P.V.B. Rao, J.
1. Shri Nikunja Behera Singh files this appeal under Section 116A of the Representation of the People Act, 1951 against the order of Shri J.K. Misra, District Judge of Sambalpur, constituting the single man Election Tribunal dated 2-11-1957, setting aside the election of the appellant to the general seat in Bargarh constituency of the Orissa Legislative Assembly and declaring the same as void on the application filed by the respondent Shri Duryodhan Pradhan, a voter of the said constituency.
2. The first respondent-petitioner is an Elector in the Bargarh Assembly Constituency of Orissa which is a double member constituency. The appellant had been elected to the general seat and Shri Bahadur Mahananda had been elected to the reserved seat for the scheduled caste, in the last general election.
The petitioner's allegations are that 29-1-57 was the last date fixed for filing of nomination papers and that on the said date the appellant had an interest in a contract for the execution of works undertaken by the Government of Orissa and as such his election was void under Section 7(d) of the Representation of the People Act (hereinafter called the Act).
The appellant entered into an agreement (Agreement No. M. C. C. 41 of 56-57) for certain work pertaining to the Hirakud Dam Project in the Bargarh Canal Reach 203.356 to 203.577 for Rs. 20,000/- and that agreement was subsisting on the date of the nomination and even after that. So the petitioner states that the appellant's nomination should have been rejected by the Returning Officer, but he improperly accepted it and this has materially affected the result of the election.
3. The appellant-opposite party No. 1 denied the existence of any interest in a subsisting contract for the execution of any works undertaken by the State Government on the date of the filing of the nomination paper and asserted that he had no contract with the Government of Orissa on the date of the filing of the nomination paper and as such he was not disqualified for being chosen as and for being a member of the Orissa Legislative Assembly.
With regard to the allegation in the petition that the appellant entered into an agreement (Agreement No. M. C. C. 41 of 56-57) the appellant simply put the petitioner to strict proof of the existence of such an agreement; that it was a contract between the State Government of Orissa and the appellant and that it was subsisting on the date of the nomination. He also stated that there was no objection at the time of scrutiny to the acceptance of his nomination paper either by the petitioner or by any of the candidates.
4. The learned Tribunal held that the respondent No. 1 petitioner was an elector in the Bargarh Constituency and that the appellant-opposite party No. 1 was interested in subsisting contract with the Government of Orissa and as such his election was void.
5. Mr. Asok Das, the learned counsel of the appellant contended that the learned Judge erred in holding that the appellant was interested in a contract of works undertaken by the Government of Orissa and submitted that the contract entered into by the appellant is ex facie a contract with the Union of India and as such the election of the appellant to the State Assembly cannot be declared void. Ext. 2 is the relevant contract. The appellant admits to have executed this contract. The contract is as follows:
Sri Nikunja Bihari Singh.
Name of work: Excavation of Bargarh Canal
Est. No 13 of 50-51.
No. P. W. Agr. No. MCC 410/56-57.
AGREEMENT FOR PIECE WORK.
I do hereby tender to execute for the President of India the undermentioned description of work on a piece-work basis and in accordance, in all respects, with the specifications, designs, drawings and instructions in writing referred to in Rule 1 hereof and the conditions of contract in consideration of payment being made for the quantity of work executed at the rate specified in the following schedule:
X X X Sd. N.K. Singh. Sd. G. Paparao.
Contractor. Executive Engineer
3-7-56. Canal Division No. II 20-9-56.
x x x Should this tender be accepted I agree to abide by and fulfil all the terms and conditions contained in the pamphlet named 'General directions and conditions of contract' annexed hereto so far as applicable, or in default thereof to forfeit and pay to the President or his successors in office the sums of money mentioned in the said conditions, without prejudice to any other right of the President.
The sum of Rs. 1024/- is herewith forwarded in S. B. Ret. No. 3 dated 5-5-56 as earnest money the full value of which is to be absolutely forfeited to the said President or his successors in office, should I fail to commence the work specified in the above schedule.
Sd/ Nikunja Behari Singh
The above P. W. agreement is hereby accepted by me, on behalf of the President of India.
Dated the 26th day of October, 1956.
Sd. S.S. Behera
Mhanadi Canal Circle
6. The learned Judge after referring to the financial and other terms of agreement between the Central Government and the Government of Orissa in respect of Hirakud Dam Project, certain budget speeches and estimates of the Orissa Assembly and after interpreting certain clauses in the said agreement between the Orissa Government and the Government of India came to the conclusion that though the contract Ext. 2 purported to be in the name of the President of India, yet in effect it was contract between the State Government and the appellant as it was a contract with regard to works undertaken by the State Government and as it was subsisting at the time of the nomination, the election of the appellant was void.
7. Section 7 of the Act is as follows :
'A person shall be disqualified for being chosen as, and for being, a member of either House of Parliament or of Legislative Assembly or Legislative Council of a State -
X X X X X (d) if whether by himself or by any person or body of persons in trust for him or for his benefit or on his account, he has any interest in a contract for the supply of goods to, or for the execution of any works or the performance of any services undertaken by the appropriate Government'.
Ext. 2, the contract in question, on the face of it, is a contract between the appellant and the President of India. Under Article 299 of the Constitution, all contracts made in the exercise of of the executive power of the Union or of a State shall be expressed to be made by the President, or by the Governor of the State, as the case may be, and all such contracts and all assurances of property made in the exercise of that power shall be executed on behalf of the President or the Governor by such persons and in such manner as he may direct or authorise.
That Ext. 2 is a contract between the President and the appellant and that it was signed on behalf of the President by officer competent to sign the same is not challenged by the respondent No. 1-petitioner. The contract is therefore a contract entered into by the appellant with the President of India in exercise of the executive power of the Union. In my opinion, this fact is alone sufficient to dispose of this appeal.
The election of the appellant is to the Orissa Legislative Assembly and the election would be void only if the contract is one with the State of Orissa. The appellant, on the face of Ext. 2, is not interested in any contract with the State Government. In the case of A. J. Arunachalan v. ElectionTribunal, Vellore 9 ELR 471, Subba Rao J. (as he then was) held,
'Section 7(d) of the Representation of the People Act, 1951, was enacted to prevent the abuses pointed out by the learned Judge. In construing a provision intended to keep a legislature beyond any suspicion in the interests of public morality, a liberal construction 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. If a contract ex facie disclosed such contract the disqualification immediately attaches to it. The source of the appropriate Government's power, in my view, is not of any relevance.'
The contract in question in this case ex facie disclosed that the appellant's contract is with the President of the Indian Union and as such does not invalidate his election to the Legislative Assembly of the State.
8. But in view of the contentions raised by Mr. H. Mohapatra, the learned counsel for the respondent, which were strenuously pressed by him, in support of the judgment of the learned Tribunal, I take up the contentions raised by him and record my conclusions regarding the same.
9. In order to clearly appreciate the contentions raised by the learned counsel, it is necessary to state that previous history of how and why the project was undertaken and the arrangement entered into between the Provincial Government and the Government of India, as they were then designated.
The Hirakud Dam Project is a multipurpose scheme for water supplies, irrigation and canals, drainage and embankments, water storage and water power. Under the Government of India Act, 1935 which was the law in force then, this was essentially a provincial subject being item 19 of list 2 of seventh schedule.
Under the present Constitution it is covered by item 17 of list 2 of the seventh schedule. Consequently an arrangement had to be made between the Government of India and the Government of Orissa for carrying out this project as money had to be given as a loan by former Government.
10. The contract in question, as already stated is with regard to what is known as the Hirakud Dam Project. Before taking up this project, there was an arrangement between the Orissa Government and the Government of India evidenced by Ext. 3. The said agreement states, inter alia, --
'I. Financial arrangements.
The Government of India would be prepared to advance the capital necessary for the construction of the Hirakud Dam Projects as a loan to the Orissa Government on terms usually prescribed for such loans ... .. .. .. .
(2) The Government of India do not consider it necessary to make an outright grant to the Provincial Government to the extent of the cost allocated to flood control. Though for the purposes of preparing estimates of cost separate estimates have been prepared of the cost of flood control aspect of the project, it is neither desirable nor necessary to separate this amount from the total cost of the Project for the purpose of financing arrangements.
X X X X X III. Establishment of Central Designs,
Organisation under the Central waterways,
Irrigation and Navigation Commission.
The Central Waterways, Irrigation and Navigation Commission have not been able to prepare detailed designs on account of inadequate staff position. It is proposed to set up a central Designs Organisation as set out in Appendix I. The Hirakud Dam Project will be one of the many projects which this Organisation will have to deal with. As the establishment of this Organisation will take some time, part of the designs work may have to be done by a foreign agency as for the Bhakra, Kosi and Ramapadasagar Dams.
IV. Hirakud Organisation.
The Hirakud Organisation will consist of two Branches :
(i) The Construction Organisation, and
(ii) The land and Development Organisation.
(1) Construction Organisation -- The Construction Organisation will deal with matter concerning the actual construction of the Dam, Power Houses, Canals, Transmission systems and all works connected therewith, except land acquisition and other matters connected with land.
This organisation will be under the C.W.I.N.C. and will have a Chief Engineer at its head with such other staff as the Government of India may from time to time sanction. In recruiting staff for the organisation care should be taken to associate with it as much local talent as possible. 'The entire expenditure on the project except that under 'B-land' will be under the control of the Government of India'.
(2) Land and Development Organisation --The Land and Development Organisation will be under the control of the Government of Orissa and will deal with the following matters concerning the Hirakud Dam Project -
(a) Land Acquisition
(b) Reclamation and Resettlement, and
There shall be a separate portfolio for this organisation under the Orissa Government. The portfolio) will be under the charge of the Hon'ble the Premier.
The Commissioner, Northern Division, will be in charge of land acquisition, land reclamation and resettlement while the Development Commissioner who is also the Secretary to the Government of Orissa in charge of the separate department created to deal with the project will be in charge of development work such as establishment of industries etc. connected with the project.
The Development Commissioner will establish close liaison between the C.W.I.N.C. and the Construction Organisation on the one hand and the Government of Orissa on the other. .... .... ....
The entire expenditure in connection with land acquisition for the Project as provided in the project Estimate will be under the control of the Government of Orissa. All sanctions will be accorded by the Secretary to the Government of Orissa in accordance with the usual procedure after consultation with the Finance Minister of the Government of Orissa whenever necessary. In respect of the expenditure chargeable to the Project Estimate he will also show the sanctions for preliminary verification and certification to the Financial Adviser and Chief Account Officer, Hirakud Dam Project appointed by the Government of India, Ministry of Finance, The latter will also be the Disbursing and Accounts Officer, for this organisation for all expenditure debi-table to the Project as well as for the construction organisation', .......... ........ .....
VI. Delegation of power by the Government of Orissa to C.W.I.N.C. and the Government of India to accord Administrative approval and Technical sanctions.
In order to secure efficient, smooth and speedy execution of the Project the C.W.I.N.C. and theGovernment of India will be empowered by the Government of Orissa to accord all technical and financial sanctions to estimates of works and other connected expenditure except expenditure connected with land acquisition and other matters connected with land.
VII. Development Board -- Hirakud Dam Project.
X X X X X Contract Board :
Hirakud Project -- for the allotment of work to contractors on the Hirakud Dam Project and dealing with other matters concerning the agency of construction in accordance with the rules to be framed by the Government of India a Contract Board will be formed comprising :
(i) The Hon'ble the Premier of Orissa, Chairman.
(ii) The Chairman, C.W.I.N.C.,
(iii) The Chief Engineer, Hirakud Dam Project. Secretary,
(iv) The Financial Adviser, Hirakud Dam Project.'
x x x x x NOTE : The details of organisation contained in III to VIII above are not to be regarded as final but are given only to indicate, the broad framework of the organisation proposed. 'The actual requirement will be settled by the Government of India after obtaining due financial concurrence'.
This is the only document filed in the case to evidence the arrangement between the Government of Orissa and the Government of India in connection with the Hirakud Dam Project. We enquired if there was any subsequent arrangement entered into between the two Governments, but neither of the parties was in a position to give us any information. Consequently we have to base our conclusions with regard to the contentions raised by Mr. H. Mohapatra on this agreement of the arrangement between the two Governments.
11. Mr. Mohapatra contends that according to this arrangement contained in Ext. 3 between the Government of India and the Government of Orissa, the Hirakud Dam Project comes under the expression 'Works undertaken by the appropriate Government (Orissa Government)'. It is the Orissa Government only that can undertake the the work of the Hirakud Dam Project as it is covered by item 19 of list 2 of the seventh schedule of the Government of India Act and if in the course of that undertaking, power is given to the Government of India to carry on a portion of the work, nevertheless it is the work undertaken by the Orissa Government and as such the contract, even if it is with the Government of India, is a contract in respect of works undertaken by the Government of Orissa.
He contends that it is not necessary for purpose of construing Section 7(d) of the Act that the contract should be with the Government of Orissa. According to him, the Government of India is the agent of the Government of Orissa as far as the Hirakud Dam Project is concerned and any contract entered into with the Government of India is in effect a contract entered into the Government of Orissa and if, as admittedly, the contract Ext. 2 was subsisting at the time of nomination, it follows that the appellant is disqualified under Section 7(d) of the Act.
He further relies upon the other terms in Ext. 3 as also the budgets presented before the Orissa Legislature and the speeches of the then Chief Minister to show that the Hirakud Dam Project is a work undertaken by the Government of Orissa. He submits that under Ext. 3, the Orissa Government delegated the powers to the C.W.I.N.C. of the Government of India to accord technical and financial sanctions to estimates of works and other connected expenditure except expenditure connected with land acquisitions and other matters connected with land.
A development board was created with the Chief Minister of Orissa as Chairman and some officers of the State Government and also of the Central Government to deal with all matters of major policy concerning the project. A contract board was also created for allotment of works to contractors on the Hirakud Dam Project and dealing with other matters concerning the agency of construction in accordance with rules to be framed by the Government of India, comprising the Chief Minister of Orissa as Chairman and some officers of the Government of India as its members.
The Provincial Government undertook to set up a 'Propaganda Organisation' to keep the public fully informed about the policy and programme of the project. As is evidenced by Ext. 4 series, the budget of the whole Hirakud Dam Project, both relating to 'construction organisation' and the 'land development organisation' has throughout been passed by the Government of Orissa and this had to be so done since all the money spent on the Hirakud Dam Project was a charge on the revenues of the State of Orissa, though the money was actually paid by the Government of India as a loan repayable by the Government of Orissa.
In the budget estimate Ext. 4 (d) relating to the year 1956-57, at page 120 in item No. 12, the particular work the execution of which was undertaken by the appellant finds mention. Ext. 5 series, the reports of some of the proceedings of the Orissa Legislative Assembly, also show that the Government of India took up the investigation of the Hiracud scheme at the instance of the Government of Orissa.
He also refers to the budget speech of the Chief Minister at page 67 of Ext. 5(b) as showing that the complete control of the Hirakud Dam Project was under the Orissa Legislature, and the entire revised report of Hirakud Dam Project was placed before the Assembly for being taken into consideration.
A part of the project relating to the Land and Development Organisation is directly under the Government of Orissa whereas the other portion of the Project, that is, Construction of Dam, power houses, canals, etc. was directly undertaken by the Government of India, but that undertaking was as an agent of the Government of Orissa.
But the portions underlined (here in ' ' marks-Ed.) by me in the arrangement between, the Government of India and the Government of Orissa shows that the Government of Orissa has no control over the actual working of that part of the Hirakud Dam Project which is under the control of the Government of India. It is stated in Ext. 3 that the entire expenditure on the project except that under B-Land will be under the Control of Govt. of India.
It is also stated that in respect of the expenditure chargeable to the project estimate, the Finance Minister of the Government of India will show the sanctions for preliminary verification and certification to the Financial Adviser and Chief Accounts Officer. Hirakud Dam Project appointed by the Government of India, Ministry of Finance and that the latter will also be the disbursing and Accounts Officer, for this organisation for all expenditure debitable to the Project as well as for the construction organisation.
It is specifically stated under the heading 'Contract Board' of Hirakud Project that for the allotment of work to contractors on the Hirakud Dam Project dealing with other matters concerning the agency of construction in accordance with the rulesto be framed by the Government of India a Contract Board will be formed comprising four persons -- one being the Premier of Orissa and the other three the majority, being the Chairman C.W.I.N.C. the Chief Engineer Hirakud Dam Project and the Financial Adviser, Hirakud Dam Project, the latter three officers being officers of the Government of India.
From this it appears that as far as the construction organisation is concerned, it is the Government of India that has the main control and admittedly the construction organisation is that of the Government of India. It is the construction organisation that deals with the actual construction of the Dam, power houses, canals, transmission systems and works connected therewith. The contract in dispute is a contract entered into with regard to canals with the President of India on behalf of the Union.
It is the contention of Mr. Mohapatra that, as already submitted by him, the Hirakud Dam Project is a work undertaken by the Government of Orissa notwithstanding the fact that the construction organisation of that project is under the control of the Government of India. According to the learned counsel, the meaning of the word 'Works' given in the Oxford Dictionary is architectural or engineering operations. Works like the Hirakud Dam Project expressly fall under item 19 of list 2 of the seventh schedule of the Government of India Act and is exclusively within the field of the State Legislature.
This being therefore a work undertaken by the State Legislature, the contract entered into by the appellant is in effect a contract relating to works undertaken by the State Government notwithstanding the fact that ex-facie the contract is in the name of the President of the Union of India.
12. Mr. Mohapatra contends that the contract, referred to in Section 7(d) of the Act need not be with the State Government. In support of this contention, he relies upon the case of Moreshwar Parashram v. Chaturbhuj Vithaldas Jasani, 7 ELR 428 which later on went up to the Supreme Court in appeal.
The contentions of the respondents in this case were that there was no enforcible contract with the Government of India and that the contract was not signed by any person authorised on behalf of the President. In repelling the contention of the respondents that the word 'contract' in Section 7(d) meant a formal contract expressly entered in writing and executed by a proper authority on behalf of the President; that if there is no such contract enforceable at law, there is no contract at all; and that the contract should have been between the Central Government (expressed to have been entered into on behalf of the President) and the Firm of Messrs. Moolji Sicka and Company, it was observed,
'Clause (d) of Section 7 only says 'contract for the supply of goods to the appropriate Government' but does not specify 'with whom'. The respondent's contention is not borne out by the language of Section 7(d) of the Representation of the People Act, 1951, which nowhere says that the contract must be with the Government. All that the section says is that the contract must be for the supply of goods to the appropriate Government.'
He also relies upon the decision in the case of Chaturbhuj Vithaldas Jasani v. Moreshwar Parasharam, 9 ELR 301 : (AIR 1954 SC 236) which is a decision of the Supreme Court of India on appeal from the previous judgment. He relies upon the observation of their Lordships at page 318 (of ELR): (at p. 243 of AIR),
'Now Section 7(d) of the Representation of the People Act does not require that the contracts at 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 are hit by the section. The purpose of the Act is to maintain the purity of the legislatures and to avoid a conflict between duty and interest. It is obvious that the temptation to place interest before duty is just as great when there is likely to be some difficulty in recovering the money from Government (for example if Government were to choose not to ratify the contracts) as when there is none.'
He also relies upon the case of 9 ELR 471 the case already referred to by me. The observation relied upon by him is at page 476,
'The State Government in so doing is exercising a statutory duty, though it had derived that part of its power under the statutory delegation by the Central Government. Whether the said service is performed by exercise of the said power delegated to it or by reason of the statuory provisions of the Madras Act, in either case, it is exercising the power as a Provincial Government.'
He, therefore, on the strength of this decision contends that as the Government of India is acting in the construction of the Hirakud Dam under the delegated power of the Orissa Government, the contract in question is a contract in effect with the Orissa Government, In my opinion, these cases do not support Mr. Mohapatra's contentions.
On the other hand, they are against him especially the last decision. The observations in the first case were only made with regard to the contention of the respondent therein that there was no enforceable contract with the Government of India as the contract in that case was only between the canteen stores and Moolji Sicka. The canteen stores was a department of the Government of India. The contention of the respondent was with regard to the form of the contract.
That contention was levelled by simply saying that the form of the contract did not matter as under Section 7(d) of the Representation of the People Act, 1951, it is not necessary that there should be a formal contract with the Government of India. The canteen stores is a department of the Government of India, but the Government of India is not a department of the Government of Orissa.
The very use of the expression of the contract in Section 7(d) connotes that there should be two persons. One should be the candidate having an interest in the contract and the other party should invariably be the appropriate Government acting through a person duly authorised. In the second case, the appeal against this decision to the Supreme Court, this point was not specifically raised before their Lordships as it was raised before the Election Tribunal and they only held that,
'A contract for the supply of goods to the Government is not void even though it is not executed in the matter prescribed by Article 299(1) of the Constitution, even though the Government could not be sued on such a contract.'
They also held,
'Even though the contract does not comply with the formalities prescribed by Article 299(1) of the Constitution it is a contract which is hit by Section 7(d).'
They observed that the contract was for the supply of goods to the Government though actually the contract was with the Canteen Stores of the Government of India. In the third case, Subba Rao J (as he then was) expressly stated,
'If a contract ex facie disclosed such a contract the disqualification immediately attaches to it. The source of the appropriate Government's power, in my view, is not of any relevance.'
The contention of Mr. Mohapatra is that the source of the power of the Government of India is the Orissa Government and the learned Judge categorically says that the source of the appropriate Government's power is not of any relevance. The contract in question is ex facie between the appellant and the Government of India. The learned Judge also observed.
'The terms of the agreement indicate that it was for the performance of the services 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 .... 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.'
Mr. Mohapatra also relied upon the case of Hanuman Prasad v. Tara Chand, 5 ELR 446 in which it was held,
'For the purposes of Section 7(d) of the Representation of the People Act, 1951, it is not necessary that there should be a contract with the Government; it is enough if there was a contract for supply of goods to or the execution of any works or the performance of any services undertaken by the Government; and there need not be a contract satisfying the requirements of the Constitution with regard to contracts made on behalf of the Government.'
In this case also the main contention was if the contract in question did not fulfil the requirements of Article 299 of the Constitution. At page 456, it is observed,
'Appended to the petition, there are two annexures specified as Parts 'A' and 'B'. Part 'A' is a 'form of application for agency' and Part 'B' is described as an 'agreement' entered into by the promisor with the State Government of Uttar Pradesh. These two forms were admittedly used at the time of obtaining the licence in form 'B' by the Merchants' Association. That fact is stated in the petition and admitted in the written statement.'
But it was contended that it was not in accordance with Article 299 of the Constitution. To repel this contention, the tribunal stated :
'The first point to be determined is whether there was a contract between respondent No. 1 and the State Government of Uttar Pradesh. Section 7(d) of the Representation of the People Act does not say that the contract must be with the Government. What it says is that 'there should be a contract for the supply of goods to, or for the execution of any works or the performance of any services undertaken by the appropriate Government'. In the present case, it is conceded that there is no contract with the Government.'
A licence was applied for and was obtained and granted by the proper authority and annexure B clearly stated that the promisor undertakes to buy store and deliver to the State Government controlled foodgrains etc. On these facts, the Tribunal held that it was not necessary that the contract should be with the Government under Section 7(d) of theAct. In this case also it is clear that it is only with regard to the formality of the contract that the point was discussed. The next case cited by Mr. Mohapatra in support of his contention is the case of Kesab Chandra Patwari v. Gori Shankar, 2 ELR 215 where it was held,
'Where a municipality has been superseded and its management has been taken over by the Government, and the Government gives a contract for the construction of a work for the municipality and which is to be paid out of municipal funds, the contractor cannot be deemed to have an interest 'in a contract undertaken by the appropriate Government' within the meaning of Section 7(d) as the Government acts not on its own account but only as the agent of the municipality. Section 7(d), being a disabling provision, must be rigidly interpreted and its operation must be confined to contracts entered into, and works or services undertaken, by the Government on its own account.'
It was observed at page 221,
'In this view of the matter, the legal position of the Government substantially comes to be one of an agent and any contract entered into by the Government for the execution of any work of the Municipality, during such period of supersession, cannot be treated as a contract with the Government on its own account, in which latter case alone, the operation of the disqualifying clause of Section 7(d) would, in our view, appear to be rigidly interpreted, and always in favour of the person sought to be disqualified, and in the absence of anything before us to show that the legislature's intention was otherwise, as we should interpret the section in a sense that is apparent, which is, to my mind, that the work must be one undertaken by the Government of Assam, on its own account, so as to attract the disqualifying clause.'
Relying on this authority, Mr. Mohapatra contends that the works were undertaken by the Government of Orissa and the Government of India was only an agent in getting the work done, and as such Ext. 2 is in effect with the State Government. He also relied upon Sections 184, 185, 186, 188 and 192 of the Contract Act in support of the contention that the Central Government is the agent of the State Government as far as as the Hirakud Dam Project is concerned.
I have already held that in determining the question, as was observed by Subba Rao J. (as he then was) that 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 and the question to be asked is whether the contract is between the appropriate Government and the candidate. The contract in this case before us is ex facie with the Government of India.
13. I cannot also accept the contention of the learned counsel that the Government of India in carrying out the Hirakud Dam Project as far as the construction part of it is concerned is acting as the agent of the Government of Orissa. The terms of the arrangement, in my view, are to the effect that as far as the construction part of it is concerned, the Government of India has plenary power.
The budget has to be sanctioned by the Orissa Legislature as the ultimate liability for the cost is upon the Orissa Government. If the contention for the learned counsel is to be accepted, its range would become very wide and any person 'dealing with any autonomous body which carries on or undertakes a particular work in respect of a minor work done by the said autonomous body would have to be held as a person interested in the contract with the appropriate Government. In the case of Thompson v. Pearce (1819) 129 ER 632 it was held,
'A clothier who contracts with the colonel of a regiment to furnish the regiment with army clothing, is not thereby incapacitated by stat. 22G. 3, c. 45, from being elected as a member to serve in parliament.'
Section 1 of the said Act is as follows:
'That any person who shall directly or indirectly himself, or by any person whatsoever in trust for him or for his use or benefit, or on his account, undertake, execute, hold, or enjoy, in the whole, or in part, any contract, agreement or commission, made or enterted into with, under, or from the Commissioners of His Majesty's Treasury, or of the Navy or Victualling Office, or with the Master-General or Board of Ordnance, or with any one or more of such Commissioners, or with any other person or persons whatsoever, for or on account of the public service, or shall knowingly and willingly furnish or provide, in pursuance of any such agreement, contract, or commission, which he or they shall have made or entered into as aforesaid, any money to be remitted abroad, or any wares or merchandise to be used or employed in the service of the public, shall be incapable of being elected, or of sitting or voting as a member of the House of Commons, during the time that he shall execute, hold, or enjoy any such contract, agreement, or commission, or any part or share thereof, or any benefit or emolument arising from the same.'
Dallas C. J. in the course of his judgment observed,
'The army clothier employs the tailor, the draper, the button-maker, and the lace-maker under him and they employ subordinate persons under them. Every thing, which each of these parties furnishes, has an application to the service of the public; and all of them, according to this comprehensive argument, would be considered as contractors with the public, and so he is disqualified from sitting and voting in parliament. I cannot think that such was the intention of the Act; and am therefore of opinion that it is impossible to consider the Defendant's case as falling within this statute.'
Park J. observed, in his judgment,
'it would be impossible to contend, that every thing, which, however remotely, has a relation to the public service, disqualifies the dealer from sitting in parliament.'
Richardson J. observed,
'If it could be considered that General Nichols were a contractor with government within the meaning of this Act, I should still think that the Defendant, as a sub-contractor, is not liable to the penalties imposed by this statute. The Act can only extend to those who come immediately in contact with government; if it were otherwise, a large proportion of competent persons must, in time of war, be excluded from sitting in Parliament. Suppose the transport board enter into a contract for ships to convey troops. The owner of each of these vessels must contract with the ship-chandler for the various articles necessary for their equipment; could it be contended, that the shin chandler and all whom he employs would be excluded by the operation of this Act? At such a season, large quantities of arms are necessarily contracted for; would the iron manufacturers of Birmingham, if elected to serve in parliament, be subject to these heavy penalties? It would be impossible to draw any line, if all sub-contractors are to be excluded from sitting in the House...The words of the statute, might, indeed, by possibility, apply to persons, whose name is not contained in the original contract with government. If, for instance, a party were to buy the interest in a contract, he might be considered as a person contemplated by the Act; but the general words 'other persons' must mean otherpersons acting as the agent of government. The defendant has no participation in the profit or loss of General Nichols, but is entitled to be paid by the General, according to the term of his agreement.'
These observations of the learned judges in the English case aptly apply to the facts of the present case before us. Even assuming that the Government of India is an agent of the Orissa Government in the construction work of the Hirakud Dam Project, the appellant who is a sub-contractor under the Government of India cannot be held to be hit by the provisions of Section 7(d) of the Act. In the case of Tranton v. Aster, (1917) 33 TLR 38S it was held ;
'A simple order to insert a Government advertisement in a particular issue of a newspaper is not a contract or agreement within the House of Commons (Disqualification) Acts, 1782 and 1801, and Section 2 of the former Act does not apply to contracts which have already been executed at the time of sitting and voting in the House.'
In N. Satyanathan v. K. Surbramanyan AIR 1955 SC 459, the relevant contract was a contract of the candidate with the postal department of the Government of India. The election was challenged on the ground that the election of the appellant to the House of the People was hit by Section 7(d) of the Act.
It was contended by him that the original contract was with the State Government inasmuch as he was a holder of a State carriage service permit issued by the Regional Transport Authority, Salem, Madras and by virtue of a clause in the said permit he undertook to carry the postal mails and entered into a contract with the postal department and that would not make him interested in a contract with the Government of India. The agreement with the postal department was a formally drawn up document which specified all the requirements of a contract.
The appellant before the Supreme Court contended that the contract with the postal department was a necessary sequel to the State carriage permit granted by the Transport Authority under the Motor Vehicles Act read along with the relevant rules under which it was a condition of every state carriage permit that the holder of the permit shall, if so required by the transport authority which granted the permit, carry mails at such rates and on such terms as the transport authority may fix after consultation with the holder of the permit and the postal authorities concerned.
It was argued before the Supreme Court that the agreement was in pursuance of a pre-existing obligation imposed by the rule framed under the Motor Vehicles Act and as such it cannot be deemed that it was in connection with a service undertaken by the Government of India, Their Lordships observed :
'It is true that the permit contains a condition that the permit-holder may be called upon to undertake transport of mail bags and postal articles but that is only notice to intending applicants for a state have to render that additional service for an additional remuneration if called upon to do so by the authorities of the Postal Department. If any one is not prepared to undertake that additional responsibility, he is free not to make an application for such permit; but that does not mean that the agreement actually entered into between the Postal Department and the permit-holder is not an independent contract governed by its own special terms.'
Applying this observation to the facts of the easel before us, in my opinion, the contract entered into by the appellant with the President of India is an independent contract governed by its own special terms and the mere fact that the Government of India was carrying on the construction work of the Hirakud Dam Project on behalf of the Orissa Government does not in any way alter the situation.
14. Mr. Asok Das, learned counsel for the appellant contends that the construction work of the Hirakud Dam cannot be said to have been taken up by the Government of the Union as an agent of the Orissa Government especially in view of the recent amendment of the Constitution by adding Article 258A. This Article reads:
''Notwithstanding anything in this Constitution the Governor of a State may, with the consent of the Government of India, entrust either conditionally or unconditionally to that Government or to its officers functions in relation to any matter to which the executive power of the State extends.'
By virtue of this Article, the learned counsel for the appellant contends that the Union Government was entrusted by the State Government with the functions in relation to a matter which is within the executive power of the State.
The arrangement evidenced by Ext. 3, therefore, from the date of the Constitution (Seventh Amendment) Act, 1956, Section 18, by virtue of which Article 258A was added in the Constitution, was a constitutional power entrusted to the Union Government and as such the construction work carried on by the Union Government cannot be regarded as having been carried on by the Union Government as the agent of the State Government.
The relationship arising by virtue of Article 258A cannot be said to pertain to the law of agency but is only a constitutional statutory entrustment in relation to the exercise of the executive power which is a sovereign power and by virtue of this executive power of the Union, the President through an authorised officer entered into a contract with the appellant with regard to the digging of the canal.
As such even if the Hirakud Dam Project was held to be undertaken by the Government of Orissa, yet the work regarding which the contract was entered into was one of the works of the construction project undertaken by the Union Government by virtue of the entrustment of the function in relation to the Hirakud Dam Project to the Government of the Union.
As such, according to the learned counsel for the appellant, the contract Ext. 2 is a contract with the Union Government and therefore the appellant has no interest in a contract relating to works undertaken by the State Government. In my opinion, this contention of Mr. Asok Das appears to be correct.
15. Accordingly I hold that the contract entered into by the appellant with the President of India which was existing at the time of the nomination was not one covered by Section 7(d) of the Act. His election to the Legislative Assembly of Orissa cannot be held to be void. The appeal is, therefore, allowed and the order of the learned Tribunal is set aside. The appellant will have his costs before the Tribunal and this Court. Hearing fee in each case is fixed at Rs. 250/-.
R.L. Narasimham, C.J.
16. I agree.