Ananthanarayana Ayyar, J.
(1) In the election to Lok Sabha from the secunderabad Parliamentary constituency in the General Election held in 1962, seven persons filled their nominations before the returning Officer namely the Collector of Hyderabad District. Among those were Shri Konda Satyanaravana Mohiuddin. At the time of scrutiny of file nomination papers, Konda Satyanarayana Reddy raise an objection that G malla Reddy had entered into a contract with the Government appropriate Government on 1-8-1957 that the contract was really a tripartile agreement between the Government of Andhra Pradesh and the Government of India and Shri G Malla Reddy and that the contrat was subsisting with the result that Shri G Malla Reddy incurred a disqualification under Section 7(d) of the Representation of the People Act (Central Act 43 of 1951) Malla Reddy opposed the objection. The Returning officer heard the learned counsel on both sides and passed an order dated 23-1-1962 holding as follows:
'.....................Though formal agreement was entered into by the Miller (G Malla Reddy) with the State Government for all practical purposes, Shri Malla Reddy has accepted by his conduct his contractual obligations with the Central Government. The State Government was only acting as an undisclosed agent to the Central Government and the contract is subsisting.
I, therefore hold that the candidate incurs the disqualification enumerated in Section 7(d) ........................ The objection are upheld and the nomination paper is rejected'.
Subsequently the objector Konda Satyanarayanan Reddy withdrew from the contest. The Election took place in due course and resulted in success for Shri Ahmed Mohiuddin. After the latter was declared as duly elected. Shri G. Malla Reddy (hereafter referred to in this judgement as the Election Petitioner) filed as an Election Petition ( E P No. 12 of 1962) before the Ahmed Mohiuddin at Hyderabad against Shri Ahmed Mohiuddin hereinafter referred to as the Election Respondent. Thereinafter referred to as the Respondent) The learned Tribunal after full trial, allowed the Election petition and declared the election of the Election Respondent void , holding as follows:
'The whole of the documentary and oral evidence conclusively establishes that the contract was with the State Government. That being so, in my opinion, the Returning Officer was wrong in rejecting the nomination paper of the petitioner on the ground that he entered into a contract with the Union Government '
He also awarded costs to the Election Petitioner and fixed the Advocates fee at Rs. 500. The Election Respondent filed this appeal against the decision of the Election Tribunal.
(2) Beyond doubt or dispute, the Election Petitioner (Shri G Malla Reddy) entered into an agreement dated 1-8-1957. The original contract is Ex B 12 and its copy is Ex A 1 its relevant provisions are as follows:
'This Agreement Made in Exercise of The Executive Powers of the States.
Executive Powers of the States,
this Ist Day of August 1957
The Governor of Andhra Pradesh, Hyderabad (hereinafter called the Government which expression shall include his successors, assignees of the one part and Shri G Malla Reddy, Prop M/ Janata Rice Mill, Chandrayan Gutta, son of Shri G. Venkat Reddy Caste Hindu, Reddy age 401 years, occupation contractor, resident at Chandrayanan Gutta Hyderabad (hereinafter called the Mill owner) which expression shall include his representatives, heirs, executors, administrators, and assignees f the other part:
Whereas the Government require the rice stocks to be cleaned; and
Whereas the mill owner has agreed to cleanse the rice stocks as given to him from time to time
it is hereby agreed by an between the parties as follows:
1 soon after the consignment is received at either Nampally or Kachiguda Railway Station , the representative of the Civil Supplies Department in the presence of the representative of the miller will simultaneously unload the wagon and deliver after 10 per cent weightment of the consignment to the miller; but the unloading charges shall be borne by the miller according to the condition in the tender. The miller at his own cost shall load the lorries and shift the consignment to his mill, cleanse, re-bag, standardise (110 seers each bag) stitch and reshift from the mill to the Civil Supplies Godowns.
2. The shifting of entire stocks from the Railway station to the mill will have to be done under the immediate supervision of the representative of the Civil Supplies and Central Storage Department.
3. Soon after the consignment is unloaded at the mill it will be kept under the joint seal of the representatives of the Civil Supplies and Central Storage Department and the miller.
4. The miller should clean only such rice as declared fit for cleansing by the supervising official and keep any rice declared as bad separately till final orders are given for its disposal. The miller is entitled to any (No) rent for the storage of such rice declared bad for a period of one month. Thereafter he is entitled to a rent of Re. 1 per month for 100 palls.
5. The rice will be cleansed under the immediate supervision of the Civil Supplies and the Central Storage Department.
6. The cleansed rice stocks will be kept in the mill godowns under the joint seal of the Civil Supplies and Central Storage Department authorities and the miller till it is shifted to Civil Supplies Godowns. The stocks shall be considered to be under the custody of the mill owner who shall be held wholly responsible for any storage accident or damage caused to the goods so stored.
7. The mill owner shall be paid cleansing and polishing charges at the rate of 31 Naya paise (thirty one Naya paise) per maund of cleansed rice delivered by him.
8. Konda and param derived during cleansing operations will be the Government property which will be the auctioned and delivered to the purchaser from the mill only. The miller will be responsible for the safe custody of konda and param etc. till the purchaser takes delivery. In the event of the storage for over a month, the miller will be allowed rent..............
9. The Mill-owner shall deliver the cleansed rice at the Civil Supplies Godowns, the very next day of cleansing the rice.
10. The Hammali of unloading of cleansed rice at the time of delivery by the miller at the godowns shall be borne by the department.
11. The security deposit of Rs. 1,000 shall be refundable after settlement of accounts. the mill owner must get his accounts settled within one month of completing the cleansing operation.
12. in case of contravention of any of the above mentioned conditions, the departments shall have the right to take over the rice stocks completely and entrust the work of cleansing to any other miller. The Government shall be entitled to forfeit the deposit or recover the charges or losses incurred by them in this respect from the amount of deposit or from the person and property of the mill-owner or from the both under provision of the Hyderabad Public Demands Recovery Act, 1308 Fasli (IV of 1308 Fasli) or any other law for the time being in force in that behalf.
13. In case any difference arises between the parties hereto touching these provisions, or the subject-matter thereof and whether such difference relates to the construction or interpretation of these provisions or otherwise, the parties agree to the accept the decision of the Commissioner, Civil Supplies, the Government of Andhra Pradesh, Hyderabad as final and binding.
In witness whereof Sri B.P. Vithal Director Civil Supplies authorised by the Governor of the Andhra Pradesh, Hyderabad and Sri G. Malla Prop. Janata Rice Mill, the mill-owner have set their hands on (1-8-1957) herein above in the presence of the following witnesses:
(Signature of Mill-owner)
(Authorised by the Governor of Andhra Pradesh)
In the Election Petition the Election Petitioner contended that the contract (Ex. B. 12) was between him and the Government of Andhra Pradesh alone. That it was not with the Union Government and that the contract had ceased to subsist on the date of filing of the nomination of the Election Petitioner. He also contends that the findings of the Returning Officer that the contract was with the Union Government and was subsisting was untenable for the various reasons mentioned in the Election Petition. The Election Respondent filed a counter denying the contentions which had been put forward by the Election petitioner in t he Election Petitioner and also contending as follows:
'The Government dated 1st August 1957 was with the Government of India representatives by the Government of India representated by the Government of Andhra Pradesh. The subsequent conduct of the parties thereto correspondence and the fact of the petitioner supplying goods to the nature of the contract between the petitioner and the appropriate Government namely the Government of India.
As the contract has been entered into with the Government of Andhra Pradesh representatives the Government of India the question of expressing the contract in the name of the President of India does not arise. The provisions of Art 299 of the Constitution have been complied with.
The alleged notice dated 18-1-1962 (which was issued by the Election Petitioner on 18-11-1962 renouncing the rights under the contract under Section 63 of the Contract Act to the Andhra Pradesh Government and was served on 19-1-1962 on the Director of Civil Supplies (R.W. 4) who has signed the agreement (Ex B. 12) as authorised representatives of the Andhra Pradesh Government) is in any case ineffective unless acc epted by the Central Government . NO notice was served on Central Government'
(3) On the pleadings, the learned Tribunal framed four issues as follows:
1. Whether on the date of the nomination there was o subsisting contract between the petitioner and the Central Government of nay words undertaken by the Central Government?
2. Did the Government of Andhra Pradesh act as agent of the Central Government to the contract of 1-8-1957.
3. Whether the subsequent conduct of the petitioner,as alleged by the respondent is enough to establish privity of contract between the Central Government and the Petitioner?
4. To what relief is the petitioner entitled?
(4) The Election Respondent let in evidence first in view of the clear undisputed position regarding the burden of proof. He examined nine witnesses before the Tribunal and eight large number of documents. Of these witnesses, R.W. 4 was the Director of Civil Supplies in 1962 who had signed the contract ( Ex B 12) The others were various officers of the Central Govt. and the Andhra Pradesh Government. Exs. B. 1 to B. 33 were marked before the Commissioner at Delhi.
(5) The Election petitioner deposed as his sole witness. He marked Ex A. 1 to Ex get some documents produced as evidence from Ministry of Food claimed privilege regarding order dated 15-7-1953 upholding the plea of the Secretary claiming privilege. The Election Respondent filed a Writ Petition in this court. The latter quashed the order of the Tribunal and issued a direction that the Tribunal might consider whether the claim of privilege should be allowed or not if necessary arose for doing so in the circumstances indicated in that direction by the High Court.
(6) The learned Tribunal referred in its order to the contentions raised by both sides as follows:
'................Sri Jain (for the Election Petitioner) urged that the Returning Officer had erred grievously in coming to the conclusion that the contract with the Union Government merely on the correspondence between the Union Govt. and the State Government and the indicia pointed out in his order which according to the Returning officer went to show that the contract was with the Union Government could not be enough to establish privity of contract between the petitioner and the Union Government Mr. Jain further argued that the Returning officer mainly relied upon the circumstance of the cleansing charges having been paid by the Government of India ; the fact that there was, resides the supervision of the officers of the Andhra Pradesh Government , the supervision of the Central Government Officers also that the goods were received from the Central Godowns . On behalf of the respondent, Sri S.P. Sinha laid stress on the fact that if it was a contract only with the Government of Andhra Pradesh, there was no necessity for a supervision of the Government of India being superimposed over that of the Andhra Pradesh Officials. Learned Counsel also urged that, at every stage, the Government of India came into the picture that the correspondence made it clear and established conclusively that although ex facie the contract appeared to be one with the State Government in reality if was a contract with the Union Government.
(7) The learned Advocate for the Election Respondent has taken before us, in this appeal, a stand which is somewhat different from the stand which he took as mentioned above in the stand which he took as mentioned above in the proceedings before the learned Tribunal. The stand which he has taken before us is that Ex. B 12 was a contract by the Election Petitioner with the Union Government and the Andhra Pradesh Government as distinct from the contract was with the Union Government alone represented. The contention urged before us in this respect is the same as the contention which had been urged against the Election petitioner and the returning Officer. The learned Tribunal referred to the Principles laid down in various decisions and observed as follows:
'...............................This decision (Bhagwan Singh v. Rameshwar Prasad Sastri : AIR1959SC876 would emphasise the principle that in order to determine as to who the contracting party is this test might be applied as to who is the person who is really responsible for the profit or loss and in the case before me, who is the person liable to pay the cleaning charges. Who could be sued for the charges of cleaning under the agreement . Ex A 1........................'
(8) The learned Tribunal relied on the following facts for coming to his final conclusion and giving his finding against the Election Respondent on the four issues:
(1) Ex. B. 12 is executed in favour of Governor and is singed by R.W.4, the Director of Civil Supplied, authorised by the Governor of Andhra Pradesh.
(2) Clauses of 13 Ex. B.12 provides for final and binding decision by the Commissioner of Civil Supplies Government of Andhra Pradesh.
(3) The Government of India is not in the picture at all. The provision for supervision of Central Government officers and the fact of delivery of Konda and Param to the Union Government Officers is not decisive or material.
(9) In the course of arguments Sri S.P. Sinha, the learned Advocate for the Election Respondent referred extensively to the evidence relating to the backgound to the contract (Ex. B. 12) and also to various facts ad circumstances which are appearing in evidence relating to the conduct of the Election Petitioner and the two Governments represented by their Officials. Shri Jain learned Advocate for the Election Petitioner, also referred to some features in the evidence referred to above.
(10) For a correct understanding and proper appreciation of the arguments of both sides, we find it necessary to set out certain facts and circumstances which appear in the background as well as in the foreground relating to the contract.
R W 4 deposed as follows:
' the old stocks or rice were taken over from the erstwhile Government of Hyderabad by the Government of India and (were) being re-issued to the State Government for distribution through fair price shops.........
The contention of this rice was very bad'.
R W 4 also says as follows:
' of the conditions mentioned by you ( that the condition of rice was very bad etc) the Government of Andhra Pradesh wanted that the expenses of classing and the losses due to cleansing should be borne by the Government of India and not by the Government of Andhra Pradesh. ....... It was also agreed between the Governments of A. P. and of India as part of this agreement of purchase that Government of Andhra Pradesh should get the rice cleansed and the expenses should be borne by the Government of India. The arrangement was that the Andhra Pradesh Government was to deduct the amount of expenses incurred in the process of cleansing from the price that they had to pay to the Union Government for the rice .............'
On 11-5-1957, the Food Department of Central Government sent a communication (Ex. B. 21) to its own officer of Hyderabad (Regional Commissioner) as follows :
(2) Andhra Government have since intimated their acceptance of the first alternative suggested in sub-para (i) of para three to take delivery of stocks lying at rail head centres from godowns and arrange cleansing at our costs and pay us for cleansed rice at Rs. 16 per maund ..... Please, therefore , new deliver stocks at Rail-Head centres after proper weighment to Andhra Government and keep in touch with State Government to ensure that :
(A) The cleansing arrangement is satisfactory from our point of view and we are not made to suffer any loss on cleaned : and
(B) the weight of cleaned rice is intimated to us promptly so that amount recoverable from Andhra Government is adjusted without delay.
Price chargeable for this rice will be Rupees sixteen per maund F.O.R. destination for cleaned rice'.
This letter indicates the extent of interest that the Central Government had in the cleansing operations and the purpose of Central Government Officer in keeping in touch with the State Government. It also indicates that it was the Andhra Pradesh Government which was to arrange cleansing though the cost of cleansing was to be borne by the Union Government and that the Andhra Pradesh Government was to pay price to the Union Government only for the cleansed rice. It does not indicate that the Andhra Pradesh Government was to enter into a contract directly with the miller or that it should bring about a contract or contractual relationship between a miller and the Central Government.
(11) On 13-1-1957, the Andhra Pradesh Government issued a notification (Ex B. 15) stating as follows and calling for tenders:
'It has been decided to cleanse the rice stocks offered by the Government of India lying with the Central Storage Department at the various centres to the District Rail Heads. Hence the question for cleansing of the above rice per maund of (4) seers is invited ...... The following conditions will govern the quotation'.
The conditions mentioned in this Notification are substantially identical with the Clauses in the contract (Ex. B 12). The Election Petitioner sent his quotation (Ex. A. 4) dated 13-7-1957 with a covering letter (Ex. A. 15). It was accepted. Accordingly, he signed in a form of contract which the Government produced. R.W. 4 also signed in it on behalf of the Andhra Pradesh Government.
(12) It would appear that the Election Petitioner finished the cleansing operations even before the end of August 1957. He sent a Bill (Ex. B 13) dated 5-9-1957 for Rs. 4,747-85 nP. with a covering letter (Ex. B. 3) in which he asked for not only payment of the amount of bill but also for return of the security deposit of Rs. 1,000 Konda and Param were lying in his mill namely, Janatha Rice Mill, Chandrayan Gutta of which the Election Petitioner was a partner. This Konda and Param are referred to in the evidence as dust and dirt but they were by-products including bran and broken bits of rice which were usable as fodder. The finished product consisted of cleansed rice which was fit for human consumption and which was to be paid for by the Andhra Pradesh Government at Rs. 16 per maund under Ex. B. 21 dated 11.5.1957.
(13) On 28-12-1957, the Government of Andhra Pradesh passed G. O. Ms. No. 913 (Agriculture) making budget provision and indicated the manner of debit of the payment to be made to millers like the Election Petitioner. It is Ex B 4 and runs as follows:
'The Government of India have allotted to Andhra Pradesh about 3,000 tons of rice . . . . . and it has been decided that the State Government should arrange cleansing of the stocks at rail-head centres at the cost of the Government of India and pay the agreed price for the 'cleansed' rice. The Civil Supplies Department has accordingly entered into an agreement with the millers for the cleansing of the stocks taken over from the Government of India at the rate of 31 naya paise per maund of cleansed rice delivered by them. The Board of Revenue, in the reference first cited, has submitted a proposal that the cleansing charges may be paid to the millers by the Government and adjusted against the payment to be made subsequently to the Government of India towards the cost of rice supplied by them. In the circumstances, the Government approve the Board's proposal and sanction the payment to millers of the charges on the cleansing and polishing.
The expenditure on account of payment of the cleansing charges may be debited to the provision of Rs. 11,50,000 made in the current year's budget of the Civil Supplies Department for the purchase of grain and other charges under M. H. 85-A - Capital outlay on State Trading Schemes'
This G. O contains a statement attached to it as an annexure showing the details of cleansing work done by three mills with amounts shown against them. One of them is Janatha Rice Mill (Mill of the Election Petitioner). the amount of Rs. 4,709-67 nP. and quantity of cleansed rice 5064 pallas 21 seers are entered against that Mill instead of Rs. 4,747-85 nP. and a quantity of cleansed rice shown as 5,604 pallas 21 seers which are mentioned in Ex.B.13.
(14) On 11-6-1958, the Director of Civil Supplies, Andhra Pradesh Government, wrote a letter (Ex. B. 16) to the Mill of the Election Petitioner saying 'that he should arrange to deliver the stocks of param and konda lying in his mill, derived in the process of cleansing of rice to the Deputy Director, Central Storage, Hyderabad as these stocks belong to Government of India'. The Election Petitioner complied with this demand and wrote a letter (Ex. B. 14) D/-22-6-60 to the Director of Civil Supplies (Andhra Pradesh Government) as follows:
'. . . . . .so far we have handed over (delivered) 265 Maunds and 17 seers of bran wrote that there were 354 pallas and 90 seers (with us) As the said goods were outside and as there was rain the goods became useless. The central store people took away the entire stock. They did not weigh the same in our presence. We did not weigh the same in our presence. We did not know how much it weighed. When we demanded the receipt, they wrote the (weight) approximately and gave it to us. Kindly give (make payment on) our bill (Ex. B. 13 dated 5-9-1957) soon.'
Ex.B. 26 dated 31-12-1959 is the receipt issued by the Assistant Director Depot, (Union Government), Hyderabad which is referred to in Ex. B.4. It runs as follows:
'Certified that a quantity of Mds. 265-17-0 of rice dust in 230 bags have been taken delivery from Janatha Rice Mills (G. M Reddy and Co.) for dumpting at Jaiguda Trenching Grounds in 23-10-1959'
R. W. 9, who was Deputy Director of Civil Supplies, deposed as follows:
'The 'konda' and 'param' were taken delivery of by the Central Storage people in my presence. The 'Param' and Konda were not weighed in my presence at any time.
(15) Under the authority of the G. O (Ex. B.4), it was possible for the Andhra Pradesh cleansing to the miller that is, the Election Petitioner claimed under Ex. B. 3, without any approval or consultation of the Union Government. So far as the Election Petitioner as miller was concerned, the Andhra Pradesh Government was to pay him under the contract (Ex. B 12) which had been entered into with him by that Government represented by an accredited Officer and drawn up in proper form as per law in the name of the Governor As between the Andhra Pradesh Govt and the Government of India, there was a separate contract of sale which created the relationship of purchaser and seller on State Trading Scheme System. It was part of the agreement of the sale that the Andhra Pradesh Government was entitled to recover from the Central Govt. the amount which the Andhra Pradesh Government paid in the first instance to the miller. But that contract was independent of the contract (Ex. B. 12) which as drawn up and executed, was with the Andhra Pradesh Government as a party.
(16) In spite of the G. O (Ex. B. 4) dated 28-12-1957 authorising payment and making provision for payment, in fact no payment was made to the Election Petitioner for years. The Returning Officer has stated in his order as follows:
'. . . . . . . As the question of determination of the price of Konda and disposal of the same was undecided no head-way was made in the settlement of these Bills.
The Deputy Director, Food, requested the Director, Civil Supplies that as the accounts relating to 'Konda left with different Millers are not proper and it is necessary to explore the possibility of getting the matters settled by contacting Millers personally to fix a date for personal discussions for the settlement of this problem. In pursuance of this request, the Director, Civil Supplies convened a meeting on 30-8-1961 and two Asst. Dy. Directors, Government of India were present in this Meeting . . .. . . ..'
(17) The General Election of 1962 was approaching The Election Petitioner had an intention of standing as a candidate in the for the coming elections. He did not like to have any contract subsisting with the Govt. So. on 20-12-1961. he applied to the Director of Civil Supplies for permission to release his share in favour of the other partners of the firm. This was rejected. The Election Petitioner wrote a letter (Ex. B. 7) dated 5-1-1962 as follows:
'Kindly deduct the cost of the shortage of your Dust and dirt (konda) which was lying in my rice Mill from the bills outstanding and pay me the rest of the amount due to me .....'
But, no payment was made. The last date for nomination to the elections was 20-1-1962 Two days before that date, on 18-1-1962 the Election Petitioner sent a lawyer notice (Ex. B. 8) to the Director of Civil Supplies (Andhra Pradesh Government) with a copy to the Secretary, Andhra Pradesh Government. The notice was served on 19-1-1962. In the notice the Election Petitioner set out all relevant farts and renounced all his claims in respect of the contract (Ex. B. 12) under Section 63 of the Indian Contract Act. On 19-1-1962, the Election Petitioner filed his nomination On 22-1-1962. an objection was raised on behalf of Konda Satyanarayana Reddy against the Election Petitioner. The Returning Officer heard both sides and passed an order on 23-1-1962, rejecting the nomination of the Election Petitioner.
(18) The Election Petitioner did not receive any reply to Ex. B 8 in January 1962 Several months later. he received a reply (Ex. B 11) dated 27-4-1962 from the Commissioner of Civil supplies stating as follows:
'. . . . the government has, taking all relevant facts into consideration. treated all mutual claims of any kind whatsoever relating to the above contract completely settled and satisfied and declares that the aforesaid contract (Ex. B. 12) shall hereby be deemed to be treated as completely discharged. . . . .' By then, the Election was over without the Election Petitioner talking part in it and he had field the Election Petition on 25-3-62.
(19) The learned Advocate for the Election Resondent contends that, to decide the question as to whether the Central Government was party to the contract, the contents of Ex. B 12 must be considered in its lackground along with the conduct of the parties as appearing from the evidence. We agree with him that all the relevant evidence including the backgourng and the oral evidence showing the conduct of the parties can be and has to be considered. The learned Tribunal accepted this principle and has mentioned that fact in his order in various places.
In particular, he has observed as follows.
'He (Shri S. P. Sinha) also submitted that although the document purported to be one with the State Government evidence was admissible to show that it was a contract with the Union Government. There can be no quarrel with regard to this proposition. But such evidence must conclusively establish the contract with the Union Government'
The learned Tribunal also observed as follows:
'the document has to be examined and the nature of the document determined, by reference to the language used, its tenor and not what it purports to be ex facie. it would not be a proper way of construing a document to go beyond the terms of the document and ascertain as to the source of competency or the power of any one of the contracting parties. This is not admissible in law.'
(20) The main contention urged by Shri S. P. Sinha, the learned Advocate for the Election Respondent before us. is that the contract of the Election Petitioner was, in fact and in law, with both the Central Government and the Government of Andhra Pradesh. This stand is different from the stand which he had taken before the Election Tribunal and also in his Memorandum of Appeal namely that the contract of the Election Petitioner was with the Government of India which was a principal represented by the Andhra Pradesh Government as an agent. Grounds Nos. 7 and 15 in his memo, of appeal run as follows.
'7. Because the above condition definitely point to the conclusion that the Government of India was the real party to the agreement.
15. Because, viewed in this light, the Government of India, becomes the principal and Andhra Pradesh Government. the agent.'
Shri B. C. Jain. the learned Advocate for the Election Petitioner. argues that the present contention of the learned counsel (Shri S. P. Sinha) is a new one and cannot be allowed to the raised in this appeal. The learned Counsel for the Election Respondent admits that the present ground is different from the ground taken before the tribunal and in the Memorandum of Appeal. But, he contends that this is not an entirely new ground as it had been raised before the Returning Officer and dealt with by the latter in his order dated 23-1-1962. But, that ground was so raised against the Election Petitioner before the Returning Officer not by the Election Respondent (Shri Ahmed Mohindin) but on behalf of another candidate (Shri Konda Setyanarayana Reddy).
(21) Shri S. P. Sinha relies on the decision of this Court in Badri Vishal v. Narsing Rao. : AIR1959AP116 . In that case, it was observed by a Division Bench of this Court as follows: (at pages 36 and 37) of Andhra WR: (at p. 120 of AIR)
'. . . . .the dominant consideration in the determination of the question whether the rejection was proper or improper is whether the candidate was disqualified from being chosen to fill the seat. That being the criterion, the rejection of a candidate who is actually disqualified to fill a seat could not be treated as improper, merely because proper grounds could not be taken before the Returning Officer. if the disqualifications could be established and if the rejection could be justified on other grounds, or on other material When once a ground is taken that a candidate is disqualified. It would be permissible to urge additional grounds as may be available before the Tribunal when the question of disqualification or otherwise of the candidate comes up for further scrutiny, since a returned candidate is merely seeking to support the election.
Moreover the Election proceedings are not merely a matter between the two contending parties but the public also have an interest in it and they concern the purity of public life . . . . For all these reasons, we consider that it is the duty of the Election Tribunal to enquire into the allegations even if they are fresh allegations as to whether there is any real disqualification arising out of such grounds . . . .'
The above principle is applicable to the present appeal also when the new ground urged is sought to be based only on the material already on record that is, the evidence which came on record in the proceedings before the Tribunal. So, we allowed the learned Advocate for the Election Respondent to urge the above contention and overruled the objection of Shri Jain.
(22) There is no room to doubt the fact that the contract (Ex. B. 12) as it stands, exfacie, is a contract to which the Andhra Pradesh Government alone is a party and the Central Government is not a party. As observed by the learned Tribunal, so far as Ex. B 12 is concerned, the Government of India is not in the picture at all as a party to the contract But, there is a reference to the Central Government Department that is, the Central Storage Department in Cls. 2, 3, 5, & 6 Clause 3 refers to the consignment being kept under joint seal of the representatives of the Civil Supplies that is the Andhra Pradesh Government and the Central Storage Department (Central Government) as well as the miller. there is similar provision of joint seal of the cleansed rice in CI. 6. there is provision in CI. 5 for supervision by departments of the Andhra Pradesh Government as well as the Central Government of the process of cleaning of the rice.
(23) Clause 8 says that Konda and Param will be the Government property which will be auctioned. But, it does not say expressly as to which was the Government whose properly was constituted by those articles. R.W. 4, who was the Director of Civil Supplies and who signed Ex. B. 12 on behalf of the Andhra Pradesh Government as a contracting parts deposed as follows:
'It would appeal from a reading of paragraph 8 of Ex. B. 12 that Konda and Param would be the property of the Government of Andhra Pradesh . . . . . the arrangement for the delivery of Konda and Param to the Government of India must have been made after Ex.B.12) (original of Ex A. 1)'
R.W. 1. who was the Personal Assistant to R.W. 4 says in his deposition as follows:
'....... The document (Ex. B. 12) as it reads would show that the 'Konda' and 'Param' obtained during the clearing operation will be the property of the Government i.e. Andhra Pradesh Government.
Q. Please say as to on what basis you stated in your evidence that the 'Konda' and 'Param' obtained during the cleansing operation was to be the property of the Central Government.'
A. On account of the correspondence in the file. I stated that those two were to be the correspondence that I stated I meant the correspondence that I state I meant the correspondence subsequent to the agreement (Ex. B. 12) between the Director of Civil Supplies, Department, From Ex. B. 19. 1 am able to say that it was at this meeting held on 30th August 1961 that it was decided that the Government of India should make arrangements for disposal of by-products so that the bills of the millers towards the cleaning charges could be forwarded to A. G. for admitting the claim.'
Thus, from the evidence, it is abundantly clear that, at the time when the contract (Ex. B. 12) was entered into by the Election Petitioner even the Officials of the Andhra Pradesh Government. Including the authorized representatives. (R.W. 4) believed that under CI.8 of the agreement, the Government referred to was the Andhra Pradesh Government and that the later was the owner of Konda and Param. So, it is not possible to accept the contention of the learned Advocate for the Election Respondent that CI. 8. among other clauses, relied on by him must have given an indication to the Election Petitioner that the Central Government had a part in the contract.
(24) If R.W. 4. as contracting party on behalf of the Andhra Pradesh Government and the Election Petitioner, who was the other party understood at the time of execution of Ex. B. 12 that under CI. 8. Konda and Param were to be property of the Andhra Pradesh Government. the fact that , by subsequent correspondence between the Andhra Pradesh Government and the Central Government. the two Governments came to an understanding and agreement among themselves that Konda and Param should belong to the Central Government instead of to the Andhra Pradesh Government would not affect the position or rights of the Election Petitioner under Ex. B. 12 in such a way as to convey that contract into one between the Election Petitioner and the Central Government. if, otherwise, the contract was only between the Election petitioner and the Andhra Pradesh Government. It is not shown to us that the Election Petitioner by any statement in correspondence or otherwise by his conduct entered into a contract or an agreement with the Central Government.
(25) The learned Advocate for the Election Respondent contends that the conduct of the Election petitioner in delivering the Konda and Param to Officers of the Central Government amounted to an attornemnt to the Central Government and, therefore, recognising the rights of the Central Government as having a contract with the Election Petitioner and a contractual right as against the Election Petitioner. This contention cannot be accepted as it is clear from the evidence that the Election Petitioner delivered the Konda and Param to the Central Government Department purely as a nominee of the Andhra Pradesh Government and under the direction of the Andhra Pradesh Government and not by way of creating or recognishing any contractual right of the Central Government as against him or admitting any contractual obligation by him to the Central Government . It was always open to the Andhra Pradesh Government inlawful exercise of its right to receive Konda as Param. to direct the Election Petitioner to deliver them to any other person just as it was open to the Election Petitioner to request the Andhra Pradesh Government to pay the cleaning charges which were due to him. to he paid to his nominee without creating any contractual obligation between the Andhra Pradesh Government and that nominee of the Election Petitioner. In particular, the action of the Andhra Pradesh Government in making Param to the Central Government did not creat privity of contract between the Election Petitioner and the Central Government. There was no attornment in law.
(26) In C1.7 provision is made by statement in passive voice that the mill owner shall be paid cleaning and polishing charges. It is not stated therein expressly as to who is the party to pay the charges to the Election Petitioner. But, the contract as drawn up contains only two parties. If one party viz.. the Election Petitioner was to do the work of cleansing the rice. obviously, the other party namely, the Andhra Pradesh Government had to pay him the charges for cleaning The learned Advocate for the Election Respondent contends that, under this clause, it is the Central Government who ultimately, in fact, bore the cleaning charges and that the wording of C1.7 in Ex. B. 12 must have given an indication to the Election Petitioner that the party who had to pay the cleaning charges would be not the Andhra Pradesh Government but the Central Government. We have already pointed out above that ex facie, the contract does not indicate the Central Government as a contracting party. It appears from the evidence that a miller like the Election Respondent did not have any choice or voice in the matter of form or wording of the contract in practice R.W. 4 deposed as follows.
'A contractor who enters into a contract with the government has to sign this pro forma (cleansing) and has no other go . . . .' R. W. 4 also says as follows:'. . . . . So far as the miller is concerned, he has nothing to do with the government of India It would be clear from Ex. B. 12 (Original of Ex. A-1) that the security deposit from the miller was taken by the Government of Andhra Pradesh. Clauses 2 and 3 of Ex B. 12 have been inserted to safeguard the interests of the Government of India since they were rendering themselves liable for payment of loss incurred into cleaning operation. It would appear from a reading of paragraph 8 of Ex. B. 12 that Konda and Param would be the property of the Government of Andhra Pradesh. the Andhra Pradesh Government purchased the rice from the Union Government with a view to distributing it after cleanssing to fair price shops. The arrangement for the delivery of Konda and Param to the government of India must have been made after Ex. B. 12'
R.W. 2 who is the Assistant Chief Accounts Officer in the Civil Supplies Department, says as follows:
'Under the arrangement relating, to the purchase by the A. P. government from the Union Government, the A. P. Government undertook to have the rice cleaned. The cleansing charges were agreed to be deducted from the price payable by the A. P. Government to the Central Government.'
R.W. 1 who was the Personal Assistant to the Director of Civil Supplies from 1957 to 9-10-19 1962. also corroborates the evidence of R.W. 2.
(27) The learned Advocate for the Election Respondent has relied on the following passage in the evidence of R.W. 4:
'The work of the cleaning operation that I spoke about, commenced before the execution of Ex. B. 12 . . . From my note in the office file. I would say that the cleansing operation by the Janatha Mill (Petitioner) started earlier than the date of Ex B. 12'
This passage does not necessarily mean that the contract under which the Election Petitioner cleaned the rice was in any way different from what is recorded the rice was in any way different from what is recorded in Ex B 12 as a formal agreement or in particular that the Central Government or in particular that the Central Government was a party to the contract with the Election Petitioner even if Ex. B. 12 dues not indicate so by its language tenor or substance.
(28) The learned Advocate for the Election Respondent relied strongly on the provision for supervision of the cleaning operations by the Central Storage Department also, in addition to supervision by officers of the Andhra Pradesh Government. In particular, he relies on the following question and answer in the cross-examination of R.W. 2.
Q. It is not a fact that the Central Government had suggested the keeping of their representatives during the cleaning operations to ensure that proper cleaning operations to ensure that proper cleansing operations to ensure that proper cleaning work is done and the government of India does not suffer any loss?
R. W. 4 has stated as follows:
'The supervision was meant to determine the percentage of the loss.. . . . . . . . . In the transaction between the Union Government and the State Government, it was a case of the Union Government selling the rice and the Andhra Pradesh Government purchasing the rice. The A. P. Government purchased the rice from the Union Government with a view to distributing it, after cleansing to fair price shops.'
It is clear from the evidence that the provision for supervision by the Central Government was with a view to protect the interests of the Central Government in cleansing operations though the operation was on a contract between the Andhra Pradesh Government and the miller. In Ex. B. 21 dated 11-5-1957, extracted earlier in this Judgment, the Central Government has explained to its local officer i.e., Regional Commissioner, at Hyderabad the purpose for which he was to keep in touch with the State Government. The damaged rice which the Govt. of India possessed was being converted by cleansing into clean edible rice fit for supply to fair price shops for being sold to the public and into by-products i.e. Konda and Param which would be worth much less than the cleansed rice. It was to the interest of turn of resultant cleansed rice was maximum consistent with edibility and that the quantity did not become any less due to excessive removal from the damaged rice as by-products. The Central Government also wanted to know the quantity of cleansed rice which had been produced by cleansing so that it would collect the price promptly from the Andhra Pradesh Government. These purposes are clearly mentioned as items (A) and (B) in Ex. 21.
(29) The learned Advocate for the Election Petitioner contended before us that the contract was similar to a contract under which a person 'X' sold his car in an unusable condition to a person 'Y' on the understanding that some repairs had to be carried out to make the car usable and that 'Y' was to carry out the necessary repairs through a repairer in a workshop at the cost of the vendor 'X' and that the repair should be carried out subject to the supervision of not only 'Y' but also 'X'. He points out that, in such a case 'Y' who wanted to have the car repaired and made into usable, road-worthy condition would wish to have a right to supervise the repairs to see that they are properly carried out and that 'X' who would ultimately have to bear the cost of repairs by payment to 'Y' or by way of deduction from the gross price, would like to have a right to supervise the repairs to see that nothing more costly than is necessary to meet the requisites of the contract between X and Y, is done and to ensure that 'X' does not suffer any loss. We find that this analogy is substantially tenable. The contention of Shri Jain that the provision for supervision of cleansing operations by the Central Government does not create privity of contract between the miller and the Central Government just as the provision in the analogy does not create privity of contract between X and the repairer, is tenable. In this connection, it is very important to note that it is nobody's case that the Election Petitioner could directly claim the cleansing charges from the Central Government or had a right of action against the Central Government to collect that amount. Under the Contract (Ex. B. 12) the Election Petitioner sent his bill (Ex. B. 13) to the Andhra Pradesh Government on 5-9-1957 and the Andhra Pradesh Government passed G.O. Ms. No. 913 (Agriculture) dated 28-12-1957 (Ex. B. 4) making provision for payment to the Election Petitioner his cleansing charges. The Andhra Pradesh Govt. has to take independent and separate steps, in which the Election Petitioner was not concerned, to collect from the Central Government by adjustment in accounts the cleansing charges which the former had already paid to the Election Petitioner.
(30) The learned Advocate for the Election Respondent contends that the provisions of Ex. B. 12 and the terms of the agreement should be considered liberally for deciding whether the Central Government is a party to the contract with the Election Petitioner. For this contention, he relied on various decisions. He
relies on the following observation in the decision in A.J. Arunachalam v. Election Tribunal Vellore, (1954) 9 Ele LR 471 (Mad) at page 477:
'S. 7(d) of the Representation of the People Act, 1951, was enacted to prevent the abuse pointed out by the learned Judge. In construing a provision intended to keep a legislator beyond any suspicion in the interests of public morality, a liberal construction should be put upon the section. The beneficial effect of it should not be allowed to be whittled down by subtle arguments based upon a conflict of powers or the law of agency. The question to be asked is whether the contract is between the appropriate Government and the candidate.' In that case, an unsuccessful candidate challenged the election of a candidate on the ground that his nomination had been illegally received. The alleged illegality was that the petitioner had an interest in a contract for performance of services undertaken by the Government of Madras and was, therefore, disqualified from standing as a candidate. The reference was to the fact that the candidate had been appointed as a State nominee for the distribution of bales of yarn in the North Area District by the Madras State Government. The Tribunal allowed the petition and held that the elected candidate had an interest in the contract as alleged in the election petition. The elected candidate filed an application for a Writ to quash the order of the Election Tribunal. One ground urged on his behalf was as follows: (at page 473)
'Assuming that the terms of the agreement constitute a contract between the petitioner and the Government the contract was not with the State Government, but only with the State Government as the Agent to the Union Government. Subba Rao. J. observed regarding that contention as follows: (at page 476)
'In exercise of the powers conferred by Section 3 of Act 24 of 1946 Essential Supplies (Temporary Powers) Act (1946), the Central Govt. made an order dated 2nd August, 1948, prescribing the machinery for the production of yarn, for control of prices and for marketing the same'
The Government of Madras also passed an order under statutory powers. The learned Judge observed as follows: (at page 476)
'This order was made only in exercise of the powers expressly conferred on the Provincial Government by the Central Government and also under the powers given to the Provincial Government under Madras Act XIV of 1946 . . . . . . . . .whether the said service is performed by exercise of the said power delegated to it, or by reason of the statutory provisions of the Madras Act in either case, it is exercising the power as a Provincial Government. The source of its power is not relevant to ascertain the manner of its exercise.
In exercise of the powers so conferred on the Provincial Government it issued a licence and entered into an agreement . . . . . . . with the petitioner for the supply and distribution of yarn stored in the mills. It is, therefore, clear that the agreement was between the petitioner and the Government of Madras for the performance of services undertaken by the Madras Government. The terms of the agreement indicate that it was for the performance of the service undertaken by the Government. The document ex facie shows that the contracting parties are the petitioner and the Government of Madras. The aforesaid provisions indicate that it was the duty of the Government of Madras to undertake such services. I cannot, therefore, accept the argument of the learned counsel for the petitioner that his client entered into the agreement with the Madras Government as agent of the Central Government.
In the present case also, the contract ex facie shows that the contracting parties were the Election Petitioner and the Government of Andhra Pradesh. The evidence also shows that it is the Government of Andhra Pradesh which had undertaken the duty of getting the rice cleansed. In this case, the Andhra Pradesh Government undertook such duty in pursuance of a separate agreement and undertaking which it had with the Central Government and with which the Election Petitioner had no concern as a party or otherwise. The contracting Government in Ex. B. 12 is the Government of Andhra Pradesh and not the Central Government, even if it be taken that the source of the power and duty of the Andhra Pradesh Government to get the rice cleansed, by an arrangement as in Ex. B. 12 was the agreement of the Andhra Pradesh Government with the Central Government.
(31) In Karaimanickam v. Ramakrishna Thevar, (1957) 13 Ele LR 275 (Mad) it was held that even though a certain portion of the cost of certain development works concerned in a contract duly entered into by the Madras State Government with a party was ultimately to be reimbursed to the State Government by the Central Government the contract related to the execution of a work or performance of a service undertaken by the Madras State Government within the meaning of Section 7(d). The learned Judges observed as follows : (at page 282)
'Learned counsel raised a subsidiary point, that the service of work, if any, was one under taken by the Central Government and that therefore, the State Government would not be the appropriate Government so as top disqualify the appellant for standing for election to the State Assembly'
The learned Judges rejected that contention :
(32) In N.B. Singh v. Duryodhan Pradhan, : AIR1959Ori58 where a candidate for the election to Orissa Legislative Assembly had entered into a contract for construction of a entered into a contract for construction of a canal pertaining to the Hirakud Dam Project in Orissa and the contract ex facie was one between the candidate and the Government of India, it was held that it would not be said that the candidate was interested with the Orissa State Government.
(33) The learned Advocate for the Election Respondent relies on the following observations in Everett v. Griffiths. (1924) 1 KB 941 (at page 947) :
'In Nutton v. Wilson, (1889) 22 QBD 744 Lord Fisher said ........... 'The provisions in the Public Health Act, 1875 are intended to prevent the members of local boards, which may have occasion to enter into contracts, from being exposed to temptation, or even to the semblance of temptation.
A man is of course 'concerned' in a contract if he is in any way a party to it, whether as a sole contractor as a partner or as undisclosed principal. A concealed interest is as much an interest as an open interest. The Court at the colourable externals'
These observations do not help the Election Respondent in the present case. For, looking at the substance of contract Ex. B 12 we find that the Central Government is not a party to the contract (Ex. B.12) with any open or concealed interest and is not a party for purposes of S. 7(d) of the Representation of the People Act.
(34) The learned advocate for the Election Respondent also relies on the following observations in the decision in Norton v. Allan Aurtur Tavlor, (1906) AC 378 (at p.380) :
'There are many ways in which a person holding a civic office might be brought within the Act 2, Edw. 7, No. 35, as for instance if he had a share in the original contract, or if he were employed by way of sub-contract......
In those cases, whether it was done directly or indirectly, he might be liable, and no device to conceal the real nature of the transaction would prevail.'
That case related to prosecution of an alderman of a Municipal Council becoming interested in a certain contract contrary to the provisions of the statute and depended on the special provisions of the statute concerned in that case. The present case has to be decided on the law applicable in India.
(35) We find that, on a proper construction of Ex. B. 12 in the light of the above decisions, the Central Government is not a party to any agreement or contract with the Election Petitioner.
(36) Shri Jain for the Election Petitioner contends that, if Ex. B.12 is to be valid contract by the Central Government it should have been in the form and been signed in the manner required by Article 299 of the Constitution. He contends that the contract is not expressed as made by the President nor executed by a person directed or authorised by the President and that, therefore, the contract would be void if it were to be assumed for arguments sake without admitting to be entered into by the Central Government. Shri S. P. Sinha contends that though the provisions of Art. 299 are not followed regarding the form, wording and authority of the executant in the manner indicated above, still the agreement (Ex. B. 12) indicated above, still the agreement (Ex. B. 12) would have the effect of disqualification under S. 7(d) of the Representation of the People Act. He relied on the decision in Chatturbhuj Vithaldas v. Moreshwar Parashram, : 1SCR817 . Therein, it was observed by the Supreme Court as follows :- (at p. 243)
'In the present case, there can be no doubt that the Chairman of the Board Administration acted on behalf of the Union Government and his authority to contract in that capacity was not questioned. There can equally be on doubt that both sides acted in the belief and on the assumption, which was also the fact, that the goods were intended for Government, purposes, namely, amenities for the troops. The only flaw is that the contracts were not in proper form and so, because of this purely technical defect, the principal could not have been sued. But that is just the kind of care that S. 230 (3). Contract Act is designed to meet .. .. .. It may be that the Government will not be bound by the contract in that case, but that is a very different thing from saying that the contracts as such are void and of no effect. It only means that the principal cannot be sued, but we take it there would be nothing to prevent ratification, especially if that was for the benefit of Government.
There is authority for the view that when a Government officer acts in excess of authority Government is bound if it ratifies the excess : See Collector of Masulipatam v. Cavaly Venkata Narainapah, (1859-61) 8 Moo Ind App 529 at p.544 (PC), We accordingly hold that the contracts in question here are not void simply because the Union Government could not have been sued on them by reasons of Art. 299 (1).
Now S. 7(d), Representation of the People Act, does not require that the contracts art which it strikes should be enforceable against the Government; all it requires is that the contracts should be for the supply of goods to the Government. The contracts in question are just that and so far hit by the section.'
Shri Jain points out the provisions in S. 2(g), (h) and (k) of the Contract Act as follows :-
'S.2 (g) An agreement not enforceable by law is said to be void : xx xx xx xx xx xx (h) An agreement enforceable by law is a contract :
(f) An agreement which is enforceable by law at the option of one or more of the parties thereto, but not at the option of the other or others, is a avoidable contract:'
S. 196 and S. 197 of the Contract run as follows :-
'S. 196 Where acts are done by one person on behalf of another, but without his knowledge or authority, he may elect to ratify or to disown such acts. If he ratifies them, the same effects will follow as if they had been performed by his authority.
S. 197 Ratification may be expressed or may be implied in the conduct of the person on whose behalf the acts are done.
(a). A, without authority, buys goods for B Afterwards B sells them to C on his own account; B's conduct implies a ratification of the purchase made for him by A.'
On the facts concerned in : 1SCR817 goods were supplied by Moolji Sica and Company under the agreements in question and had been received by the other party and had also been paid for a considerable extent and thus both parties had acted under the terms of the agreement.
(37) In Bhikraj v. Union of India, : 2SCR880 it was held that where contract between dominion of India and a private individual was not in the form required by S. 175(3) of the Government of India Act, 1935 it could not be enforced and, therefore, the Dominion of India could not be sued by the private individual for compensation for breach of contract. Their Lordships referred to the decision in AIR 1954 SC 2136 and observed as follows :
'The facts proved in that case clearly establish that even though the contract was not in the form prescribed, the Government had accepted performance of the contract by the firm of which Jasani was a partner, and that in fact there subsisted a relation between the Government and the firm under which the goods were being supplied and accepted by the Government. The agreement between the parties could not in the case of dispute have been enforced at law, but it was still being carried out according to its terms; and the Court held that, for the purpose of the Representation of the People Act, the existence of such an agreement which was being carried out in which Jasani was interested disqualified him....'
In State of West Bengal v. B. K. Mondal and Sons, : AIR1962SC779 it was held as follows :- (at p. 783)
'In our opinion, there can be no doubt that failure to comply with the mandatory provisions of the said section makes the contracts invalid.'
Their Lordships referred with approval to the decision in Bhik Raj v. Union of India, : 2SCR880 . They observed regarding the decision in : 1SCR817 as follows : (at page 783)
'It would thus be seen that in the case of Chatturbhuj, : 1SCR817 this Court was dealing with the narrow question as to whether the impugned contract for the supply of goods would cease to attract the provisions of S. 7(d) of the Representation of the People Act on the ground that it did not comply with the provisions of Art. 299 , and this Court held that notwithstanding the fact that the contract could not be enforced against the Government it was a contract which fell within the mischief of S. 7(d).....
All that this Court meant by the said observation was that the contract made in contravention of Art. 299 could be ratified by the Government if it was for its benefit and as such it could not be capable of ratification but since according to the Court the contract in question could have been ratified it was not void in that technical sense. That is all that was intended by the observation in question....... Indeed, Bose J./, has expressly stated that such a contract cannot be enforced against the Government and is not binding on it.'
(38) In New Marine Coal Co. (Bengal) Private Ltd. v. Union of India : 2SCR859 their Lordships referred to the decision in : AIR1962SC779 and observed as follows :- (at p. 155)
'.....As a result of this decision, there can be no doubt that the contract on which the suit is based is void and unenforceable ..... It is also clear under this decision that, if in pursuance of the said void contract, the appellant has performed his part and the respondent has received the benefit of the performance of the contract by the appellant, S. 70 would justify the claim made by the appellant against the respondent.....'
The above decision does not refer to the decision in : 1SCR817 .
(39) In Karamshi Jethabai v. State of Bombay. : 6SCR984 , it was held that an agreement was void as it had not complied with the provisions of S. 175 of the Government of India Act, 1935. In that case, though there was an agreement between the Government and the concerned party, a formal document was not executed as contemplated in the manner, required under Art. 299 of the Constitution though such a formal document was intended to be executed. The decision in that case shows that a formal written contract complying with Article 299 of the Constitution alone would be enforceable against the Government and that an agreement which is not even in writing could not be enforceable against the Government and would, therefore, be void.
(40) Hence the contention raised by the learned Advocate for the Election Respondent before us that Art. 299 of the Constitution does not affect implied contracts is not tenable.
(41) It is clear from the decisions of the Supreme Court that, if the agreement (Ex. B. 12) were assumed for arguments' sake. without admitting, to be an agreement to which the Central Government is a party, it would be void as it does not comply with the requirements of Art 299 of the Constitution and, therefore, would come under S. 2 (g) of the Contract Act. The hypothetical question of law whether a contract like Ex. B. 12 even if void, would still have the effect of disqualification under S. 7(d), is not of practical importance and need not be gone into in the present case because we have found already that the Central Government was not a party to the agreement (Ex. B. 12) either along with the Andhra Pradesh Government, as contended before us in this appeal, or as represented by the Andhra Pradesh Government, s contended before the learned Tribunal.
(42) The learned advocate for the Election Respondent contents that, even if it be taken that the Central Government is not ex facie a party to the agreement (Ex. B. 12), it can enforce a right against the Election Petitioner because it has certain benefits under Ex. B. 12 regarding Konda and Param and that S. 7(d) of the Representation of the People Act would be applicable. He relies on the decision of the Calcutta High Court in Deb Narayan Dutt v, Chuni Lal Ghouse, ILR 41 Cal 137 : (AIR 1914 Cal 129). In that case, where a transferee of a debtor's liability had acknowledged his obligation to the creditor for the debt to be paid by him, under the provisions of the registered instrument conveying to him all the movable and immovable properties of the original debtor, and the acknowledgment was communicated to the creditor and accepted by him, it was held that the creditor was entitled to sue the transferee on the registered instrument. The learned Judges made reference to an important English decision as follows (at p. 1458 (of ILR 41 Cal) ; (at p. 131 of AIR ) :-
'If we were governed by Tweddle v. Atkinson, (1861) 1 B and S. 393 there might possibly be a difficulty in our way. we now have ample authority for saying that the administration of justice in these Courts is not to be in anyway hampered by the doctrine laid down in (1861) 1 B and S. 393 : 30 LJ QB 265 ......'
That I take to be the result of the decision of the Privy Council in the recent case Kwaja Muhammad Khan v. Hussaini Begum, (1910) ILR 32 All 410 (PC), AIR 1923 PC 54 (1) (sic).
'On the findings of facts of the Courts below, the only question for decision is whether a contract between A and B to pay C who is a creditor of A would without more entitle C to sue B.....'
The learned Judges considered the law in England and the law as laid down by various High Courts in India and held as follows :- (at p. 385)
'In view of this decision of Beasley, J. (C. S. No. 325 of 1926) which was confirmed in appeal by Coutts - Trotter, C. J. and Walsh J. (in O. S. A. No. 95 of 1927) we think we may take it as settled law in Madras that a stranger to a contract cannot without more sue to enforce it.....This view was based upon a decision of their Lordships of the Privy Council in (1910) ILR 32 All 410.'
The words 'without more' indicate that if certain additional exceptional circumstances existed e.g., creation of trust in favour of the plaintiff in respect of the amount sued for, the stranger could sue to enforce the contract. We do not consider it necessary to mention all those exceptional circumstances mentioned in that decision, as it is nobody's case, that any such circumstances exist in the present case. In that decision, they referred to the decision of the Calcutta High Court in ILR 41 Cal 137 : (AIR 1914 Cal 129) and observed as follows :- (at page 387)
'We may point out in this connection that the view taken in ILR 41 Cal 137 : (AIR 1914 Cal 129) which lays down broadly that the doctrine in (1861) 1 B. & S. 393 : 30 LJQB 265 is inapplicable to British Courts in India and that the aim of the mofussil Courts of Justice in British India is to do complete justice in one suit according to the general principles of justice, equity and good conscience, has not been followed in later cases.'
They finally held as follows :- (at p. 389)
'We are of opinion that where all that appears is that a person transfers property to another and stipulates for payment of money to a third person, a suit to enforce that stipulation by the third party will not lie.'
This decision of the Full Bench is binding on this Court. We hold than the mere fact that this Court. We hold that the mere fact that the Central Government was to get the Konda and the Param under the arrangement between itself and the Andhra Pradesh Government, does not give any right to the Central Government to enforce such performance against the Election Petitioner on the fates and circumstances proved in the present case.
(43) In Halsbury's Laws of England (third edition) by Lord Simonds, Volume 8, at p 66 it is stated as follows :
'110. As a general rule a contract affects only the parties to it, and cannot be enforced by or against a person who is not a party...'
(44) The relevant position of law is stated correctly in Venkatesa Iyer's Law of Contracts' (3rd Edition, 1939) at p. 85 as follows :-
'The above case (Dunlop Pneumatic Tyre Co. v. Selfridge and Co. Ltd., 1915 AC 847) is an authoirty for both the propositions'
(1) that a stranger to a consideration cannot sue, and
(2) that a stranger to a contract cannot sue.
Thus privity of contract is absolutely essential for a right of action.
(45) Turning to the Indian Law, we find that the framers of the Indian Contract Act, not being bound by the historical antecedents of the doctrine of consideration in English Law, have made a wide departure from it. Section 2, Cl. (d) of the Indian Contract Act reads :-
'When, at the desire of the promisor, the promisee or any other person has done or abstained from doing, or does or abstains from doing, or promises to do or to abstain from doing, something, such act or abstinence or promise is called a consideration fro the promise'
The words, 'the promisee or any other person', clearly show that a stranger to a consideration may maintain a suit. When the statute is so clear, no decided cases are necessary : (at page 89)
'So, we may state the position briefly thus : (a) A stranger to a consideration cannot sue in English Law, but he can under the Indian Law.
(b) A stranger to a contract, both under the English Law and Indian Law cannot, as a general rule, sue upon the contract. But both systems recognise certain exceptions to the rule.'
(46) In the result, we find as follows. The Central Government is not a party to the agreement (Ex. B.12) on the face of it. The Central Government is not the appropriate Government for the purpose of S. 7(d) of the Representation of the People Act because of any of the grounds urged by the Election Respondent.
(47) The Election Respondent filed C.M.P. No. 9338 of 1965 for being allowed to urge two additional the Civil Miscellaneous Petition. We proceed to deal with the additional grounds raised therein.
Additional ground No. 1: It is that the election petition does not exist as the election petitioner in his sworn deposition on 25-1-1964 had stated that the election petition was not drafter on his instructions, that he was not aware of its contents or of the grounds covered therein nor were the grounds read out and explained to him. This ground was raised by the Election Respondent before the learned Tribunal and was rejected by the latter's order dated 20-2-1965. For this contention, the learned advocate for the Election Respondent relies on the following passage in the evidence of P. W. 1 :-
'The Election Petition was not read out and explained to me as I did not want it to be read out because I handed over the papers to him and entrusted them to him. I did not instruct my advocate to state the grounds which had been mentioned in the Petition.'
(48) The learned Tribunal rejected this ground as he felt satisfied that, in fact, the Election Petitioner had knowledge of the content of the Election Petition. He observed as follows : - (1 A No. 4 of 1964)
'......It, therefore, follows that there is an Election Petition in proper form conforming to the provisions of the Election Law before the Court. The defect pointed out in the matter of the verification of the petition cannot possibly entail the dismissal of the petition for the reason already stated heretofore. I am rather disinclined to believe that the petitioner has put in his signature to the petition without knowing the contents of the petition. A perusal of his statement would show that he has filed this petition in order to set aside the election of the respondent. He is aware of the fact that his nomination was dismissed by the Returning Officer on the ground that, on the date of the nomination, there was a subsisting contract with the Central Government. He has stated in his deposition that that order is wrong. He says: 'I say that the rejection of nomination was improper and illegal. I had nothing to do with the Central Government.' He has stated that he seeks to get that order set aside the consequence of which would be that the election of the respondent would be set aside, because under the law, a finding to the effect that the nomination was improperly rejected would necessarily lead to the setting aside of the election of the party who was declared elected under the above circumstances. He categorically states in the beginning of his deposition. 'I have filed this Election Petition' We see no reason to disagree with the finding of the Election Tribunal that the evidence shows that the Election Petitioner was really aware of the contents of the Election Petition, in spite of the statement in P. W 1's deposition on which reliance is placed. We find that this additional ground No.1 is not tenable.
(49) Additional Ground No. 2 : It is that the Hon'ble Election Tribunal ought to have rejected the claim of privilege with regard to twelve material documents. This ground is not urged before us and one of the documents has been referred to.
(50) So, there is no substance in any of these additional grounds.
(51) In the course of the arguments, the learned Advocate for the Election Petitioner, Shri Jain has himself stated that, while the proceedings relating to the objection filed by Konda Satyanarayana Reddy were pending before the Returning Officer, the Election Respondent was not averse to the objection petition being dismissed and even openly expressed to Shir Jain that, apart from the merits or tenability of the objection, from the point of view of convenience, he would welcome the dismissal of the objection petition and the participation of the Election Petitioner in the election against him (Election Respondent) and take his chance of success against the Election Petitioner in open contest in the election. Shri Jain says that, still, as the objection had been raised by another person namely, Konda raised by another person namely, Konda Satyanarayana Reddy and pressed by him, the proceeding resulted in the objection being upheld and the nomination of the Election Petitioner being rejected. Thus, it seems clear that the Election Respondent did not raise the objection before the Returning Officer and did not take part in pressing of that objection. But, all the same, as the Election Respondent had contested the petition before the Election Tribunal, costs were rightly awarded against him. As the Election Respondent has filed this appeal which fails, we award costs to the Election Petitioner in this appeal also.
(52) In the result, we dismiss this special appeal with costs. Advocate's fee Rs. 500.
(53) Appeal dismissed.