the funds  for  such  payments. These findings of fact have not been disputed by the learned respondent  counsel for the appellant.

     The  first  issue arising for decision is whether  the respondent  was  holding  any  office of  profit  under  the Government  of India within the meaning of Article 191(1)(a) of  the  Constitution which provides that a person shall  be disqualified for being chosen as, and for being, a member of the  Legislative Assembly or Legislative Council of a  State if  he  holds any office of profit under the  Government  of India  or the Government of any State specified in the First Schedule,  other than an office declared by the  Legislature of the State by law not to disqualify its holder.  The other parts  of this Article are not relevant for our purpose  and hence are not being referred to.

     The  phrase  office of profit is not defined in  the Constitution.   By a series of decisions (see Maulana  Abdul Shakur  Vs.  Rikhab Chand & Anr., 1958 SCR 387;  M.  Ramappa Vs.   Sangappa & Ors., 1959 SCR 1167;  Guru Govinda Basu Vs. Sankari  Prasad  Ghosal  &  Ors.,   (1964)  4  SCR  311  and Shivamurthy  Swami  Inamdar  &  Anr.   Vs.   Agadi  Sanganna Andanappa & Anr., (1971) 3 SCC 870, this court has laid down the  tests for finding out whether the office in question is an office of profit under a Government.  These tests are (1) Whether  the Government makes the appointment;  (2)  Whether the  Government  has  the  right to remove  or  dismiss  the holder;   (3) Whether the Government pays the  remuneration; (4)  What are the functions of the holder?  Does he  perform them  for  the  Government;   and (5)  Does  the  Government exercise   any  control  over   the  performance  of   those functions?

     In  Guru  Gobinda  Basu Vs.  Sankari Prasad  Ghosal  & Ors.,  (1964)  4 SCR 311, the Constitution Bench  emphasised the  distinction  between the holder of an office of  profit under  the  Government and the holder of a post  or  service under  the Government and held that for holding an office of profit  under the Government, one need not be in the service of  Government  and there need be no relationship of  master and servant between them.  Several factors entering into the determination   of  question  are  :   (I)  the   appointing authority  (ii) the authority vested with power to terminate the  appointment,  (iii) the authority which determines  the remuneration, (iv) the source from which the remuneration is paid, and (v) the authority vested with power to control the manner  in which the duties of the office are discharged and to  give  directions in that behalf.  But all these  factors need  not co-exist.  Mere absence of one of the factors  may not  negate  the  over-all  test.   The  decisive  test  for determining  whether  a  person holds any office  of  profit under  the Government, the Constitution Bench holds, is  the test  of appointment;  stress on other tests will depend  on facts  of each case.  The source from which the remuneration is paid is not by itself decisive or material.

     The  available case law was reviewed by this Court  in Madhuker  G.E.   Pankakar Vs.  Jaswant Chobbildas  Rajani  & Ors.   -  (1976)  3 SCR 832.  The  Court  described  certain

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aspects as elementary :  (i) for holding an office of profit under  Government  one  need  not  be  in  the  service   of Government  and there need be no relationship of master  and servant,  (ii) we have to look at the substance and not  the form;   and  (iii) all the several factors stressed by  this Court  (in  Guru  Gobindas case) as  determinative  of  the holding  of  an  office  under  Government,  need  not  be conjointly  present.   The critical circumstances,  not  the total  factors,  prove  decisive.   A  practical  view,  not pedantic basket of tests, should act as guide.

     In  Satrucharla  Chandrasekhar  Raju  Vs.   Vyricherla Pradeep  Kumar Dev & Anr., (1992) 4 SCC 404, this Court  has articulated  the  object underlying Articles 102 (1)(a)  and 191  (1)(a) of the Constitution in the following words: in order to eliminate or reduce the risk of conflict between the duty and interest amongst the members of the Legislature and  to ensure that the Legislature does not contain persons who  have  received  benefits  from the  Executive  and  who consequently  being under an obligation might be amenable to its  influence.   Thus  the object is to see  that  such  an elected member can carry on freely and fearlessly his duties without   being  subjected  to   any  kind  of  governmental pressure, thereby implying that if such an elected person is holding  an office which brings him remunerations and if the Government  has  a  voice in his functions in  that  office, there  is every likelihood of such person succumbing to  the wishes  of  the Government.  Therefore this object  must  be borne  in mind in interpreting these Articles.  Under  these provisions  the right to contest is being taken away on  the ground  of  the  said  disqualification.    Such  a  ban  on candidature  must have a substantial and reasonable nexus to the  object that is to be achieved namely the elimination of possibility  of  misuse  of the position.  It is  from  this point  of view that the right to appoint and right to remove the  holder of the office in many cases becomes an important and decisive test.

     A  variety  of  situations  have   come  up  for   the consideration  of  this Court wherein the Court  was  called upon  to  apply  the determinative tests so as to  find  out whether  a  case  of holding an office of profit  under  the Government  was made out or not.  It will be advantageous to have  a brief resume of such cases.  In D.R.  Gurushanthappa Vs.   Abdul  Khuddus  Anwar  & Ors., (1969)  3  SCR  425,  a Government   undertaking  was  taken   over  by  a   Company incorporated under the Indian Companies Act, 1956 as a going concern  and  the employees working in the undertaking  were also  taken  over.   As  a result of  the  transfer  of  the undertaking,  the  employees  of the Government  became  the employees  of the Company and were covered by the definition of  workman  under the Industrial Disputes Act, 1947.   It was held that such a workman ceases to be Government servant and  is  not disqualified to be a candidate for election  to State  Legislative Assembly under Article 191 (1)(a) of  the Constitution.   The Court refused to accept the  proposition that  the mere fact that the Government had control over the Managing Director or other Directors as well as the power of issuing  directions  relating to the working of the  company can lead to the inference that every employee of the company is under the control of the Government.

     In  Ashok Kumar Bhattacharyya Vs.  Ajoy Biswas &  Ors. -  (1985)  2 SCR 50 a 3-judge Bench of this Court  has  held that  whether  a person holds an office of profit under  the

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Government  must be measured are judged in each case in  the light  of  the relevant provisions of the Act.  The  measure and  nature of control exercised by the Government over  the employee   must  be  judged  in   the  light  of  facts  and circumstances  of  each  case so as to  avoid  any  possible conflict  between  his personal interests and duties and  of the  Government.   An Account-in-charge of Municipality  was held  not to be holder of office under the Government merely because  his  appointment  was subject  to  confirmation  by be removed subject to sanction by Government. Pradeep  and he could In Satrucharla Chandrasekhar Raju  Vs. Vyricherla  Pradeep Kumar Dev & Anr., (1992) 4 SCC 404,  the appellant  was  appointed as a single teacher in  a  primary school run by an Integrated Tribal Development Agency (ITDA) which  is a registered society by its Project Officer.   The Project  Officer of the ITDA is also the District  Collector and  alone  appoints teachers and has also power  to  remove them same.  This Court held that the ITDA being a registered society,  having  its own Constitution, the Project  Officer though a District Collector, acted as a different entity and while exercising the power to appoint or to remove teachers, he  was  acting as the Project Officer.  The power  was  not being exercised by the Government.  The Government may have control  over  the  appointing authority but has  no  direct control  over  the teachers. The question of  any  conflict between his duties and interest as an elected member did not arise.  It could not be said that the appellant as a teacher can  be subjected to any kind of pressure by the  Government which  had  neither power to appoint him nor to  remove  him from service.  The appellant could not be held to be holding an  office of profit under the Government within the meaning of Article 191 (1)(a) of the Constitution.

     Aklu  Ram Mahto Vs.  Rajendra Mahto, 1999 (3) SCC 541, is  a case very near to the case in hand.  A Khalashi and  a Meter  Reader of Bokaro Steel Plant contested elections  for Members of Bihar Legislative Assembly.  This Court held -

     The  Bokaro  Steel Plant is under the management  and control  of Steel Authority of India Ltd.  This is a company incorporated  under the Companies Act.  Its shares are owned by  the  Central Government.  The Chairman and the Board  of Directors are appointed by the President of India.  However, the  appointment and removal of workers in the Bokaro  Steel Plant  is under the control of Steel Authority of India Ltd. Their  remuneration is also determined by Steel Authority of India  Ltd.  The functions discharged by Steel Authority  of India  Ltd.   or  by  the   Bokaro  Steel  Plant  cannot  be considered  as  essential functions of the  Government.   In this  context  a worker holding the post of a Khalashi or  a Meter  Reader  is not subject to the control of the  Central Government  nor  is the power of his appointment or  removal exercised  by the Central Government.  Control over his work is  exercised  not  by  the Government,  but  by  the  Steel Authority of India Ltd..

     The Court held that the two could not be considered as holding  an  office of profit under the Central  Government. The Court also tested the case on the touch stone of Section 10  of the RPA and held that the posts of Khalashi and Meter Reader  are non-executive posts.  Neither of them is  either Secretary  or  Manager  or a managing agent.  None  of  them attracted disqualification even under Section 10 of the RPA.

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     Posed  with  the perplexed problem - whether a  person holds an office under the Government, the first and foremost question  to be asked is :  whether the Government has power to appoint and remove the person on and from the office?  If the  answer is in the negative, no further enquiry is called for,  the  basic determinative test having failed.   If  the answer be a positive one, further probe has to go on finding answers  to  questions framed in Shivamurthys case  (supra) and  searching  for how many of the factors pointed  out  in Guru  Gobinda Basus case (supra) do exist?  The totality of the  facts  and circumstances reviewed in the light  of  the provisions  of  relevant  Act,  if any,  would  lead  to  an inference  being  drawn  if  the office held  is  under  the Government.   The  inquisitive over-view-eye  would  finally query:   on  account  of holding of such  office  would  the Government  be  in  a  position to so influence  him  as  to interfere  with his independence in functioning as a  member of  Legislative Assembly and/or would his holding of the two offices-one  under  the  Government and the  other  being  a member  of  Legislative  Assembly,  involve  a  conflict  of interests  inter  se?   This  is how the  issue  has  to  be approached and resolved.

     That  being the position of law, no fault can be found with  the  finding  arrived at by the High  Court  that  the respondent  was  not holding an office of profit  under  the Government  of  India  and   therefore  no  disqualification attached   to   him  under  Article   191  (1)(a)   of   the Constitution.   The Government of India do not exercise  any control  on  appointment,  removal, service  conditions  and functioning  of the respondent.  The respondent does hold an office and there is profit attaching with the office but such  office  of  profit  is not under  the  Government  of India,  His being a clerk in Coal India Ltd.  does not  and cannot  bring  any  influence  or pressure  on  him  in  his independent  functioning as member of Legislative  Assembly. The finding that the respondent was neither a managing agent nor  a manager nor a secretary under Coal India Ltd.  though the  Company  has 100% share holding of the Government,  was not seriously disputed by the learned senior counsel for the appellant  and  in all fairness, rather, he did  not  pursue this   submission.   Even  otherwise,  we  find   that   the respondent  was merely a Clerk Grade-I.  Occasionally in the absence  of  his  senior  officer on  account  of  leave  or absence,  he  exercised some supervisory function  over  his subordinates  but  this would not make him a manager of  the Company.   We agree with the High Court that the  respondent did not incur a disqualification under Section 10 of the RPA also.   As  the  respondents   nomination  was   improperly rejected, the appellants election was liable to be declared void  without proof of the result of the election, in so far as   it  concerns  the   returned  candidate,  having   been materially affected.

     The  appeal is devoid of any merit and is liable to be dismissed.   It is dismissed accordingly.  The order of  the High  Court is affirmed.  The interim order dated  25.2.2000 passed  by  this Court stands vacated.  No order as  to  the costs.