1965 (10) TMI 73 - SC - Indian Laws

Summary

Issues Involved:
1. Whether the appellant was a contractor under the State Government or a sub-contractor under G.P. Saxena.
2. Whether there was a subsisting contract at the time of filing the nomination papers.
3. Whether the contract was void under Article 299(1) of the Constitution of India.

Issue-wise Detailed Analysis:

1. Contractor vs. Sub-contractor:
The appellant contended that he was not a contractor under the State Government but a sub-contractor under G.P. Saxena, who held the primary contract with the State Government. The High Court reviewed the evidence and concluded that the appellant was indeed a sub-contractor under Saxena for the mosaic work. This conclusion was based on the interpretation of the documentary evidence and the terms of the contract, particularly clause 3(c) of Exhibit 'T', which allowed the Executive Engineer to assign the work to another contractor if the original contractor defaulted. The High Court found that the appellant continued to work under Saxena and not directly under the State Government.

2. Subsisting Contract:
The High Court held that since the appellant was a sub-contractor, the question of a subsisting contract with the State Government did not arise. The appellant's counsel argued that there was a subsisting contract because the appellant had not been paid for his work, and a suit was pending against the Government for recovery of the money. However, the High Court found that the contract between Saxena and the Government subsisted, and the appellant's role was limited to that of a sub-contractor. The High Court also noted that the amendment to Section 7(d) of the Representation of the People Act, 1951, required a valid and binding contract to exist at the relevant time, which was not the case here.

3. Void Contract under Article 299(1):
The High Court distinguished the case from Chaturbhuj Vithaldas Jasani v. Moreshwar Parashram ([1954] S.C.R. 817), where the Supreme Court held that a contract void under Article 299(1) could still disqualify a candidate under Section 7(d) of the Act. The High Court observed that since the State Government had not accepted the performance of the contract by the appellant, the contract could not be considered valid and binding. The High Court further noted that the amendment to Section 7(d) required a subsisting contract, which was not fulfilled in this case. Therefore, the appellant did not incur any disqualification under Section 7(d) of the Act.

Supreme Court's Analysis:
The Supreme Court analyzed the old and new statutory provisions of Section 7(d) and found that the Legislature had narrowed the disqualification criteria. The Court held that a contract continues to subsist until payment is made and the contract is fully discharged by performance on both sides. However, the Court agreed with the High Court that a contract void under Article 299(1) and not ratified by the Government could not be considered a "contract" within the meaning of Section 7(d). The Supreme Court concluded that no contract between the appellant and the Government subsisted at the relevant time, and the appellant was not disqualified under Section 7(d).

Separate Judgment by Shah J.:
Shah J. delivered a separate judgment, agreeing with the majority that the appeal should be dismissed. He emphasized that the purpose of Section 7(d) was to maintain the purity of the legislature and avoid conflicts of interest. Shah J. found that the documentary evidence and admissions by the appellant established that there was a contract between the appellant and the State Government. However, since the contract was not in the form prescribed by Article 299 of the Constitution, it was unenforceable against the State. Nevertheless, the contract was not void and could still disqualify the appellant under Section 7(d). Shah J. concluded that the contract was subsisting at the time of filing the nomination papers, and the appellant was disqualified.

Conclusion:
The Supreme Court, by majority, dismissed the appeal, holding that the appellant was not disqualified under Section 7(d) of the Representation of the People Act, 1951, as no subsisting contract with the State Government existed at the relevant time. The separate judgment by Shah J. concurred with the majority but provided additional reasoning on the subsistence and enforceability of the contract.