C.R.P.(MD).No.2325 of 2023

BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT

RESERVED ON: 07.04.2026

PRONOUNCED ON: 25.06.2026

CORAM

THE HON'BLE MR.JUSTICE V.LAKSHMINARAYANAN

C.R.P.(MD).No.2325 of 2023

and

C.M.P.(MD).Nos.11941 of 2023 and 11078 of 2024

S.Raja Mohamed ... Petitioner/Petitioner

Vs.

1.The Tamil Nadu State Election Commission,

Chennai – 106,

Tamil Nadu State.

2.The District Collector,

Theni,

Theni District.

3.The Commissioner,

Periyakulam Municipality,

Periyakulam,

Theni District. ... Respondents/Respondents

PRAYER: Civil Revision Petition filed under Article 227 of the Constitution

of India, to allow the Civil Revision Petition and set aside the fair and

decreetal order dated 13.07.2023 made in El.O.P.No.41 of 2022 on the file of

the Additional District and Sessions Judge, Theni at Periyakulam.

For Petitioner: Mr.G.Prabhu Rajadurai

for M/s.Ajmal Associates

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C.R.P.(MD).No.2325 of 2023

For R-3 : Mr.N.Dilip Kumar

ORDER

This Civil Revision Petition challenges the order and decretal order of

the learned Additional District and Sessions Judge, Theni, sitting as an

Election Tribunal in Election O.P.No.41 of 2022 dated 13.07.2023.

2. The petitioner is a resident of Periyakulam in Theni District. The

Tamil Nadu State Election Commission announced elections to local bodies

vide notification dated 28.01.2022. The petitioner, with a desire to become a

Councillor in Periyakulam Municipality, filed his nomination for the 26

th

ward. Elections were held on 19.02.2022. The results were declared on

22.02.2022. The petitioner was declared elected as the Ward Councillor. A

certificate was issued by the Election Officer cum Commissioner,

Periyakulam Municipality, Theni District under Form-27.

3. The first council meeting was held on 02.03.2022. It was for the

elected candidates to assume their respective offices. Two days later, on

04.03.2022, election was conducted for the office of the Chairman and Vice

Chairman of the Municipality. The petitioner threw his hat to be elected as

the Vice Chairman. He was the only candidate for the said post. He was

declared elected.

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C.R.P.(MD).No.2325 of 2023

4. On 12.04.2022, the Commissioner issued a show cause notice

calling upon the petitioner to submit his explanation as to why he should

not be disqualified from the post of Vice Chairman. The reason for issuing

such a notice was because the petitioner was in occupation of Shop Nos.1

and 2 at the Old Fish Market Commercial Complex belonging to

Periyakulam Municipality. The Commissioner had issued the notice invoking

Section 49(2)(c) of the Tamil Nadu District Municipalities Act of 1920.

5. On being served with the notice, the petitioner challenged the same

by way of a Writ Petition before this Court in W.P.(MD).No.7788 of 2022. The

petitioner pleaded that the notice had been issued without jurisdiction or

authority under law. It was urged by the petitioner that Section 49(2)(c) of

the District Municipalities Act of 1920, when read with the proviso

contained therein, would apply only to a case prior to the election (ie), when

a person submits his nomination and not post the election.

5.1. This Court, after hearing both sides, made a suggestion to the

Municipality as to whether the impugned notice can be withdrawn. The

learned Standing Counsel for the Municipality reported to the Court that the

notice issued on 12.04.2022 would be withdrawn. He sought for liberty to

initiate fresh proceedings for disqualification as against the petitioner under

the relevant provisions. Though this was opposed, this Court left it open to

the parties to agitate the correctness of the subsequent proceedings, as and

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C.R.P.(MD).No.2325 of 2023

when, they are initiated. The Writ Petition was disposed of accordingly on

22.04.2022.

6. Subsequently, the Commissioner, the 3

rd

respondent herein, issued

a notice on 25.04.2022, invoking Section 50(1)(d) of the District

Municipalities Act. Thereafter, he passed an order on 25.04.2022, declaring

the petitioner as having been disqualified for being interested in a subsisting

contract with the Municipality. Challenging the same, an election petition

was presented before the jurisdictional District and Sessions Court.

7. The learned District Judge received the election petition as Election

Petition No.41 of 2022. He called upon the respondents to file their counter.

The respondents agreed to the list of dates and events that was given by the

petitioner, including the earlier proceedings that had been initiated, the

withdrawal thereof and the fresh notice issued under Section 50(1)(d). It was

urged that the petitioner had been in occupation of Shop Nos.1 and 2 of the

Old Fish Market Commercial Complex belonging to the Periyakulam

Municipality from 2007 onwards. It was further pointed out that the period

of occupation was extended upto 02.05.2022 and 24.10.2022 on payment of

renewal fees. The letters of extension had been given by the petitioner and

orders of extension had been passed by the 3

rd

respondent on his request. It

was urged that the petitioner had incurred disqualification to be a Ward

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C.R.P.(MD).No.2325 of 2023

member of the Municipality and therefore, he was ineligible to continue in

the post of the Vice Chairman. It was pleaded that the petitioner had

deliberately suppressed the fact that he was an occupant of the Shop Nos.1

and 2 of the Municipality and that the interpretation sought to be given to

Section 49(2)(c) read with Section 50(1)(d) by the petitioner is misplaced.

8. On the side of the petitioner, the petitioner examined himself as

P.W.1. He marked Ex.P1 to Ex.P7. On the side of the respondents, the

Municipal Commissioner examined himself as R.W.1. He marked Ex.R1 to

Ex.R16.

9. On a consideration of the petition, counter and evidences let in

before the Court, the Election Tribunal came to the following conclusions:

(i) The petitioner had taken lease of Shop Nos.1 and 2 from the

respondent Municipality on 24.10.2007 and it had been extended from

03.05.2019 to 02.05.2022.

(ii) The petitioner had admitted in his cross-examination that the lease

for Shop Nos.1 and 2 was still in force and he was paying rents for the same.

(iii) When the nomination papers were filed on 04.02.2022, the

petitioner had not disclosed that Shop Nos.1 and 2 had been taken on lease.

On these factual findings, the learned District Judge came to a conclusion

that in terms of Section 49(2)(c) read with Section 50 of the District

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C.R.P.(MD).No.2325 of 2023

Municipalities Act, the petitioner was disqualified to contest for election as a

Ward Member and consequently, his election as a Vice Chairman also is

void abinitio. In view the said findings, the learned Judge came to a

conclusion that the Election Petition deserved to be dismissed with costs

and accordingly, he did so.

10. Challenging the same, the present revision, invoking Article 227 of

the Constitution of India.

11. Mr.G.Prabhu Rajadurai appearing on behalf of M/s.Ajmal

Associates made the following submissions:

(i) He urged that there is a difference between the words “licence” and

“lease” used in the District Municipalities Act and it cannot be given the

same treatment for the very terms used in the Transfer of Property Act. He

pointed out that in Section 261(2) of the District Municipalities Act, the word

“lease” or “tenure” is used and that tenure includes licence. Therefore, he

pointed out that the interpretation that is given to these terms normally

should not be made applicable to the District Municipalities Act.

(ii) Relying upon the judgment of the Supreme Court in Provash

Chandra Dalui and another Vs. Biswanath Banerjee and another,

1989 Supp (1) SCC 487 , he pointed out that it is not an acquisition of a

new right and therefore, a subsisting contract would not attract the

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C.R.P.(MD).No.2325 of 2023

provisions of Section 50 of the District Municipalities Act. He also relied

upon a judgment of this Court in K.M.Rajaram Vs. Chinnathurai and

another, (1968) 81 LW 254, to urge the difference between a completed

lease and subsisting contract, where there is a continuing liability to pay

rent and that such a lease would not attract the disqualification under the

District Municipalities Act.

12. Per contra, Mr.N.Dilip Kumar, learned Standing Counsel for the

Municipality, urged that if there is a subsisting contract between a person

and the Municipality, he is disqualified to stand for election. He pointed out

that the only exception, which the statute permits, is a shareholder of the

company, as a contract with the company cannot be treated as a contract

with the individual. He further urged that the plea to read the words

“licence” and “lease” as having similar context under the District

Municipalities Act, as attempted by Mr.G.Prabhu Rajadurai, is not a wrong

one. According to him, licences under the District Municipalities Act are

permissions to do certain acts and they cannot be treated as lease. He added

that the exception has to be read strictly and referred to Section 344 of the

said Act to point out that “rents” and “fees” have been used separately and

they are not interchangeable. The interpretation he attempted to give of the

word “acquisition” is whether it is a renewal or not, a new right is created. He

invited the attention of this Court to Ex.R9, Ex.R14 and Ex.R15 to point out

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C.R.P.(MD).No.2325 of 2023

that the words used in the letters were “GJg;gpj;J”, implying a new contract.

He urged that the learned Additional District and Sessions Judge had

analysed all these issues in detail and consequently, seeks confirmation of

the order of the Election Tribunal. He relied upon a judgment of a Division

Bench of this Court in P.Muthusamy Vs. State of Tamil Nadu and

others, (2014) 5 MLJ 129, to urge that applying the judgment, the

petitioner can be categorised only as a licensee and not as a lessee.

13. By an order dated 23.03.2026, I summoned the original records

from the file of the learned Additional District and Sessions Judge,

Periyakulam. The records have been submitted. I have gone through the

same.

14. The following facts are not in dispute:

The petitioner's nomination for contesting as a Ward Councillor for

Ward No.26 of Periyakulam Municipality was accepted by the

Commissioner. Under the directions of the Tamil Nadu Election

Commission, it was the third respondent, who conducted the election. The

results of the election threw up the petitioner as the Ward Councillor for the

aforesaid ward. On 04.03.2022, he was declared elected (unopposed) to the

post of the Vice Chairman of the Municipality. It is also not in dispute that

the petitioner is running Shop Nos.1 and 2 at the Old Fish Market

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C.R.P.(MD).No.2325 of 2023

Commercial Complex belonging to the respondent Municipality. Initially, a

show cause notice was issued invoking Section 49(2)(c) of the Tamil Nadu

District Municipalities Act. On the suggestion of this Court in W.P.(MD).No.

7788 of 2022, the same was withdrawn. The third respondent issued fresh

proceedings on 25.04.2022, disqualifying the petitioner invoking Section

50(1)(d) of the Tamil Nadu District Municipalities Act.

15. I shall now refer to Section 50(1)(d) of the Act. The said provision

reads as under:

“50. Disqualification of Councillors .— (1) Subject to the provisions

of Section 51, a Councillor shall cease to hold his office, if he —

(d) subject to the proviso to clause (c) of sub-section (2) of

Section 49, acquires any interest in any subsisting contract made

with, or work being done, for the Council except as a shareholder

(other than a director), in a company ***;”

Section 50(1)(d) is not a stand alone section. It has to be read subject to

Section 49(2)(c) of the District Municipalities Act. Section 49 deals with

pre-election disqualification and Section 50 deals with post election

disqualification.

16. Section 49(2)(c) of the District Municipalities Act reads as under:

“49. Disqualification of candidates:

(2) A person shall be disqualified for election as a Councillor

if such person is at the date of nomination or election,

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C.R.P.(MD).No.2325 of 2023

....

(c) interested in a subsisting contract made with, or any work

being done for, the Municipal Council except as a shareholder

(other than a director) in a company :

Provided that a person shall not be deemed to have any

interest in such contract or work by reason only of his having a

share or interest in --

(i) any lease, sale or purchase of immovable property or any

agreement for the same ; or

(ii) any agreement for the loan of money or any security for

the payment of money only;

...”

A perusal of Section 49(2)(c) indicates that if a candidate is interested in any

subsisting contract made with, or any work being done, for the Municipal

Corporation, he is disqualified. The only exception provided under Section

49(2)(c) is when the candidate has a share or interest in any lease, sale or

purchase of immovable property or any agreement for the same; or for any

agreement for the loan of money or security for the payment of money only.

17. This takes us to the interpretation of the word “ subsisting

contract”. Subsisting contract can be defined as a legally binding agreement

between the parties. It should be current, in force and not yet fully

performed. This contract should also not be terminated, discharged or

nullified. In other words, the relationship should continue and the parties

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C.R.P.(MD).No.2325 of 2023

remain bound by the terms to perform their respective duties and

obligations. The kernel of a subsisting contract are two-fold:

(i)The currency of the validity and

(ii)continuance of performance.

18. A perusal of the records shows that under Ex.R9, by an order

dated 26.12.2019, on the request of the petitioner, his right to occupy the

aforesaid shops was extended by the Municipality. Ex.R12 and Ex.R13 are

the agreements entered into by the petitioner with the respondent

Municipality for Shop Nos.1 and 2 respectively. Under Ex.R9, it is clear that

the petitioner had obtained an extension order for being in occupation of

Shop Nos.1 and 2. The period that was granted under the proceedings of the

Commissioner was from 03.05.2019 to 02.05.2022 with respect to Shop

No.1 and 25.10.2019 to 24.10.2022 with respect to Shop No.2. I have

already pointed out as to what a subsisting contract means. It should not be

a completed transaction where nothing remains to be done by the

contracting parties.

19. First, I have to see whether the petitioner is a lessee or a licensee.

Interpreting a similar relationship between the parties, a Division Bench of

this Court in P.Muthusamy Vs. State of Tamil Nadu and another, (2014)

5 MLJ 129, at paragraph 20, held that though the word “lease” has been

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C.R.P.(MD).No.2325 of 2023

used in the contract, it is a mere licence to run the shops. The Bench added,

just because the word “lease” had been mentioned, a licence cannot ipso

facto be converted into a lease. The licence being issued on fixed terms, it

should be treated as such and not as in the lease agreement.

20. The reason why Mr.G.Prabhu Rajadurai referred to the judgment

in K.M.Rajaram Vs. Chinnathurai and another, (1968) 81 LW 254, is

because, according to him, nothing remained to be done by the contracting

parties once a lease is entered into and consequently, it will not be covered

by the words “subsisting contract”. This plea cannot be accepted in the light

of the categorical pronouncement of the Division Bench in P.Muthusamy's

case. The petitioner's position is only as a licensee and unlike the case of

completed leases and transfers, it is not a concluded contract, but an

existing one. It is only in cases where nothing further is to be done by the

contracting parties, can it be treated that it is not a subsisting contract. In

view of the letter written by the petitioner himself seeking for renewal and

the consequential proceedings issued under Ex.R9, this Court has to point

out that on the date on which nomination was filed, there was a contract in

subsistence between the petitioner and the respondent Municipality and

consequently, he has to be treated as disqualified for conduct as a Ward

member. In terms of Section 50 read with Section 49(2)(c) of the District

Municipalities Act, the exceptions are specific. They apply only for lease, sale

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C.R.P.(MD).No.2325 of 2023

or purchase of immovable property or agreements thereof. When the

Division Bench has treated the relationship between the parties as licence,

the civil revision petitioner cannot be treated as a lessee for me to apply the

judgment in K.M.Rajaram's case.

21. The plea of Mr.G.Prabhu Rajadurai that the Act does not make a

difference between a lease and licence, though attracts, cannot be accepted.

This is because, a perusal of Sections 183(4) and 183(6) of the District

Municipalities Act shows that a difference has been drawn by the legislation

with respect to lease and licence. Similarly, under Section 261(2) of the Act,

a difference is made between the terms “lease” and “tenure”. Licence would

fall under the latter category. Similarly, Section 303(2)(d) of the Act also uses

the word “lease or otherwise”. Once the petitioner does not fall under the

category of a lessee, he can only be treated as a licensee. If he is a licensee,

then, there is a subsisting contract and by virtue of Section 50(1)(d), he

attracts disqualification.

22. Let me now turn to the authorities cited by Mr.G.Prabhu

Rajadurai. In K.M.Rajaram Vs. Chinnathurai and another, (1968) 81

LW 254, the petitioner had taken the lease of coconut tope belonging to the

Perambur Panchayat Mayuram Taluk. The Election Commissioner of

Panchayats (District Munsif) Mayuram came to a conclusion that there was

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C.R.P.(MD).No.2325 of 2023

a subsisting contract in respect of the tope at the date of nomination.

Consequently, he invoked Section 25(2)(c) of the Panchayat Act of 1958 and

disqualified the petitioner from the election as a Panchayat member. This

order was put to challenge before this Court by way of a Writ Petition.

23. Venkatadri, J. (as he then was) came to a conclusion that there

was an error apparent on the face of record in the impugned order. After

reviewing several authorities, he came to a conclusion that completed leases

or transfers, where nothing remains to be done by the contracting parties,

cease to be “subsisting contracts” of the kind contemplated by the statute.

He pointed out that such transactions are governed by the Transfer of

Property Act and liabilities are enforceable under that Act, rather than

continuing contractual obligations under the Contract Act or Specific Relief

Act. A lease of a coconut tope cannot be compared with occupation of shops

belonging to the Municipality, especially when the Division Bench has

concluded that such occupancy creates a relationship of a license and not of

a lease.

24. Mr.G.Prabhu Rajadurai relied upon the judgment of the Supreme

Court in Provash Chandra Dalui and another Vs. Biswanath Banerjee

and another, 1989 Supp (1) SCC 487 , in order to show that the word

“extension” implies to enlarge, expand, lengthen, prolong and to carry out

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C.R.P.(MD).No.2325 of 2023

further than its original limit. He relies on paragraph 14 of the judgment to

urge that there is a distinction between extension and renewal. In case of a

renewal, a new lease is required, while in the case of extension, the same

lease continues in force.

25. The said judgment arose on the interpretation of the Calcutta

Thika Tenancy Act of 1949. In the said case, the property had been leased

through a registered lease deed dated 26.09.1946. The terms of the lease

were on the following terms:

For the first 10 years, the monthly rent of Rs.200/- was payable and

there was a provision for two extensions of five years each- totalling

additional 10 years, with enhanced rent of Rs.250/- and Rs.300/-.

26.1. The landlord filed an ejectment suit. The tenants claimed that

they were protected under the Calcutta Thika Tenancy Act of 1949. This

statute had excluded any lease of duration expressly stated to be not less

than 12 years. The tenants argued that since they did not exercise option of

renewal after the expiry of the initial period of 10 years and as they did not

pay the enhanced rent, the lease fell below the 12 year statutory threshold of

the Act and consequently, they were protected from eviction.

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C.R.P.(MD).No.2325 of 2023

26.2. The Supreme Court held that the legal effect and nomenclature

of registered document must be gathered from the document in its entirety

and not from isolated clauses and titles. It followed the classic test of ut res

magis valeat quam persat – construction of a document should give effect to

all clauses rather than rendering any clause regimented. Consequently,

reading the document as a whole, the Court determined the total intended

duration was 20 years and thereby, the tenancy was excluded from

protection under the 1949 Act.

26.3. It was in those circumstances, the Court explained the

difference between “extension” and “renewal”. “Extension” prolongs the

existing relationship on the same terms as the original agreement. No new

agreement or execution of lease is required. The time period is simply

expanded according to the original terms. However, in case of a renewal, the

execution is of a completely fresh lease and it brings about a new

relationship necessitating fresh execution of documents.

27. This judgment, instead of going in favour of Mr.G.Prabhu

Rajadurai, goes against him. The letters written by the petitioner in Ex.R14

and Ex.R15 pointed out his request for renewal [“ GJg;gpj;J”] and the

consequential order in Ex.R9 passed by the Municipal Commissioner points

out a fresh relationship of lease with enhanced rent for a fresh period of

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C.R.P.(MD).No.2325 of 2023

time. Hence, I conclude, applying the judgment of the Supreme Court in

Provash Chandra's case, that it was not a case of extension of an existing

contract, but renewal of a contract, thereby, making it a subsisting contract

on the date of filing of the nomination.

28. Mr.G.Prabhu Rajadurai next relied upon the judgment of the

Supreme Court in Sanjay Ramdas Patil Vs. Sanjay and others, (2021)

10 SCC 306. He invited my attention to paragraph Nos.29 and 30. This

judgment holds that a Court must adopt a harmonious construction of the

statute. It also held a statute must be read as a whole and a construction

which preserves workability and efficiency of law must be adopted, rather

than one that renders any statutory provision a “useless lumber” or a “dead

letter”. This position of law is well settled. The purpose of incorporating

Sections 49 and 50 in the District Municipalities Act was to ensure that a

person, who has a subsisting contract with the Municipal Council, must not

be in a position of power so as to enable him to benefit from the said

position. If a person, who is having a subsisting contract becomes a power

holder, obviously, he would be in a position to dictate how the terms of the

contract must be provided. The statute does not hold that such power

should actually be exercised. But, on the contrary, reading the statute as a

whole, as pointed out in the aforesaid judgment, it prevents such persons

from entering the office. The purpose of the statute can be interpreted from

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C.R.P.(MD).No.2325 of 2023

reading Sections 49 and 50, namely, that if a person has a subsisting

contract, his nomination before election should be rejected and if it has

escaped attention at that stage or if a contract is entered into subsequently,

Section 50(1)(d) can always be invoked for disqualifying the person from

holding the office.

29. In the light of the above discussions, I do not find any error in the

order passed by the learned Election Tribunal as the petitioner was

interested in a subsisting contract, namely, occupying Shop Nos.1 and 2 at

the Old Fish Market Commercial Complex belonging to the respondent

Municipality and his act attracts Section 50(1)(d) of the Tamil Nadu District

Municipalities Act, 1920. Hence, the Civil Revision Petition is without

merits. It deserves to be dismissed and is accordingly dismissed. The

respondents will be entitled to their costs. Consequently, connected

miscellaneous petitions are closed.

25.06.2026

NCC : Yes / No

Index : Yes / No

Internet: Yes / No

Lm

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C.R.P.(MD).No.2325 of 2023

To

1.The Additional District and Sessions Court,

Theni at Periyakulam.

2.The Tamil Nadu State Election Commission,

Chennai – 106,

Tamil Nadu State.

3.The District Collector,

Theni,

Theni District.

4.The Commissioner,

Periyakulam Municipality,

Periyakulam,

Theni District.

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C.R.P.(MD).No.2325 of 2023

V.LAKSHMINARAYANAN,J.

Lm

C.R.P.(MD).No.2325 of 2023

25.06.2026

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