# ~1JI,K<1himf9 ~·,· Bas• v. Sankari Prasad GhtYsal and Others

- **Citation:** [1964] 4 S.C.R. 311
- **Court:** Supreme Court of India
- **Decided:** 1962-09-27
- **Bench:** S. K. DAs, AcTING C.J.; K: S~B'} RAo, Raghubar.Dayal, N. Rajagopala Ayyangar, J.-R-MuoHOLKAR
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/1ji-k-1himf9-bas-v-sankari-prasad-ghtysal-and-others-3086
- **Pages:** 14

## Headnote

Elections-Appellant, a chtirtered accountant and a partner
of a firm of auditors-the firm appointed as auditors of two Government owned companies-Appellant elected to Lok :!apha-Whether he holds an office of profit under the Union Gov~rnment
Tests to be a'pplied-Copstitution of India, Art. 1.02(1)(•)-lndian
Companies Act, 1956 (1 of )956) sS. 224, 227, 619-Represen/ation
of the People Act, 1950 ( 43 of 1950). s. 116.
The appellant was a chartered accountan.t· and a partner of a
firm of auditors.
This firm acted as auditors 'Of two companies,
among others, registered under the Indian .. Companies Act, 1956,
the entirety of the shares of one 6f which are own;d py the Union
Government and the entirety of the shares of .the other by _the
West Bengal Government.
The appellant was declared elected to
the Lok Sabha. His election was challenged by two vo\ers of the
constituency by means .... of an election petition. The main ground
raised was that the appellant was at the relevant Period the holder
of an office of profit under the Governmeqt of India· as ";'"ell as
theoState Governmel\t·and hen£he was disqualified from standiμg
for election under Art. 102(1)(a)
of the Constitntion. The Election Tribunal accepted this contention and declared the election
of the appellant void.
The appellant filed an appeal before the
High Court in which he did not succeed. The present appeal was
by virtue of a certificate granted by the High Court_ under Art.
133(1)(c) of the Constitntion.
·
It was contended before this Court that on a true construction
of the expression uunder the Government of India Or the Govern~
ment of any State" occur.ring in cl. (a) of Art. 102 (1) df the Constitntion the appellant could not be said' to hold an o)lice of profit under
the Government of India or the Government of West Bengal. It
was argued that the various tests, namely, who has ilie power to
appoint, who has the right to remove, who pays the remuneration,
what are the functions and Who exercises the control shbuld all
co.exist and each must .show subordination to th'c
Governm~nt.
The fulfilment of some of the tests alQne, woμld nbt be suffi~ient to
determine that a person holds an offic'e Of profit under the Govern·
ment. It was contented on beli:ilf 'of the respondent that the! teSts
were not cumulative and that the court should lobk to the subs-
·tance ~rather than to, the form.
t:
Held:
(i) For holding an •office of profit under the Government a
person need nbt be in the service of the Goverrμnent and there
:i.eed not be any relationship of niaster· ahd sCrvant betWCen them.
· .
1963
dug~si...1.f~, J
_____ ..
1963
......
--,
~1J!,K<1himf9
~·,· ... Bas•
v.
Sankari Prasad
GhtYsal and
Others
S. K. Das
Acg. C. /.
312
·SUPREME COURT REP.ORTS
[1964]
(ii) The examination of ~e various
p~qvisions of the Companies Act, 1956 (ss. 224, 227, 618 and 619) showed that so far as
the two companies in question Were concerned 'the appellant \Vas
appointe~ as .an aq.dit?r by\ t~ir;~Ceptraf Government, :vas removable
by the Contral Gov~rnment, that the Comptroller and the Auditor
Gen~ral of India exercised full contrcil over him and that his remuneration was fixed ·by the Central 'Government .under sub0s. (S) of
s. 224 of the Companies Act though it was paid by the companies
concerned.
(iii) Where the several elemfints, the power to appoint,
the
poWer to dismiss, the power to control and give.directions as to the
mariner in which the dut_\es of the office are to be performed and
thC .power to di:termine the q~estion of remuneration are all present in a given c:isC then thC officer in question holds the office
under the authority so empowered.
It is not necessary that all
these must co-exis~ nor is the fact that the source from which the remuneration is paid is not from public revenue decisive.
(iv) The appellant held an office of profit under the Government of India witl)in the meaning of Art. 102(1)(a) of the Constitution of Indi::t and as suCh he was disqualified for being
cho

## Text

•
•.
!fS.C.R.
SUPREME COURT ·REPORTS
GU:R,UGOBINDA BASU
.fl.
·SANKARI PRASAD GHO.SAL and DRS.
. '3H
(S. K. DAs, AcTING C.J.; K: S~B'} RAo, RAGHUBAR.DAYAL,
N. RAJAGOPALA AYYANGAR AND J.-R-MuoHOLKAR, JJ.)
Elections-Appellant, a chtirtered accountant and a partner
of a firm of auditors-the firm appointed as auditors of two Government owned companies-Appellant elected to Lok :!apha-Whether he holds an office of profit under the Union Gov~rnment
Tests to be a'pplied-Copstitution of India, Art. 1.02(1)(•)-lndian
Companies Act, 1956 (1 of )956) sS. 224, 227, 619-Represen/ation
of the People Act, 1950 ( 43 of 1950). s. 116.
The appellant was a chartered accountan.t· and a partner of a
firm of auditors.
This firm acted as auditors 'Of two companies,
among others, registered under the Indian .. Companies Act, 1956,
the entirety of the shares of one 6f which are own;d py the Union
Government and the entirety of the shares of .the other by _the
West Bengal Government.
The appellant was declared elected to
the Lok Sabha. His election was challenged by two vo\ers of the
constituency by means .... of an election petition. The main ground
raised was that the appellant was at the relevant Period the holder
of an office of profit under the Governmeqt of India· as ";'"ell as
theoState Governmel\t·and hen£he was disqualified from standiμg
for election under Art. 102(1)(a)
of the Constitntion. The Election Tribunal accepted this contention and declared the election
of the appellant void.
The appellant filed an appeal before the
High Court in which he did not succeed. The present appeal was
by virtue of a certificate granted by the High Court_ under Art.
133(1)(c) of the Constitntion.
·
It was contended before this Court that on a true construction
of the expression uunder the Government of India Or the Govern~
ment of any State" occur.ring in cl. (a) of Art. 102 (1) df the Constitntion the appellant could not be said' to hold an o)lice of profit under
the Government of India or the Government of West Bengal. It
was argued that the various tests, namely, who has ilie power to
appoint, who has the right to remove, who pays the remuneration,
what are the functions and Who exercises the control shbuld all
co.exist and each must .show subordination to th'c
Governm~nt.
The fulfilment of some of the tests alQne, woμld nbt be suffi~ient to
determine that a person holds an offic'e Of profit under the Govern·
ment. It was contented on beli:ilf 'of the respondent that the! teSts
were not cumulative and that the court should lobk to the subs-
·tance ~rather than to, the form.
t:
Held:
(i) For holding an •office of profit under the Government a
person need nbt be in the service of the Goverrμnent and there
:i.eed not be any relationship of niaster· ahd sCrvant betWCen them.
· .
1963
dug~si...1.f~, J
_____ ..
1963
......
--,
~1J!,K<1himf9
~·,· ... Bas•
v.
Sankari Prasad
GhtYsal and
Others
S. K. Das
Acg. C. /.
312
·SUPREME COURT REP.ORTS
[1964]
(ii) The examination of ~e various
p~qvisions of the Companies Act, 1956 (ss. 224, 227, 618 and 619) showed that so far as
the two companies in question Were concerned 'the appellant \Vas
appointe~ as .an aq.dit?r by\ t~ir;~Ceptraf Government, :vas removable
by the Contral Gov~rnment, that the Comptroller and the Auditor
Gen~ral of India exercised full contrcil over him and that his remuneration was fixed ·by the Central 'Government .under sub0s. (S) of
s. 224 of the Companies Act though it was paid by the companies
concerned.
(iii) Where the several elemfints, the power to appoint,
the
poWer to dismiss, the power to control and give.directions as to the
mariner in which the dut_\es of the office are to be performed and
thC .power to di:termine the q~estion of remuneration are all present in a given c:isC then thC officer in question holds the office
under the authority so empowered.
It is not necessary that all
these must co-exis~ nor is the fact that the source from which the remuneration is paid is not from public revenue decisive.
(iv) The appellant held an office of profit under the Government of India witl)in the meaning of Art. 102(1)(a) of the Constitution of Indi::t and as suCh he was disqualified for being
chosen as a member of Pa,rliaipent.
Maulana Abdul Shakur v.
Rikhab Chand,
[1958]
S.C.R.
387, distinguished.
, .Rarriappa v. "Sangapp,,, .[1959] S. C. )l. 1167, referred to.
CIVIL APPEtLATE JuRISDICTION: Civil Appeal No. 486 o(
1963.
Appeal from the Judgment and order dated September
27, 1962, of th~ Calcuna High Court in ,Appeal from Original Decree No. 424 of 1962.
S. Chaudhuri, -R. C. Deb and S. S. Shukla, for the
appellant.
Hari Prosonna Mukherjee, K. G. Hazra Chaudhari
and D. N. Mukherjee, for the
responden~s Nos. 1 and 2.
August 14, 1~63. The Judgment of the Court was delivered by
S. K. DAS, Acting Chief Justice.-This is an appeal on
a certifica1e granted by the High Court of Calcutta under
Art. f33(l)(c) c,if the COnsfitutibn. No preliminary olr.
jection h:aving been takep as to the competency of the certificate, we have heard the ;tppeal. on merits.
The short facts giving rise to the appeal are these.
The appellant before us is Gurugobinda Basu who is a chartt:red accountant .. and a partn~r of the firm of auditors
carrying on business under th<; name and stvle of G. ,Ba,su
and Con:pany. This firm acted as the auditor of certain
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•
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....._ -
4 S.C.R.
SUPREME COURT REPORTS
313
companies and corporations, such as the Life Insurance
Corporation of India, the Durgapur Projects Ltd., and the
Hindustan Steel Ltd., on payment of certain remuneration.
The appellant was also a Director of the West Bengal Financial Corporation having been appointed or nominated
as such by the State Government of West Bengal. The
appointment carried with it the right to receive fees or
remuneration as director of the said corporation.
In February-March, 1962, the appellant was elected
to the House of the People from Constituency No. 34
(Burdwan Parliamentary Constituency) which is a single
member cons·tituency. The election was held in February,
1962. There were two candidates, namely, the appellant
and respondent No. 3 to this appeal. The appellant was
declared elected on March 1, 1962, he having secured
1,55,485 votes as against his rival who secured 1,23,015
votes. This election was challenged by two voters of the
said constituency by means of an election petition dated
April 10, 1962.
The challenge was founded on two
grounds : (1) that the appellant was, at tbe relevant time,
the holder of offices of profit both under the Government
of India and the Government of West Bengal and this
disqualifie,~ him from standing for election under Art_
102 (l)(a) of the Constitution; and (2) that he was guilty
of certain corrupt practices which vitiated his election. The
second ground was abandoned at the trial, and we are no
longer concerned with it.
The election Tribunal held that the appellant was a
holder of offices of profit both under the Government of
India and the Government of West Bengal and was therefore disqualified from standing for election under Art.
102(1) (a)
of the Constitution. The Election Tribunal
accordingly allowed the election petition and declared that
the election of the appellant to the House of the People
was void. There was an appeal to the High Court under
s. 116-A of the Representation of the People Act, 1951.
The High Court dismissed the appeal, but granted a certific:ite of htness under Art. 133(1)(c) of the Constitution.
The only question before us is whether the appellant
was disqualified 'from being chosen as, and for being, a
member of tbe House of the People under Art. 102(1)(a)
of the Constitution. The answer to the question depends
21-2 SC lndia/64
1963
Gurugobi•da
Basu
v.
S•nkori Prasad
Ghosol and
Others
S. K. Das
Acg. C. /.
1963
Gurugobinda
Basu
v.
Sankari Prasad
Ghosal and
Others
s.·K. Das
Acg. C. /.
314
SUPREME COURT REPORTS
ll964]
on whether the appellant held any offices of profit under
the Government of' India or the Government of any State
other than such offices as had been declared by Parliament
by law not to disqualify their holder. It has not been
seriously disputed before us that the office of auditor which
the appellant held as partner of the firm of G. Basu and
Company was an office of profit. It has not been contended by the appellant before us that the office of profit
which he held had been declared by Parliament by law
not to disqualify the holder.
Therefore the arguments
before us have proceeded entirely on the question as to the
true scope and meaning of the expression "under the Government of India or the Government of any State" occurring in cl. (a) of Art. 102 ( 1) of the Constitution. The
contention on behalf of the appe!lant has been that on a
true construction of the aforesaid expression, the appellant
cannot be said to hold an office of profit under the Government of India or the Government of West Bengal.
On
behalf of the respondents the contention is that the office
of auditor which the appellant holds is an office of profit
under the Government of India in respect of the Life Insurance Corporation of India, the Durgapur Projects Ltd.
and the Hindustan Steel Ltd., and in respect of the West
Bengal Financial Corporation of which the appellant is a
Director appointed by the Government of West Bengal,
he holds an office of profit under the Government of West
Bengal. These are the respective contentions which fall
for consideration in the present appeal.
It is necessary to state here that if in respect of any of
the four companies or corporations it be held that the
appellant holds an office of profit under the Government,
be it under the Government of India or the Government
of West Bengal, then the appeal must be dismissed. It
would be unnecessary then to consider whether the office
of profit which the appellant holds in respect of the
other companies is an office of profit under the. Government or not. We would therefore take up first the two
companies, namely, the Durgap11r Projects Ltd.; and the
Hindustan Steel Ltd., which are 100% Government companies and consider the respective contentions of the parties
before us in respect of the office of auditor which the appellant holds in these two companies. If we hold that in
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..
........ -
r
..
•
4 S.C.R.
SUPREME COURT REPORTS
315
respect of any of these two companies the appellant holds
an office of profit under the Government of India, then
it would be unnecessary to consider the position of the
appellant in any of the other companies.
It is not disputed that the Hindustan Steel Ltd., and
the Durgapur Projects Ltd. are Government companies
within the meaning of s. 2(18) read with s. 617 of the
Indian Companies Act, 1956.
It has been stated before
us that 100% of the shares of the Durgapur Projects Ltd.
are held by the Government of West Bengal and 100%
of the shares of the Hindustan Steel Ltd. are held by the
Union Government. We may now read s. 619 of the
Indian Companies Act, 1956.
"(I) In the case of a Government company, the
following provisions shall apply, notwithstanding anything contained in sections 224 to 233.
(2) The auditor of a Government company shall be
appointed or re-appointed by the Central Government
on the advice of the Comptroller and Auditor-General
of India.
(3) The Comptroller and Auditor-General of India shall have power-
( a) to direct the manner in which the company's
accounts shall be audited by the auditor appointed
in pursuance of sub-section (2) and to give such
auditor instructions in regard to any matters relating to the performance of his functions as such :
(b) to conduct a supplementary or test audit of the
company's accounts by such person or persons as
he may authorise in this behalf; and for the purposes of such audit, to require information or
additional information to be furnished to any person or persons so authorised, on such matters, by
such person or persons, and in such form, as the
Comptroller and Auditor-General may, by general or special order, direct.
( 4) The auditor aforesaid shall submit a copy of
his audit report to the Comptroller and Auditor-General of India who shall have the right to comment
upon, or supplement, the audit report in such manner
as he may think fit.
(5) Any such comments upon, or supplement to,
1963
Gurugobinda
Basu
v.
Sankari Prasad
Ghosal and
Others
S. K. Das
Acg. C. /.
1963
Gurugobind•
Basu
v.
Sankari Prasad
Ghosal and
Others
S. K. Das
Acg. C. /.
316
SUPREME COURT REPORTS
[19641
the audit report shall be placed before the annual
general .meeting of the company at the same time and
in the same manner as the audit report."
It is clear from the aforesaid provisions that notwitl1
standing s. 224 of the Act which empowers every company
to appoint an auditor or auditors at each annual general
meetings, the appointment of an auditor of a Government
company rests solely with the Central Government and in
making such appointment the Central Government takes
the advice of the Comptroller and Auditor-General of
India. Under s. 224(7) of the Act an auditor appointed
under s. 224 may be removed from office before the expiry
of his term only by the company in general meeting, after
obtaining the previous approval of the Central Government
in that behalf. The· remuneration of the auditors of a
company is to be fixed in accordance with the provisions
of sub-s. (8) of s. 224. It is
clear however that sub-s.
(7) of s. 224 does not apply to a Government company
because the auditor of a
Government company is
not appointed under s. 224 of the Act, but is appointed
under sub-s. (2) of s. 619 of the Act. It is clear therefore
that the appointment of an auditor in a Government company rests solely with the Central Government and so
also
his
removal from
office.
Under sub-s.
(3) of
s. 619 the Comptroller and Auditor-General of India
exercises control over the auditor of
a
Government
company in respect of various matters including the manner in which the company's accounts shall be audited.
The Auditor-General has also the right to give such auditor
instructions in regard to any matter relating to the performance of his functions as such. The Auditor-General
may conduct a supplementary or test audit of the company's accounts by such person or persons as he may authorise in this behalf. In other words, the Comptroller and
Auditor-General of India exercises full control over the
auditors of a Government company. The powers and duties of auditors in respect of companies other than Government companies are laid down in s. 227 of the Act but by
virtue of sub-s. ( 1) of s. 619 of the Act, the provisions in
s. 227 of the Act do not apply to a Government company
because a Government company is subject to the provisions
of s. 619 of the Act. Under s. 619-A of the Act, where the
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-
4 S.C.R.
SUPREME COURT REPORTS
317
Central Government is a member of a Government company, an annual report of the working and affairs of the
company has to be prepared and laid before both Houses
of Parliament with a copy of the audit report and the
comments
made
by
the
Comptroller and
AuditorGeneral. Under s. 620 of the Act the Central Government
may by notification direct that any of the' provisions of
the Act, other than ss. 618, 619 and 639, shall not apply
to any Government company.
The net result of the aforesaid provisions is that so far
as the Durgapur Projects Ltd. and the Hindustan Steel Ltd.
are concerned, the appellant was appointed an auditor by the
Central Government; he is removable by the Central Government and the Comptroller and Auditor-General of India
exercises full control over him. His remuneration is fixed
by the Central Government under sub-s. (8) of s. 224 of
the Act though it is paid by the company.
In these circumstances the question is, does the appellant hold an office of profit under the Central Government?
We may now read Art. 102 (I) of the Constitution.
102. (I) A person shall be disqualified for being
chosen as, and for being, a member of either
House of Parliament-
( a) if he holds any office of profit under the
Government of India or the Government of any
State, other than an office declared bv Parliament
by law not to disqualify its holder ; ·
(b) ..
..
"
~
(c) "
"
"
*
~)"
..
..
..
(e) "
"
"
*
We have stated earlier that the sole question before us is
whether the office of profit which the appellant undoubtedly holds as auditor of the Durgapur Projects Ltd.,
and the Hindustan Steel Ltd. is or is not under the Government of India. According to Mr. Chaudhuri who has argued
the appeal on behalf of the appellant, rhe expression "under
the Government" occurring in Art. 102(1)(a) implies subordination to Government. His argument is that ordinarily
there are five tests of such subordination, namely, (1) whether Government makes the appointment to the office;
(2) whether Government has the right to remove or dis1963
Gurugobinda
Basu
v.
Sankari Prasad
Ghosa/ and
Others
S. K. Das
Acg. C. /.
1963
Gurugobinda
Basu
v.
Sankari Prasad
Ghosal and
Others
S. K. Das
Acg. C. l·
318
SUPREME COURT REPORTS
[1964]
miss the holder of office; (3) whether Government pays the
remuneration; (4) what are the functions which the holder
of the office performs and does he perform them for Government; and (5) does Government exercise any control
over the performance of those functions.
His argument
further is that the tests must all co-exist and each must
show subordination to ·Government so that the fulfilment
of only some of the tests is not enough to bring the holder
of the 'office under the Government. According to him all
the tests must be fulfilled before it can be said that the'
holder of the office is under the Government. His contention is that the Election Tribunal and the High Court were
in error in holding that the appellant was a holder of
office under the Government, because they misconstrued
the scope and effect of the expression "under the Government" in Art. 102 ( 1) (a) of the Constitution.
He has
contended that tests (3), ( 4) and (5) adverted to above
are not fulfilled in the present case. The appellant gets
his remuneration from the company though fixed by Government; he performs functions for the company and he
is controlled by the Comptroller and Auditor-General who
is different from the Government.
, On behalf of the respondents it is argued that the tests
are not cumulative in the sense contended for by the ap·
pellant, an<l what has to be considered is the substance of
the matter which must be determined by a consideration
of all the factors present in a case, and whether stress will
be laid on one factor or the other will depend on the circumstances of each particular case. According to the respondents, the tests of appointment and dismissal are important tests in the present case, and in the matter of a
company which is a 100% Government company, the payment of remuneration fixed by Government, the performance of the functions for the company and the exercise
of control by the Comptroller and Auditor-General, looked
at from the point of view of substance and taken in conjunction with the power of appointment and dismissal,
really bring the holder of the office under the Government
which appoints him.
One point may be cleared up at this stage. On behalf
of the respondents no question has been raised that the
Durgapur Projects, Limited, or the Hindustan Steel, Limi-
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4 S.C.R.
SUPREME COURT REPORTS
319
ted, is a department of Government or an emanation of
GoYernment-a question which was considered at some
length in Narayanaswamy v. Krishnamurthi('). Learned
counsel for the respondents has been content to argue
before us on the basis that the two companies having been
incorporated under the Indian Companies Act, 1956 are
separate legal entities distinct from Government. Even on
that footing he has contended that in view of the provisions of s. 619 and other provisions of the Indian Companies Act, 1956, an auditor appointed by the Central Government and liable to be removed from office by the same
Government, is a holder of an office of profit under the
Government in respect of a company which is really a
hundred per cent Government company.
We think that this contention is correct. We agree
with the High Court 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. The Constitution itself makes
a distinction between 'the holder of an office of profit under
the Government' and 'the holder of a post or service under
the Government'; see Arts. 309 and 314. The Constitution
has also made a distinction between 'the holder of an office
of profit under the Government' and 'the holder of an
office of profit under a local or other authority subject to
the control of Government'; see Art. 58(2) and 66(4). In
Maulana Abdul Shakur v. Rikhab Chand and another( 2 )
the appellant was the manager of a school run by a committee of management formed under the provisions of the
Durgah Khwaia Saheb Act, 1955. He was appointed by
the administrator of the Durgah and was paid Rs. 100
per month. The question arose whether he was disqualified to be chosen as a member of Parliament in view of
Art. 102(1)(a) of the Constitution. It was contended for
the respondent in that case that under ss. 5 and 9 of the
Durgah Khwaja Saheb A<t, 1955 the Government of India
had the power of appointment and removal of members
of _the committe~ of m~nagement ~s als~ the power to appoint the admm1strator m consultat10n with the committee;
therefore the appellant was under the control an,1 rnper·
·- '\l\\.L.R. fl9581 Mad. 513.
(2) [1958 j S.C.R. 387.
1963
Gurugobinda
Basu
v.
Sankari Prasad
Ghosal and
Others
S. K. Das
Acg. C. /.
1'63
Gurugobi~da
Bilsu
v •.
Sankuri Pras•d
Gho,./ •nd
Others
S. K. D.,
Acg. C. /.
320
SUPREME COURT REPORTS
[1964]
vision of the Government and that therefore he was holding
an office of profit under the Government of India. This contention was repelled and this court pointed out the distinction between 'the holder of an office of profit under the
Government' and 'the holder of an office of profit· under
some other authority subject to the control of Government'. Mr. Chaudhuri has contended before us that the
decision is in his favour. He has argued that the appellant
in the present case holds an office
of profit under the
Durgapur Projects Ltd. and the Hindustan Steel Ltd.
which are incorporated under the Indian Companies Act;
the fact that the Comptroller and Auditor-General or even
the Government of India exercises some control does not
make the appellant any the less a holder of office under
the two companies.
We do not think that this line of
argument is correct. It has to be noted that in Maulana
Abdul Shakur's case(') the appointment of the appellant
in that case was not made by the Government nor was
he liable to be dismissed by the Government. The appointment was made by the administrator of a committee and
he was liable to be dismissed by the same body. In these
circumstances this Court observed:
"No doubt the Committee of the Durgah Endowment
is to be appointed by the Gevernment of India but
it is a body corporate with perpetual succession acting
within the four corners of the Act. Merely because
the Committee or the members of the Committee
are removable by the Government of India or the
Committee can make bye-laws prescribing the duties
and powers of its employees cannot in our opinion
convert the servants of the Committee into holders
of office of profit under the Government of India.
The appellant is neither appointed by the Govern·
ment of India nor is removable by the Government
of India nor is he paid out of the revenues of India.
The power of the Governm<;nt to appoint a person to
an office of profit or to continue him in that office or
revoke his appointment at their discretion and payment from out of Government revenues are important
factors in determining whether that person is holding
an office of profit under the Government though pay-
(1) [1958] S.C.R. 38i.
-
4 S.C.R.
SUPREME COURT REPORTS
321
ment from a source other than Government revenue
is not always a decisive factor. But the appointment
of the appellant does not come within this test."
It is clear from the aforesaid observations that in Maulana
Abdul Shakur's case(') the factors which were held to be
decisive were (a) the power of the Government to appoint
a person to an office of profit or to continue him in that
office or revoke his appointment at their discretion, and
(b) payment from out of Government revenues, though
it was pointed out that payment from a source other than
Government revenues was not always a decisive factor.
In the case before us the appointment of the appellant
as also his continuance in office rests solely with the Government of India in respect of the two companies. His
remuneration is also fixed by Government. We assume
for the purpose of this appeal that the two companies are
statutory bodies distinct from Government but we must
remember at the same time that they are Government companies within the meaning of the Indian Companies Act,
1956 and 100% of the shares are held by the Government.
We must also remember that in the performance of his
functions the appellant is controlled by the Comptroller
and Auditor-General who himself is undoubtedly holder
of an office of profit under the Government, though there
are safeguards in the Constitution as to his tenure of office
and removability therefrom. Under Art. 148 of the Constitution the Comptroller and Auditor-General of India is
~ppointed by the President and he can be removed from
office in like manner and on the like grounds as a Judge
of the Supreme Court. The salary and other conditions of
service of the Comptroller and Auditor-General shall
be such as may be determined by Parliament by law
and until they are so determined shall be as specified
in the Second Schedule
to
the Constitution.
Under
cl. (4) of Art. 148 the Comptroller and Auditor-General is not eligible for further office either under the
Government of India or under the Government of any
St~te aft;r he has ceased to hold his office. Cl. (5) of the
said ~t1~le lays down that subject to the provisions of the
Con~ti~t10i_i and of any law made by Parliament, the
admm1strat1ve powers of the Comptroller and Auditor-
(') [1958] S.C.R. 387.
1963
Gurugobinda
Basu
v.
Sankari Prasad
Ghosal and
Others
S. K. Das
Acg. C. /.
1963
Gurugobinda
Basu
v.
Sankari Prasad
Ghosal and
Others
S. K. Das
,4cg. C. /.
322
SUPREME COURT REPORTS
[1964}
General shall be such as may be prescribed by rules made
by the President after consultation with the Comptroller
and Auditor-General. Under Art. 149 of the Constitution
the Comptroller and Auditor-General shall perlorm such
duties and exercise such powers in relation to the accounts
of the Union and of the States and of any other authority
or body as may be prescribed by or under any law
made by Parliament and, until provision in that behalf is
so made, shall perform such duties and exercise such
powers in relation to the accounts of the Union and of the
States as were conferred on or exercisable by the AuditorGeneral of India immediately before the commencement of
the Constitution in relation to the accounts of the Dominion of India and of the Provinces respectively. The reports
of the Comptroller and Auditor-General of India relating
to the accounts of the Union have to be submitted to the
President and the reports of the Comptroller and AuditorGeneral relating to the accounts of a State have to be
submitted to the Governor. From the aforesaid provisions
it appears to us that the Comptroller and Auditor-General
is himself a holder of an office of profit under the Government of India, being appointed. by the President and his
administrative powers are such as may be prescribed by
rules made by the President, subject to the provisions of
the Constitution and of any law made by Parliament.
Therefore if we look at the matter from the point
of view of substance rather than of form, it appears
to us ·that the appellant as the holder of an office of
profit in the two Government companies, the Durgapur Projects Ltd. and the Hindustan Sted Ltd.,
is
really under the Government of India; he is appointed
by the Government of India, he is removable from
office by the Government of India; he performs functions for two Government companies under the control of
the Comptroller and Auditor-General who himself is appointed by the President and whose administrative powers
may be controlled by rules made by the President.
In Ramappa v. San gappa (') the question arose as to'
whether the holder of a village office who has a hereditary
1 ight to it is disqualified under Art. 191 of the Constitution, which is the counter-part of Art. 102, in the matter
( 1) [19591 S.C.R. 1167.
-
-
-
4 S.C.R.
SUPREME COURT REPORTS
of membership of the State Legislature. It was observed
therein:
"The Government makes the appointment to the office
though it may be that it has under the statute no
option but to appoint the heir to the office if he has
fulfilled the statutory requirements. The office is,
therefore, held by reason of the appointment by the
Government and not simply because of a hereditary
right to it. The fact that the Government cannot
refuse to make the appointment does not alter the
situation."
There again the decisive test was held to be the test of
appointment. In view of these decisions we cannot accede
to the submission of Mr. Chaudhury that the several factors
which enter into the determination of this question-the
appointing authority, the authority vested with power to
terminate the appointment, the authority which determine~
the remuneration, the source from which the remuneration
is paid, and 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-must all co-exist and each
must show subordination to Government and that it must
necessarily follow that if one of the elements is absent,
the test of a person holding an office under the Government, Central or State, is not satisfied. The cases we have
referred to specifically point out that the circumstance that
th.e source from which the remuneration is paid is not
from public revenue is a neutral factor-not decisive of
the question. As we have said earlier whether stress will
be laid on one factor
or
the other will depend on
the facts of each case.
However, we have no hesitation in saying
that
where the several elements, the
power to appoint, the power to dismiss, the power to control and give directions as to the manner in which the
duties of the office are to be performed, and the power to
determine the question of remuneration are all present in
a given case, then the officer in question holds the office
under the authority so empowered.
For the reasons given above we have come to the conclusion that the Election Tribunal and the High Court
were right in coming to the conclusion that the appellant
as an auditor of the two Government companies held an
1963
Gurugobinda
Basu
v.
Sankari Prasad
Ghosal and
Others
S. K. Das
Acg. C. /.
1963
Gurugobint1•
Buu
v.
Sankari Prasai
Ghosal and
Others
1963
August H
324
SUPREME COURT REPORTS
[1%4]
office of profit under the Government of India within the
meaning of Art. 102(1)(a) of the Constitution. As such
he was disqualified for being chosen as, and for being, a
member of either House of Parliament. It is unnecessary
to consider the further question whether he was a holder
of an office of profit either under the Government of India
or the Government of West Bengal by reason of being an
auditor for the Life Insurance Corporation of India or a
Director of the West Bengal Financial Corporation.
The appeal accordingly fails and is dismissed with costs.
Appeal dismissed.
VASUMATIBEN GAURISHANKAR BHATT
fl.
NAVAIRAM MANCHHARAM VORA AND ORS.
(P. B. GAJENDRAGADKAR AND K. c. DAS GUPTA, JJ.)
Landlord and Tenant-Tenant in arrears of rent /01· about ltvo
years-Notice served by the landlord-A few days later the Act
amended-Suit· filed by the landlord
for
eviction-Pend:ng the
hearing of suit all arrears paid by tenant-Whether the u:rtartt can
be evicted on the ground of arrears of rent-Bon1bay l?.e1,ts, Hotel
and Lodging House Rates Cont1·ol Act, 1947 (Born. 57 of 1947)
s. 12.
The appellant was a tenant of the respondents occupying one
room of a building belonging to them. She was in arrears c,f rent.
The respondents served a notice on her clai1ning to 1eco\'er arrears
of rent for a period of two years and tvvo 1nonths. ·A fe\v days
after the service of this notice the. Bombay Rents, Hotel and Lodging
House Rates Control Act, 1947, \vhich govern-' this case was amend·
ed.
The respondents thereafter filed a suit for the eviction of the
appellant on the ground that they required the premises for bona
fidr: personal use and on the ground that the· appellant was in
arrears of rent for more than 6 months. The suit was resisted by
the appellant on several grounds but pending the hearing of the
·suit and before the decree was passed she deposited the entire rent
due from her.
The trial Judge upheld both the contentions of the respondent
and decreed the eviction of the appellant. On appeal the District
Judge rejected the contention of bona fidr: personal use put forward by the respondent but found that the appellant was in arrears
of rent and dismissed the appeal. The revision filed by the present