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PETITIONER: RAM PADARATH MAHTO

       Vs.

RESPONDENT: MISHRI SINGH & ANR.

DATE OF JUDGMENT: 17/11/1960

BENCH: GAJENDRAGADKAR, P.B. BENCH: GAJENDRAGADKAR, P.B. SARKAR, A.K. WANCHOO, K.N.

CITATION:  1961 AIR  480            1961 SCR  (2) 470

ACT: Election--Disqualification-Contract   with  Government   for stocking  foodgrains-Whether  for  Performance  of  services undertaken  by Government-Representation of the People  Act, 1951 (43 of 1951) S. 7(d).

HEADNOTE: The  appellant  was a member of a joint Hindu  family  which carried  on  the business of Government stockists  of  grain under  a  contract  with  the  Government  of  Bihar.    His nomination  for election to the Bihar  Legislative  Assembly was rejected on the ground that he was disqualified under s. 7(d)  of the Representation of the People Act, 195T,  as  he had  an  interest  in  a contract  for  the  performance  of services undertaken by the Bihar Government.  The  appellant contended that the service undertaken by the Government  was the sale of foodgrains under the Grain Supply Scheme and the contract was not for the sale of such foodgrains and did not attract the provisions of S. 7(d). Held,  that the contract was not one for the performance  of any  service undertaken by the Government and the  appellant was not disqualified under s. 7(d).  A contract of  bailment which  imposed  on the bailee the obligation  to  stock  and store  the foodgrains in his godowns was not a contract  for the  purpose  of  the service of sale  of  grain  which  the Government  had undertaken.  The Government  had  undertaken the work of supplying grain but the contract was not one for the supply of grain. N.   Satyanathan  v. K. Subramanyam, [1955] 2 S.C.R. 83  and V.   V. Ramaswamy v. Election Tribunal, Tirunelveli,  (1933) 8 E.L.R. 233, distinguished.

JUDGMENT: CIVIL APPELLATE JURISDICTION: Civil Appeal No. 388 of 1960. Appeal  by special leave from the judgment and  order  dated February 3, 1959, of the Patna High Court in Election Appeal No. 10 of 1958. S.   P. Varma, for the appellant. L.   K. Jha and D. Govardhan, for respondent No. 1.

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L.   K. Jha and K. K. Sinha, for respondent No. 2. 1960.  November 17.  The Judgment of the Court was delivered by 471 GAJENDRAGADKAR,  J.-Is  the  appellant  Ram  Padarath  Mahto disqualified  for membership of the Bihar Legislature  under s.  7(d)  of  the Representation of  the  People  Act,  1951 (hereafter  called  the Act)?  That is  the  short  question which  arises  for  our decision in the  present  appeal  by special leave.  The appellant was one of the candidates  for the Dalsinghsarai Constituency in the District of  Darbhanga in  Bihar for the State Legislature.  The said  Constituency is  a Double-Member Constituency; it was required  to  elect two  members,  one  for the general and the  other  for  the reserved seat for scheduled castes in the Bihar  Legislative Assembly.  It appears that the said Constituency called upon voters  to elect members on January 19, 1957.   January  29, 1957  was  fixed  as the last date for  the  filing  of  the nomination papers.  The appellant filed his nomination paper on January 28, 1957, and on the next day seven other members filed  their  nomination papers.  On February 1,  1957,  the nomination paper filed by the appellant was rejected by  the returning officer on two grounds; he held that the appellant being   an  Inspector  of  Co-operative  Societies   was   a Government   servant  at  the  material  time  and  so   was disqualified from standing for election.  He also found that the  appellant was a member of a joint and  undivided  Hindu family  which  carried  on the  business  of  Government  as stockiest  of grain under a contract between the  Government of Bihar and a firm of the joint family known as Nebi Mahton Bishundayal  Mahto.  Thereafter the election was duly  held, and  Mr. Mishri Singh and Mr. Baleshwar Ram,  respondents  1 and 2 were declared duly elected to the general and reserved seat  respectively.   The  validity  of  this  election  was challenged by the appellant by his Election Petition No. 428 of  1957.  To this petition he impleaded the two  candidates declared  to have been duly elected and five others who  had contested in the election.  Before the Election Tribunal the appellant  urged  that  he  was not in  the  employ  of  the Government  of Bihar at the material time.  He  pointed  out that he had resigned his job on January 13, 472 1957,  and his resignation had been accepted on January  25, 1957,  relieving him from his post as from the  later  date. He  also contended that there was a partition in his  family and  that  he had no share or interest in  the  contract  in question.   Alternatively  it was argued that  even  if  the appellant  had an interest in the said contract it  did  not fall within the mischief of s. 7(d) of the Act.  These pleas were  traversed  by respondents 1 and 2  who  contested  the appellant’s election petition. The  Election Tribunal found that the petitioner was  not  a Government servant on the day he filed his nomination paper, and  so according to it the returning officer was  wrong  in rejecting  his nomination paper on the ground that he was  a Government  servant  at  the material  time.   The  Election Tribunal  rejected  the appellant’s case that  there  was  a partition in the family, and held that at the relevant  time the  appellant continued to be a member of the  joint  Hindu family which had entered into the contract in question  with the  Government of Bihar.  However, in its  opinion,  having regard  to  the  nature  of the said  contract  it  was  not possible  to hold that the appellant was disqualified  under s. 7(d), and so it came to the conclusion that the returning officer was in error in rejecting the appellant’s nomination

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paper  on this ground as well.  In the result  the  Tribunal allowed the election petition, declared that the  nomination paper had been improperly rejected, and that the election of the two contesting respondents was void. Against  this decision the two contesting respondents  filed two  appeals  in the High Court at Patna  (Election  Appeals Nos.  9 and 10 of 1958).  The High Court has  confirmed  the finding  of  the  Tribunal  that the  appellant  was  not  a Government servant at the material time.  It has also agreed with  the  conclusion of the Tribunal that at  the  relevant time  the  appellant  was a member of  the  undivided  Hindu family.   On the construction of the contract,  however,  it differed  from the view adopted by the Tribunal, and it  has held that as a result of the said contract the appellant was disqualified under s. 7(d) of the Act.  This finding 473 inevitably  led  to  the  conclusion  that  the  appellant’s nomination  paper had been properly rejected.  On that  view the  High  Court  did not think  it  necessary  to  consider whether  the  Tribunal  was  right  in  declaring  void  the election  of  not only respondent 1 but of respondent  2  as well.   It is against this decision of the High  Court  that the appellant has come to this Court  by special  leave; and the only question which is raised on his behalf is that  the High Court was in error in coming to the conclusion that  he was  disqualified  under  s. 7(d).   The  decision  of  this question naturally depends primarily on the construction and effect of the contract in question. Section  7  of  the Act provides  for  disqualification  for membership of Parliament or of State Legislatures.   Section 7(d), as it stood at the material time and with which we are concerned in the present appeal provides,, inter alia,  that a person shall be disqualified for being chosen as, and  for being,  a member of the Legislative Assembly of a State,  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 supply of  goods to, or for the execution of any works or the performance  of any services undertaken by, the appropriate Government.   On the  concurrent findings recorded by the High Court and  the Tribunal  it cannot now be disputed that the  appellant  has interest in the contract in question; so that the first part of s. 7(d) is satisfied.  The High Court has found that  the contract  attracts  the  last part of s.  7(d)  inasmuch  as according  to  the High Court the Government  of  Bihar  had undertaken  to discharge the service of supplying  grain  to the  residents  of  Bihar and the firm  of  the  appellant’s family  had entered into a contract for the  performance  of the said services.  The last part of s. 7(d) postulates that the appropriate Government has undertaken to perform certain specific  services,  and it is for the performance  of  such services that the contract had been entered into by a  citi- zen.   In  other  words, if a citizen  has  entered  into  a contract with the appropriate Government for the 60 474 performance   of  the  services  undertaken  by   the   said Government  he  attracts the application of s.  7(d).   This provision  inevitably  raises two questions:  what  are  the services  undertaken by the appropriate Government? Has  the contract  been entered into for the performance of the  said services? At this stage it is necessary to consider the material terms of  the  contract.  This contract was made  on  February  8, 1956, between the Governor of Bihar who is described as  the

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first  party and the firm which is described as  the  second party.   The preamble to the contract shows that  the  first party  had  to  stock  and  store  foodgrains  in  Darbhanga District for sale in pursuance of the Grain Supply Scheme of the  Government for which a proper custodian and bailee  for reward was necessary.  It also recites that the second party had  applied  to become such custodian and  bailee  of  such stock of foodgrains as the first party shall deliver to  the second  party in one lump or from time to time on terms  and in the manner expressly specified under the contract, or  as may  be  necessarily  implied.  Clause  1  of  the  contract provides  that the second party shall, at the  direction  of the  first  party,  take over foodgrains  from  the  railway wagons  or  from any place as directed by the  first  party; thereafter  the second party had to cause the grains  to  be stored  in his godown at Dalsinghsarai and had to  redeliver the  same  to the first party after weighing either  at  the second party’s godown approved by the first party or at  any other place as directed by the first party.  The movement of the grain had to be done by the second party himself or by a transport contractor appointed by the first party.  Clause 2 imposed  on  the second party the liability  to  maintain  a register and keep accounts as prescribed thereunder.   Under cl.  3  the second party undertook to keep such  stocks  and establishments  as  may  be necessary at  his  own  expense. Clause  4  imposed upon the second party the  obligation  to protect  the stock of foodgrains or to make good the  losses except  as  thereinafter provided: Clauses 5 to  8  are  not material for our purpose.  Clause 9 provides that the second party shall deposit the sum of 475 Rs.  5,000 in a Savings Bank account which has been  pledged to  the District Magistrate, Darbhanga, and comply with  the other  conditions specified in the clause.  Clause 10  deals with the remuneration of the second party.  It provides that the  first-party shall be liable to pay to the second  party remuneration  for the undertaking in this agreement  at  the rate of Re. 1 per( cent on the value of the stocks moved  or taken  over from his custody under the orders or  directions of the first party or his agent calculated at the rate fixed by  the Government from time to time for wholesale sales  of grain.   The  clause  adds that  no  remuneration  shall  be payable  to the second party if the first party  takes  over the  whole of the balance stock lying with the second  party for  reasons of the termination of the agreement.  The  rest of the clauses need not be recited. It would thus be seen that the agreement in terms is one  of bailment.   The State Government wanted to entrust the  work of stocking and storing foodgrains to a custodian or bailee. In that behalf the appellant’s firm made an application  and ultimately  was appointed a bailee.  There is no doubt  that by  this contract the firm has undertaken to do the work  of stocking  and  storing  foodgrains belonging  to  the  State Government;  and  if  it can be  reasonably  held  that  the service  undertaken by the State Government in  the  present case  was  that of stocking the foodgrains the  contract  in question would obviously attract the provisions of s.  7(d). Mr. Varma, however, contends that the service undertaken  by the  State  Government is the sale of foodgrains  under  its Grain Supply Scheme; and he argues that unless the  contract shows  that  it  was for sale of the said  goods  it  cannot attract the provisions of s. 7(d).  Unfortunately the scheme adopted by the State Government for the supply of grain  has not  been produced before the Election Tribunal, and so  the precise nature and extent of the services undertaken by  the

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State  Government fall to be determined solely by  reference to  the contract in question.  It is true that the  contract relates to the stocking and storing of foodgrains which  the State  Government wanted to sell to the residents of  Bihar; but can it be said 476 that stocking and storing of foodgrains was such an integral or  essential part of the selling of goods that  a  contract for  stocking and storing foodgrains should  necessarily  be regarded  as a contract for their sale?  In our opinion,  it is  difficult  to  accept the  argument  that  stocking  and storing  of foodgrains is shown to be such an essential  and integral  part  of the supply scheme adopted  by  the  State Government. Theoretically  speaking  stocking  and  storing   foodgrains cannot  be said to be essential for the purpose of  carrying out  the  scheme  of sale of foodgrains,  because  it  would conceivably be possible for the State Government to adopt  a scheme  whereby  goods  may be supplied  without  the  State Government having to store them; and so the work of stocking and  storing of foodgrains may in some cases be  conceivably incidental to the scheme and not its essential part.  It  is significant that sale of goods under the contract was  never to  take place at the godown of the firm.  It had always  to take  place  at other selling, centers or shops;  and  thus, between  the  stocking and storing of goods and  their  sale there  is an element of time lag.  The only obligation  that was  imposed  on  the  firm by this contract  was  to  be  a custodian  or bailee of the goods, keep them in  good  order and  deliver them after weighment as directed by  the  first party.   It cannot be denied that the remuneration  for  the bailee has been fixed at the rate, of Re.  1 per cent on the value  of the stocks moved or taken over from  his  custody; but  that only shows the mode or method adopted by the  con- tract for determining the remuneration including rent of the godowns;  it  cannot possibly show the relationship  of  the contract with the sale of goods even indirectly.  Can it  be said that the contract entered into by the State  Government for purchasing foodgrains from agriculturists who grow  them or  for transporting them after purchase to the godowns  are contracts  for  the sale or supply of  goods?   Purchase  of goods  and their transport are no doubt preparatory  to  the carrying  out  of the scheme of selling  them  or  supplying them,  and yet it would be difficult to hold that  contracts entered into by the State Government with the agriculturists or the transport agency is a contract for the 477 sale  of goods.  We have carefully considered  the  material terms  of this contract, and on the record as it  stands  we are unable to accept the conclusion of the High Court that a contract  of  bailment  which  imposed  on  the  bailee  the obligation  to stock and store the foodgrains in his  godown can be said to be a contract for the purpose of the  service of  sale of grain which the State Government had  undertaken within the meaning of s. 7(d). It appears that before the High Court it was not disputed by the  appellant that the service whose performance  had  been undertaken  by the State Government consisted in the  supply of  grain to the people of the State of Bihar; and the  High Court  thought  that  from  this  concession  it  inevitably followed that the firm had a share and was interested in the contract  for the performance of the service  undertaken  by the Government of Bihar.  It seems to us that the concession made  by  the appellant does not inevitably  or  necessarily lead  to  the  inference drawn by the High  Court.   If  the

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service  undertaken  by  the  State  Government  is  one  of supplying  grain  how  does it  necessarily  follow  that  a contract  by which the bailee undertook to store  the  grain was  a  contract  for the supply of  grain?   It  may  sound technical,  but in dealing with a statutory provision  which imposes  a  disqualification  on  a  citizen  it  would   be unreasonable  to  take merely a broad and general  view  and ignore  the  essential points of distinction on  the  ground that  they  are technical.  The narrow question is:  if  the State Government undertook the work of supplying the  grain, is  the  contract  one  for the supply  of  grain?;  in  our opinion,  the  answer  to  this  question  must  be  in  the negative;  that  is  why we think the  High  Court  did  not correctly appreciate the effect of the contract when it held that  the said contract brought the appellant’s case  within the mischief of s. 7(d). In coming to its conclusion the High Court thought that  its view  was  supported  by  a decision of  this  Court  in  N. Satyanathan  v.  K.  Subramanyan  (1).   In  that  case  the appellant who was a contractor had entered into an agreement with the Central Government (1)  [1955] 2 S.C.R. 83. 478 whereby he had offered to contract with the Governor-General for the provision of a motor vehicle service for the transit and  conveyance  of  all  postal  articles  for  the  period specified  in  the contract, and  the  Governor-General  had accepted  the  offer.  As a consideration for the  same  the Government  had agreed to pay to the contractor Rs. 200  per month  during  the  subsistence of  the  agreement  "as  his remuneration  for  the service to be rendered by  him".   It appears  that  on this contract two  questions  were  raised before this Court.  First it was urged that it could not  be said that the Central Government had undertaken any  service within  the  meaning  of s. 7(d) of the  Act  when  it  made arrangements  for  the  carriage  of  mailbags  and   postal articles  through  the  contractor.   This  contention   was rejected  on the ground that though the Government  was  not bound in the discharge of its duties as a sovereign State to make  provision  for  postal mail service, it  had  in  fact undertaken  to do so under the Indian Post Offices  Act  for the  convenience  of the public.  "It cannot  be  gainsaid", observed  Sinha,  J.,  as  he then  was,  "that  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"; and he added,  "the present case is a straightforward  illustration of  the kind of contract contemplated under s. 7(d)  of  the Act".   This straightforward illustration, in  our  opinion, clearly  brings  out the class and type of  contracts  which fall  within s. 7(d) of the Act.  Government must  undertake to render a specified service or specified services and  the contract  must be for the rendering of the said  service  or services.  That was precisely what the contract in the  case of  N. Satyanathan (1) purported to do.  It is difficult  to see  how this case can be said to support the conclusion  of the High Court that the contract for stocking and storing of goods  is a contract for rendering the service of  supplying and selling the same to the residents of the place. In  this connection Mr. Jha, for the respondents, has  drawn our attention to a decision of the Madras High (1)  [1955] 2 S.C.R, 83. 479 Court  in V. V. Ramaswamy v. Election Tribunal,  Tirunelveli (1).   In  that  case  the Court  was  concerned  with  four

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contracts by which the contracting party agreed "to hold the reserve  grain stock belonging to the Government of  Madras, safely  store  it,  and  dispose  of  it  according  to  the directions  of  the Government".  In other words, it  was  a contract not only for the stocking and storing of foodgrains but  also of disposing of it, and that naturally meant  that the contract was for service which the State Government  had undertaken  to  perform.  This decision  cannot  assist  the respondents in the present appeal. In the result we hold that the High Court was not  justified in  reversing the finding of the Tribunal that the  contract in question did not attract the provisions of s. 7(d) of the Act.  The appeal must, therefore, be allowed and  the  order passed by the High Court set aside.     We  cannot   finally dispose of the matter, because     one    question     still remains to be considered, and that is whether the conclusion that  the appellant’s nomination paper had  been  improperly rejected would lead to the decision that the election of not only  respondent 1 but also respondent 2 should be  declared to  be void.  The Election Tribunal has declared  the  whole election  to be void, and in their respective appeals  filed before  the High Court both the respondents have  challenged the  correctness of that finding.  The High Court,  however, thought  that since in its opinion the nomination  paper  of the appellant had been properly rejected it was  unnecessary to deal with the other point.  The point will now have to be considered  by  the High Court.  We  would,  therefore,  set aside the order passed by the High Court and remand the pro- ceedings  to  it in order that it may deal  with  the  other question  and  dispose  of  the  appeals  expeditiously   in accordance  with law.  In the circumstances of this case  we direct that the parties should bear their own costs in  this Court.  Costs in the High Court will be costs in the  appeal before it.                                           Appeal allowed. (1)  (1953) 8 E.L.R. 233. 480