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Ramakant Kesheorao v. Bhikulal Laxmichand And Others
Summary of the Legal Opinion (G.P. Bhutt, J.)
Factual and Procedural Background
This is an appeal under Section 116-A of the Representation of the People Act, 1951, directed against the order of the Election Tribunal, Chhindwara, which dismissed an election petition seeking a declaration that the election of respondent No. 1 to the House of the People from the Chhindwara Parliamentary Constituency was void.
The election petition was originally filed by Lekhram (P.W. 4), an elector from Parasia, who was granted leave under Section 109 of the Act to withdraw the petition. The appellant (who had been respondent No. 6 in the election petition) applied under Section 110(3)(c) and was substituted in Lekhram's place to continue the proceedings.
The Chhindwara Parliamentary Constituency was a double-member constituency (one general seat and one reserved for Scheduled Tribes). Respondents Nos. 1–7, respondent No. 11 and the appellant were candidates for the general seat; respondents Nos. 8–10 contested the reserved seat. Respondents Nos. 2 and 4 and the appellant subsequently withdrew their candidature.
Respondent No. 11 also filed a nomination for the State Legislative Assembly from Parasia. An objection under Section 7(e) (alleging he held an office of profit under Rewa Coal Fields Ltd., in which the State Government held not less than 25% of the capital) was upheld by the Returning Officer, who rejected his nomination under Section 36(2)(a). The Returning Officer thereafter also rejected respondent No. 11's nomination for the House of the People.
The election of respondent No. 1 was challenged on three grounds:
- Corrupt practices by respondent No. 1 (personally, through agents or others with his consent);
- Improper rejection of the nomination of respondent No. 11; and
- Improper acceptance of the nomination of respondent No. 3 (allegedly below statutory age).
The Election Tribunal rejected the contentions on corrupt practices and the age issue for want of evidence; those findings are not contested by the appellant. The sole point for decision in the appeal is whether the nomination of respondent No. 11 was improperly rejected. The Election Tribunal found respondent No. 11 disqualified under Section 7(e) and also held that, although the Returning Officer had at first accepted the nomination and later rejected it, that procedural irregularity amounted to non-compliance with rules and had not been shown to have affected the result in respect of respondent No. 1; accordingly the election petition was dismissed.
Legal Issues Presented
- Whether Section 116-A of the Representation of the People Act, 1951 (providing for an appeal from an Election Tribunal) is constitutionally barred by Article 329(b) of the Constitution of India (i.e., whether Parliament could provide for an appeal as a separate authority to decide election disputes).
- Whether the nomination of respondent No. 11 for election to the House of the People was improperly rejected by the Returning Officer — specifically, (a) whether respondent No. 11 held an office of profit under Rewa Coal Fields Ltd. such as to disqualify him under Section 7(e), and (b) whether the Returning Officer had power to change an earlier endorsement (allegedly accepting the nomination) and reject the nomination later.
Arguments of the Parties
Appellant's Arguments
- The Returning Officer had initially accepted respondent No. 11's nomination for the House of the People and had written the word "valid" on the nomination paper; when the Returning Officer allowed the objection to respondent No. 11's nomination for the State Legislative Assembly, the Returning Officer purportedly changed "valid" to "invalid" and thereby rejected the House of the People nomination — an act the appellant contended the Returning Officer had no power to do under the Act.
- On the merits, the appellant denied that respondent No. 11 held any office of profit under Rewa Coal Fields Ltd., and denied that the appropriate Government (the Union Government) had any share in the capital of that company sufficient to invoke disqualification under Section 7(e).
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Ravanna Subbanna v. G.S. Kaggeerappa, AIR 1954 SC 653 | That monetary gain for services rendered amounts to "profit" within the meaning of Section 7(e) of the Act. | The court relied on this authority to hold that payments made to respondent No. 11 for services to Rewa Coal Fields Ltd. constituted "profit" for the purposes of disqualification under Section 7(e). |
| Shivnandan Sharma v. Punjab National Bank, AIR 1955 SC 404 | That although engagement of employees rested with managing agents, employees were effectively employees of the company which was liable to pay their remuneration. | The court used this principle to conclude that, despite the managing agents' role, respondent No. 11's engagement and the fact that payment was made by the company meant he held an office under the company. |
| Virindar Kumar Satyawadi v. State of Punjab, AIR 1956 SC 153 | That the power conferred on a Returning Officer under Section 36(2) to examine nomination papers and decide objections is judicial in character. | The court acknowledged this authority while distinguishing the present case (noting that acceptance requires judicial consideration only when an objection is raised and rejected). |
| Natwar Lal v. Bhartendra Singh, 5 ELR 408 | Illustrated circumstances where a nomination was rejected after enquiry and thus raised the question whether a Returning Officer can review such a judicial order. | The court contrasted that factual situation with the present case, holding that no similar judicial acceptance (by formal procedure under Section 36) had occurred here, so the question of review of a judicial order did not arise. |
Court's Reasoning and Analysis
The court addressed the issues in a sequence which tied constitutional validity to the factual and statutory questions:
- Maintainability under Article 329(b): The preliminary objection that Section 116-A violated Article 329(b) was overruled. The court reasoned that the phrase "in such manner as may be provided by or under any law made by the appropriate Legislature" is governed by the exception clause and that Parliament was competent to provide for an appeal from an Election Tribunal. The court also observed that an appeal is a continuation of the original lis, and therefore the power to provide an authority to decide the appeal falls within the legislative competence under Article 329(b).
- Office of profit — factual findings and legal consequence:
- Evidence (Ex. R-30) showed respondent No. 11 was paid salary from the Central Office of the managing agents (Shaw Wallace & Co.).
- W. Bright (R.W. 9), an official of the managing agents, deposed that respondent No. 11 acted as coal auditor for Rewa Coal Fields Ltd. and as Labour Officer when directed, and that a proportionate amount of salary and allowances was debited to Rewa Coal Fields Ltd.
- Applying Ravanna Subbanna, the court concluded that the monetary gain for services amounted to "profit" under Section 7(e).
- Examining the company's memorandum (Ex. P-41: Articles 135, 136 and 130), the court noted the managing agents had power to engage staff but that the company was ultimately liable to pay salaries and commissions; citing Shivnandan Sharma, the court treated such persons as employees of the company. Given the periodic nature of auditing and the role of Labour Officer, the court concluded respondent No. 11 held an office under Rewa Coal Fields Ltd.
On these bases the court confirmed the Election Tribunal's finding that respondent No. 11 held an office of profit under the company, rendering him disqualified under Section 7(e).
- Whether the Union Government held the requisite share in the company:
- The court set out facts about 95,400 shares standing in the name of the late ruler of Rewa, and the ensuing dispute upon merger as to whether those shares vested in the State or were personal property.
- Ex. R-75 (Government of India letter) indicated that 90,400 of those shares were to be divided equally between the Government of India and the Maharaja (after 5,000 being identified as Bank property), resulting in 45,200 shares attributed to the Union Government.
- Relying on Article 563(1) which takes the dispute out of court jurisdiction, the court held that 45,200 shares vested in the Union Government and thus the Union Government had more than 25% of the capital of Rewa Coal Fields Ltd.
Accordingly, the court concluded respondent No. 11 was disqualified under Section 7(e) because he held an office of profit in a company in which the Union Government had the requisite shareholding.
- Whether the Returning Officer had accepted the nomination and later lacked power to reject it:
- Ex. P-1 bore an endorsement: "The nomination is invalid as per order elsewhere." The court observed the prefix "in" appeared to have been added subsequently, but the endorsement as a whole did not clearly show it had not been written in one sitting.
- There was no evidence from the Returning Officer (B.R. Mandal, R.W. 8) that he had earlier made an endorsement accepting the nomination before disallowing respondent No. 11's candidacy for the State Assembly seat.
- Practically, no endorsement accepting a nomination is required under Section 36 unless an objection has been raised and dismissed; thus it was improbable the Returning Officer would have recorded "valid" when there had been no objection.
- While the power under Section 36(2) is judicial in character (Virindar Kumar Satyawadi), the court emphasized that a question of accepting or rejecting a nomination engages judicial consideration only when an objection is made and dealt with under the statutory procedure. The court distinguished cases (e.g., Natwar Lal) where a prior judicial acceptance was followed by review and rejection; in the present case there was no such judicial acceptance.
- The court held that until acceptance or rejection has been determined judicially in accordance with Section 36, the Returning Officer retains the power to reject a nomination up until the list of validly nominated candidates is made and affixed under sub-section (8) of Section 36.
Therefore the Returning Officer's subsequent rejection of respondent No. 11's nomination was not open to question on the basis advanced by the appellant.
- Consequential procedural classification:
The court noted it was unnecessary to decide whether, if the Returning Officer had no power to reject the nomination, the defect would amount to "improper rejection" under clause (c) or merely "non-compliance with rules" under clause (d)(iv) of sub‑section (1) of Section 110. The court expressed the view that if the Returning Officer indeed had no such power, the situation would constitute improper rejection of the nomination rather than mere non-compliance with rules.
Holding and Implications
Core Ruling: Appeal dismissed.
Detailed holdings and direct consequences:
- The court overruled the preliminary constitutional objection and held that Section 116-A did not offend Article 329(b) so as to render the appeal provision invalid.
- The court confirmed the Election Tribunal's finding that respondent No. 11 held an office of profit under Rewa Coal Fields Ltd. and that the Union Government held sufficient shares to bring Section 7(e) into operation; consequently respondent No. 11 was disqualified for membership of the House of the People under Section 7(e).
- The court held that the Returning Officer's rejection of respondent No. 11's nomination was not open to question on the basis that it had been previously accepted, because there was no judicial acceptance under the statutory procedure which would have removed the Returning Officer's power to act before the list under Section 36(8) was affixed.
- As a result of the above, the appeal failed. The court dismissed the appeal with costs: hearing fee Rs. 200 to each contesting respondent who appeared; costs to be paid from the appellant's security and any balance refunded to the appellant.
Broader implications: The opinion applied established authorities to the facts; it did not purport to create a new legal principle beyond the application of existing law. The direct effect is that the election petition was dismissed (the election of respondent No. 1 was not declared void) and respondent No. 11's nomination rejection was sustained due to disqualification under Section 7(e).
Disposition
Appeal dismissed. Costs awarded as set out above.
G.P Bhutt, J.:— This is an appeal under Section 116-A of the Representation of the People Act, 1951 (hereinafter called the Act), which is directed against the order of the Election Tribunal, Chhindwara, dismissing the appellant's election petition for declaration that the election of respondent No. 1 to the House of the People from the Chhindwara Parliamentary Constituency was void.
2. The election Petition was filed by Lekhram (P.W 4) who was an elector on the roll of the Chhindwara Parliamentary Constituency from Parasia. The Election Tribunal granted him leave under section 109 of the Act to withdraw the election petition. Thereafter, the appellant, who was respondent No. 6 in the election petition, was, on his application under Sec. 110(3)(c) of the Act, substituted by the Election Tribunal in his place and allowed to continue the proceedings. The Chhindwara Parliamentary Constituency is a double-member constituency, one of the seats being general and the other reserved for a member of the scheduled tribes. Respondents Nos. 1 to 7, respondent No. 11 and the appellant were candidates for the general seat, and respondents Nos. 8 to 10, for the reserved seat. No objections were raised to their nomination. Subsequently respondents Nos. 2 and 4, and the appellant withdrew their candidature.
3. Respondent No. 11 also filed a nomination paper for election to the State Legislative Assembly from the Parasia Legislative Assembly Constituency. An objection was raised to his nomination under Sec. 7(e) of the Act on the ground that he held an office of profit under the Rewa Coal Fields Ltd., in the capital of which the State Government owned not less than 25 per cent, share. That objection was upheld by the Returning Officer and his nomination was rejected under Sec. 36(2)(a) of the Act. The Returning Officer thereafter also rejected his nomination as a candidate for election to the House of the People.
4. The election of respondent No. 1 was contested on the following grounds:
(i) That he was guilty of corrupt practices either personally or through his agents, or through other persons with his consent;
(ii) That the rejection of the nomination of respondent No. 11 was improper; and
(iii) That the nomination of respondent No. 3 was improperly accepted, although he was below the statutory age limit.
5. The contentions regarding the corrupt practices and improper acceptance of the nomination of respondent No. 3 were not accepted by the Election Tribunal for want of evidence. These findings are not contested by the appellant. The only point for decision in the appeal is whether the nomination of respondent No. 11 was improperly rejected.
6. The case of the appellant was that the Returning Officer had at first accepted the nomination paper of respondent No. 11 for the House of the People as valid and written the word ‘valid’ thereon, but when he allowed the objection to his nomination as a candidate for election to the State Legislative Assembly, he changed the word ‘valid’ into ‘invalid’ and rejected his nomination paper for the House of the People, which he had no power to do under the Act. On merits he denied that respondent No. 11 held any office of profit under the Rewa Coal Fields Ltd., or that the appropriate Government (in this case the Union Government) had any share in the capital of that company.
7. The Election Tribunal found that the Union Government owned more than 25 per cent, share in the capital of the Rewa Coal Fields Ltd. and that respondent No. 11 held an office of profit under that company. In this view, it held that respondent No. 11 was disqualified for membership of the House of the People under Sec. 7(e) of the Act and accordingly his nomination was not improperly rejected.
8. It, however, also held that the Returning Officer had at first accepted the nomination and consequently he had no power to reject it subsequently, but as this only amounted to non-compliance with the rules made under the Act and it was not proved that the result of the election, in so far as it concerned respondent No. 1, was affected thereby, the election petition was liable to be dismissed.
9. Before, we take up this question for consideration, we would dispose of the preliminary objection that has been raised to the maintainability of the appeal. It has been contended that Sec. 116-A of the Act, in so far as it provides an appeal from the decision of an Election Tribunal, offends Article 329(b) of the Constitution of India, which empowers the appropriate Legislature to set up by law only one authority to decide an election dispute.
10. In our judgment, the words “in such manner as may be provided by or under any law made by the appropriate Legislature” in Article 329(b) are governed by the word ‘except’ which precedes them, and, therefore, Parliament was also competent to provide an appeal for decision of the election dispute. The preliminary objection has also no force on another ground.
11. Since an appeal is only a continuation of the original lis, the power of the Parliament, under Article 329(b), would also extend to providing an appeal and also an authority to decide it, when it had the power to make a law for decision of an election petition by an Election Tribunal. The preliminary objection is accordingly overruled.
12. It is not in dispute that Shaw Wallace and Co., are the managing agents of 3 coal companies, namely, the Pench Valley Coal Co. Ltd., the Amalgamated Coal Fields Ltd. and the Rewa Coal Fields Ltd., and respondent No. 11 was coal auditor of the first two companies. It appears from the list of payment vouchers, Ex. R-30, that he was paid his salary from the Central Office of the managing agents.
13. W. Bright (R.W 9) is the Chief Mechanical Engineer and administrative head of the managing agents. He deposed that respondent No. 11 acted as coal auditor for the Rewa Coal Fields Ltd., and also as Labour Officer for all the three companies, when he directed him to do so. When he worked for the Rewa Coal Fields Ltd., a proportionate amount of his salary and allowances was debited to that company by the Central Office.
14. There is, therefore, no doubt that for the services that he rendered to the said company, he made a monetary gain which would amount to ‘profit’ within the meaning of Sec. 7(e) of the Act: See Ravanna Subbanna v. G.S Kaggeerappa, AIR 1954 SC 653 at p. 656. It is not, therefore, necessary for purposes of this appeal to consider whether the term ‘profit’ should be given an extended meaning so as to include intangible benefits also. The question is whether respondent No. 11 held an office under the Rewa Coal Fields Ltd.
15. Ex. P-41 is the memorandum of association of the Rewa Coal Fields Ltd. Article 135 thereof provides that the managing agents shall have the power, and exercise the duty, to engage and dismiss managers, engineers, experts, clerks, assistants and other servants of the company and to direct and control them, and fix and pay their remuneration. Article 136 gives them similar power to appoint and at their discretion to remove or suspend such employees, whether permanent or temporary or engaged for special services.
16. Article 130 provides that the company shall be liable to pay salaries and commission to such of the employees who are engaged solely in the company's business and to pay such proportion of the salaries and commission of any experts employed by the managing agents partly in connection with the business of the company and partly in connection with other business, as the directors may from time to time determine.
17. Although, therefore, the engagement of the employees rested with the managing agents, they were really employees of the company which was ultimately liable to pay for their services: see Shivnandan Sharma v. Punjab National Bank, (S) AIR 1955 SC 404 at p. 410. The work of auditing is periodical in nature, so also that of Labour Officer.
18. Since, as a part of his employment, respondent No. 11 was to work as a coal auditor for the Rewa Coal Fields Ltd., and also as Labour Officer, whenever occasion arose, it cannot be said that he did not hold an office. We, therefore, confirm the finding of the Election Tribunal that respondent No. 1 held an office of profit under the Rewa Coal Fields Ltd.
19. It is not disputed that 95400 shares of the Rewa Coal Fields Ltd., out of 135000 total shares, stood in the name of the late H.H Sir Gulab Singh, the then ruler of Rewa. When the State of Rewa merged with the Union of India, a question arose whether those 95400 shares were the ruler's personal property or the property of the State. The Union Government claimed that all these shares were the property of the State and accordingly vested in the Government of India, under Article II of the V.P Merger Agreement.
20. It appears from the Government of India, Ministry of Home Affairs letter, dated 25/26-7-1957, Ex. R-75, that out of 95400 shares held in the name of the late H.H Sir Gulab Singh, 5000 shares were the property of the Bank of Baghelkhand and it was decided that the remaining 90400 shares should be divided equally between the Government of India, and His Highness the Maharaja of Rewa. This letter was written by S. Narayan Swamy (R.W 12). Deputy Secretary to the Government of India. It appears that the decision alleged in this letter was given in accordance with clause (2) of Article VI of the V.P Merger Agreement.
21. This dispute is taken out of the jurisdiction of the Courts of the country under Article 563(1) of the Constitution of India. It cannot, therefore, be contended, notwithstanding any provision in the Indian. Companies Act, relating to the transfer of shares, that 45200 shares of the Rewa Coal Fields Ltd., do not vest in the Union Government. Accordingly the Union Government has more than 25 per cent, share in the capital of that company.
22. In view of the above findings, respondent No. 11 must be held to have been disqualified for membership of the House of the People under section 7(e) of the Act. The question, however, is whether the Returning Officer had accepted the nomination of respondent No. 11 and rejected it subsequently as a result of his order on the objection to his nomination as a candidate for election to the State Legislative Assembly.
23. Ex. P-1 is the nomination paper which bears the following endorsement of the Returning Officer.
“The nomination is invalid as per order elsewhere.”
24. The prefix “in” before “valid” does appear to be subsequently added. The endorsement as a whole, however, does not indicate that it was not written in one sitting. It is, therefore, possible that while making the endorsement, the prefix “in” was inadvertently omitted and was added when the mistake was detected. There is also nothing to indicate from the evidence of the Returning Officer, B.R Mandal (R.W 8), that he had made the endorsement accepting the nomination, before the nomination of respondent No. 11 as a candidate for election to the State Legislative Assembly was rejected.
25. As a matter of fact, no endorsement accepting a nomination paper, is required to be made under section 36 of the Act, unless an objection has been raised and dismissed. It does not, therefore, appear probable that the Returning Officer would have made an endorsement recording the validity of the nomination, when there was no objection to its acceptance.
26. In the above view, no question arises as to whether the Returning Officer has power to review an order accepting a nomination, when there is no challenge to its validity. It is no doubt true that the power given to a Returning Officer under section 36(2) of the Act to examine the nomination paper and decide objections which may be made thereto is, as held in Virindar Kumar Satyawadi v. State Of Punjab , (S) AIR 1956 SC 153, judicial in character.
27. The question of rejecting a nomination, however, does not arise, until an objection is made or the Returning Officer otherwise comes to know of any defect or disqualification during the course of the scrutiny. The question of accepting a nomination, therefore, does not require judicial consideration, until an objection is raised and rejected.
28. In Natwar Lal v. Bhartendra Singh, 5 ELR 408, the nomination was rejected after enquiry. In that case, therefore, the question properly arose as to whether the Returning Officer had any power to review such a judicial order. No such question, however, arises in the present case where, even if the nomination paper was endorsed as valid, the question of its acceptance would not be deemed to be decided judicially.
29. We are, therefore, of the opinion that until the question of acceptance or rejection of a nomination is decided judicially in accordance with the procedure laid down in Sec. 36 of the Act, the Returning Officer has the power to reject the nomination till such time as the list of validly nominated candidates has not been made and affixed to his notice board under sub-section (8) thereof. The order of the Returning Officer rejecting the nomination of respondent No. 11, therefore, is not open to question.
30. In the view that we have taken, it is not necessary to consider whether, if the Returning Officer had no power to reject the nomination paper, it would be a case of improper rejection of a nomination under clause (c), or of non-compliance with the rules under Cl. (d)(iv), of sub-s. (1) of Sec. 110 of the Act. We are, however, of the opinion that if the Returning Officer had no such power, the case would be one of imporper rejection of the nomination and not of non-compliance with the rules. The result is that the appeal fails and is dismissed with costs. Hearing fee Rs. 200/- to each of the contesting respondents who put in appearance in this Court. The costs shall be paid from the amount of the security, and the balance, if any, shall be refunded to the appellant.
V.R.B
31. Appeal dismissed.
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