T. Venakatadri, J.
1. An interesting question of law arises in this writ petition, viz., whether a person can be disqualified for election as a member of a Panchayat, on the ground that he was a lessee of a coconut thope belonging to the Panchayat, on the date of the nomination.
2. The writ petitioner had taken out a lease of coconut thope belonging to the Panchayat. In the election to the Perambur Panchayat, Mayuram Taluk, held on 30th January, 1965, the petitioner was declared elected. Tine first respondent filed an election petition against the petitioner, for a declaration that the election was void, as the petitioner had an interest in a subsisting contract with the Panchayat, Board on the date of nomination, and he was therefore disqualified to be a member of the Panchayat.
3. As per the provisions of the Panchayat Act, a person is disqualified for election ^s a member, if, at the date of nomination or election, he is interested in a subsisting contract made with or any work being done for, any panchayat. In the instant, case, it is common ground that the petitioner was the highest bidder at the auction for the sale of the lease of the property on 30th April, 1964. The property owned by the Panchayat comprises of 10 coconut trees and 6 lime trees. It is the case of the petitioner that on the date of nomination he had surrendered the lease, but the Election Commissioner of Panchayat is (District Munsif), Mayuram, did not believe this case of the petitioner. He found that there was a subsisting contract in respect of the thope at the date of nomination, and that the petitioner was, therefore, disqualified under Section 25(2)(c) of the Panchayat, Act, 1958, for election as a member of the Panchayat.
4. The only question, for consideration in this Writ petition is whether the petitioner can be disqualified, merely by reason of the fact, that he had taken out a lease of the thope belonging to the Panchayat.
5. Learned Counsel for the petitioner contends that, once a lease had been executed and the lessee had taken possession of the leased property, nothing remains to be done by the petitioner except to enjoy the usufruct during the period of the lease. The petitioner's Counsel, therefore, submits that it cannot be said that there is a subsisting contract.
6. Before the present Act was enacted, under the provisions of the old Act, there was a notification issued by the Government which stated that no person should be disqualified for election as a member of a Panchayat on the ground that at the date of nomination or election, he was interested in a subsisting contract made with, or any work being done for, the Panchayats, and no member should cease to hold office as such on the ground that he acquired any interest in any such contract. But under the provisions of the present Act, a member shall cease to hold office as such if he acquires any interest in any subsisting contract with, or work being done for, the Panchayat. In this case, can it be said that the petitioner is interested in a subsisting contract made with, or any work being done for, the Panchayat?
6. Learned Counsel has cited K.S. Sharma v. Ramgulam A.I.R. 1954 Nag. 255, a case on identical facts, wherein the question for consideration was whether a contract of lease with municipal committees would be a disqualification under Clause (1) of Section 15 of C.P. and Berar Municipalities Act, which says that no person shall be eligible for election, selection or nomination as a member of a committee if such person has directly or indirectly any interest in any contract with, by or on behalf of the committee, while owning such share or interest. A Division Bench of the Nagpur High Court has held in that case, that, where a contract is completely executed by both the parties and nothing remains to be done by either side, the contract is wholly exhausted and ceases to have any effect. In Bholanath v. Krishna Chandra Gupte 6 E.L.R. 104 the Election Tribunal has held that a person to whom the Collector has leased out land under Section 4 of the U.P. Land Utilisation Act, 1948, is not disqualified under Section 7(d) of the Representation of the People Act, 1951, as the transaction is not a contract, express or implied, between the lessee and the State Government, for the supply of goods, to, or the performance of any services undertaken by, the State Government. In Lumba Ram v. Ram Narain 5 E.L.R. 319, the Director of the Department of Mines and Geology of State granted to the petitioner the sole right to quarry building stone from the various quarries of the State under a contract which contained a stipulation that the petitioner agreed to submit to the excavation and removal of all stone required for the State Railway and Military Works and also to allow the P.W.D. contractors to excavate and remove all stone required for Government works on payment of a fixed royalty. The Election Tribunal held that the contract was not one for the supply of goods to the Government within the meaning of Section 7(d) of the Representation of the People Act, as there was no agreement to supply goods but only to allow the removal of stone required for Government purposes. In R. Deshpande v. Muttam Reddy : AIR1961AP180 , it was alleged that the first respondent therein was a beedi-leaf contractor of the Government for some named villages which contract Was subsisting at the time the nomination papers were filed, and therefore his election should be set aside. The question for consideration was whether the terms of the contract deemed it a contract for the supply of goods or the execution of any works or the performance of any services undertaken by the appropriate Government. The Bench observed that the nature of the Beedi-leaves contract was such that no supply of goods or execution of any works to or for the Government was envisaged, and that the agreement between the Government and the first respondent as one for sale and purchase of beedi-leaves, pure and simple. In Dip Narain Singh v. Nageshar Prasad : AIR1930All1 it was held by a Full Bench of the Allahabad High Court that once a document transferring immoveable property had been duly executed and registered, the transaction passed out of the domain of mere contract into one of conveyance, and that such a complete transaction was governed by the provisions of the Transfer of Property Act. The same view was held in the case of lease in Kandasami Pillai v. Ramasami Mannadi : (1919)36MLJ313 , After referring to the above case, it is observed in K.C. Sharma V. Ramgulam A.I.R. 1954 Nag. 255, that, although, therefore, in a case of completed lease there is a continuing liability to pay rent, it cannot be referred to the contract after it is executed and that this liability would, after the completion, of the lease, be enforceable under Section 108-B(1), Transfer of Property Act, and not under the provisions of the Contract Act or Specific Relief Act.
7. Lastly, In C.V.K. Rao v. D.B. Rao : 8SCR152 , the Supreme Court held that in the case of a mining lease by Government, where there was a covenant for pre-emption of minerals in favour of Government, the right of pre-emption did not amount. to contract for supply of goods which could be said to subsist between the parties. Their Lordships have observed that the disqualification which results from Section 7(d) of the Representation of the People Act is conditioned by a number of circumstances; there must be a subsisting contract between the appropriate Government and the candidate, the contract must be in the course of trade or business of the candidate and finally it must be inter alia for the supply of goods to such Government. In. the present case, the petitioner is not supplying the usufruct to the Panchayat. He cannot be said to supply goods to the Panchayat nor render service to the Panchayat under the alleged contract. It is also useful to refer to the following passage occurring in Tranton v. Astor (1917) 33 T.L.R. 383.
I will say at once that I think that the real and sufficient answer to the claim of the plaintiff in this action is that even if Government department acting, directly does give an order to a newspaper for the insertion of a Government advertisement in a particular issue of the newspaper, and the newspaper accepts and inserts the advertisement, and that is all, such a transaction is not a contract or agreement within the meaning of this legislation at all, and such casual or transient transactions are not the kind of contracts coveted by these statutes, but that what are meant to be covered are contracts of a more permanent or continuing and lasting character, the holding and enjoying of which might, improperly influence the action both of legislators and the Government.
8. Therefore, in the present case, once the petitioner has taken out a lease of the thope belonging to the Panchayat and once the lease has been executed, there remains nothing to be done by the petitioner to the Panchayat, and he is; only required to enjoy the usufruct of the leasehold property during the period of the lease. And the petitioner is not supplying any goods to the Panchayat. Therefore, on a review of the case-law and upon facts, it appears to me that the conclusion come to by the Election Commissioner is vitiated by an error apparent on the face of the record.
9. The Writ Petition is allowed but without costs.