http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 29

CASE NO.:

Appeal (civil) 2-3 of 2002

Appeal (civil) 1455 of 2002

PETITIONER:

PRAKASH KHANDRE

Vs.

RESPONDENT:

DR. VIJAYA KUMAR KHANDRE AND OTHERS

DATE OF JUDGMENT: 09/05/2002

BENCH:

M.B. Shah, Bisheshwar Prasad Singh & H.K. Sema

JUDGMENT:

Shah, J.

In the background of facts briefly stated below, questions for

determination in these appeals are

1. In an Election Petition under the Representation of the

People Act, 1951 (hereinafter referred to as 'the Act'),

when contest for election to the post of MLA is by more

than two candidates for one seat and a candidate, who

was disqualified to contest the election, is elected

whether the Court can declare a candidate who has

secured next higher votes as elected? And

2. Whether contract between the elected candidate and the

Government was subsisting on the date of scrutiny of

nomination papers?

Appellant Prakash Khandre contested election from No.2-

Bhalki Constituency of Karnataka State Legislative Assembly and

was declared elected. Respondent no.1 Dr. Vijay Kumar Khandre

contested the said election but was defeated. The details of the votes

secured by each candidate are as follows: -

Sl.No. Name of the Candidate No. of Votes Difference

Polled

01. Shri Prakash Khandre 47,132 |

| 10327

02. Dr. Vijay Kumar Khandre 36,805 |

03. Sri Bheemanna Kolle 660

04. Shri Shivaraj Patil 1,054

05. Sri Siddaramaiah S. Swamy 177

Respondent no.1 challenged the said election by filing Election

Petition No.25/99 and contended that declaration of election dated

5.9.1999 resulting in favour of the appellant was illegal and void. He

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 29

prayed that he may be declared as duly elected to Karnataka State

Legislative Assembly on the ground that under Section 9-A of the

Act, appellant was disqualified to contest the election as there were

subsisting contracts entered into by him in the course of his business

with the State Government.

Further, a voter Mr. Baswaraj D. Honna - appellant in C.A. No.

1455 of 2002 also filed Election Petition No.30/99 for a declaration

that election of Mr. Prakash Khandre was void under Section

100(1)(a) and Section 100(1)(d)(i) of the Act.

Appellant also filed Recrimination Petition under Section 97 of

the Act praying that in the event of his election to the constituency

being declared void, respondent No. 1 Dr. Vijay Kumar Khandre

should not be declared as elected as he is guilty of corrupt practices as

specified in Section 123 of the Act.

The High Court of Karnataka at Bangalore [Mr. Justice A.V.

Srinivasa Reddy] by its judgment and order dated 21.12.2001 allowed

the election petition filed by respondent No.1 and the election of

appellant was declared void under section 100(1)(a) on the ground

that work of effective improvement and asphalting of Halburga-

Bawgi-Kamtana road was continued to be carried out by Prakash

Khandre even after purported closure of contract. With regard to the

rest of the contract works, the High Court held that contracts were

terminated. The Court also declared that the votes polled by the

elected candidate would become wasted and, therefore, Dr. Vijay

Kumar Khandre who has secured the next highest number of valid

votes has to be declared elected under Section 101 of the Act and was

declared accordingly. That order is challenged by Prakash Khandre

by filing Civil Appeal Nos.2-3 of 2002. Civil Appeal No. 1455 of

2002 is filed by Basavaraj D. Honna.

At the time of admission of this matter, by order dated

18.1.2002, the Court granted interim relief as under:

"Appeals admit.

The impugned judgment is stayed thereby entitling

the appellant only to attend the Assembly Sessions and

sign the register but he will neither participate in the

proceedings nor vote nor draw remuneration in his

capacity as Member of the Legislative Assembly till the

disposal of the appeals. Any further documents to be

filed by either party be filed within four weeks from

today.

These appeals may be listed for final disposal in

the second week of March, 2002.

On the other respondents, dasti notice is

permitted."

Re: Question No.1

At the time of hearing of these appeals, learned senior counsel

Mr. Ashok Desai submitted that the order passed by the High Court

declaring election-petitioner Dr. Vijay Kumar Khandre as elected is,

on the face of it, illegal and erroneous as election was contested by 5

candidates and in support of his submission, he referred to various

decisions rendered by this Court. As against this, Mr. K.N. Bhat,

learned senior counsel for respondent No.1 submitted that the High

Court rightly declared Dr. Vijay Kumar Khandre as elected and the

decision of the High Court is based on the provisions of Section 101

of the Act.

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 29

For appreciating the aforesaid submissions, we would first refer

to the relevant provisions of the Act, namely, Sections 53, 84 and 101

of the Act which are as under:

"53. Procedure in contested and uncontested

elections.(1) If the number of contesting candidates is

more than the number of seats to be filled, a poll shall be

taken.

(2) If the number of such candidates is equal to

the number of seats to be filled, the returning officer shall

forthwith declare all such candidates to be duly elected

to fill those seats.

(3) If the number of such candidates is less than

the number of seats to be filled, the returning officer shall

forthwith declare all such candidates to be elected and the

Election Commission shall by notification in the Official

Gazette call upon the constituency or the elected

members or the members of the State Legislative

Assembly or the members of the electoral college

concerned as the case may be, to elect a person or

persons to fill the remaining seat or seats.

Provided that where the constituency or the elected

members or the members of the State Legislative

Assembly or the members of the electoral college having

already been called upon under this sub-section, has or

have failed to elect a person or the requisite number of

persons, as the case may be, to fill the vacancy or

vacancies, the Election Commission shall not be bound to

call again upon the constituency, or such members to

elect a person or persons until it is satisfied that if called

upon again, there will be no such failure on the part of

the constituency of such members.

84. Relief that may be claimed by the petitioner.

A petitioner may, in addition to claiming a declaration

that the election of all or any of the returned candidates is

void, claim a further declaration that he himself or any

other candidate has been duly elected.

101. Grounds for which a candidate other than the

returned candidate may be declared to have been

elected.If any person who has lodged a petition has, in

addition to calling in question the election of the returned

candidate, claimed a declaration that he himself or any

other candidate has been duly elected and the High Court

is of opinion

(a) that in fact the petitioner or such other

candidate received a majority of the valid

votes; or

(b) that but for the votes obtained by the

returned candidate by corrupt practices the

petitioner or such other candidate would

have obtained a majority of the valid votes,

the High Court shall, after declaring the election of the

returned candidate to be void declare the petitioner or

such other candidate, as the case may be, to have been

duly elected."

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 29

From a reading of sub-section (2) of Section 53, it is clear that

if number of candidates is equal to number of seats to be filled, the

returning officer has to declare all such candidates to be duly elected

to fill those seats, meaning thereby it would be uncontested election.

Further, if the number of contesting candidates is more than the

number of seats to be filled, a poll is required to be taken. Finally,

after taking poll if one candidate is declared elected and there are only

two candidates who contested for the election, and if it is found that

elected candidate was disqualified for one or other reason for being

declared to be elected then his election would be set aside and

unsuccessful candidate, if otherwise eligible, could be declared as

elected and that relief could be granted in view of Section 53 read

with Section 84 of the Act.

However, the question which requires consideration isif there

are more than two candidates for one seat and the elected candidate is

subsequently found to be disqualified, whether the candidate who has

secured more votes than remaining candidates should be declared as

elected or not? For this, we would consider the ingredients of Section

101 which inter alia provide that after declaring election of returned

candidate to be void, the High Court may declare the petitioner or

such other candidate to have been duly elected if

(a) in fact the petitioner or such other candidate received a

majority of valid votes; or

(b) but for the votes obtained by the returned candidate by

the corrupt practices, the petitioner or such other

candidate would have obtained a majority of the valid

votes.

Therefore, the first ingredient for declaring the election-

petitioner or other candidate to have been duly elected depends upon

error for various reasons in counting of valid votes and if it is found

that in fact the petitioner or such other candidate received a majority

of valid votes, he is to be declared elected.

Second ingredient provides for establishing that the votes

obtained by the returned candidate were obtained by corrupt practices

and but for such votes the petitioner or such other candidate would

have obtained a majority of valid votes. Say as in the present case, the

difference between the elected candidate and the election petitioner is

of 10327 votes and if it is established that elected candidate obtained

more than 10327 votes by corrupt practices then petitioner or such

other candidate who has obtained majority of valid votes could be

declared as elected.

However, in an election where elected candidate is declared to

be disqualified to contest election and there are more than two

candidates contesting election, there is no specific provision under the

Act under which the person who has secured the next highest number

of votes could be declared as elected. The Act is silent on this point.

Further, it cannot be presumed that the votes secured by the

disqualified elected candidates would have been wasted or would

have been secured by the next candidate who has secured more votes.

If disqualified candidate was not permitted to contest the election then

how the voters would have voted in favour of the candidate who has

secured more votes than other remaining candidates would be a

question in the realm of speculation and unpredictability. In such a

situation, declaring the election of the returned candidate on the

ground of his initial disqualification to contest the election by itself

would not entitle the election petitioner or any other candidate to be

declared elected.

The learned counsel for the parties referred to various decisions

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 5 of 29

rendered by this Court and we would refer them in chronological

order. The Constitution Bench of this Court in Konappa Rudrappa

Nadgouda v. Vishwanath Reddy and another [(1969) 2 SCR 90]

dealt with the case where one Vishwanath Reddy was declared elected

to Mysore Legislative Assembly and that election was challenged by

Nadgouda who was a contesting candidate on the ground that Reddy

was disqualified from standing as a candidate for election. This Court

by order dated 19th July, 1968 held that election of Reddy was void

and that votes cast in his favour be treated as thrown away. The Court

held "as there was no other contesting candidate, we declare the

appellant (election petitioner) as elected to the seat from the Yadgiri

constituency." That order was challenged by filing a review

application which was granted and question whether it was open to

the Court on finding recorded about disqualification of Reddy to

declare Nadgouda as duly elected to the Mysore Legislative Assembly

was dealt with and decided. The Court referred to earlier decision in

Keshav Laxman Borkar v. Dr. Devrao Laxman Anande [(1960) 1

SCR 902], wherein it was held that a candidate whose nomination

paper is accepted after scrutiny, is a validly nominated candidate "at

least for the purpose of receiving votes at the election", and that the

candidate must be treated as a person for whom votes could be given.

The Court on that view held that where there are only two candidates

for a seat and the election of the candidate declared elected is set aside

on the ground that he was disqualified, the defeated candidate cannot

be declared elected, and there must be a fresh election. In the opinion

of the Court the votes cast in favour of the disqualified candidate

cannot be said to be thrown away unless there is a "special pleading"

that certain voters had cast their votes with the knowledge or notice

that the candidate for whom they had voted was not eligible for

election, and they had deliberately thrown away their votes in favour

of the disqualified person; in the absence of such a plea it cannot be

said that the votes cast in favour of a person who was by law

disquaslified from being nominated, but who was in fact nominated,

were thrown away. In the opinion of the Court a defeated candidate

out of the two who contested the election may be declared elected

under section 84 read with section 101 of the Act, if he proves that the

voters had notice of the disqualification of the successful candidate.

The correctness of the said view was challenged before the

Constitution Bench. The Court considered various English decisions

cited at the bar and observed that the cases decided by the Courts in

the United Kingdom appear to have proceeded upon some general rule

of election law that the votes cast in favour of a person who is found

disqualified for election may be regarded as thrown away only if the

voters had notice before the poll of the disqualification of the

candidate. Thereafter, the Court pertinently observedbut in our

judgment the rule which has prevailed in the British Courts for a

long time has no application in our country. The rule enunciated

in U.K. has only the merit of antiquity; the rule cannot be extended

to the trial of disputes under our election law, for it is not consistent

with our statute law, and in any case the conditions prevailing in our

country do not justify the application of that rule. The Court also

considered Section 53 of the Act and held that it renders a poll

necessary only if there are more candidates contesting the election

than the number of seats contested and if the number of candidates

validly nominated is equal to the seats to be filled, no poll is necessary

and where by an erroneous order of the returning officer poll is held

which, but for that order, was not necessary, the Court would be

justified in declaring those contesting candidates elected, who, but for

the order, would have been declared elected.

Thereafter, the Court observed thus

"When there are only two contesting candidates,

and one of them is under a statutory disqualification,

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 6 of 29

votes cast in favour of the disqualified candidate may be

regarded as thrown away, irrespective of whether the

voters who voted for him were aware of the

disqualification. This is not to say that where there are

more than two candidates in the field for a single seat,

and one alone is disqualified, on proof of disqualification

all the votes cast in his favour will be discarded and the

candidate securing the next highest number of votes will

be declared elected. In such a case, question of notice to

the voters may assume significance, for the voters may

not, if aware of the disqualification have voted for the

disqualified candidate."

The Court also considered Section 101 and held as under

"....The votes obtained by corrupt practice by the

returned candidate, proved to be guilty of corrupt

practice, are expressly excluded in the computation of

total votes for ascertaining whether a majority of votes

had been obtained by the defeated candidate, and no

fresh poll is necessary. The same rule should, in our

judgment, apply when at an election there are only two

candidates and the returned candidate is found to be

under a statutory disqualification existing at the date of

the filing of the nomination paper."

In Thiru John and Another v. Returning Officer and Others

[1977 (3) SCR 538], the Court dealt with the biennial election to the

Rajya Sabha from the State of Tamil Nadu where the voting pattern is

single-transferable vote wherein the elected candidate Shri John was

found by the Court to be statutorily disqualified for election. The

Court considered the question whether the votes secured by such

candidate be regarded as 'thrown away' and in consequence the next

candidate be declared elected? In that context the Court observed: -

"Again, the answer to this question, in our opinion,

must be in the negative. It is nobody's case that the

electors who voted for Shri John, had at the time of

election, knowledge or notice of the statutory

disqualification of this candidate. On the contrary, they

must have been under the impression that Shri John was

a candidate whose nomination had been validly accepted

by the returning officer. Had the electors notice of Shri

John's disqualification, how many of them would have

voted for him and how many for the other continuing

candidates, including Sarv Shri Subramanyan and Mohan

Rangam, and in what preferential order, remains a

question in the realm of speculation and

unpredictability."

The Court also referred to the following observations made by

Hidayatullah, C.J. speaking for the Court in R.M. Seshadri v.

G.Vasantha Pai [1969 (1) SCC 27] rejecting similar contention:-

"This (question) will depend on our reaching the

conclusion that but for the fact that voters were brought

through this corrupt practice to the polling booths, the

result of the election had been materially affected. In a

single transferable vote, it is very difficult to say how the

voting would have gone, because if all the votes which

Seshadri had got, had gone to one of the other candidates

who got eliminated at the earlier counts, those candidates

would have won. We cannot order a recount because

those voters were not free from complicity. It would be

speculating to decide how many of the voters were

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 7 of 29

brought to the polling booths in car. We think that we

are not in a position to declare Vasanta Pai as elected,

because that would be merely a guess or surmise as to the

nature of the voting which would have taken place if this

corrupt practice had not been perpetrated."

And, thereafter the Court held as under: -

"The position in the instant case is no better. It is

extremely difficult, if not impossible, to predicate what

the voting pattern would have been if the electors knew

at the time of election, that Shri John was not qualified to

contest the election. In any case, Shri Subramanyan was

neither the sole continuing candidate, nor had he secured

the requisite quota of votes. He cannot therefore, be

declared elected:"

The Court also considered the dictum in the case of Viswanath

(supra) and observed that the ratio decidendi of said case is applicable

only where (a) there are two contesting candidates and one of them is

disqualified; and (b) the election is on the basis of single non-

transferable vote.

Again in Lata Devi (Mali) v. Haru Rajwar [(1989) 4 SCC

773], this Court dealt with the same question and observed as under: -

".It is to be noted that in an election petition

what is called in question is the election and what is

claimed is that the election of all or any of the returned

candidate is void, with or without a further declaration

that the election petitioner himself or any other candidate

had been duly elected. Declaring the election of the

returned candidate void does not, by itself, entitle the

election petitioner or any other candidate to be declared

elected."

Learned counsel for the appellant lastly referred to the decision

in D.K. Sharma v. Ram Sharan Yadav and Others [(1993) Supp 2

SCC 117]. In that case, the High Court referred to the decision in

Konappa Rudrappa Nadgouda (supra) and held that on the basis of

the oral evidence, it was not possible to hold that the voters who cast

their votes in favour of the elected candidate did so after having

noticed about the disqualification and knowing that their votes would

be wasted and therefore, the second prayer of the election petitioner to

declare him as duly elected after throwing away the votes of elected

candidate, was not allowed. This Court did not find any infirmity in

the said reasoning and, therefore, dismissed the appeal.

In view of the aforesaid settled legal position, in our view, the

impugned order passed by the High Court declaring the election

petitioner as elected on the ground that the votes cast in favour of

elected candidate (appellant) are thrown away was totally erroneous

and cannot be justified. As held by the Constitution Bench in

Konappa's case that some general rule of election law prevailing in

the United Kingdom that the votes cast in favour of a person who is

found disqualified for election may be regarded as 'thrown away' only

if the voters had noticed before the poll the disqualification of the

candidate, has no application in our country and has only merit of

antiquity. We would observe that the question of sending such notice

to all voters appears to us alien to the Act and the Rules. But that

question is not required to be dealt with in this matter. As stated

earlier, in the present case for one seat, there were five candidates and

it would be impossible to predict or guess in whose favour the voters

would have voted if they were aware that elected candidate was

disqualified to contest election or if he was not permitted to contest

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 8 of 29

the election by rejecting his nomination paper on the ground of

disqualification to contest the election and what would have been

voting pattern. Therefore, order passed by the High Court declaring

the election petitioner Dr. Vijay Kumar Khandre as elected requires

to be set aside.

Re: Question No.2.

Whether Contract between the Government and Appellant

was subsisting on the date of scrutiny of nomination

papers?

Finding given by the High Court:

On this question, we would first refer to the finding given by

the High Court. The learned Judge held that out of seven contracts

between appellant and the State Government, six contracts were

terminated. But from the evidence on record, he held that the work of

effective improvement and asphalting of Halburga-Bawgi-Kamtana

road was continued to be carried out by Prakash Khandre even after

the purported closure of contract, that is, subsequent to the writing of

the letters and, therefore, as a matter of fact there was subsistence of

contract between him and PWD. For this purpose, the learned Judge

relied upon Ex.118 wherein the name of the contractor appeared to be

Mr. Prakash Khandre and the likely date of completion was shown as

December 1999. He has also placed reliance upon Ex. 105 which is a

measurement book pertaining to Halbarga Bawgi works and held that

if these works were carried out by Mallikarjun Khandre after 1.9.99,

the entries under various columns could not have born the details of

the contract as entered into by Prakash Khandre and the name of the

contractor would also have been mentioned as Mallikarjun Khandre.

He held that except letters and agreements Ex. 71 and 72, there was

nothing on record to show that the department closed the contract of

Mr. Prakash Khandre. He further referred to the evidence of

Mallikarjun Khandre and held that Earnest Money Deposit was not

given by him to the authority. He, therefore, held that the department

as well as Mallikarjun Khandre did not actually treat the work allotted

to Mallikarjun Khandre as a fresh contract and there appeared to be

mere substitution of Mallikarjun Khandre in place of Prakash

Khandre. With regard to the rest of the contract works, he arrived at

the conclusion that the contracts were not subsisting. He finally

arrived at the conclusion that election of Mr. Prakash Khandre was

void under Section 100(1)(a) of the Act as he was disqualified under

section 9-A of the Act on the date of scrutiny of nomination papers,

on the date of election and on the date of declaration of result and it

was declared as such on that count.

SUBMISSIONS:

Learned senior counsel Mr. Ashok Desai for the appellant

submitted that once the contract is terminated by writing various

letters by the appellant and when such termination is accepted by the

Department, it inevitably means that contract does not subsist.

Further, the moment registration of the contractor is cancelled and no

dues certificate is issued, it would mean that contracts were

terminated. The Government cancelled registration of Prakash

Khandre as Class-I contractor on 16.8.1999 and issued no dues

certificate. It is his submission that appellant has unequivocally

terminated the contracts and that is accepted by all witnesses from the

Public Works Department examined by the election petitioner.

Therefore, there was no reason for the learned Judge to hold that

Halbarga-Bawagi contract works continued. It is his submission that

prior to termination of the contract 95% of the work was over and 5%

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 9 of 29

of the work remained to be completed but the appellant was required

to terminate the contract as elections for the legislative assembly were

preponed. For this purpose, he referred to the cost of the actual

contract work as per the tender, which was for a sum of

Rs.3,21,97,034/-. He pointed out that out of that he has completed the

work of Rs.2,90,42,705/-. For the work done by him prior to

termination of the contract, he had received Rs.2,31,52778/- and had

recovered remaining amount by instalments in the months of

September/October/November and December, but that does not mean

that appellant has carried out further contract work. He pointed out

that whatever amount he had received after termination of the contract

was for the work done by him prior to termination of the contract.

Learned senior counsel Mr. Shanti Bhushan appearing for the

election petitioner submitted that the finding of the High Court that

the contracts between the appellant and the State Government were

subsisting is based upon appreciation of evidence and the said

appreciation cannot be said to be in any way erroneous. It is his

contention that contracts were not terminated and the appellant

continued the contract work through his brother as benamidar. He

submitted that from the evidence on record, it is proved that the

contracts were subsisting. It is his further contention that mere

cancellation of registration would not be sufficient to arrive at the

conclusion that contract was terminated. He heavily relied upon

certain Exhibits and submitted that there was tampering of evidence

by the Department in favour of the appellant. It is his say that transfer

of work in favour of Mallikarjun Khandre was as such benami.

Statutory Provision:

Before dealing with the facts, we would refer to relevant

statutory provision. Under the Act, disqualification on the ground of

subsistence of contract was first provided under Section 7(d) which

reads 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 Counsel of a

State

(d) 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."

Thereafter it was amended by Act 58 of 1958 which read thus:-

"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."

The aforesaid section was replaced by Section 9A by Act 47 of

1966 which came into force from 14th December 1966. It reads thus: -

"9A. Disqualification for Government contracts, etc.A

person shall be disqualified if, and for so long as, there

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 10 of 29

subsists a contract entered into by him in the course of

his trade or business with the appropriate Government for

the supply of goods to, or for the execution of any works

undertaken by, that Government.

Explanation.For the purposes of this section,

where a contract has been fully performed by the person

by whom it has been entered into with the appropriate

Government, the contract shall be deemed not to subsist

by reason only of the fact that the Government has not

performed its part of the contract either wholly or in

part."

The objects and reasons for substituting Section 7(d) by Section

9A are as under:

"Apart from the grouping of the sections effected

by clause 20, some changes have also been made in the

relevant provisions. In the new section 9-A, an

Explanation has been added to make it clear that a

contract with the Government shall be deemed not to

subsist by reason only of the fact that the Government

has not performed its part of the contract either wholly or

in part. This change has become necessary in order to do

away with the disqualification that attaches to a person

for being chosen as or for being a member of Parliament

or State Legislature even after he has fully performed his

part of the contract, since it would hardly be justifiable to

retain such a disqualification provision in a modern

welfare State when State activities extend almost over

every domain of the citizen's affairs where very many

persons, in one way or the other, have contractual

relationship with the Government. That being the case,

an unduly strict view about Government contract in the

present day might lead to the disqualification of a large

number of citizens many of whom may prove to be able

and capable members of Parliament or State Legislatures.

It would be of interest to note in this connection that in

the United Kingdom, any disqualification arising out of

any contract with the Crown has been done away with by

the House of Commons Disqualifications Act,1957."

From the afore-quoted objects and reasons of substituting

Section 9-A, it is clear that unduly strict view about the Government

contract in the present day is not required to be taken and the change

became necessary in order to do away with the disqualification that

attach to a person for being chosen as or for being member of the

Parliament or State Legislature even after he has fully performed his

part of the contract.

Further, initially section 7(d) was very wide. A person having

any share or interest in contract or such person having interest by any

person in trust for him or for his benefit or on his own account was

disqualified to contest election. This disqualification was narrowed

down in 1958. Thereafter in 1966, Section 9-A was substituted,

which provides that the person shall be disqualified

(a) if and for so long as there subsists a contract by

him in course of his trade or business;

(b) for the supply of goods to; or

(c) for the execution of any work undertaken by him.

Explanation further provides that where the contract has been

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 11 of 29

fully performed by the person by whom it has been entered into the

contract shall be deemed not to subsist by reason only of the fact that

Government has not performed its part of the contract either wholly or

in part. This explanation is added to clarify that mere non

performance on the part of the Government, say non payment of

money would not be deemed to mean that contract subsists even

though the contract has been fully performed by such person.

In Ranjeet Singh v. Harmohinder Singh Pradhan [(1999) 4

SCC 517] this Court (in para 7) observed thus:

"Section 9-A is a statutory provision which

imposes a disqualification on a citizen. It would,

therefore, be unreasonable to take a general or broad

view, ignoring the essentials of the section and the

intention of the legislature. Purposive interpretation is

necessary. In Dewan Joynal Abedin v. Abdul Wazed

[1988 Supp SCC 580] Section 9-A of the Act has been

correctly interpreted in the following words:-

"An analysis of Section 9-A of the Act

shows that only in two cases a person would be

disqualified if he has entered into a contract with

the appropriate Government in the course of his

trade or business which is subsisting on the date of

scrutiny of nomination. They are (i) when the

contract is one for supply of goods to the

appropriate Government and (ii) where the

contract is for the execution of any works

undertaken by that Government."

Correspondence for Termination of Contract: -

In the light of the aforesaid statutory provision, to find out

whether contract was subsisting on the date of filing of nomination,

we would first refer to the letters written by the appellant to the

Department for terminating the contracts and the action taken by the

Department on the basis of the said letters.

Copy of letter dated 4.8.1999 (Ex.R-5)

To

The Executive Engineer

PWD Bidar Division

Bidar.

Sir,

Sub: Regarding Finalisation of Works and Issue of No.

Due Certificate and Cancellation of My

Registration (Licence).

======

I am contesting for the forth-coming Assembly Election.

Hence I request you kindly to finalise the works which are

entrusted to me in your department even if the works are

incomplete, as per rules. I also request you to issue me the No

Due Certificate and cancel my registration of contractorship.

Further I write to state that I am also managing a partner of M/s

C. Saraswati & Sons, Engineer and Contractor, Bhalki. So now

I want to retire from the partnership which may kindly be

accepted.

Early action in the matter is requested and issue me the

No Due Certificate immediately.

Thanking you sir,

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 12 of 29

Yours faithfully,

Sd/-

(Prakash Khandre)"

Copy of letter dated 6.8.1999 (Ex.P-55)

To

Chief Engineer

Communication and Building

Government of Karnataka

Bangalore.

Sir,

Sub: Termination of Contract with the Government in

respect of various works which will be set-out

herein below.

======

I am the Class-I contractor of the Government of

Karnataka. I intend to contest the ensuing election for the

Legislative Assembly. Hence I pray as hereunder:

1. As a contractor I have been entrusted the various works

mentioned herein below:

(a) Improvements and Asphalting of Halburga-Bawgi-

Kamtana in Bidar district completed 95% of the

work. Balance 5% work not completed due to

EIRL not approved by the Department.

(b) Improvement and Asphalting of Dhannara Pati to

Chandapur KM 0/0 5/6 completed 30% of the

work. Due to rains the work is stopped.

(c) Improvement and Asphalting of Mahagoan to

Shulepeth Work started in the month of April

1999 25% of the work is completed due to rains

the work is stopped.

(d) In KM 76 RBC Canal lining in KPCC Division

Balki construction of the work not started. Due

to rains the work is not started due to Election

coming I am not ready to start the work.

(e) Bijapur to Athani Work completed Final bill to

be submitted by Department.

(f) Sholapur Chitradurga NS 13 KM 237/0-256/0

work completed but final bill to be submitted by

department.

(g) In Bijapur NH Division, the PR Work on Sholapur

Chitradurga Road in KM 32/0-97/0 184/0

183/0 and KM 217/0 227/0 Work order

received, tender agreement also completed Work

to be done after rainy season.

In respect of the works referred to above I have

completed the work substantially. In view of the rainy season

and incessant rains in Bidar District, the aforesaid work could

not progress so as to complete the work before August, 1999. I

humbly state that I undertook the various works referred to

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 13 of 29

above with an intention to complete them by end of November,

1999. As pointed out by me earlier I intended to contest the

ensuing election for the Assembly Elections. In view of the

pre-ponement of the election and for the reasons beyond my

control, I could not complete the aforesaid work.

2. As you may be aware the Election Commission of India

has issued the calendar of Events. The last date for submitting

the nomination is 18.8.1999. For the reasons beyond my

control, I would not complete those works and I will not be in a

position to complete the aforesaid work on or before 18.8.1999.

Right to contest the election is my fundamental right. I want to

exercise that fundamental right by contesting the ensuing

Assembly Election. In view of Sec.9A to the Representation of

People Act, 1951, the existing contract between me and the

Government is causing me undue hardship and is coming in the

way of me contesting the ensuing assembly election. Having

regard to various facts and circumstances I have decided to

request you to terminate all the existing contracts subsist

between me and the Government forthwith. Further, I request

you to cancel my registration as Class-I contractor with the

department thereby putting an end to any sort of subsisting

contractual relationship between me and the Government.

Further, there are several contractors in Bidar District who are

ready and willing to undertake the said work and complete the

same on the same rates and conditions which is given to me in

the subsisting contract between me and the Government.

Therefore, I humbly request you to terminate all the

existing contract between me and the Government in respect of

various works referred to above and issue necessary certificate

declaring that there is no subsisting relationship between me

and the Government forthwith. I humbly request you to entrust

the work to other Class-I Contractor of Bidar District who are

ready and willing to undertake the work on the same rates,

terms and conditions. It is needless to state the last date for

filing nomination is 18.8.1999. Therefore, I humbly request

you to take the decision at the earliest and allow me to exercise

my fundamental right to contest the election in the ensuing

assembly election of 1999 and oblige.

Thanking you,

Yours faithfully,

Sd/-

(Prakash Khandre)"

Copy of letter dated 6.8.1999 (Ex.P-39)

To

Chief Engineer

Communication & Buildings (South)

Bangalore.

Sub: Requesting to cancel registration of Class-I Contractor in

the Karnataka Public Works Department-Reg.

Ref: Registration No.65 date: 5.4.1995.

Related to the above subject, I am willing to contest 1999

State Assembly Elections, I am a Registered Class-I Contractor

of the Karnataka Public Works Department and now I am

contesting in the forthcoming Election as a Candidate.

Therefore, I pray you to cancel my registration.

Thanking you,

Yours faithfully,

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 14 of 29

Sd/-

(Prakash Khandre)"

Copy of letter dated 6.8.1999 (Ex.P-61)

GOVERNMENT OF KARNATAKA

No.Lo.E: LEVI:99-2000: 1165.

OFFICE OF THE EXECUTIVE

ENGINEER PUBLIC WORKS

DEPARTMENT BIDAR, BIDAR

DIVISION.

Dated: 6.8.1999

To

Superintending Engineer

Public Works Department

Gulbarga Circle

Gulbarga.

Respected Sir,

Subject: Regarding the issue of No Due Certificate to

Sri Prakash Khandre, Class-I, Contractor

Bhalki.

Ref.: (1) Letter of Sri Prakash Khandre dated 4.8.99.

(2) Letter of Sri Prakash Khandre dated 4.8.99.

(3) Letter of Sri Mallikarjun Khandre dated 4.8.99.

In respect to the above subject, Sri Prakash Khandre

Class I Contractor, Bhalki in his letter Ref. No.1 has requested

to close his all works as in the present stage which comes in this

division and also requested to issue No Due Certificate and to

cancel his Registration of Contractor and also sought

permission to retire from the Firm namely "C. Saraswathi &

Sons" because he is willing to contest the Forthcoming

Assembly Elections as a Candidate.

In Ref. No.2, Sri Prakash Khande requested as in the

First Letter to close all works entrusted to him and to transfer

the incomplete works in the Sri Mallikarjun Khandre, Class-I

Contractor. Contractor Licence of Mallikarjun Khandre is

enclosed.

Hot Mix Plant, Paver and Road Roller and ready to do

the incomplete works of Sri Prakash Khandre in the same rates

quoted and on the same Tender clause of Sri Prakash Khandre

and regarding to this he is ready to submit the Affidavit of the

Court.

Present Tender Works in the name of Sri Prakash Khandre.

Sl. No. Details of the Works. Progress Stage.

1. Impts. Halbarga Bawgi-Kamthana Road 90% of the work is

(under NABARD Works) completed.

2. Halbarga Junior College Building Work is completed

3. Impts. Dhannura Pati to Chandapur Rd. Work is under

Progress.

4. Dadgi to Muchlum (HKDB). Work is under

Progress.

5. Bhalki to Humnabad Road. Work is completed

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 15 of 29

6. Bhalki to Neelanga road. Work is completed

Therefore, the above matter is sent to kind attention and

requesting to give directions. The matter is related to the

coming election, hence the order and the directions are expected

soon.

Yours faithfully,

Sd/- 5.8.99

Executive Engineer PWD Division Bidar.

1. Copy submitted for the kind information of Chief

Engineer.Communication and Buildings (North),

Dharwad.

Copy of letter dated 7.8.1999 (Ex.P-40)

No.CBS: 65:RCT:CSB:99

OFFICE OF THE CHIEF ENGINEER

Communication & Buildings (South)

Bangalore. Date 7.8.99

To

1. All the Chief Engineers (All Projects)

2. Chief Engineer, National Highways, Bangalore.

3. All the Superintending Engineers (All Projects).

4. Superintending Engineer, National Highway Circle,

Dharwad.

5. All the Executive Engineers, PWD and Irrigation

Departments.

6. Executive Engineer, Zilla Panchayat Engineering

Division.

Respected Sir,

Subject: Regarding the application of Sri Prakash

Khandre, Class-I Contractor to Cancel his

Registration of Class-I contractor, to contest

the forthcoming Assembly elections.

Ref: Request letter of Sri Prakash Khandre,

Class-I Contractor dated 6.8.1999.

Sri Prakash Khandre, Class-I Contractor, Bhalki, Bidar

district has given a requisition to cancel his Registration of

Class I Contractor because he is willing to contest the

forthcoming assembly elections. His registration no. being

CBS:65 Civil95 dated 5.4.95 (for the period of 1995-2000).

Therefore submit the details regarding the incompleted

works and any dues to come to the Govt. This is a election

matter hence give personal attention and send the reply in the

next post. If any dues to come from contractor to Govt., send it

within 16.8.99 to this office. If any reports showing the dues

are sent after the above mentioned date are not considered and

the concerned Executive Engineer and the Account

Superintendent will be held responsible.

Yours faithfully,

Sd/-

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 16 of 29

Chief Engineer

Communication & Buildings (South)

Bangalore.

Amshi:7899.

Copy of letter dated 9.8.1999 (Ex.P-68a)

Government of Karnataka

(Public Works Department)

No./PWD/BDR/AC-1/99-2000/

OFFICE OF THE EXECUTIVE ENGINEER

Bidar Divn., Bidar.

Dated:9.8.99.

To

The Superintending Engineer

PWD Gulbarga Circle

Gulbarga.

Sir,

Sub: Closing of PWD Works and issue of No Due

Certificate-regarding.

Ref: 1. Application of Sri Prakash Khandre, PWD

Contractor Bhalki dtd. 4.8.1999.

2. Chief Engineer, C&B (North Dharwar ltr.

No.CBS/65 RCT/CSB/99 dtd.7.8.99.

Anent to the above it is to be stated that statement

showing the works entrusted to Sri Prakash Khandre, PWD

Class I, Contractor, Bhalki on tender basis is submitted

herewith showing the details of estimated amount physical and

financial progress and balance of the works.

The above works entrusted to the agency are in progress

as the agency is capable to completing the work. The

completion of work may take some more time. In the

meanwhile, he has requested to close his works and issue no

due certificates, as intends to contest for ensuing Assembly

Election.

Further, Sri Mallikarjun Khandre, PWD Class I

Contractor has given his consent letter dated 4.8.1999 with the

copy of his Registration for Class I Contractor to execute the

works and completion of the balance work at the rates quoted

by Sri Prakash Khandre, Class-I Contractor and terms &

conditions of the agreement and also to pay any Govt. dues

outstanding against the above agency.

Therefore, it is requested to accord permission for closing

the works entrusted to Sri Prakash Khandre, Contractor and to

rescind the contract on his request. Sri Mallikarjun Khandre,

PWD Class I Contractor has given his consent to execute the

balance works at the agreed rates by Sri Prakash Khandre.

Therefore, in view of the above, as a special case,

permission may also be given to entrust the balance works to

Sri Mallikarjun Khandre, Contractor on Form No.PWG-65 i.e.

piece work entrusted Agreement system at the agreed rates by

Sri Prakash Khandre, in order to complete the work as

scheduled. Thus there will be no loss to the Government.

Early orders are requested in the matter.

Yours faithfully,

Sd/-

Exe. Engineer, PWD,

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 17 of 29

Bidar Divn., Bidar.

1) Copy submitted to the Chief Engineer (C&B) North,

Dharwad, alongwith the statement for favour of kind

information and needful action in the matter.

Sd/-

Executive Engineer, PWD

Bidar Divn., Bidar.

Copy of letter dated 11.8.1999

GOVT. OF KARNATAKA

(PUBLIC WORKS DEPARTMENT)

No.CE:Tha.Sa/4:99-2000/4908

OFFICE OF THE CHIEF ENGINEER

Communication and Buildings (North)

DHARWAD.

Dated: 11th August, 1999.

Chief Engineer

Communication & Buildings (South)

Bangalore

Respected Sir,

Sub: Regarding the application of Sri Prakash Khandre,

Class-I Contractor to Cancel his Registration of

Class I contractor, to contest the forthcoming

Assembly elections.

Ref: (1) CE (C&B) South, Bangalore, letter

no.CBS:65:RCT: CCB:99 dated 7.8.99.

(2) Letter No. AAGu : C-5: BeBaaKi :

PramanaPathra : 99-2000:2514:12, dated

10.8.99 of Superintending Engineer, PWD

Gulbarga Circle, Gulbarga.

Sri Prakash Khandre, Class I Contractor, Bhalki is

willing to contest the forthcoming Assembly Elections

therefore requested to cancel his Contractor Registration.

Superintending Engineer has submitted the details

regarding this in his letter (Ref. No.2). Sri Prakash

Khandre, Contractor has submitted the Affidavit along with

the letter of Sri Mallikarjun Khandre, PWD, Class I

Contractor regarding the completion of the incomplete

work of Sri Prakash Khandre. Mallikarjun Khandre

himself has submitted the affidavit to take over the works

entrusted to Prakash Khandre in the old rates and stated to

take full responsibility. Sri Prakash Khandre also

submitted the affidavit stating that in case if Mallikarjun

Khandre fails to complete the works, he will take

responsibilities to get it completed. On the basis of the

affidavit this proposal may be accepted.

Therefore as explained above, PWD, C&B (North)

has no objection to cancel the Class I Contractor

Registration of Sri Prakash Khandre.

Yours faithfully,

Sd/-

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 18 of 29

Chief Engineer

Comm. & Buildings (North)

Dharwad.

Copy of letter dated 12.8.1999 (Ex.P27)

Government of Karnataka

(Irrigation Department)

No.SEB:IPCC/AE-2/76Km.RBC/99-2000

Office of the

Superintending Engineer, ID.,

IPC Circle, Bidar.

Dated:12.8.1999.

To

The Executive Engineer, ID

KPC Divn. No.2

Bhalki.

Sir,

Sub: Providing & Fixing SS/CC Lining from Ch:75000

to 76000m in Km.76 of RBC of Karanja Project.

Ref: Chief Engineer, IPZ, Gulbarga Phonogram

confirmation Ltr. No.CEG/IPZ/KR/TA-2/A-E-2/

Km.76/lining/RBC/99-2000/2202 dated 13.8.1999.

Please refer the above cited letter Originally addressed to

this Office as well as your office you are hereby directed to

close the contract of Sri Prakash Khandre duly observing Codal

rules as per Tender clause as instructed by Chief Engineer

forthwith.

Yours faithfully,

Sd/-

Superintending Engineer, I.D.,

IPC Circle, Bidar.

Copy submitted to the Chief Engineer, ID, Irrigation Projects

Zone, Gulbarga with reference to Central Office letter No.2202

dated 13.8.1999.

Copy of letter dated 16.8.1999 (Ex.P-53)

No.CBS:66:RCO:CSB:99.

Office of the Chief Engineer

Communication and Buildings (S)

Bangalore, dated 16.8.1999.

MEMORANDUM

Sub: Regarding cancellation of Class-I Contractor registration

of Sri Prakash Khandre.

Ref: 1. The request of Sri Prakash Khandre dated 6.8.99.

2. The letter of Chief Engineer, Communication &

Building (N) Dharwad vide No.CE:N:SS-1:99-

2000-4908 dtd.11.8.99.

3. Letter of Chief Engineer, Raichur Division vide

No.ESH:TAS:REG:MIS99-2000 dated 13.8.1999.

PREAMBLE:

Sri Prakash Khandre, Class-I Contractor, Balki, Bidar

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 19 of 29

district has submitted an application to this office on 6.8.1999

requesting for cancellation of his Class I Contractor

Registration as he is willing to contest the ensuing Assembly

Elections. In this connection letters were sent to all the Chief

Engineers and the Executive Engineers to send reports

pertaining to any dues or incomplete projects of Government

from Sri Prakash Khandre, the contractor, requesting them to

submit report before 16.8.1999 to this office. As per the reports

received till date, there are no dues from Sri Prakash Khandre to

the Government and the Chief Engineer and the Executive

Engineer have recommended for cancellation of Class-I

Registration as per the above references referred at No.(1) and

(2). Based on the recommendations, the Registration of Sri

Prakash Khandre, Class-I Contractor can be cancelled.

ORDER:

The Registration of Class-I Contractor of Sri Prakash

Khandre, Bhalki Bidar district vide Ref. No.CBS:65:Civil:95

dated 6.4.95 is cancelled with immediate effect and it is also

certified that there is no dues from Sri Prakash Khandre

pertaining to any projects to the Government.

Sd/-

(B. SRINIVAS)

Chief Engineer

Communication and Buildings (South), Bangalore.

Copy of letter dated 29.8.1999 (Ex.P8)

Government of Karnataka

(P.W.D.)

No.EE/PWD/BDR/TS.1/99-2000

Office of the

Executive Engineer, PWD,

Bidar Divn., Bidar.

Dated:29.8.1999.

To

The Asst. Executive Engineer,

PWD, Sub-Divn., Bhalki/Bidar.

Sub: Closing measurement of Prakash Khandre,

Contractor Works-Reg.

Ref: CE/office letter No.CE/North/Dharwad/TS.4/99-

2000/4108 dt.11.8.99.

Sir,

With reference to the above subject you are hereby

directed that the registration of Prakash Khandre, Class-I

Contractorship has cancelled, so the following works should be

closed and closing measurements will be recorded and intimate

to this office.

1. Impts. To Halbarge, Bowgi to Kemthane Road

Km.0/0 to 34/40.

2. Impts. To Dhanurapati to Chandapur Km.4/0 to

9/50 in Bhalki Tq.

Yours faithfully,

Sd/- Sd/-

Received Executive Engineer, PWD,

Bidar Divn., Bidar.

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 20 of 29

Copy to Sri Prakash Khandre, Class-I, PWD, Contractor,

R/original Bhalki Tq. for information.

Sd/-

Executive Engineer, PWD,

Bidar Divn., Bidar."

From the correspondence stated above, it can be held as under:-

1. On 4th, the appellant requested the Executive Engineer

(a) to finalise the works which were entrusted to him

even if the works were incomplete as per the

Rules.

(b) to issue 'No Dues Certificate' and

(c) to cancel his registration of contractorship.

2. On 6th August, he wrote similar letter to the Chief

Engineer specifically requesting him to do the needful

forthwith for termination of all existing contracts and to

put an end to any sort of subsisting contractual

relationship between him and the Government. Again,

he reiterated to terminate all existing contracts and to

issue necessary certificate declaring that there existed no

subsisting relationship between him and the Government.

3. On the same date, he wrote letter to the Chief Engineer,

Communication and Buildings (South) Bangalore to

cancel his registration.

4. On 6th itself, the Chief Engineer wrote letter to the

Superintending Engineer for taking necessary immediate

action as prayed for by the appellant as the matter related

to the coming election and the copy was also submitted

to the Chief Engineer, Communication and Buildings

(North) Dharwad.

5. On 7th August, the Chief Engineer, Communication and

Buildings (South), wrote letters to all Chief Engineers

(All Projects), Chief Engineer, National Highways,

Bangalore, Superintending Engineers (All Projects), all

Executive Engineers, PWD and Irrigation Departments,

Executive Engineer, Zilla Panchayat Engineering

Division for cancellation of Prakash Khandre's

registration of Class I contractor as he was to contest the

forthcoming assembly elections and to communicate any

reports showing the dues, if any, with a specific

statement. It was also stated that if any reports showing

the dues are sent after 16th August, the concerned

Executive Engineer and the Account Superintendent

would be held responsible.

6. On 9th August, Executive Engineer, Bidar Division wrote

letter to the Superintending Engineer, Gulbarga Circle

that Prakash Khandre has requested to close his work and

issue 'No due certificate' and certificate of cancellation

of registration as he wanted to contest the ensuing

assembly elections. Therefore, permission was sought

for closing the works entrusted to Prakash Khandre and

that Mallikarjun Khandre, Class-I contractor had given

his consent to execute the work at the rate agreed by

Prakash Khandre. Therefore, as a special case,

permission was sought to entrust the balance work to Shri

Mallikarjun Khandre as it would not cause any loss to the

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 21 of 29

Government.

7. On 11th August, 1999, Chief Engineer, Communication

and Buildings (North) Dharwad wrote letter to the Chief

Engineer, Communication and Buildings (South)

Bangalore stating that Prakash Khandre (Contractor) has

submitted affidavit along with the letter of Sri.

Mallikarjun Khandre that regarding completion of the

incomplete work, Mallikarjun Khandre would complete

the same and Prakash Khandre has also submitted

affidavit stating that in case if Mallikarjun Khandre fails

to complete the work, he will take responsibility to get it

completed.

8. On 12th August, Superintending Engineer directed the

Executive Engineer to close the contract of Shri Prakash

Khandre as instructed by the Chief Engineer.

9. Finally on 16th August, Chief Engineer, issued a

memorandum Ex.53 that registration of Prakash Khandre

was cancelled with immediate effect and it was certified

that there were no dues pertaining to any project to the

Government. For this purpose, relevant correspondence

is referred to in Ex.52.

10. On 29th August, the Executive Engineer, PWD, Bidar

Divn., Bidar directed the Asstt. Executive Engineer,

PWD, Sub-Divn., Bhalki/Bidar that as the registration of

Prakash Khandre Class-I contractor is cancelled, the

works of Halbarge-Bawgi to Kemthane Road and

Dhanurapati to Chandapur in Bhalki Tq. should be closed

and closing measurements of the work executed be

recorded and the same may be intimated to the office.

This correspondence manifestly establishes that appellant

terminated all his contracts with the State Government as he was to

contest election and the same was accepted by the Department and the

Chief Engineer issued 'No Dues Certificate' and also cancelled his

registration as Class I Contractor.

ORAL EVIDENCE: -

To the same effect all witnesses of the Department examined by

the Election-petitioner have deposed before the Court. This would be

clear from the evidence discussed below.

Election Petitioner examined PW2 B. Mallikarjuna, who was

the Chief Engineer, Irrigation Project. He was asked about the

procedure for termination of subsisting contract and to that, he replied

the authority who entered into the contract is also the authority for

terminating the contract. He produced the entire file containing the

correspondence regarding cancellation of contract which was marked

as Ex.P9 and the file of Inspection Note Ex.P10. He carried out the

inspection on 8.11.1999 on account of closure of the work by the

appellant in order to issue further instructions to his subordinate

officers to entrust the same work to some other contractor. He had

called for explanation from the Superintending Engineer and the

Executive Engineer regarding the work being carried out after the

termination of the contract in favour of the appellant. He denied the

suggestion that the work was being carried out by the appellant. He

has produced letter dated 12.8.1999 sent by the Superintending

Engineer in response to phonogram Ex.32. He has also stated that

Executive Engineer had sought permission from him for entrustment

of work to Mallikarjun Khandre but the permission was not granted.

He has also denied the suggestion that he has manipulated the record

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 22 of 29

in order to help the appellant. The learned Judge has noted that after

the evidence was read over to the witness, he pointed out that when he

made surprise inspection on 8.11.1999, he noted that Bed Concreeting

had already been completed as stated in Ex.28 and his statement that

the work was in progress was not correct.

Other witness PW8 N.L. Matry was working as Asstt.

Executive Engineer at the relevant time. He stated that he had

accompanied the Chief Engineer on 8th November, 1999 for surprise

inspection of the piece work from 75.750 to 75.810 km. He was not

in position to say who executed some portion of the work as observed

by the Chief Engineer in his report. However, he definitely stated that

it was false to suggest that the said work was carried out by Mr.

Prakash Khandre and that he was suppressing the said fact.

The next witness PW4 Dinkar Rao, who was working as

Superintending Engineer IPC Circle, Bidar at the relevant time

between July, 1998 to 5th October, 1999, has stated that the appellant

had given a representation to the Executive Engineer requesting to

issue no dues certificate. It is his say that he had sought the opinion of

the Government Pleader regarding premature termination of the

contract and on receipt of the said opinion, the same was forwarded to

the Chief Engineer.

Other witness is PW5 S.K. Desai, who was working as

Executive Engineer, KPC Division No.2, Bhalki from 6.3.1999 to

8.8.2000. He was shown Ex.P22a letter dated 10.8.1999 given by

the appellant to him to close the work entrusted to him and to issue a

no dues certificate at the earliest. It is his say that he also received

another letter from the appellant enclosing the necessary affidavit in

prescribed proforma to close his tender work which was produced at

Ex.P23. Both these exhibits were endorsed by him on 10.8.1999 and

the necessary entries were made in inward and outward register

maintained by their office. He has also produced letter dated 9.8.1999

written by him to the Chief Engineer, Zone South, Bangalore which is

Ex.P24 along with the no dues certificate. 'No dues certificate' was

given after getting clearance from account section. He has stated that

it was false to suggest that appellant himself had executed the work

and he was suppressing the truth from the Court. He admits that he

has written letter dated 12.8.1999 (Ex.27) to the appellant informing

that the tender for the work was closed. It is his say that even though

the appellant requested to entrust remaining work to his brother

Mallikarjun Khandre, the Central Office did not accede to his request.

PW7 Ashok Kumar Mogsheety was working as a Junior

Engineer at the relevant time. He has stated that the last measurement

in respect of the work entrusted to the appellant was taken on

10.8.1999 and it is his say that the entries of measurement book Ex.34

were in his handwriting. He stated that the measurement book was

also signed by the Executive Engineer and that there was no further

measurement of work pertaining to Sri Prakash Khandre.

Next witness PW9 K. Mallikarjunaiah who was working at the

relevant time as the Chief Engineer, North Zone, PWD (C&B),

Dharwad, has stated that letter dated 9.8.1999 sent by the Executive

Engineer, PWD Bidar Division was subsequently brought to his notice

on 11.8.1999. Pursuant to the said letter, he addressed letter dated

11.8.1999 Ex.P37 to Chief Engineer (C&B), South, Bangalore. It is

his say that he permitted the transfer of work from appellant to his

brother Sri Mallikarjun Khandre. It is his say that by Ex.P37, he had

informed the Chief Engineer, (C&B), South, Bangalore stating that he

has no objection for cancellation of the registration of the appellant.

With regard to the transfer of contract work from one contractor to

another, he specifically stated that he had verified the Codal Rules and

that he was competent to grant the permission of transfer of work

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 23 of 29

from one contractor to another under special circumstances. During

1994 before the general elections, the same procedure was adopted.

In further cross-examination, he has stated that he had ordered the

transfer of contract work after 16.8.1999. On 16.8.1999, the

registration of contractorship of appellant was cancelled.

PW10 B. Srinivasa who was working as Engineer-in-Chief has

stated that at the relevant time he was working as Chief Engineer

PWD (C&B) South, Bangalore. It is his say that his office received a

letter dated 6.8.1999 Ex.P39 requesting for cancellation of registration

of appellant. Pursuant to that letter, he sought for sending No Dues

Certificate from all the Chief Engineers, Superintending Engineers

etc. as mentioned in his letter dated 7.8.1999 Ex.P40. On 16.8.1999

he passed the orders cancelling the registration of the appellant after

obtaining necessary information from Chief Engineer and

Superintending Engineers and others. He has denied the suggestion

that the order of cancellation of registration was manipulated. It is his

further say that as per the portion of Ex.52 (c), he passed the order

Ex.P52(e) terminating all the contracts of the appellant. Ex.52 order

was issued on 16.8.1999 to the appellant.

PW11 Basavraj Kukunda who was working as a Superintending

Engineer has produced correspondence file of one inward and one

outward registers for the month of August onwards which were

Exhibited as Ex. P 56, Ex. P. 57 and Ex. P 58. He has stated that on

the basis of information given by the Executive Engineer, Ex. P. 59,

he had sent a letter dated 10th August, 1999 to the Chief Engineer

recommending cancellation of the registration of the contract of

appellant and to entrust the same work to his brother Mallikarjun

Khandre. That letter is produced as Ex. P60. It is his say that during

the 1994 elections pending work of a contesting candidate for the

general elections was transferred in favour of another contractor and

on the basis of the same analogy, the contract of the appellant was

cancelled and the same was recommended to be transferred to his

brother Mallikarjuna Khandre. He agreed to the suggestion that

baring the precedence stated above, the Codal Rules of PWD do not

authorise or empower him to transfer the work.

PW12 V.S. Pathange, Executive Engineer has admitted that

after cancellation of the contract work in favour of the appellant the

balance work was entrusted to his brother Sri Mallikarjun Khandre.

He has also stated that contract comes to an end when the registration

of the contract is cancelled. He has denied the suggestion that even

though the contract was transferred in the name of Mallikarjun

Khandre, the same has been carried out benami by the appellant. He

admitted that he has entrusted the work to Mallikarjun Khandre on

1.9.1999 and has sent the original Ex. 71 and 72 in his office at Bidar

and the entrustment of the work under the aforesaid Exhibits was on

the direction of the higher authority. Such directions were given to

him in writing which was Ex. P. 20. He has also produced agreement

Form PWG 65. He denied the suggestion that work was done by

Mallikarjun Khandre for the appellant. It is his say that in the month

of September 1999, a different proforma was prescribed which was

Ex.115 and because of the oversight he might have earlier stated the

agency as Prakash Khandre for the months of October to December

1999.

PW16 Raj Kumar Wadde who was working as Jr. Engineer,

Bhalki Sub-Division has stated that nobody has done the work of

Halburga-Bawgi road during August, 1999. Regarding stopping of

work by Prakash Khandre, he made entry in Ex.P103. Thereafter,

further work which was carried out by Mallikarjun Khandre was also

entered in Ex.P103. It is his say that writing of name of Prakash

Khandre at Page no.56 Ex.P103 was a mistake and, therefore, the

same was struck-off and in his place Mallikarjun Khandre's name was

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 24 of 29

written. He further stated that from the month of September to

December, 1999 no work was carried out on Halburga-Bawgi roads.

PW17 Chandrasekhar Patil who was working as Assistant

Executive Engineer has also stated that he was inspecting the progress

of work of Halburga-Bawgi road between 4th August, 1999 to 30th

August, 1999 and during that period he had not seen any progress in

the work. He had received the letter from the Executive Engineer on

29th August, 1999 to take the closing measurement of the said work.

After taking the measurement of 30th August, 1999, he submitted it to

the Divisional Office at Bidar.

From the aforesaid oral evidence, it is abundantly clear that

contract of asphalting of Halburga-Bawgi Kamtana road was

cancelled and the work was handed over to Mallikarjun Khandre.

PW10 Engineer-in-Chief who was working as Chief Engineer, PWD,

South Zone, Bangalore has specifically stated that registration and

cancellation of contractors falling in Class-I and II is to be made by

the Chief Engineer Communication and Building (South), Bangalore

and the power to remove from approved list of the contractors is

vested in him under Rule 12. After getting information from all

offices, he issued no dues certificate and cancelled the registration of

the appellant on 16th August, 1999. The contracts were terminated

after obtaining the opinion of the Government Pleader regarding pre-

mature termination of the contracts. PW2 Chief Engineer carried out

inspection on 8.11.1999 because of the closure of the work by the

appellant. He denied that work was carried out by Prakash Khandre

after termination of the work. No dues certificate was also issued after

getting clearance from all the departments including the accounts

section. The last measurement with regard to the work executed by

Prakash Khandre was taken on 10.8.1999, as stated by PW7 Ashok

Kumar. PW9 Chief Engineer has also stated that he had permitted the

transfer of work from appellant to his brother Mallikarjun Khandre

after verifying Codal Rules and that he had ordered transfer of

contract work after 16.8.1999. The work was entrusted to Mallikarjun

Khandre on the recommendation of Superintending Engineering,

PW11. It is also stated that contracts come to an end when the

registration of contractorship is cancelled. PW12 (Executive

Engineer) denied the suggestion that even though the contract was

transferred in the name of Mallikarjun Khandre, the same was carried

out benami by the appellant.

From the evidence and the correspondence produced between

the appellant and the Department, it is crystal clear that the appellant

terminated the subsisting contracts and the Department accepted it.

Hence, contracts were brought to an end by the parties. Department

also permitted the remaining works to be carried out by Mallikarjun

Khandre. In this view of the matter, the finding given by the High

Court that work of effective improvement and asphalting of Halburga-

Bawgi Kamtana road continued and, therefore, contract was subsisting

is erroneous.

The question whether the contracts were subsisting or not is

always a question of fact to be determined from the evidence on

record, still however, we would refer to the relevant case law cited at

the bar. In S. Munishamappa v. B. Venkatarayappa and Others

[(1981) 3 SCC 260], the Court considered letter written by a candidate

who was elected wherein he stated that "I cannot contest the

elections to Vidhan Sabha, therefore, I request you to immediately

cancel the work licence registered under you in my name. I request

you to finalise all works pending in my name and cancel my licence

immediately." That was processed by the Department and it was

endorsed "please, finalise the claims of the contractor for the above

works". A further endorsement was made directing the bills of the

contractor to be submitted immediately. The High Court arrived at

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 25 of 29

the conclusion that on the relevant date the contract was subsisting

and, therefore, he was disqualified for contesting the election in view

of Section 9A of the Act. This Court considered the submission that

contract can come to an end (1) by parties, (2) by express agreement,

(3) under the doctrine of frustration and (4) by breach; and after

considering the letter Ex.17, the Court held thus: -

" The appellant makes it manifestly clear that he

intended to contest the election and to enable him to do

so he wanted to have the licence in his favour cancelled

immediately and to have his bills settled. The said letter

clearly proceeds on the basis that at that point of time

there was no existing contract between him and the

government and he was only asking for a settlement of

his bills and for cancellation of the licence. The

endorsements made on the said letter by the authorities

also go to indicate that the said position is accepted by

them and necessary directions for finalisation of the bills

are given"

With regard to the breach of contract, the Court further

observed as under: -

"Even if it be held that the appellant had

committed a breach of the contract, the contract cannot

be said to be subsisting thereafter. If the contract is

discharged by breach on the part of the appellant, the

entire contract necessarily goes and along with this the

agreement, if there be any, with regard to the

maintenance, must necessarily go, leaving the party

aggrieved to take steps to recover damages for such

breach. The contract, however, cannot be said be

subsisting. The fact that the bills of the appellant

were settled at a later date and that the security deposit

was refunded later on, will not disqualify the appellant

in view of the explanation to Section 9-A of the Act."

The Court negatived the contention that if any contractor is

permitted to put an end to a contract by committing breaches thereof

to enable him to contest the election, will frustrate the very purpose of

Section 9-A of the Act by holding that whether a contract subsists or

not, has to be determined in the light of the provisions of law relating

to contract and the interpretation cannot be in any way different while

considering the provisions contained in Section 9-A of the

Representation of the People Act.

Similarly in Smt. Aslhing @ Lhingjanong v. L.S. John and

Others [(1984) 1 SCC 205], the Court considered the letter written by

the contractor to the concerned Executive Engineer stating that he was

closing his contract, to be sufficient for holding that the contract was

no longer subsisting as the contractor unilaterally put an end to the

contract and informed the department concerned accordingly and he

had also resigned from the contractor's list of PWD. The Court

negatived the contention that unless the letter was accepted by the

authority, the contract would continue and the contractor would suffer

from disqualification by holding that acceptance of the letter by the

authorities was unnecessary for putting an end to the contract

although, the breach may give rise to a cause of action for damages.

Mr. Shanti Bhushan, learned senior counsel heavily relied upon

the affidavit dated 9.8.1999 sworn by appellant Prakash Khandre.

That affidavit was sent along with a letter written by Mallikarjun

Khandre who was the substitute contractor for the appellant to the

Executive Engineer stating that he was willing to execute all the

balance works entrusted to Shri Prakash Khandre on his quoted rates

as per agreement and to complete them in all respect. In the said

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 26 of 29

letter, it was further stated that he was prepared to pay any dues

outstanding against Shri Prakash Khandre. Along with letter there is

an affidavit of Prakash Khandre stating that in view of the

preponement of the assembly election, he could not complete the

work and, therefore, he had submitted application to terminate

subsisting contracts between him and the Government of Karnataka.

For the remaining work, in his place, Sri Malikarjun Khandre Class-I

Contractor has agreed to execute the same on the same rate, terms and

conditions.

We would quote paragraph 7 of the said affidavit as heavy

reliance is placed by the learned senior counsel for contending that it

would establish that contract subsisted or there was novatio.

"Para 7. I hereby declare in case Sri

Mallikarjun Khandre Class-I Contractor, person fails to

execute the work, I will take the full responsibilities of

getting it completed on the same rate and terms and

conditions."

Firstly, from the aforesaid affidavit, it can be stated that the

appellant had terminated the contract and that there was no question

of subsisting contract. Further, statement made in the affidavit only

indicates that if Mallikarjun Khandre fails to execute the work,

election petitioner will take the full responsibility of getting it

completed on the same rate, terms and conditions. But the said

statement would not mean that any new contract for getting the works

to be carried out was executed between the appellant and the State

Government.

Learned senior counsel also relied upon the decision in

Konappa Rudrappa Nadgouda v. Vishwanath Reddy & Anr. (1969)

1 SCR 395] and submitted that in the present case also there is

condition to repair the work for a period of one year even after

completion of the contract work. It is his further submission that in

view of the paragraph 7 of the affidavit, appellant agreed to take over

the responsibility of completing the work if Mallikarjun Khandre

failed to execute the same and, therefore, there was a fresh contract

between the appellant and the Department. In the aforesaid case, the

Court referred to Chatturbhuj Vithaldas Jasani v. Moreshwar

Parashram and others [(1954) SCR 817] wherein a contention was

raised that no longer any contract for supply of goods was in existence

but only an obligation arising under a guarantee clause subsisted and,

therefore, it cannot be held that contract was subsisting. The Court

negatived the said contention by holding thus:

"It was argued that assuming that to be the case,

then there were no longer any contracts for the "supply of

goods" in existence but only an obligation arising under

the guarantee clause. We are unable to accept such a

narrow construction. This term of the contract, whatever

the parties may have chosen to call it, was a term in a

contract for the supply of goods. When a contract

consists of a number of terms and conditions, each

condition does not form a separate contract but is an item

in the one contract of which it is a part. The

consideration for each condition in a case like this is the

consideration for the contract taken as a whole. It is not

split up into several considerations apportioned between

each term separately. But quite apart from that, the

obligation, even under this term, was to supply fresh

stocks for these three depots in exchange for the stocks

which were returned and so even when regarded from

that narrow angle it would be a contract for the supply of

goods. It is true they are replacements but a contract to

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 27 of 29

replace goods is still one for the supply of the goods

which are sent as replacements."

The Court thereafter held that applying these observations in the

context of construction of buildings and roads, it is obvious that if

some part of the work is found defective and has to be re-done, the

contract of execution as such is still to be fully performed. This term

of contract is part of the contract of the execution because no

execution can be said to be proper or complete till it is properly

executed. In such circumstances, the Court held that the contract

would subsist and, therefore, disqualification provided under Section

9-A would apply.

In our view, the aforesaid decision would have no bearing to

the facts of the present case. That case dealt with a situation where

contract work was over, but the time period as stipulated in the

contract for carrying out the repairs was not over. Therefore, it cannot

be said that the contract was fully performed and hence, it was

subsisting. In the present case, there is termination of all contracts by

the appellant. The Department accepted such termination and the

contracts were brought to an end by both the parties. Therefore, there

is no question of contract or any part thereof subsisting on the date of

scrutiny of the nomination. This has been made clear in the first letter

written by the appellant on 6th August, 1999 to the Chief Engineer by

stating that his registration as Class I contractor with the Department

be cancelled thereby putting an end to any sort of subsisting

contractual relationship between him and the Government. Presuming

that according to the terms of the contract if some part of the contract

work is found to be defective or is not properly executed and the

contractor was bound to perform the same during a period of one year

after completion of the contract, then also as contracts stood

terminated, said term of the contract of repairing for a period of one

year of curing the defect would also not subsist.

Learned Senior Counsel Mr. Shanti Bhushan submitted that the

contract work which was given to the brother of the appellant was, as

a matter of fact, performed on behalf of the appellant by Mr.

Mallikarjun, his brother and, therefore, the High Court rightly held

that contract was subsisting on the date of scrutiny of the nomination

paper. In our view, this submission is without any substance mainly

because after termination of the contract, fresh contract is executed by

Mallikarjun Khandre for carrying out remaining work. Further

Section 7(d) as it stood prior to its amendment in 1958 inter alia

provided if the work is carried out "by himself or for any person or

body of persons in trust for him or for his benefit or on his account",

then such person was disqualified and in such situation, the question

of benamidar or carrying out on behalf of appellant might require

some consideration. After substitution of Section 7(d) by Section 9A,

there must be subsisting contract by the contesting candidate for

execution of any works undertaken by him with the Government. The

essential ingredient of the Section is that the contract for the execution

of any works undertaken by the Government should be subsisting on

the date of scrutiny of nomination. It is to be stated that because

Mallikarjun Khandre is brother of the contractor, it cannot be said that

he was acting as a benamidar as he himself was a registered Class-I

contractor. Further, as stated above, the objects and reasons of

Section 9-A provides that an unduly strict view about the government

contract should not be taken as it might lead to disqualification of

large number of citizens, many of whom may prove to be able or

capable Members of Parliament or State Legislatures. Therefore, the

amended Section 9-A uses the phrase that a person shall be

disqualified 'so long as there subsists a contract'. Similarly,

subsequent payment by the Government for the work done which was

payable at the time of termination of contract would not mean that

contract between the parties was subsisting and Explanation to

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 28 of 29

Section 9-A has made the position clear.

Learned counsel further referred to Ex.105, which is a

measurement book and submitted that in the months of September,

October, November and December 1999 also, the name of contractor,

Prakash Khandre continued and, therefore, it cannot be held that

contract was terminated. In our view, as stated above, all contracts

with the appellants stood terminated on 16th August, 1999.

Contractor's registration was cancelled. No dues certificate was also

given. Fresh contracts with the firm of brother of appellant,

Mallikarjun Khandre were executed. Mallikarjun Khandre himself

was a Class-I contractor. In these set of circumstances, it would be

totally unreasonable and unjustifiable to refer to some errors

committed by some officers as admitted by the witnesses, in

mentioning the name of Prakash Khandre as contractor in the

measurement book to arrive at the conclusion that contract between

appellant and the Government was subsisting. Further, as per letter

dated 29.8.1999, the Executive Engineer directed the Assistant

Executive Engineer that the closing measurement of the work

executed be recorded and the same may be intimated to the office.

The work included Halbarga-Bowgi road to Kamthane road.

Learned counsel next referred to the Codal Rule 167 and

contended that contract work should not have been given to

Mallikarjun Khandre and the Department was required to follow the

procedure prescribed thereunder. Codal Rule 167 reads as under: -

"167. (1) Contracts for works estimated to cost

Rs.10,000/- and over mentioned in sub-para 4 infra,

should be prepared only on regular contract form No.

PWG 65 and should be invited by public tenders.

(2) Sanctioned works falling under the following

categories may be got executed on piece-work system at

rates not exceeding the current minimum schedule of

rates each case being however reported to government.

(a) Works for which there have been no response

from any of the contracts to the Notification calling for

tenders.

(b) Works for which only individual tenders are

received and which cannot be accepted in view of the

prohibitively high rates quoted which will not bear any

comparison with the sanctioned estimate rates or the

current schedule of rates. In the case of tendered

contractors who stop away in the middle, action should

be immediately taken to cancel their contract, strictly

enforcing the penal clause of the contract, the balance of

work being got done as above or as per terms of contract.

In any case, either the same tendered contractor or his

agents should not be given the balance work for

execution."

In our view, the Election Petitioner could not challenge the

acceptance or termination of contract and grant of contract to

Mallikarjun by the Department by resorting to certain departmental

procedure prescribed for grant of contract to other contractor. In any

case, not following the procedure prescribed under the Rules would

hardly be a ground for holding that the contract was subsisting. PW9,

Chief Engineer, North Zone has specifically stated that he had verified

the Codal Rules and that he was competent to grant permission of

transfer of work from one contractor to another under special

circumstances and that similar procedure was adopted before General

Elections during 1994. Hence, presuming that he has wrongly

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 29 of 29

interpreted Codal Rule 167, then also it cannot be held that contract

between the appellant and the State Government was subsisting. In

this view of the matter, in our view, further evidence led by the parties

is not required to be dealt with or considered.

From the aforesaid discussion, it is apparent that there was no

contract subsisting between the appellant and the State Government so

as to apply the provisions of Section 9-A of the Act and to hold that

appellant was disqualified to contest the elections. As stated above,

the order passed by the High Court declaring Dr. Vijay Kumar

Khandre-respondent No.1 as elected is, on the face of it, illegal.

In the result, Civil Appeal Nos. 2-3 of 2002 filed by Prakash

Khandre are allowed, the impugned order passed by the High Court

declaring election of Prakash Khandre, the returned candidate, as void

and declaring Dr. Vijaykumar Khandre who had polled the next

highest number of valid votes as elected from No.2 Bhalki Legislative

Assembly constituency to the Eleventh Karnataka Legislative

Assembly is quashed and set aside.

In view of the order passed above, Civil Appeal No.1455 of

2002 stands dismissed.

There shall be no order as to costs.

........J.

(M.B. SHAH)

........J.

(BISHESHWAR PRASAD SINGH)

........J.

(H.K. SEMA)

May 9, 2002.

67