# LALITESHWAR PRASAD SAHi v. BATESHWAR PRASAD AND OTHERS

- **Citation:** [1966] 2 S.C.R. 63
- **Court:** Supreme Court of India
- **Decided:** 1965-10-07
- **Case number:** Civil Appeal No. 211 of 1965
- **Bench:** P. B. Gajendragadkar, K. N. Wanchoo, M. Hidayatullah, J. C. Shah, S. M. S!Kri
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/laliteshwar-prasad-sahi-v-bateshwar-prasad-and-others-3730
- **Pages:** 29

## Headnote

Representation of the People Acr, 1951-S. 7(d)-Contract w;:h Governn1ent not coniplying lV~!h provision of Art. 299 of the ConstiturionNot subsequently ratified by Governn1ent-Whether disqualifies candi·
date.
In an election petition filed by the appellant, the respondent's election
to the Bihar Legislative Assembly was challenged, mainly on the ground.
that he was disqualified under s. 7(d) of the Representation of the
People Act, !951, as he had entered· into a contract with the State
Government which was subsisting on January 14, 1962, i.e. the date fixed
for filing nomination papers.
One S bad entered into a contract in 1951 with the State Government
[or certain construction work and the respondent was working as a sub~
contractor under him. As there was delay etc. in the completion of the work
by S, in exercise of a power reserved to the State GovernmenJ. in cl. 3(c)
of the agreement with S, whereby the Government could, under certain
circumstances, make alternative arrangements for the completion of the
work, the Executive Engineer of the Government approached the respondent to ascertain if he would complete the work instead.
In a letter
addressed to the Executive Engineers, the respondent offered to do thework on certain terms and this offer was accepted.
Thereafter, various
letters were exchanged with the respondent by the S.D.O. and the Executive
Engineer about the progress of the work.
However, after most of the
work to be done by the respondent was completed,, S was restc>red as tho
contractor and further correspondence about the \vork done by the respondent and regarding the payment for it was conducted by the concerned
officers of the State Government with S. The payment for this work remained
outstanding on the date for filing nomination papers in January J 962.
The Election Tribunal allowed the petition and declared the respondents•·
election to be void.
But the High Court reversed this decision and held
that the respondent had at all relevant times continued to be a sub-contractor
of S, and that even assuming there was a contract bet\veen the respondent
and the State Government, the alleged contract was void in view of Art.
299 (I) of the Constitution.
On appeal to this Court,
HELD : (per majority)
No contract between the first respondent and the Stale Government
subsi9ted at the relevant time and the respondent was
noot
disqualified
under s. 7(d).
H
The correspondence in the case clearly disclosed an agreement for th.,.
execution of work between the Ex·zcutive Engineer and itfie respondent,
But the fact that by virtue of cl. 3(e) of the contract with S, the Government could, under certain circumstances, enter into an agreement
SUPREME COURT REPO!tTS
(1966] 2 S.C.R.
with someone else to do the work, did not dispense with the requirement
.of compilance with !he provisions of Art. 29~. [70 E-F]
The evidence on record showed that the State Government had chosen
not to ratify the agreement with the respondent but to consider the original
conract with S as still standing and to treat the respondent as a subcontractor working under S. [73 HJ
The principle in Chatrurbhui Vithaldas Jasani's case ([1954] S.C.R. 817)
that although a contract may not comply with Art. 299, such contract,
being capable of ratification by the Government may still disqualify a
person under s. 7(d), cannot be extended to cover a case where the
Government has in fact not ratified the contract. To hold otherwise would
be to substitute "agreement" for "contract" in s. 7(d) .. A mere agreement entered into in contra;-ention of Art. 299 and in fact not ratified
.cannot be caled a "contract" within s. 7(d). [72 A-BJ
New Marz'ne Coal Co. (Bengal) v. The Union of India A.LR. 1964
S.C. 152; State of W. Bengal v. B. K.. Monda! A.I.R. 1962 S.C. 779;
referred to.
(per Hidayatullah and Shah JJ., dissenting);
A
B
c
The available evidence clearly supported the case that there was a
oonlrac~ directl:Y between the firiJtl respondent and the State for the
exet

## Text

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LALITESHWAR PRASAD SAHi
v.
BATESHWAR PRASAD AND OTHERS
October 7, 1965
[P. B. GAJENDRAGADKAR, C.J., K. N. WANCHOO,
M. HIDAYATULLAH, J. C. SHAH AND S. M. S!KRI, JJ.]
Representation of the People Acr, 1951-S. 7(d)-Contract w;:h Governn1ent not coniplying lV~!h provision of Art. 299 of the ConstiturionNot subsequently ratified by Governn1ent-Whether disqualifies candi·
date.
In an election petition filed by the appellant, the respondent's election
to the Bihar Legislative Assembly was challenged, mainly on the ground.
that he was disqualified under s. 7(d) of the Representation of the
People Act, !951, as he had entered· into a contract with the State
Government which was subsisting on January 14, 1962, i.e. the date fixed
for filing nomination papers.
One S bad entered into a contract in 1951 with the State Government
[or certain construction work and the respondent was working as a sub~
contractor under him. As there was delay etc. in the completion of the work
by S, in exercise of a power reserved to the State GovernmenJ. in cl. 3(c)
of the agreement with S, whereby the Government could, under certain
circumstances, make alternative arrangements for the completion of the
work, the Executive Engineer of the Government approached the respondent to ascertain if he would complete the work instead.
In a letter
addressed to the Executive Engineers, the respondent offered to do thework on certain terms and this offer was accepted.
Thereafter, various
letters were exchanged with the respondent by the S.D.O. and the Executive
Engineer about the progress of the work.
However, after most of the
work to be done by the respondent was completed,, S was restc>red as tho
contractor and further correspondence about the \vork done by the respondent and regarding the payment for it was conducted by the concerned
officers of the State Government with S. The payment for this work remained
outstanding on the date for filing nomination papers in January J 962.
The Election Tribunal allowed the petition and declared the respondents•·
election to be void.
But the High Court reversed this decision and held
that the respondent had at all relevant times continued to be a sub-contractor
of S, and that even assuming there was a contract bet\veen the respondent
and the State Government, the alleged contract was void in view of Art.
299 (I) of the Constitution.
On appeal to this Court,
HELD : (per majority)
No contract between the first respondent and the Stale Government
subsi9ted at the relevant time and the respondent was
noot
disqualified
under s. 7(d).
H
The correspondence in the case clearly disclosed an agreement for th.,.
execution of work between the Ex·zcutive Engineer and itfie respondent,
But the fact that by virtue of cl. 3(e) of the contract with S, the Government could, under certain circumstances, enter into an agreement
SUPREME COURT REPO!tTS
(1966] 2 S.C.R.
with someone else to do the work, did not dispense with the requirement
.of compilance with !he provisions of Art. 29~. [70 E-F]
The evidence on record showed that the State Government had chosen
not to ratify the agreement with the respondent but to consider the original
conract with S as still standing and to treat the respondent as a subcontractor working under S. [73 HJ
The principle in Chatrurbhui Vithaldas Jasani's case ([1954] S.C.R. 817)
that although a contract may not comply with Art. 299, such contract,
being capable of ratification by the Government may still disqualify a
person under s. 7(d), cannot be extended to cover a case where the
Government has in fact not ratified the contract. To hold otherwise would
be to substitute "agreement" for "contract" in s. 7(d) .. A mere agreement entered into in contra;-ention of Art. 299 and in fact not ratified
.cannot be caled a "contract" within s. 7(d). [72 A-BJ
New Marz'ne Coal Co. (Bengal) v. The Union of India A.LR. 1964
S.C. 152; State of W. Bengal v. B. K.. Monda! A.I.R. 1962 S.C. 779;
referred to.
(per Hidayatullah and Shah JJ., dissenting);
A
B
c
The available evidence clearly supported the case that there was a
oonlrac~ directl:Y between the firiJtl respondent and the State for the
exetution of certain construction work and not that the work was done
D
by the first respondent under a sub-contract from S.
The court was only
required to determine whether there was such a contract and \Vas not
concerned with the question whether the contract was enforceable against
the State. [81 G]
Although the contract was not in the form prescribed under Art. 299.
it was not for that reason unlawful.
H was always open to the State,
notwithstanding informality in tho mode of execution of the contract, to
E
accept liability arising under the terms of the contract. Such a contract,
although not enforceable by action against the Government was still to
be regarded as disqualifying a person under s. 7(d). The first respondent
had performed his part of the contract but no payment had been made
to him. There was therefore a subsisting contract within the rrleaning of
s. 7(d). [79 A; 80 A-B; 91 BJ
Chaturbhuj
Vithaldas Jasani's case
[1954]
S.C.R.
817
applied;
F
Bhikrai Jaipuria v. Union of India [1962] 2 S.C.R. 830 referred to.
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 211 of
1965.
Appeal by special leave from the judgment and decree dated
the April 25, 1964 of tho Patna High Court in Election Appeal
No. 11 of 1963.
Purshottam Trikumdas and D. Goburdnun, for the appellant.
Sarjoo Prasad, Nagendra Kumar Roy and K. K. Sinha, for the
respondent No. 1.
The Judgment of GAJENDRAGADKAR C.J.,
WANCHOO
and
SIKRI, JJ. was delivered by SIKRI J. The dissenting Opinion of
HIDAYATUI.LA!I and SHAH, JJ. was delivered by SHAH J.
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LALITESHWAR V. BATESHWAR (Sikri, J.)
6 5
Sikri J.
This is an appeal by certificate granted by the High
Court of Patna, directed against the judgment of the said High
Court reversing the decision of the Election Tribunal, Muzaffarpur.
This appeal arises out of the election of the respondent, Shri
Bateshwar Prasad, to the Bihar Legislative Assembly from Lal
Ganj North Constituency. The appellant was one of the candidates.
He filed an election petition No. 133 of 1962, alleging
inter a/ia that the election of respondent No. l, Shri Bateshwar
Prasad, was void as he was disqualified under s. 7(d) of the
Representation of the People Act, 1951, hereinafter referred to as
the Act. His complaint was that respondent No. 1 had entered
into various contracts with the Government and that these contracts were subsisting on January 14, 1962, the date fixed for
filing nomination papers. The Election Tribunal, after reviewing
both oral and documentary evidence, held that the respondent
had entered into contracts to do Mosaic flooring work in the
Rajendra Surgical Block of Patna Medical Hospital and that
these were subsisting on the date of the nomination, viz., January
14, 1962." The Election Tribunal further held that by virtue of
cl. 3 ( c) of the conditions embodied in the agreement, Ex. 'D',
it was not at a!J necessary for the Public Works Department to
have entered into a contract with the respondent's company,
called the Patna Flooring Company. In the result, the Election
E Tribunal declared the election of Respondent No. 1 to the Bihar
Legislative Assembly from the Lal Ganj North Constituency as
void, but refused the prayer of the petitioner before it to be
declared elected.
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Both sides appealed to the High Court but we are only concerned with the election appeal No. 11 of 1963, filed by Bateshwar
Prasad, the returned candidate.
Before the High Court three
points were taken :
( 1) The appellant was not a contractor under the
State Government for the mosaic work to be done in
the Rajendra Surgical Block, but that at all relevant
times, he was a sub-contractor under one G. P. Saxeaa,
who was a contractor under the State Government for
the purpose;
(2) Assuming that there was a contract within the
meaning of section 7 ( d) of the Representation of the
People Act, 1951 (Act 43 of 1951), sometime, there
was no subsisting contract when the appellant had filed
nomination paper in 1962 ~nd thereafter;
66
SUPREME COURT REPORTS
[1966] 2 S.C.R.
( 3) Assuming again that there was a contract
A
between the appellant and the State Government sometime, the contract alleged was void, in view of Article
299 ( 1) of the Constitution of India, so that the Tribunal
could not have held that the appellant was disqualified
to be chosen as a candidate.
The High Court reviewed the entire evidence and came to the
conclusion on point No. 1 above that the appellant was not a contractor under the State Govermnent but continued to be a subcontractor under Saxena for mosaic work. It also differed from
the Election Tribunal on the interpretation of cl. 3 ( c) of Ex. 'D'.
B
On the second point, the High Court felt that in view of its deciC
sion on the first point, the question was of mere academic interest
and there might be substance in the argument of the learned
counsel for the respondent that this question ought not to be
allowed to be raised at this stage. Regarding the third point, the
High Court held that Chaturbhuj's case ( Chatturbhuj Vithaldas
Jasani v. Moreshwar Parashram)(') was distinguishable because D·
in the instant case the State Government had not accepted the
performance of the contract by the appellant. It further held that
since the decision in Chaturbhuj's(') case the law had been
amended by the amendment of s. 7 ( d) and the effect of the
amendment was "that the candidate shall be disqualified for being
chosen as a member only if there still exists, in substance, at the E
relevant time, a valid and binding contract between him and the
appropriate government." The High Court further observed that
"it is difficult to accept the contention of the learned counsel for
the respondent that a transaction may be void under the Contract
Act, but its factual existence may still be a disqualification under F
present section 7 ( d) ." In conclnsion, the High Court held that
Bateshwar Prasad had not incurred a disqualification under s. 7 ( d)
of the Act, and accordingly set aside the judgment and order of
the Election Tribunal.
Mr. Purshottam, the learned counsel for the appellant, has G
urged before us that the High Court was wrong in holding that
the amendment had made any change in the law on the question
whether the contract which is void under art. 299 of the Constitution is or is not a contract within s. 7 ( d) of the Act. He says that
the reasoning of the decision of this Court in Chatturbhuj's(')
case still holds the field. He then says that the High Court came H
to a wrong conclusion on the question of fact in this case, namely,
(I) (1954] S.C.R. 817.
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LALITESHWAR V. BATESHWAR (Sikri, J.)
67
whether the contracts subsisted or not at the relevant date, and
that this Court should reverse the finding even though it is a finding of fact.
Mr. Sarjoo Prasad, the learned counsel for
the
respondent, controverts this point and he urges that this Court
should not go into the question of fact. On the question of law,
he says that the present s. 7 ( d) is quite difierent from the old
s. 7 ( d) and that the Supreme Court decision cannot be applied
to the wording of the present section.
Coming to the law point, it is necessary to set out the old
and the new statutory provisions, and these are as under :
"7. A person shall be disqualified for being chosen
as, and for being, a member of either House of Parliament or of the Legislative Assembly or Legislative Council of a State ....
(ct) 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 of 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;"
As amended
"7. A person shall be disqualified for being chosen
as, and for being, a member of either House of Parliament or of the Legislative Assembly
or Legislative
Council of a State ....
(d) if there subsists a contract entered into in the
course of his trade or business by him with the appropriate Government for the supply of goods to, or for the
execution of any works undertaken by, that Government;".
Comparing the old section and the new section. there is no
doubt that there has been a change in the wording. One change
is quite clear and that is that the contract now must have been
entered in the course of his trade or business by a person with the
appropriate government.
Previously it need not have been a
contract in the course of trade or business. The words were much
wider and included any contract entered into for his benefit or on
his own account or a contract in which he had any share or
intcres·r. To this extent the Legislature has clearly narrowed the
area of this disqualification.
But is Mr. Sarjoo Prasad right in
contending that the change has gone further and that it only
"68
SUPREME COURT REPORTS
[1966] 2 S.C.R.
embraces executory contracts but not executed contracts ? In A
our opinion, the Legislature has made no change in this respect
for under the old provision it was also necessary for a contract
to have subsisted at the relevant time. This Court had in Chaturbhuj's(') case included both executed and executory contracts
within the provision of s. 7 ( d) and had refused to follow the
English rulings to the contrary. We cannot go into the question
B
whether this was rightly done or not for we are bound by that
-decision.
Accordingly, following Chatturbhuj's(') case we hold
that a contract for the supply of goods or for the execution of any
works or the performance of any services undertaken does not
·cease to subsist only because the goods had been supplied or work C
had been executed or services performed. It continues to subsist
·till payment is made and the contract is fully discharged by performance on both sides.
But whether Chatturbhuj's(') case applies when a void con-
. tract has not been accepted or ratified by the Government, we
·will consider presently. Mr. Purshottam next contends that the
D
respondent entered into two contracts and they were subsisting at
the date of the nomination as the respondent had not been paid for
his work and as a matter of fact a suit is pending against the
Government for recovery of the money.
He has taken us through
the documentary evidence and it is now necessary to deal with it.
The documentary evidence may be conveniently divided into two E
groups.
The first group relates to documents bearing on the
formation of the alleged contract.
It appears that one G. P.
Saxena had entered into a contract, Ex. D., for the construction of
a surgical block in the Patna Medical College compound, Patna,
and this contract was entered into in 1951, and the respondent was
F
working as a sub-contractor under him. It further appears that
there were some disputes between Saxena and the Public Works
Department and he was not completing the work in time or to
their satisfaction.
Consequently,
the Sub-Divisional Officer
enquired from the Patna Flooring Company whether they would
be willing to complete the work.
Patna Flooring Company, on G
April 17, 1955, wrote to the Executive Engineer, through the
Sub-Divisional Officer, and gave their quotations and terms and
condiiions. It may be noted here that these terms were different
from the terms under which Saxena had taken the contract. This
is an important fact and it is necessary to bear this in mind. On
April 25, 1955, the Sub-Divisional Officer forwarded this letter H
to the Executive Engineer with the remarks that "the contractor
_(I) [1954] S.C.R. 817.
LALITESHWAR V. BATESHWAR (Sikri, J.)
69
A is being asked to start work immediately as per your orders."
The Executive Engineer noted on this letter as follows : "It is
hoped necessary notice has been given by you to the defaulting
contractor." The S.D.0. noted that "the contractor had already
been served with a notice and a copy to your office vide T.O.
No. 497, dated 20th April, 1955. The ·P.F.C. has been ordered
B to start work and a copy of that submitted to you vide T.O. No.
504, dated 20th April, 1965".
On April 20, 1955, the SubDivisional Officer wrote to the Patna Flooring Company to "start
immediately the remaining mosaic floor and dado work in the
R. S. Block and finish the work completely within a fortnight as
promised by you."
He endorsed a copy of this letter to the
Executive Engineer. He also sent a notice to Saxena informing
him that as he had failed to do (in spite of repeated asking) the
remaining mosaic work of floor and dado in Surgical Block, the
remaining work was being got done by other agency and the cost
would be recovered from him.
He endorsed a copy of this to
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the Executive Engineer noting that the remaining work was being
done by the Patna Flooring Company, as instructed by him. On
May 13, 1955, the Executive Engineer warned Patna Flooring
Company to finish the work within the stipulated time and that
no extension of time wonld be granted if the work would be left
unfinished.
On May 23, 1955, the Sub-Divisional Officer again
wrote to Patna Flooring Company saying that necessary instructions regarding slope etc. had already been given at the site, that
there was no canse for delay in work and asked them to push up
the progress of the work as it was a top priority work. It appears
that by May 25, 1955, 90% of the work had been done and the
Patna Flooring Company wrote to the Sub-Divisional Officer
requesting that the S.0. Incharge of the said work be ordered to
submit an on account bill for making payment to them at an
early date.
Mr. Purshottam contends that on a perusal of the correspondence contained in this group it is quite clear that an oral conG
tract for the construction of work was entered into between the
Executive Engineer and the Patna Flooring Company and that
the High Court had erred in holding that no such contract ever
came into being. He points out that under cl. 3 ( c) of the Contract, Ex. D, the Executive Engineer was entitled to ask the Patna
H
Flooring Company to do the work. Clause 3 ( c) reads as follows :
"Clause 3.-In any case in which under any clauses
of this contract the contractor shall have rendered himself liable to pay compensation amounting to the whole
70
SUPREME
COURT REPORTS
[1966] 2 S.C.R.
of his security deposit in the hands of Government
(which whether paid in one sum or deducted by instalments) to Executive Engineer on behalf of the Governor
of Bihar, shall have power to adopt any of the following
courses, as he may deem best suited to the interests of
Government ....
( c) To measure up the work of the contractor, and
to take such part of the work of the contract as shall
be unexecuted out of his hands, and to give it to another
contractor to complete, in which case any
expenses
which may be incurred in excess of the · sum which
would have been paid to the original contractor if the
whole work had been executed by him (of the amount
of which excess the certificate in writing of the Executive
Engineer shall be final and conclusive) shall be borne
and paid by the original contractor and may be deducted
from any money due to him by Government under the
contract or otherwise, or from his security deposit or
the proceeds of sale thereof, or a sufficient part thereof."
A
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D•
We are inclined to agree with Mr. Purshottam that the correspondence in this group clearly discloses an agreement for the
execution of work between the Executive Engineer and the Patna
Flooring Company, and the Election Tribunal was quite right in E
coming to this conclusion.
But we may say that the Election
Tribunal was not right in holding that cl. 3 ( c) got rid of art. 299
of the Constitution. Any work which is given in exercise of the
powers under cl. 3 ( c) has also to comply with the provisions of
art. 299 of the Constitution.
What the effect of this is we will
consider later.
F ·
Mr. Sarjoo Prasad, however, says that assuming that a contnict was entered into, the contract did not subsist at the time of
the nomination because the Government had refused to ratify the
contract given under cl. 3 ( c) and that Chatturbhuj's(') case does
not Jay down that a contract which has not been ratified by the G
Government is a contract within s. 7 ( d) of the Act.
It seems
to us that there is a great deal of force in the contention of the
learned counsel. It is truel that this Court has held in a number
of cases, the latest being New Marine Coal Co. (Bengal) v. The
Union of India('), that a contract entered into with the Government in contravention of s. 17 5 ( 3) of the Government of India H
Act, 1935, or art. 299 of the Constitution is void and unenforce-
(1) [1954] S.C.R. 817.
(2) A.I.R. 1964 S.C. 152.
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LALITESHWAR V. BATESHWAR (Sikri, J.)
71
able. But in State of West Bengal v. B. K. Monda/(') this Court
distinguished Chatturbhuj's( 2 ) case on the ground that in the latter
case "this Court was dealing with the narrow question as
to
whether the impugned contract for the supply of goods would
cease to attract the provisions of s. 7 ( d) of the Representation of
the People Act on the ground that it did not comply with the
provisions of art. 299 (l), and this Court held that notwithstanding
the fact that the contract could not be enforced against the Government it was a contract which fell within the mischief of s. 7 ( d)."
This Court further observed that "all that this Court meant by
the said observation (of Bose J. in Chatturbhuj's( 2 ) case at p. 835,
quoted below) was that the contract made in contravention of
art. 299(1) could be ratified by the Goverm11ent if it was for its
benefit and as such it could not take the case. of the contractor
outside the purview of s. 7 ( d). The contract which is void may
not be capable of ratification, but, since according to the Court
the contract in question could have been ratified it was not void
in that technical sense.
That is all that was intended by the
observation in question." But the question arises whether Chatturbhuj's(2) case can be extended to cover a case where the contract
has in fact not been ratified.
Bose J.
observed in Chatturbhuj's(') case as follows :
"In the present case, there can be no doubt that the
Chairman of the Board of Administration
acted
on
behalf of the Union Government and his authority to
contract in that capacity was not questioned. There can
equally be no doubt that both sides acted in the belief
and on the assumption, which was also the fact, that the
goods were intended for Government purposes, namely,
amenities for the troops. The only flaw is that the con1 racts were not in proper form and so, because of thi!
purely technical defect, the principal could not have
been sued. But that is just the kind of case that s. 230
( 3) of the Indian Contract Act is designed to meet. ...
It only means that the principal cannot be sued; but
we take it there would be nothing to prevent ratification,
especially if that was for the benefit of Government.
There is authority for the view that when a Government officer acts in excess of authority Government is
bound if it ratifies the excess : see The
Collector of
Masulipatam v. Cavalr,v Venkata Narrainapah
(S
M.I.A. 529 at 554) ."
(1) A.I.R. 1962 S.C. 779.
(21 (19541 S.C.R. 817.
72
SUPREME COURT REPORTS
[1966] 2 S.C.R.
It seems to us that the decision in Chatturbhuj's(.') case cannot
A
be extended to cover a case where the Government has in fact
not ratified the contract. If we were to hold that this type of
transaction is covered then we would be giving no effect to the
word "contract" ins. 7(d) and we would be substituting the word
"a,,oreement" for it.
The Legislature has not chosen to use the
B
word "agreement" but has used the word "contract". Therefore,
a mere agreement entered into in contravention of art. 299 and
in fact not ratified cannot be called a "contract" within s. 7 ( d)
of the Representation of Reople Act.
The question then arises whether the Government did or did
not ratify the oral contract entered into between the Executive
C
Engineer and the Patna Flooring Company. In this connection,
Mr. Sarjoo Prasad, relies on a number of documents. The first
document he refers to is Ex. A-2, dated July 12, 1955. The SubDivisional Officer wrote to the Patna Flooring Company as
follows:
"It is disappointing to note that in spite of my
repeated askings you have not submitted your final bill
for the mosaic work uptil now. I have been personally
explaining to you the whole position and you promised
to submit your final correct bill on Friday the 8th July,
1955 so that I may ask the contractor Shri G. P. Saxena
to pay you off finally and settle your accounts immediately."
))
E
It appears that something happened between May 25, 1955 and
July 12, 1955.
According to the respondent, what happened
was that Saxena approached the Superintending Engineer and F
the Superintending Engineer ordered that Saxena would continue
to be the contractor as before and no contract would be given to
any firm. The respondent stated this in his evidence as R. W. 32.
It is objected that this is hearsay and this part of the statement is
not admissible.
There is some force in this contention and we
omit this part of the statement from consideration. But apart from G
this oral evidence it is quite clear from this letter that something
happened, otherwise it was not necessary to use the words "personally explaining to you the whole position" in this letter, and it
is not understandable why the Patna Flooring Company was being
asked to submit the bill to Saxena. This inference is strengthened
by subsequent correspondence.
By letter, dated July 13, 1955, H
Ex. A3, the S.D.0. acknowledged the receipt of the bill and said
(!) [1954] S.C.R. 817.
-
A
JI
c
D
LALITESHWAR V. BATESHWAR (Sikri, J.)
73.
that he had sent it to Saxena for making settlement. Ex. A-17,
dated July 20, 1955, is significant.
The Sub-Divisional Officer
requested Saxena to issue orders to his contractors "to mend and
rectify all the cuttings and damages properly and nicely so that
the building is in a fit condition for handing over on 1-8-1955."
On July 23, 1955, Saxena endorsed it to the Patna Flooring Company for information and necessary action and with the request
to rectify the defects pointed out to the Patna Flooring Company
and complete the remaining portions of works and give final
polishes thereto by the schedule date. It is not understandable
why Saxena was endorsing this for action to Patna Flooring Company unless the Government had chosen not to ratify the contract
with the Patna Flooring Company and was still treating him as a
contractor.
It is also significant that it has not been alleged or·
proved that any similar letter was written to Patna Flooring Company direct by the S.D.0. On July 21, 1955, a "statement show•
ing up to 21st day of July, 1955, correct amount for the mosaic
work done by M/ s. Patna Flooring Co. in the Rajendra Surgical·
Block, Patna Medical College and Hospital, Patna-Transactions
between Shri G. P. Saxena, Prop. M/s. G. P. Saxena & Co. and
M/s. Patna Flooring Co." was made out and this statement of
account shows "Bill No. BP/1833/45/55, dated 13-7-55 through
the S.D.O. No. III Subdivision, Construction Division, PatnaE
bill for Rs. 14,000/9/-" and Saxena agreed to seltle this bill, and·
a copy of that statement was forwarded to the ExecutivtJ Engineer
for record with reference to the discussion which was held between
Saxena and Prasad in his presence and the presence of the S.D.0.-
This statement shows that the Government Officer was acknowledg-
}i
G
H
ing that the liability for work done by the Patna Flooring Company
would be that of Saxena. If a direct contract between the Patna
Flooring Company and the Government still subsisted, all this ·
.arrangement seems to be uncalled for.
Mr. Sarjoo Prasad further points out an important· fact that
when Saxena submitted the bill to the Government, he not only
charged for the work done by the Patna Flooring Company but
he charged it at the rates contained in his own contract and not
in the quotations, dated April 14, 1955, given by the Patna Flooring Company. We agree with him that this is a very significant
fact and shows that as far as the Government was concerned, the
original contract stood and the Government had not chosen to
treat Patna Flooring Company as a contractor, l:iut only as a suo~
cootractor working under Saxena.
. '
·74
SUPREME
COURT REPOR rsc~
[1%6] 2 S.C.R.
Mr. Purshottam laid a great deal of stress on the pleadings in A
·the money suit No. 53 of 1959. There is no doubt that the plaint
in the money suit filed by the Patna Flooring Company shows that
Bateshwar Prasad, plaintiff, was trying to make out that there was
a direct contract entered into between the P.W.D. and the plaintiff,
but even so, the plaint does not make them solely responsible. We
have also come to a finding that there was admittedly a contract
B
in the beginning .. The fact that the plaint does not allege any
subsequent non-acceptance or refusal to ratify by. the Government
·would not estop the respondent from proving in this case that on
the material on record it is' clear that the Government had not
ratified the contract with the respondent but confirmed the original
-contract with Saxena. The written statement filed by the GovernC
ment in the money suit cannot be used to dest~oy the inference
·which clearly arises from the documents referred· to above. It
·is doubtful whether the written statement can be taken into con-
·sideration at all.
In the result we hold that no contract between respondent No. 1
and the Government subsisted at the relevant time, viz .• the date
of the nomination, and the respondent was not disqualified under .
s. 7 ( d). The appeal accordingly fails and is dismissed with costs.
D
Shah J.. At the general elections held in February 1962 the
appellant Laliteshwar Prasad Sahi and the first respondent BateshE
war Prasad contested a seat from the Lalganj North constituency
in the Bihar Legislative Assembly. The first respondent was
declared elected.
The appellant then filed a petition be'ore the
Election Tribunal, Muzaffarpur, for an order dedaring the elec-
. tion of the first respondent void on the ground that the first res:
·pondent was disqualified und_er s. 7 ( d) of the Representation of F
the People Act 1951-·h~reinafter called 'the Act'-for being a
member of the Bihar Legislative Assembly, and for an order that
the appellant be declared duly elected.
The Election Tribunal
disqualified the first respondent under s. 7 ( d) of the Act because
in the view of the Tribunai" on the date on which the first responG
dent filed the nomination paper there was a subsisting contract
between him and the State of Bihar for execution of works undertaken by the Government. The Tribunal declined to declare the
appellant duly elected ..
Against the order passed by the Tribunal, appeals were preferred to the High Court of Patna by the appellant and the ·first
· respondent under s. 116-A of the Act. In the view of the Hi.gh
'Court. the first respondent was 11ot di~qualified from being elected
II
\ •
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•
•
'
•
LAL!TESHWAR v. BATESHWAR (Shah, J.)
75
A a member of the Bihar Legislative Assembly because there was at
the date of nomination no subsisting contract for supply of goods
or execution of works between the first respondent and the Government of Bibar.
The appeal filed by the first respondent was
accordingly allowed and the appeal filed by the appellant was dismissed. With certificate granted by the High Court, the appellant
B bas preferred this appeal.
c
D
Section 7 (1 )( d) of the Act as it stood at the r.elevant time
read as follows :
"A person shall be disqualified for being chosen as,
and for being, a member of either House of Parliament,
or of the Legislative Assembly or Legislative Council
of a State.
( d) If there subsists a contract entered into in the
course of his trade or business by him with the
appropriate Government for the supply of goods to, or
for execution of any works undertaken by that Govern1nent."
The appellant contends that the first respondent was disqualified
from being a member became there was betwe.en him and the
Government of Bihar a subsisting contract relating to execution of
E works for the Government. Two components of the issue to be
determined in this appeal are : whether at the relevant time there
was between the State of Bihar and the first respondent a contract
in the course of the first respondent's trade or business for execuc
tion of any work undertaken by that Government and whether at
the material time the contract was subsisting. The Trial Court
ll answered both the components in the affirmative. The High Conrt
was of the view that there was no contract at any time between the
State of Bihar and tt first respondent.
The appellant's case was that the first respondent and his son
Bhupendra Nath Prasad carried on business of executing mosaic
G flooring, plU111bing and sanitary works in the name of M/ s Patna
Flooring Company, that the first respondent on behalf of M / s
Patna Flooring Company·had obtained contracts from the Government of Bihar for doing "mosaic and dado works" at Rajendra
Surgical Block of Patna General Hospital, and that in connection
with the said contracts the first respondent had 'filed suit No. 53
H
of 1959 in 'the Court of the Subordinate Judge, Patna, against the
State of Bihar the Executive Engineer, P.W.D.
(Construction
Division No. 1) and others for a decree for Rs. 18,500/- and it
LlSup. C.T./66-'6
76
SUPREME COURT REPORTS
[1966] 2 S.C.R.
wa~ claimed in the plaint in that suit that there was a "direct conA
traqt" between the first respondent and the State of Bihar, and on
tl).at account the first respondent was disqualified under s. 7(d) of
the Act from being a member of the Bihar Legislative Assembly.
The first respondent denied that he was looking after the business
o{ M/ s Patna Flooring Company on the date of filing of the nomination paper and contended that the contract for doing mosaic
B
work at Rajendra Surgical Block of the Patna Medical College
General Hospital was between G.P. Saxena and the Gove=ent
of Bihar, and that he-the first respondent-had never entered
into a contract with the Govermnent of Bihar for doing mosaic
work at Rajendra Surgical Block and that in any event there was
C
no subsisting contract at the date of his nomination as a candidate.
There is on the .record a mass of documentary
evidence
which throws light upon the question in dispute.
Saxena had
submitted in March 1951 ·his tender for the construction work
of the Rajendra Surgical Block at Patna, which was undertaken D
by the Gove=ent of Bihar.
Items 39 & 40 of the contract
related to "mosaic flooring and dado". For "mosaic flooring" the
rat\) tendered and accepted was Rs. 2/4/- per sq. ft. and for
"mosaic dado" the rate was Rs. 2/8/- per sq. ft. By cl. 2 of tile
cQnditions of the contract, it was provided, inter alia, that the
contractor shall strictly carry out the work within the time stipuE
lated with all due diligence and that the contractor shall pay as
compensation amounts equal to 1/3 per cent, on the estimated
cost of the whole work as shown by the tender for every . day
that the work remains uncommenced or unfinished after the agreed
dates. By clame 3 it was. provided that in any case in which the
contractor shall have rendered .himself liable to pay compensation
F
all)ounting to the whole of his security deposit in the hands of the
Government, the Executive Engineer shall have power to adopt
anv of the following courses, as he may deem best suited to the
interests of Gove=ent :
(a) To rescind the contract;
(b) To emoloy labour paid by the P.W.D. to carrv
· out the work, or anv part of the work, debiting
the contractor with the cost of labour;
( c) To take away such part of the work of the contract as shall be u"executed out nf his hand<.
and to give it to another contractor for completion.
G
H
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•
LAL!TESHWAR V. BATESHWAR (Shah, J.)
77
A
The first respondent was working as a sub-contractor under
Saxena in certain sections of the work undertaken by the latter.
In April, 1956, Saxena was unwilling or unable to complete the
"mosaic flooring" and "mosaic dado" under his contract, and negotiations took place between the Executive Engineer, Construction
Division, and the first respondent regarding completion of that
B work by the first respondent. ·On April 17, 1955, the first respondent addressed a letter Ext I (g) to the Executive Engineer recording the conversation he had with the Executive Engineer relating
to the rates of mosaic work etc., and submitted his terms and conditions. The rates offered by the first respondent were substantiaUy lower than those under the contract with Saxena, but he
C requested that certain construction materials be supplied by the
Department on his account, and the price thereof may be debited
against his bill. The Executive Engineer made a note on this letter
"It is hoped, necessary notice has been given .... to the defaulting
contractor". On April 20, 1955, the Sub-Divisional Officer made
D a note that the contractor (Saxena) had "already been served with
a notice" and that the first respondent's firm had been ordered to
start the work. On April 20, 1955, the Sub-Divisional Officer
addressed a letter Ext. 1 (c) to M/s Patna Flooring Company as
under:
E
"As ordered by the Executive Engineer, please start
immediately the remaining mosaic floor and dado work
in the R. S. Block and finish the work completely within a fortnight as promised by you."
Intimation about entrustment of the work to M/s Patna Flooring
Company was also given to Saxena by Jetter Ext. 1 (j). It was
F stated in that letter :
"As you have failed to do (in spite of repe1ted
askings) the remaining mosaic work of floor and d1do
in Surgical Block, the remaining work is being got done
by other agency and the cost will be recovered from your .
G
bill which please note."
Ml s Patna Flooring Company was called upon by letten dated
May 7, 1955 and May 13, 1955 and May 23, 1955 to complete
~
the work within the period stipulated. On May 25, 1055 M/s
~-
Patna Flooring Company addressed a letter to the Sub-Divisional
Officer infom1ing him that his firm had finished ?bout 903 of the
H entire work entrusted to them, and requested that an "on account
payment" may be made to them. There is on the record no
further correspondence in regard to the mosaic flooring and dado
78
SUPREME COURT REPORTS
[1966] 2 S.C.R.
work in the Surgical Block. On December 23, 1955, the SubA
Divisional Officer addressed a letter to M/s Patna Flooring Company referring to an "oral order" of the Executive Engineer and
requested the Company to do mosaic work in "two bath rooms and
laboratory of the Lecture Theatre" and asked them "to do the work
as per instructions''. On April 4, 1956 M/s Patna Flooring Company submitted a bill for the "flooring and dado work" done in
B
the bath rooms of the Lecture Theatre under the orders of the
Executive Engineer and of the Sub-Divisional Officer and requested that payment be made to them. A copy of that letter was sent
to the Sub-Divisional Officer along with a copy of the bill for the
work done, for information and for immediate payment, but no
C
payment was made. The P.W.D. authorities, it appears, thought
that instead of making the payment directly to the first respondent,
Saxena should be called upon to pay the amounts due to M/s
Patna Flooring Company for work done by them.