M. Hidayatullah, C. J.
1. This appeal is by Gourishankar Sastri, a returned candidate to the general seat from the Charghoda double member Legislative Assembly constituency in tho Raigarh district, whose election has been set aside by an order of the Election Tribunal Raigarh, passed on 8-1-1958 in Election Petition No. 194 of 1957.
2. Seven persons contested the election for the two seats. The second respondent Raja Lalit Kumar Singh was declared elected to the reserved seat. His election is no longer in dispute and no argument at the hearing was advanced against him. The appellant Gourishankar Shastri was elected to the general seat. The results of the election were declared on 9-3-1957 and the Gazette notification was issued on 1-4-1957. Though as many as 62 issues were framed in the case, the decision of the Tribunal rests upon issues nos l(a) and (b).
The contention of Mayadhardas, the election petitioner, was that the nomination paper of Gourishankar Shastri was wrongly accepted inasmuch as he held a contract with the State Government & was disqualified under Section 7(d) o the Representation of the People Act. The Tribunal accepted this contention applying a decision of their Lordships of the Supreme Court reported in Chatturbhuj Vithaldas Jasani v. Moreshwar Parashram, 1954 SCR 817: (AIR 1954 SC 236). This formed the only subject of contention between the parties, all other issues decided against the election petitioner having been abandoned by him before us.
3. The returned candidate is admittedly the proprietor of Manay Printing Press, Raigarh. On 14-4-1955 he entered into an agreement (Exh. l-R-5) by which he undertook to print and supply Hindi Electoral Rolls of the Madhya Pradesh Legislative Assembly in the Raigarh district. He deposited a sum of Rs. 500/- as security and agreed to complete the work according to the conditions of the contract 'within 45 days of the day on which the Manuscript Electoral Rolls were delivered to him.'
4. Refore the expiry of the period above indicated, he wrote a letter (Exh. l-R-2) on 21-5-1955 intimating the Deputy Commissioner, Raigarh, his inability to execute the printing of the Electoral Rolls for 'certain unavoidable circumstances'. In reply thereto, the Deputy Commissioner wrote a memorandum (Exh. l-R-3) on 31-5-1955. In that memorandum the Deputy Commissioner asked for the return of the manuscript copies of the Rolls and paper supplied for the work and commissioned his assistant election clerk to receive them.
It is an admitted fact that these were returned and the work was executed by another printing press. The Deputy Commissioner ordered the recovery of Rs. 1,933/13/- from the appellant as arrears of land revenue being the extra cost for getting the Rolls printed elsewhere. The contention of the petitioner was that the returned candidate was disqualified under Section 7 of the Representation of the People Act and the acceptance of the nomination paper was illegal. This plea was accepted by the learned Member of the Tribunal who declared the election to the general seat void. Hence the appeal.
5. In reaching the above conclusion the Tribunal gave two reasons. The first was that the returned candidate having admitted that a contract was given to him, it was for him to plead and prove that the contract was not subsisting on the date his nomination was accepted and that in view of the fact that the date for the acceptance of the nomination paper was not pleaded nor proved the returned candidate had failed to discharge the burden which was upon him. The other reason was that till recovery of the extra charge andpenalty had been effected the contract must be deemed to be subsisting and the disqualification contained in Section 7(d) of the Representation of the People Act must be held to be still operating.
6. As regards the first point, it was conceded that the nomination papers were received and scrutinized after the Electoral Rolls were already printed by the new press. That indeed must have been so because nominations can only be received after the electoral rolls are ready. In our opinion, the learned Member of the Tribunal took too strict a view of the pleadings in the case. An opportunity to plead the date might well have been given. As regards proof, he should have acted on the maxim 'Certum est quod certum reddi potest'. Indeed, with the nomination papers before him he could find the date because it was a matter of record. This ground had no real substance.
7. The crux of the matter is, however, the contention that till all liabilities arising-from or under the contract had been met, the contract roust be deemed to be subsisting and the returned candidate regarded as having an interest in a contract for supply of goods to or for execution of a work on behalf of the State Government. The learned Member of the Tribunal relied upon the decision of their Lordships of the Supreme Court and applied it to the facts here contained.
In the case before their Lordships one Jasani had entered into an agreement with the military for the supply of bidis to the canteens on a commission basis. In the judgment of then Lordships are to be found in tabular form the dates on which the goods were supplied and those on which payments for the supplies were made. The dates of nomination and poll are also mentioned. Their Lordships held, differing from the view taken in English Courts, that so long as the contract was not discharged by performance on both sides, it must be regarded as still subsisting and the person having an interest in such a contract must be treated as disqualified under the section.
8. The facts here are entirely different. In the present case, there was no question of performance of the contract because the contract had bees breached already and its performance was out of the question inasmuch as the contract was already performed by another printing press. All that remained was to enforce the penal clauses of the agreement against the contractor for breach. The question is whether the existence of such a right in the aggrieved party can be construed as indicating the subsistence of the contract for supply of goods or for execution of a work. It is the contention of the answering respondent that the answer must be in the affirmative.
9. A contract is discharged in various ways. One of such ways is the discharge of the contract by performance. One other way in which the contract is discharged is by breach by one of the parties and the rescission of the contract on accepting the breach by the other. That there are claims arising from or under the contract does not show that the contract itself is subsisting. The section contemplates existence of a contract for the supply of goods or for the execution of a work. Where, before the time has expired, one party has intimated the other of its inability or its unwillingness to perform the contract and the other party has accepted that as the breach of the contract and has rescinded it, the contract must be treated as discharged by breach.
Any book on the Law of Contract will show that this is one of the modes by which a contract is terminated. The fact that claims for damages etc., arise under the contract and that the agreementmay have to be referred to in that connection does not show that the contract 'for the supply of goods or for the execution of any works' is subsisting.
10. The learned counsel for the answering respondent referred us to a decision of the House of Lords reported in Heyman v. Darwins Ltd., 1942 AC 356. The House of Lords differed from the exposition of the law made by the Privy Council in the cases noted in it. The point which arose in the case is stated in the speech of Lord Macmillan in the.se words:
'If there is a clause in the contract referring to arbitration all disputes under or arising out of or relating to the contract, what is the effect of the repudiation on its efficacy?'
It was contended before the House of Lords that if there was a 'breach of the contract and that breach was accepted by the other party, whick rescinded the contract accepting the breach, the contract must be treated as at an end and no term therein could be referred to because the contract was dead. The House of Lords repelled such a contention and held that the contract survived for the working out of ancillary matters like the one for determination of damages or for enforcement of arbitration. In the body of the speeches by the Noble Lords one finds a reference to the termination of a contract by frustration and by breach. The Noble Lords stated in many places that, in so far as the contract itself was concerned, it must be treated as at an end.
According to them, the repudiation of a contract by one of the parties gives an option to the ether either to hold the party in breach to the contract and ask for its performance or to rescind the contract altogether. If the option is exercised to rescind the contract, the contract is at an end in so far as its performance by one or the other or both is concerned. The contract, however, survives for any incidental or ancillary purpose because the determination of the quantum of damages for breach or the enforcement of the arbitration clause, if any, depends upon the terms in the agreement, and it may be looked into for that limited purpose.
11. The question that naturally arises in the present case is what were the terms- We quote below Clauses 10 to 13 as bearing materially upon-this topic:
'10. If the contractor fails to completely execute the work and effect delivery of printed copies of the electoral rolls free from all misprints within the time specified in condition 7 the D. C. may at the cost and risk of the contractor get the unexecuted work done by any other press and in that event the contractor shall be liable to pay any extra cost which may be incurred therein.
11. Upon the breach by the contractor, of any of the terms and conditions herein contained, it shall be lawful for the D. C. to forfeit the security deposit in whole or part or impose such penalty as he may deem fit and recover the same from the security deposit but without prejudice to the right of the Governor to recover any further sum as damages or otherwise.
12. Any sum falling due from the contractor hereunder may be recovered as an arrear of land revenue.
13. If any dispute shall arise between the parties hereto in respect of the contract or any of the provisions herein contained, or anything arising hereout, every such dispute shall be referred to the arbitration of the Superintendent, GovernmentPrinting Nagpur, whose decision thereon shall be final and binding on the parties.'
12. It will be noticed that these clauses entitle the Government to get the work executed by a third party holding the party in breach in damages, which can be recovered as arrears of land revenue. There is also an arbitration clause for referring the dispute to arbitration, which ordinarily entitles the party sued in breach to plead as a defendant the bar of arbitration clause. The short question is whether by the existence of these terms one can say that the returned candidate continued to hold a contract for the supply of goods or for the execution of any work from the State Government.
If it can be said that the prohibition contained in Section 7(d) embraces such a state of affairs, then undoubtedly the decision of the Tribunal is correct. But if it be held that in the circumstances of this case the breach having been already effected and accepted qua breach by the aggrieved party, the contract must be treated as rescinded and as at an end in 30 far as the prohibition in Section 7(d) is concerned, then the decision of the Tribunal must be reversed.
13. We have read carefully the decision of their Lordships of the Supreme Court. We do not think there is any observation therein which states tho law in such general terms that the subsistence of a contract which has not been fully performed by both sides can be equated to the breach of the contract by one party and the acceptance of the breach and rescission of the contract by the other. The decision of the Full Bench in Surajmal v. State of M. P., 1957 MP LJ 788: (AIR 1953 MP 103), was cited before us and we were asked to apply the dictum to every case of discharge of contract where any kind of liability between the parties under the contract remains to be worked out.
We do not think that the principle enunciated in the Full Bench case as to the application of 'ratio decidendi of cases can be available in the present case. The case in hand is one of breach of a contract and the acceptance of the breach by the other side who gets the contract performed by another. This is not a case of discharge by performance in which one side is still to execute his part of the contract and the contract is not fully discharged. On the other hand, this is a case in which both sides have elected not to proceed with the performance and to terminate the contract and treat it as rescinded. In these circumstances, we do not think that the principle enunciated by their Lordships can be extended without further examination.
14. The observations of the House of Lords in the cited case no doubt show that the view of the Privy Council that the contract being at an end by breach cannot any longer be enforced in any of its parts was not accurate. We need not join in the controversy because the question which the House of Lords was deciding was merely whether in view of the rescission of the contract the arbitration clause was still enforceable. We entirely agree -- and we say respectfully -- that the arbitration clause here too would be equally enforceable at the instance of the returned candidate. But that docs not denote that the contract subsists as it should be before a candidate can be said to be disqualified.
Payment of price is a different matter and claim for damages is quite another. We do not consider it necessary to examine cases of frustration, novation etc., because those cases must be pronounced upon when they arise. The case relied upon by the Tribunal is of performance by one side with performance due by the other. We say it respect-fully that we do not think that the analogy of that case can serve as a binding precedent to us in the determination of this case where the contract was put an end to by the voluntary breach of one side and the acceptance of the breach by the other, resulting in its rescission and performance by quite a different party.
15. Section 7(d) contemplates the subsistence of contractual relations between the parties. These relations cannot be said to be subsisting when both the parties have rescinded the contract and, to use the words of the Noble Lords in the House of Lords case, 'have put an end to it'. In such a case, we are of the opinion that the contract must be regarded as ended. That there is a claim for damages or that the matter might go to arbitrators to determine the effect of breach is not a consideration which flows, naturally from the wording of Section 7(d). Courts must be in a position to say that the contract for supply of goods or for execution of work subsists between the Government and the candidate. If the Courts cannot fairly say that, then the bar of Section 7(d) does not apply.
16. Having regard to all the circumstances of the case, we cannot say that the contract, which was breached by the returned candidate and rescinded by the Deputy Commissioner in exercise of the option whether to rescind or not, subsisted as a contract for the supply of goods or for execution of any works. We think that in these circumstances, the acceptance of the nomination paper of the returned candidate was valid.
17. We accordingly allow the appeal and reverse the decision of the Election Tribunal. Theelection petition filed by the first respondent shallbe ordered to be dismissed with costs both hereand before the Tribunal. These costs shall be payable by the first respondent. Counsel's fee Rs.100/-, The outstanding amount of the securitydeposit shall be returned to the appellant.