# VIDYA SAGAR JOSID v. SURINDER NATH GAUTAM

- **Citation:** [1969] 2 S.C.R. 84
- **Court:** Supreme Court of India
- **Decided:** 1968-09-13
- **Case number:** Civil Appeal No. 853 of 1968
- **Bench:** M. Hidayatullah, G. K. Mitter
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/vidya-sagar-josid-v-surinder-nath-gautam-4596
- **Pages:** 6

## Headnote

B·
Representation of People Act,
1951 (43 of 1951). ss. 77(3)
and
~
123(6)-Amount sp.ent on seeking party ticket-Whether expenditure--
jExpenditure', 'in connection with election', and 'incurred or authorised',
meaning of.
The appellant applied for a Congress ticket for election to the Legislative Assembly and deposited certain sums, which according to the rnles
G
of the Congress Party was refundable if tlie candidate was uot selected
but the deposit was to be forfeited if he contested the election against th~
official Congress
candidate. The appellant
was denied the
Congress
ticket. Thereafter the notification inviting electors to elect a member to
the Assembly was issued, and the last date for filing Mmination papers
and for withdrawing from the contest was fixed.
The appellant contested
the election against the respondent who was the official Congress nominee
and incurred the penalty of forfeiture. The appellant was declared electDi
ed and he filed his return of election expenses. The respondent challenged the appellant's election on the ground that he had committed corrupt
practice under s. 123(6) of the Representation of People Act, 1951, for
Mt having included the sum deposited by him in seeking the Congress
ticket in his return and by adding this sum to the return of election
expenses filed the prescribed amount was exceeded, thereby contravening
s. 77(3) of Act. The High Court held in favour of the election petitioner.
Dismissing the appeal, this Court,
E:
HELD : Section 77 as framed now departs in language from the earlier provision on the subject which was r. 117. The words 'conduct arid
management of election' are. not as wide as the words 'all expenditure in
oonneqtion with election incurred or authorised by him' which now find
place in s. 77 with 'election' and 'incurred or authorised.'
'Expenditure'
means the amount expended and 'expended' means to pay away, lay out or
spend. It really represents money out of pocket,
a going
out.
The
F
amount paid away or paid out need not be all money which a man spends
on himself during this time.
It is money 'in connection with' his election.
These words mean not
so mu~h as 'consequent upon' as 'having to do
with'.
All money laid out and having to do with the election is contemplated. But here again money which is liable to be refunded is not to
be taken note of. The word 'incurred' shows a finality.
It has the
·sense of rendering one·self liable for the amount.
The words a'.re not
equivalent to 'conduct or management of an election' and the expenses
G
need not be for promotion of. the interest of the candidate. Therefore·
the section regards everything for which the candidate has rendered himself liable and of which he is out of pocket in connection with his election, that is to say having to do with his election. [87 G-88 BJ
(In this case, the appellant put out the money for his election since
he was trying to obtain a Congress ticket. If he had got the ticket and
H
the money was refunded to him, this would not have counted as an
expenditure since the expense would not have been incurred. When the
appellant knowing that the money would be lost went on to stand as an
independent candidate, he was willing to let the money go and take a
..
•
•
•
•
V!DYA SAGAR V. SURINDER NATH (Hidayatullah, C.J.)
8 5
A
chance independently. So the amount was an expenditure within the
meaning of the section. [88 C-D]
B
c
D
Haji Aziz and Abdul Shakoor Bros. v. Commissioner of Income-tax,
Bombay City, [19611 2 S.C.R. 651, distinguished.

## Text

VIDYA SAGAR JOSID
v.
SURINDER NATH GAUTAM
September 13, 1968
A
[M. HIDAYATULLAH, C.J. AND G. K. MITTER, J.J
B·
Representation of People Act,
1951 (43 of 1951). ss. 77(3)
and
~
123(6)-Amount sp.ent on seeking party ticket-Whether expenditure--
jExpenditure', 'in connection with election', and 'incurred or authorised',
meaning of.
The appellant applied for a Congress ticket for election to the Legislative Assembly and deposited certain sums, which according to the rnles
G
of the Congress Party was refundable if tlie candidate was uot selected
but the deposit was to be forfeited if he contested the election against th~
official Congress
candidate. The appellant
was denied the
Congress
ticket. Thereafter the notification inviting electors to elect a member to
the Assembly was issued, and the last date for filing Mmination papers
and for withdrawing from the contest was fixed.
The appellant contested
the election against the respondent who was the official Congress nominee
and incurred the penalty of forfeiture. The appellant was declared electDi
ed and he filed his return of election expenses. The respondent challenged the appellant's election on the ground that he had committed corrupt
practice under s. 123(6) of the Representation of People Act, 1951, for
Mt having included the sum deposited by him in seeking the Congress
ticket in his return and by adding this sum to the return of election
expenses filed the prescribed amount was exceeded, thereby contravening
s. 77(3) of Act. The High Court held in favour of the election petitioner.
Dismissing the appeal, this Court,
E:
HELD : Section 77 as framed now departs in language from the earlier provision on the subject which was r. 117. The words 'conduct arid
management of election' are. not as wide as the words 'all expenditure in
oonneqtion with election incurred or authorised by him' which now find
place in s. 77 with 'election' and 'incurred or authorised.'
'Expenditure'
means the amount expended and 'expended' means to pay away, lay out or
spend. It really represents money out of pocket,
a going
out.
The
F
amount paid away or paid out need not be all money which a man spends
on himself during this time.
It is money 'in connection with' his election.
These words mean not
so mu~h as 'consequent upon' as 'having to do
with'.
All money laid out and having to do with the election is contemplated. But here again money which is liable to be refunded is not to
be taken note of. The word 'incurred' shows a finality.
It has the
·sense of rendering one·self liable for the amount.
The words a'.re not
equivalent to 'conduct or management of an election' and the expenses
G
need not be for promotion of. the interest of the candidate. Therefore·
the section regards everything for which the candidate has rendered himself liable and of which he is out of pocket in connection with his election, that is to say having to do with his election. [87 G-88 BJ
(In this case, the appellant put out the money for his election since
he was trying to obtain a Congress ticket. If he had got the ticket and
H
the money was refunded to him, this would not have counted as an
expenditure since the expense would not have been incurred. When the
appellant knowing that the money would be lost went on to stand as an
independent candidate, he was willing to let the money go and take a
..
•
•
•
•
V!DYA SAGAR V. SURINDER NATH (Hidayatullah, C.J.)
8 5
A
chance independently. So the amount was an expenditure within the
meaning of the section. [88 C-D]
B
c
D
Haji Aziz and Abdul Shakoor Bros. v. Commissioner of Income-tax,
Bombay City, [19611 2 S.C.R. 651, distinguished.
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 853 of
1968.
Appeal under section 116-A of the Representation of the
People Act, 1951 from the judgment and order dated January 15,
1968 of the Delhi High Court, Himachal Bench in C.0.P. No. 4
of 1967.
C. B. Agarwala, S. K. Bagga and S. Bagga, for the appellant.
Sarjoo Prasad and Naunit Lal, for the respondent.
The Judgment of the Court was delivered by
Hidayatullah, C.J. This is an appeal against the judgment,
dated January 15, 1968, of the High Court of Delhi (Himachal
Bench) setting aside the election of the appellant to the Santokhgarh Assembly Constituency of Himachal Pradesh. The election
has been set aside on the ground of corrupt practice under section
123 ( 6) of the Representation of People Act read with s. 98 (b)
of the Act.
E
By a notification dated January 13, 1967 the electors of this
constituency were invited to elect a member to the Assembly. The
the last date of withdrawal was January 23, 1967.
Three candiJ
dates contested the election.
The appellant was an independent
candidate opposed by the respondent who was a Congress nominee and one Shanti Swarup, Jansangh candidate.
The poll took
F
place throughout the constituency on February 18, 1967. Votes
were counted four days later at Una and the result was declared
at follows:
G
Vidya Sagar Joshi {Appellant)
Surinder Nath Gautam
(Election Petitioner)
8437 votes
7695 votes
Shanti Swarup
2067 votes
1267 ballots were rejected as invalid.
Thus the present appellant was returned with a margin of 742 votes. The returned
candidate filed his return of election expenses showing an expenditure of Rs. l,862.05P.
The limit of expenditure in this constiH
tuency was Rs. 2,000/-. One of the contentions of the election
petitioner was that he had filed a false return of his election expenses, that he had spent an amount exceeding Rs. 2,000/- in the
aggregate and therefore contravened the provisions of s. 77 (3)
86
SUPREME COURT REPORTS
(1969] 2 S.C.R.
of the Representation of People Act, 1951 and therefore commitA
ted corrupt practice under section J 23 ( 6) of the Act.
The election petitioner therefore asked that his election be declared void.
There were other grounds also
on which the election was
challenged, but we need not refer to them since no point has been
made before us.
The main item on which the expenses were said to be false
was a deposit of Rs. 500/- as security and Rs. 200/- as application fee which the returned candidate had made with the Congress
party on or before January 2, 1967. The fee was not returnable,
but as this payment was made before the notification calling upon
the voters to elect a member to the Assembly nothing turns upon
it.
The returned candidate was denied the Congress ticket on or
about January 10, 1967. This was also before the said notification.
According to the rules of the Congress party the security
deposit was refundable to a candidate if he or she was not selected.
It was however provided in the same rules that if the candidate
contested the election against the official Congress candidate, the
security deposit would be forfeited.
The returned
candidate
chose to stand as ain independent candidate against the official
Congress nominee and incurred the penalty of forfeiture.
This
was after the date for the filing of the nomination paper (January
20, 1967).
He had time till January 23, 1967 to withdraw
from the contest. If he had done so the deposit would have presumably been returned to him.
As he became a ·contesting candidate the forfeiture of the deposit became a fact.
The case of the election petitioner was that if this deposit
were added to the election expenses, the limit of Rs. 2,000/- was
exceeded and therefore this amounted to a corrupt practice under
section 123(6) read withs. 77(3) of the Representation of People
Act.
The High Court held in favour of the election petitioner
and hence the appeal.
Section 77 of the Representation of People Act provides as
follows :
Section 77. Account of election expenses and maximum thereof-
( 1) Every candidate at an election shall either by
himself or by his election agent, keep a separate and
correct acconnt of all expenditure in connection with the
election incurred or authorised by him or by his election agent between the date of publication of the notification calling the election and the date of declaration of
the result thereof, both dates inclusive.
(2) The account shall contain such particulars, as
may be prescnbed,
B
c
D
E
F
G
H
'
•
•
- ..
A
B
c
•
D
•
E
_)
I
G
•
H
V!DYA SAGAR v. SURINDER NATH (Hida:yatullah, C.J.)
87
(3) The total of the said expenditure shall not exceed such amount as may be prescribed.
The third sub-section creates a bar against expenditure in excess of the prescribed amount. In this
case the prescribed
amount was Rs. 2,000/-.
Section 123(6) provides
that "the
incurring or authorising of expenditure in contravention of section
77 is a corrupt practice." Therefore, if the amount of Rs. 500/-
was added to the election expenses as declared by the returned
candidate he would be guilty of a corrupt practice, under the two
sections quoted above.
The question, therefore, is whether this.
amount can be regarded as an election expense.
The first sub-section of s. 77 discloses what the candidate has
to declare as part of his election expenses.
It speaks of "all expenditure in connection with the election incurred or authorised
by him or by his election agent between the date of publication
of the notification calling the election and the date of declaration
of the result thereof; both dates inclusive." In the present case,
therefore, the critical dates were January 13, 1967 and February
22, 1967. The amount in question was paid before the first date.
It was liable for confiscation not on the date on which the Congress
ticket was refused to the returned candidate but on January 23,
1967 when he did not withdraw from the contest and offered himself as a contesting candidate against the official Congress candidate.
In other words, the payment was made before the period
marked out by s. 77 ( 1) but the expenditure became a fact between
the two dates.
The contention of the returned candidate was
that this was not an expenditure within the meaning of s. 77 (I)
of the Representation of People Act and this is the short question
which falls for consideration in the present case.
Section 77 as framed now departs in language from the earlier
provision on the subject which was rule 117.
It read:
"117. Maximum election expenses-No expense
shall be incurred or authorised by a candidate or his
election agent on account of or in respect of the conduct
and management of an election in any one constituency
in a State in excess of the maximum amount specified
in respect of that constituency in Schedule V."
The words "conduct and management of election" are not as wide
as the words "a]J expenditure in connection with election incurred
or authorised by him, "which now find place in s. 77". The question thus is what meaning must be given to the words used in s. 77.
The critical words of s. 77 are 'expenditure' 'in connection with
election' and 'incurred or authorized'.
'Expenditure' means the
amount expended and 'expended' means to pay away, lay out or
spend.
It really represents money out of pocket, a going out.
·ss
SUPREME COURT REPORTS
[1969] 2 S.C.R.
Now the amount paid away or paid out need not be al! money
which a man spends on himself during tbis time.
It is money
'in connection with' his election. These words mean not so much
as 'consequent upon' as 'having to do with'.
All money laid out
and having to do with the election is contemplated.
But here
again money which is liable to be refunded is not to be taken
note of.
The word 'incurred' shows a finality.
It has the sense
of rendering oneself liable for the amount. Therefore the section
regards everything for which the candidate has rendered himself
liable and of which he is out of pocket in connection with his
election that is to say having to do with his election.
The candidate here put out this money for his election since
he was trying to obtain a congress ticket.
If he had got the
ticket and the money was refonded to him, this would not have
counted as an expenditure since the expense would not have been
incurred.
When the candidate knowing that the money would be
lost went on to stand as an independent candidate, he was willing
to let the money go and take a chance independently.
The case
·of the appellant is that this money was not used in furthering the
prospect of his election.
On the other hand, it was in fact used
against him by the Congress Party as he was opposed to that party's
candidate.
He contends that such an expense cannot be regarded
as expense in connection with the election.
According to him the
connection must be a connection of utility and not something
which is of no use but rather against the chances of victory.
In
this connection the learned counsel draws our attention to Hals-
'bury's Laws of F,ngland, Third Edition Volume 14, at page 177
paragraph 314.
It is stated there as follows :
"While no attempt has been made by judges to
define exhaustively the meaning of expenses incurred
in the conduct or management of an election, it has
been said that if expenses are, primarily or principally,
expenses incurred for the promotion of the interests of
the candidate, they are election expenses."
It will be seen that the above passage refers to expenses incurred in the conduct or management of an election.
The learned counsel for the appellant and respondent relied
upon two decisions of this Court. Reliance was also placed upon
two decisions of the Election Tribunals. The decisions of the
Election Tribunal are of the same Bench and concern Rule 117.
They need not be considered.
The two cases of this Court may
be noticed.
A
B
c
D
E
F
G
In Haji Aziz and Abdul Shakoor Bros. v. Commissioner of
H
Income Tax, Bombay City(') the question arose under the Indian
{I) [1961] 2 S.C.R. 651.
•
•
I
'
A
B
c
D
E
G
H
VIDYA SAGAR V. SURINDER NATH (Hidayatullah, C.J.)
89
Income-tax Act:
A firm importing dates was found
to have
breached some law and a penalty was imposed on it under the
Sea Customs Act.
The firm sought to treat the penalty as expenses and they were disallowed by this Court. Learned Counsel
for the appellant relied on this case and claimed that the same
principle applies and this penalty cannot be said to be an expenditure in connection with the election.
The analogy is not apt because not only the prescriptions of the two laws are different but
the underlying principle is different also. In Income tax laws the
expenditure must be laid out wholly or exclusively for the purpose
of the business etc.
Breaking laws and incurring penalty is not
carrying on business and therefore the loss is not for the purposes
of business.
Here the expenditure is to be included if it is incurred
in connection with the election and the payment to secure the seat
is an expenditure in connection with the election.
The mlin~
therefore, does not apply.
In the second case a congress candidate had paid a sum of
Rs. 500/- of which Rs. 100/- were subscription for membership
and Rs. 400/- were a deposit.
Later he paid Rs. 500/- as donation to the Congress.
He failed to include the two sums of
Rs. 500 /- each in bis return of expenses.
The Tribunal found
that both the sums were spent in connection with the election and
by including them the limit was exceeded.
This Court affirmed
the decision of the Tribunal.
The case was decided under r. 117.
The two sums were considered separately.
The contention was
that under section 123 (7) and r. 117 the candidate was nominated
poly on November 16, 1951 and the first sum was
paid on
September 12, 1951. The question then arose when the candidate
became a candidate for the application of the Rule and section
123(7). It was held that the candidate became a candidate when
he unequivocally expressed his intention by making the payment.
The question of commencement of the candidature is
now
obviated by prescribing the two terminii between which the expense
is to be counted. In so far as the case goes it supports our view.
It is risky to quote the decision because the terms of the law on
which it was declared were entirely different.
We can only say
that there is nothing in it which militates against the view taken by
us here.
On the whole, therefore, the judgment under appeal is correct.
The appeal fails and will be dismissed with costs.
Y.P.
Appeal dismissed.
L2Scip.C!/69-7