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PETITIONER: VIDYA SAGAR JOSHI

       Vs.

RESPONDENT: SURINDER NATH GAUTAM

DATE OF JUDGMENT: 13/09/1968

BENCH: HIDAYATULLAH, M. (CJ) BENCH: HIDAYATULLAH, M. (CJ) MITTER, G.K.

CITATION:  1969 AIR  288            1969 SCR  (2)  84  CITATOR INFO :  RF         1971 SC 696  (20)

ACT: Representation of People Act,  1951 (43 of 1951), ss.  77(3) and  123(6)-Amount  spent on  seeking  party  ticket-Whether expenditure-’Expenditure’,  ’in connection  with  election’, and ’incurred or authorised’, meaning of.

HEADNOTE: The appellant applied for a Congress ticket for election  to the  Legislative Assembly and deposited certain sums,  which according to the rules of the Congress Party was  refundable if the candidate was not selected but the deposit was to  be forfeited if he contested the election against the  official Congress    candidate.   The  appellant   was   denied   the Congress  ticket.   Thereafter  the  notification   inviting electors  to elect a member to the Assembly was issued,  and the   last  date  for  filing  nomination  papers  and   for withdrawing  from  the  contest was  fixed.   The  appellant contested  the election against the respondent who  was  the official  Congress  nominee  and  incurred  the  penalty  of forfeiture.  The appellant was declared elected and he filed his return of election expenses.  The respondent  challenged the  ’appellant’s  election   on  the  ground  that  he  had committed   corrupt   practice  under  s.  123(6)   of   the Representation of People Act, 1951, for not having  included the  sum deposited by him in seeking the Congress ticket  in his return and by adding this sum to the return of  election expenses  filed the prescribed amount was exceeded,  thereby contravening s. 77(3) of Act.  The High Court held in favour of  the  election petitioner.  Dismissing the  appeal,  this Court,     HELD: Section 77 as framed now departs in language  from the earlier provision on the subject which was r. 117.   The words ’conduct ’and management of election’ are; not as wide as  the words ’all expenditure in connection  with  election incurred or authorised by him’ which now find place in s. 77 with ’election’ and ’incurred or authorised.’  ’Expenditure’ means the amount expended and ’expended’ means to pay  away, lay out or spend.  It really represents money out of pocket, a  going  out.  The amount paid away or paid out need not be all  money which a man spends on himself during  this  time.

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It  is money ’in connection with’ his election. These  words mean  not   so much as ’consequent upon’ as  ’having  to  do with’.   All  money  laid  out and having  to  do  with  the election  is  contemplated.  But here again money  which  is liable to be refunded is not to be taken note of.  The  word ’incurred’ shows a finality.  It has the sense of  rendering one-self   liable  for  the  amount.   The  words  are   not equivalent to ’conduct or management of an election’ and the expenses  need not be for promotion of the; interest of  the candidate.   Therefore  the section regards  everything  for which the candidate has rendered himself liable and of which he is out of pocket in connection with his election, that is to say having to do with his election. [87 G---88 B]     (In  this case, the appellant put out the money for  his election  since he was trying to obtain a  Congress  ticket. If he had got the ticket and the money was refunded to  him, this  would  not have counted as ’an expenditure  since  the expense  would not have been incurred.  When  the  appellant knowing that the money would be lost went on to stand as  an independent  candidate, he was willing to let the  money  go and take a 85 chance  independently.   So the ’amount was  an  expenditure within the meaning of the section. [88 C-D]     Haji  Aziz  and Abdul Shakoor Bros. v.  Commissioner  of Income-tax, Bombay City, [1961] 2 S.C.R. 651, distinguished.

JUDGMENT: CIVIL APPELLATE JURISDICTION:  Civil Appeal No. 853 of 1968.     Appeal  under  section 116-A of the  Representation   of the  People  Act,  1951 from the judgment  and  order  dated January 15, 1968 of the Delhi High Court, Himachal Bench  in C.O.P. No. 4 of 1967. C.B. Agarwala, S.K. Bagga and S. Bagga, for the appellant. Sarjoo Prasad and Naunit Lal, for the respondent. The Judgment of the Court was delivered by     Hidayatullah,  C.J.   This  is  an  appeal  against  the judgment, dated January 15, 1968, of the High Court of Delhi (Himachal Bench) setting aside the election of the appellant to   the  Santokhgarh  Assembly  Constituency  of   Himachal Pradesh.   The election has been set aside on the ground  of corrupt practice under section 123(6) of the  Representation of People Act read with s. 98(b) of the Act.     By a notification dated January 13, 1967 the electors of this  constituency  were invited to elect a  member  to  the Assembly.  The the last date of withdrawal was  January  23, 1967.    Three  candidates  contested  the  election.    The appellant  was  an  independent  candidate  opposed  by  the respondent who was a Congress nominee and one Shanti Swarup, Jansangh  candidate.   The poll took  place  throughout  the constituency on February 18, 1967.  Votes were counted  four days later at Una and the result was declared at follows: Vidya Sagar Joshi (Appellant)                     8437 votes Surinder Nath Gautam                              7695 votes (Election Petitioner) Shanti Swarup                                     2067 votes 1267  ballots  were  rejected as  invalid.Thus  the  present appellant  was  returned with a margin of  742  votes.   The returned  candidate  filed his return of  election  expenses showing  an  expenditure  of Rs. 1,862.05P.   The  limit  of expenditure  in this constituency was Rs. 2,000/-.   One  of the  contentions of the election petitioner was that he  had filed  a false return of his election expenses, that he  had

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spent .an amount exceeding Rs. 2,000/- in the aggregate  and therefore contravened the provisions of s. 77 (3) 86 of  the  Representation of People Act,  1951  and  therefore committed corrupt practice under section l23(6) of the  Act. The election petitioner therefore asked that his election be declared void. There were other grounds also  on  which  the election   was  challenged, but we need not  refer  to  them since no point has been made before us.     The  main  item on which the expenses were  said  to  be false  was a deposit of Rs. 500/- as security and Rs.  200/- as  application  fee which the returned candidate  had  made with  the Congress party on or before January 2, 1967.   The fee was not returnable, but as this payment was, made before the  notification calling upon the voters to elect a  member to  the  Assembly  nothing  turns  upon  it.   The  returned candidate was denied the Congress ticket on or about January 10,  1967.   This was also. before  the  said  notification. According  to the rules of the Congress party  the  security deposit  was refundable to a candidate if he or she was  not selected.     It  was however provided in the same rules that  if  the candidate  contested  the  election  against  the   official Congress candidate, the security deposit would be forfeited. The   returned  candidate chose to stand as  an  independent candidate   against  the   official  Congress  nominee   and incurred the penalty of forfeiture.  This was after the date for  the filing of the nomination paper (January 20,  1967). He  had  time till January 23, 1967  to  withdraw  from  the contest.   If  he  had  done  so  the  deposit  would   have presumably been returned to him.  As he became a  contesting candidate the forfeiture of the deposit became a fact.     The  case of the election petitioner was  that  if  this deposit  were added to the election expenses, the  limit  of Rs.  2,000/- was exceeded and therefore this amounted  to  a corrupt practice under section 123(6) read with s. 77(3)  of the  Representation of People Act.  The High Court  held  in favour of the election petitioner and hence the appeal.                   Section 77 of the Representation of People               Act provides as follows.:                     Section 77. Account of election expenses               ’and maximum thereof---                     (1  )  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.                     (2).  The  account  shall  contain  such               particulars, as may be prescribed. 87        (3)  The  total  of the said  expenditure  shall  not exceed such amount as may be prescribed.     The third sub-section creates a bar against  expenditure in  excess  of the prescribed amount.  In  this   case   the prescribed amount was Rs. 2,000/-.  Section 123(6)  provides that  "the  incurring  or  authorising  of  expenditure   in contravention   of  section  77  is  a  corrupt   practice." Therefore,  if  the  amount  of Rs.  500/was  added  to  the election  expenses as declared by the returned candidate  he would  be  guilty  of  a corrupt  practice,  under  the  two sections quoted above.  The question, therefore, is  whether

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this amount can be regarded as an election expense.     The  first  sub-section  of s.  77  discloses  what  the candidate has. to declare as part of his election  expenses. It  speaks.  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."  In the present case, therefore,  the  critical dates were January. 13,  1967  and February  22, 1967.  The amount in question was paid  before the  first date. It was liable for confiscation not  on  the date  on  which  the  Congress ticket  was  refused  to  the returned  candidate but on January 23, 1967 when he did  not withdraw  from  the’  contest  and  offered  himself  as   a contesting   candidate   against   the   official   Congress candidate.  In other words, the payment was made before  the period marked out by s. 77 ( 1 ) but the expenditure  became a  fact  between  the two. dates.   The  contention  of  the returned   candidate  was that this was not  an  expenditure within  the  meaning of s. 77(1) of  the  Representation  of People  Act and this is the short question, which falls  for consideration in the present case.     Section  77 as flamed now departs in language  from  the earlier  provision  on the subject which was rule  117.   It read:                     "117.  Maximum  election    expenses--No               expense  shall be incurred or authorised by  a               candidate or his election agent on account  of               or in respect of the conduct and management of               an election in any one constituency in a State               in  excess of the maximum amount specified  in               respect of that constituency in Schedule V." The  words "conduct and management of election" are  not  as wide  as  the  words. "all expenditure  in  connection  with election  incurred  or authorised by him,  "which  now  find place  in s. 77". The question thus is what meaning must  be given  to the words used in s. 77. The critical words of  s. 77  are  ’expenditure’  ’in connection  with  election’  and ’incurred  or authorized’.  ’Expenditure’ means  the  amount expended  and  ’expended’ means to. pay away, lay..  out  or spend.   It really represents money  out of pocket, a  going out. 88 Now  the amount paid away or paid out need not be all  money which a man spends on himself during this time.  It is money in  connection with’ his election. These words mean  not  so much as ’consequent upon’ as ’having to do with’.  All money laid   out   and  having  to  do.  with  the   election   is contemplated.   But here again money which is liable  to  be refunded  is not to be  taken note of.  The word  ’incurred’ shows  a  finality.  It has the sense of  rendering  oneself liable  for  the  amount.  Therefore  the  section   regards everything  for  which the candidate  has  rendered  himself liable  and of which he is out of pocket in connection  with his election that is to say having to do with his election.     The  candidate here put out this money for his  election since he was trying to obtain a congress ticket.  If he  had got  the  ticket and the money was refunded  to.  him,  this would  not have counted as an expenditure since the  expense would  not have been incurred.  When the  candidate  knowing that  the  money  would  be lost went  on  to  stand  as  an independent  candidate, he was willing to let the  money  go and take a chance independently.  The case of the  appellant is  that this money was not used in furthering the  prospect of  his  election.  On the other hand, it was in  fact  used

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against him by the Congress Party as he was opposed to  that party’s candidate.  He contends that such an expense  cannot be  regarded  as expense in connection  with  the  election. According  to  him the connection must be  a  connection  of utility  and  not  something which is of no use  but  rather against  the  chances of victory.  In  this  connection  the learned  counsel draws our attention to Halsbury’s  Laws  of England, Third Edition Volume 14, at page 177 paragraph 314. It is stated there as follows:                     "While  no  attempt has  been   made  by               judges  to define exhaustively the meaning  of               expenses incurred in the conduct or management               of  an  election,  it has been  said  that  if               expenses   are,  primarily   or   principally,               expenses  incurred  for the promotion  of  the               interests of the candidate, they are  election               expenses."                   It  will  be seen that the  above  passage               refers to expenses incurred in the conduct  or               management of an election.     The  learned  counsel for the appellant  and  respondent relied upon two decisions of this Court.  Reliance was  also placed  upon two decisions of the Election  Tribunals.   The decisions of the Election Tribunal are of the same Bench and concern  Rule  117. They need not be  considered.   The  two cases of this Court may be noticed.     In Haji Aziz and Abdul Shakoor Bros. v.  Commissioner of Income  Tax,  Bombay City(1) the question  arose  under  the Indian (1) [1961] 2 S.C.R. 651. 89 Income-tax Act.  A firm importing dates was  found  to  have breached some law and a penalty was imposed on it under  the Sea  Customs Act.  The firm sought to treat the penalty   as expenses  and they were disallowed by this  Court.   Learned Counsel  for the appellant relied on this case  and  claimed that  the same principle applies and this penalty cannot  be said  to be an expenditure in connection with the  election. The analogy is not apt because not only the prescriptions of the  two laws are different but the underlying principle  is different also.  In Income tax laws the expenditure must  be laid  out  wholly  or exclusively for  the  purpose  of  the business  etc.  Breaking laws and incurring penalty  is  not carrying on ’business and therefore the loss is not for  the purposes  of  business.   Here  the  expenditure  is  to  be included  if it is incurred in connection with the  election and  the  payment to secure the seat is  an  expenditure  in connection  with the election.  The ruling  therefore,  does not apply.     In  the second case a congress candidate had paid a  sum of  Rs.  500/-  of which Rs.  100/-  were  subscription  for membership and Rs. 400/- were a deposit.  Later he paid  Rs. 500/-  as  donation to the Congress.  He failed  to  include the  two  sums  of Rs. 500/- each in his return of expenses. The  Tribunal  found  that  both  the  sums  were  spent  in connection with the election and by including them the limit was  exceeded.   This  Court affirmed the  decision  of  the Tribunal.   The case was decided under r. 117. The two  sums were  considered separately.  The contention was that  under section 123 (7) and r. 117 the candidate was nominated  only on  November  16,  1951 and the first sum   was    paid   on September  12,  1951.  The  question  then  arose  when  the candidate became a candidate for the application of the Rule and section 123(7).  It was held that the candidate became a candidate  when he unequivocally expressed his intention  by

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making the payment.     The question of commencement of the candidature  is  now obviated  by prescribing the two terminii between which  the expense  is  to be counted.  In so far as the case  goes  it supports our view. It is risky to quote the decision because the terms of the law on which it was declared were  entirely different.   We  can only say that there is  nothing  in  it which militates against the view taken by us here.     On  the whole, therefore, the judgment under  appeal  is correct. The appeal fails and will be dismissed with costs. y.p.                                       Appeal dismissed. 2Sup.CI/69- 7 90