Chandra Reddy, C.J.
1. The interpretation of Section 7(d) of the Representation of the People Act (hereinafter referred to as the Act) is involved in this appeal directed against the judgment of the Election Tribunal, Eluru.
2. The facts that are necessary for this enquiry are few and are not in dispute. The appellant and the respondent along with two others contested the general elections held in 1962 from Kakinada constituency of Andhra Pradesh. At the time of scrutiny of the nominations, an objection was raised by one of the contestants that the appellant was disqualified under Section 7(d) of the Act by reason of his holding a mining licence and also a prospecting licence from the Govenment of AndbraPradesh. This objection did not find favour with the Returning Officer with the result that the nomination paper was accepted.
3. The poll took place in February and ultimately the appellant was elected to the Legislative Assembly of Andhra Pradesh. Shortly thereafter, one of the defeated candidates, C.V.K. Rao, the respondent herein filed an election petition before the Election Commission, New Delhi, on 7th April calling in question the election of the appellant on the ground that he was subject to the disqualifications mentioned in Section 7(d) of the Act by virtue of his holding a mining lease for period of 25 years commencing from 13-4-1960 from the Government of Andhra Pradesh and a prospecting licence for manganese ore in Guttigonda Forest. That petition also contained allegations of corrupt practices falling within the terms of Section 123 of the Act. It was accompanied by an affidavit in support of the allegations of corrupt practices as required by the relevant statutory provisions. The petition was forwarded to the Election Tribunal, Eluru in due course of time.
4. Before the trial was taken up it was discovered that the affidavit did not conform to Rule 94-A, which was promulgated under a notification dated 27th February, 1962, issued by the Ministry of law, India, and which required the affidavit to be Sworn before Magistrate of the 1st Class or a Notary or Commissioner of Oaths. A request was then made to the Election Tribunal in the shape of I. A. No. 2 of 1962 filed on 25-8-1962 to accept an affidavit in the prescribed form and to condone the delay in that behalf. In spite of the opposition of the appellant, the application was allowed and the trial of the petition proceeded with.
5. While holding that the allegations of corrupt practice have not been substantiated and it was not proved that the appellant was granted a prospecting licence, the Tribunal decided the issues bearing on Section 7(d) against the appellant, in his opinion, the relevant clauses in the mining lease had the effect of imposing on the appellant a disqualification under that section. In the result, he declared the election of the appellant invalid and directed fresh election.
6. It is this view of the Election Tribunal that is challenged before us. It has to be mentioned at this stage that the findings of the Tribunal on the other questions are not impugned before us. We have therefore only to consider whether the appellant has incurred disqualification envisaged by Section 7(d) of the Act by reason of his obtaining a mining lease from the Government of Andhra Pradesh.
7. Before we go into this controversy, we have to dispose of a preliminary objection raised by Mr. Krishna Menon, the learned counsel for the appellant, as to the competency of the Tribunal to condone the delay in filing an affidavit in the proper form. The above narration of facts shows that the affidavit as originally filed was not in terms j of the requirement of Rule 94-A which was added to the relevant rules under the afore-mentioned notification, in that it was not sworn before a 1st Class Magistrate but before an Advocate. It is for this reason that a second affidavit in properform with an application to excuse the delay in that behalf was presented. It is urged on behalf of the appellant that the proviso to Section 83 of the Act made it obligatory on the part of the election petitioner to file an affidavit in the prescribed form and that non-compliance with it rendered the petition ineffective and it was not within the power of the tribunal to excuse the delay in regularising the petition by filing a proper affidavit subsequently and to proceed to try the petition on its merits.
8. A petition without the accompaniment of an affidavit sworn before a Magistrate is as it were non est and there was no petition in the eye of law which could be enquired into by the Tribunal. A disregard of the mandatory provision like the proviso to Section 83 entails the consequence of the dismissal of the petition, proceeded the argument of the learned counsel. He drew our attention to some of the decided cases as substantiating this submission.
9. Before we refer to the cases called in aid by him, we have to look at the terms of the relevant statutory provisions in the light of which the problem thus posed has to be solved.
10. Section 83 of the Act says:
(1) An election petition (a) shall contain a concise statement of the material facts on which the petitioner relies (b) shall set forth full particulars of any corrupt practice that the petitioner alleges, including as full a statement as possible of the names of the parties alleged to have committed such corrupt practice and the date and place of the commission of each such practice; and (c) shall be signed by the petitioner and verified in the manner laid down in the Code of Civil Procedure 1908 (5 of 1908) for the verification of pleadings.
Provided that where the petitioner alleges any corrupt practice the petition shall also be accompanied by an affidavit in the prescribed form in support of the allegation of such corrupt practice and the particulars thereof.
11. We are here concerned only with the proviso. It is manifest that the proviso is cast in a peremptory mould. Immediately after the general elections, the Union Government amended the Conduct of the Election Rules 1961 by adding Rule 94-A which says:
'Form of affidavit to be filed with election petition -- the affidavit referred to in the proviso to Sub-section (1) of Section 83 shall be sworn before a Magistrate of the first class or a notary or a Commissioner of Oaths and shall be in form 25.'
A new form of affidavit was also inserted under that notification after form No. 24 and that is in these words:
Form No. 25 (Affidavit) see Rule 94-A.
I ..... the petitioner in the accompanyingelection petition calling in question the election ofShri/Shrimati ..... (respondent No. inthe said petition) made solemn affirmation/oath and say:
(a) that the statements made in paragraphs..... ofthe accompanying election petition about the commission of the corrupt practice of ..... and theparticulars of such corrupt practice mentioned in paragraphs ..... of the same petition and inparagraphs ..... of the schedule annexed thereto are true to my knowledge;
(b) that the statements made in paragraphs .....of the said petition about the Commissionof the corrupt practice given in paragraphs .....of the said petition and in paragraphs ..... of theschedule annexed thereto are true to my information.'
12. Indisputably, the affidavit that first accompanied the election petition was defective for the reason mentioned above. But does it inevitably result in the dismissal of the petition? Sri. Krishna Menon, the learned counsel for the appellant, invites us to answer it in the affirmative. He argues that as the election petition seeks to violate the rights of the person elected under the Constitution and the statutes made under the Constitution, it should enforce to all the statutory provisions and the inevitable consequence of non-compliance with them is the dismissal of the petition. We will now refer to the cases cited by him.
13. Barker v. Palmer, (1881) 8 QBD 9 dealt with Order VII! Rule 7 of the County Court Rules 1875, which laid down that summons in an action brought to recover lands shall be delivered to the bailiff forty clear days at least before the return, day and shall be served thirty five clear days before the return day thereof. In an action for the recovery of lands, the plaintiff delivered the summons to the bailiff 39 clear days and the bailiff served it upon the defendant 38 clear days, before the return day. At the trial, an objection was. taken that the service of summons was bad as the summons was not delivered to the bailiff in time and so County Court Judge had no jurisdiction to hear the case. The trial Judge overruled the objection, tried the case and gave judgment for the plaintiff. On appeal, it was held that the rule regarding the delivery of summons to the bailiff was obligatory and not directory and that when the former part of Rule 7 was not complied. with, the trial Court could not hear the case.
14. The subject-matter of the enquiry in Edwards v. Robert, (1891) 1 QB 302 was a rule contained in 20 and 21 Vict. c. 43, Section 2: which says:
'After the hearing and determination by a. justice or justices of the peace of any information or complaint which he or they have power to determine in, a summary way by any law in force or hereafter to be made, either party to the proceeding before the said justice or justices may, if dissatisfied with the said determination as being erroneous in point of law, apply in writing within three days after the same to the said justice or justices to state and sign a case setting forth the facts and the grounds of such determination, for the opinion, thereon of one of the superior Courts of law to be named by the party applying; and such party, hereinafter called 'the appellant' shall within three days after receiving such case transmit the same to the Court named in his application, first giving notice in writing of such appeal, with a copy of the case so stated and signed, to the other party to the proceeding in which the determination was given, hereinafter called the respondent.'
The appellant had not given the respondent notice in writing of the appeal as required by thestatutory provision. On an objection being taken by the respondent, it was held that the Court had no jurisdiction to hear the appeal.
15. One of the rules stated in State of Uttar Pradesh v. Tobit, : 1958CriLJ809 and on which reliance is placed for the appellant is that when Section 419 of the Criminal Procedure Code requires that a copy of the judgment or of the heads of charge be filed along with the petition of appeal, it is not unreasonable to hold that it is the certified copy so obtained that must be filed,
16. What is decided by the Supreme Court in Mallappa Basappa v. Basavaraj Ayyappa, : [1959]1SCR611 is that the relevant provisions of the Act constitute a self-contained Code governing the trial of election petition and that Order XXIII Rule 1 which permits the withdrawal of an action was inapplicable to the trial of election petition bytribunals and so the election petition could not be permitted to be withdrawn as other persons interested could continue the proceedings. It was observed :
'If the constituency as a whole is interested in the petition presented before the Election Tribunal, no such withdrawal or abandonment of a part of the claim could ever be permitted without giving an opportunity to any person who might have beena petitioner to continue the proceedings and pursue the petition to its logical conclusion.'
17. In Harish Chandra v. Triloki Singh, (S) : [1957]1SCR370 , the principle enunciated was that, when a tribunal had power under Order 6, Rule 17 Civil Procedure Code or order amendmentof a petition, that power could not be exercised so to change its character as to make it substantially a new petition, if a new petition on these averments was barred.
18. In Jagat Dhish v. Jawahar Lal, : [1961]2SCR918 , it was laid down, inter alia, that the requirements of Order 41 Rule 1 Civil Procedure Code which requires a certified copy of the decree to be filed along with the memorandum of appeal, was mandatory and the absence of the decree would lender the filing of the appeal incomplete, ineffective and incompetent. It is worthy of note that it was observed there that
'No hard and fast rule of general applicabilitycan be laid down for dealing with appeals defectively filed under Order 41, Rule 1: Appropriate orders will have to be passed having regard to the circumstances of each case but the most important step to take in cases of defective presentation of appeals is that they should be carefully scrutinised at the initial stage soon after they are filed and the appellant required to remedy the defects.'
These remarks indicate that a defect of the present kind does not warrant a dismissal of the action in limine. We lastly turn to the State of Uttar Pradesh v. Lakshmi Ice Factory, : (1962)ILLJ281SC , where it is held that enactments regulating the procedure in Courts are imperative.
19. In our considered opinion, we cannot derive much assistance from these rulings in the con-text of this enquiry. We have to decide the question with reference to the provisions of the Act.
20. At this stage, we have to reproduce Section 85 of the Act as amended in 1956. That section postulates:
'If the provisions of Section 81, Section 82 or Section 117 have not been complied with, the election commission shall dismiss the petition, provided that the petition shall not be dismissed without giving the petitioner an opportunity of being heard.'
21. It is plain from this section that it is only non-compliance with the provisions of Sections 81, 82 or Section 117 that calls for the dismissal of the petition. Section 81 prescribes the manner of presentation of the petition. Section 82 deals with parties to the petition while Section 117 bears on the deposit of security. It is this concept that is also embodied in Section 90(3) of the Act which says;
'The Tribunal shall dismiss an election petition which does not comply with the provisions of Section 81, or Section 82 notwithstanding that it has not been dismissed by the Election Commissioner under Section 83.'
22. There is another provision in the Act which negatives the contention urged on behalf of the appellant and that is Section 98. That section enacts:
'At the conclusion of the trial of an election petition the Tribunal shall make an order:-
(a) dismissing the election petition; or
(b) declaring the election of all or any of the returned candidates to be void, or
(c) declaring the election of all or any of the returned candidates to be void and the petitioner or any other candidate to have been duly elected.'
23. This shows that if the election petition is not dismissed for non-observance of the terms of Sections 81, 82 and 117 matters other than those falling within the mischief of Section 85 could be disposed of only at the conclusion of the trial and could not be dismissed in limine.
24. These sections do not invest the Commission or the Tribunal with jurisdiction to dismiss a petition for failure to fulfil the terms of any of the sections except those enumerated in Section 85. Incontestably, there is no violation of any of the provisions of Section 81, 82 or 117. If that were so, how could it be posited that the Tribunal acted without jurisdiction in proceeding with the trial of the election petition and not dismissing it in limine?
25. We may here note the legislative changeson the topic that occurred between i95r when theAct was passed and 1956 when Sections 83 and90(3) were amended. In the Act as it originallystood, Section 85 included Section 83. There wasthen no reference to Section 82. Similarly, Section 90 (3) talked only of the dismissal of a petition which did not comply with the provisions ofSections 81, 83, or 117. By Act XXVII of 1956,Section 82 was substituted for Section 83. Thischange clearly indicates that Parliament regardedthat non-compliance with Section 83 should not beregarded as fatal. If the Parliament in its undoubted wisdom thought that the penalty of dismissalshould not attach to non-compliance with the termsof Section 83 and amended the law in that regard,it would not be open to Courts to fasten such apenalty on failure to fulfil the requirements of Section 83.
26. This view of curs is amply supported by two judgments of the Supreme Court, which had occasion to deal with Section 85 as it stood prior to the amendment in 1956 and subsequently. As already observed, in the original Act, the disregard of Section 83 was attended with penal consequences but not of Section 82.
27. In Jagan Nath v. Jaswant Singh, : [1954]1SCR892 , the Supreme Court had to consider the effect of non-observances of the provisions of Section 82. Their Lordships held that the nonjoinder of a duly nominated candidate, who had withdrawn his candidature, was not fatal to the petition and that a petition, which did not comply with the provisions of Section 82, could only be dismissed at the conclusion of the trial on grounds sufficient to dismiss it Observed the learned Chief Justice, who spoke for the Court.
'It is significant that both the Election Commission and the Tribunal have been given powers in express terms to dismiss an election petition which does not comply with the requirements of Sections 81, 83, or 117 but no such powers are given to dismiss a petition in limine which does not comply with the provisions of Section 82. Such A petition can only be dismissed at a conclusion of the trial and on grounds to dismiss it.'
It was also observed that a provision of statute isnot mandatory unless the non-compliance with itwas made penal.
28. It is not out of place here to remember that Section 82 also employs the expression 'shall join as respondents to his petition all the candidates .....' as Section 83. Notwithstandingthe use of the word 'shall' in Section 82, their Lordships thought that no power inhered in the Election Commission or Tribunal to reject a petition in limine.
29. The Supreme Court had to discuss again the result of the failure to conform strictly to the procedure, indicated in Section 83 concerning an election in Balwan Singh v. Lakshmi Narain, AIR 1060 SC 770. There, the particulars of corrupt practices were not furnished in the petition. It was held by the Supreme Court that the Representation of the People Act, 1951 as amended by Act XXVII of 1956 did not impose the penalty of dismissal of a petition or the striking out of the plea of corrupt practices merely because particulars in that behalf were not set out. Their Lordships remarked :
'Where an objection is raised by the respondent that a petition is defective because full particulars of an alleged corrupt practice are not set out, the Tribunal is bound to decide whether the objection is well-founded. If the Tribunal upholds the objection, it should give an opportunity to the petitioner to apply for leave to amend or amplify the particulars of the corrupt practice alleged; and in the event of non-compliance with that order the Tribunal may strike out the charges which remain vague.'
30. It is true that the Supreme Court had not to deal with the effect of non-compliance with the proviso but with the main body of the Section; and Section 90(5) enables a Tribunal to allow particulars of any corrupt practice alleged in the petitionto be amended or amplified in such manner as are necessary for ensuring a fair and effective trial of the petition. But if it was thought that fatality attached to a petition which did not strictly fulfil the terms of Section 83, Section 90 (5) would not have been of much avail. It may be mentioned that Section 90 (5) was added by Act XXVII of 1956 and it did not exist in the original Act. Evidently having deleted Section 83 from Section 85, Parliament thought of inserting this section so as to give an opportunity to the parties to cure the defects in the petition.
31. We do not think that the requirements as to the accompaniment of an affidavit is more stringent than the conditions regarding the furnishing of particulars of corrupt practices and if the defects in regard to the particulars could be rectified, we do not see why a formal defect in regard to an affidavit could not be cured. Further, the utmost that could be urged is that the failure to furnish particulars could only lead to striking out the defective plea. It was observed in : [1960]3SCR91 :
'By Section 90 (1) of the Act every election petition is subject to the provisions of the Act and Rules made thereunder to be tried as merely as may be in accordance with the procedure applicable under the Civil Procedure Code to the trial of suits; and for failure to furnish particulars after being so ordered, but not before, the Tribunal may strike out a defective plea.'
32. In fact in the instant case, the request made to the Tribunal by the appellant was that allegations regarding corrupt practices should be struck off. It was not the contention of the appellant that the election petition should be dismissed in limine. For the first time, such a request is made in this Court. The question whether the averments relating to corrupt practices should be struck out or not has no practical importance in this case having regard to the fact that it was found by the Tribunal that the respondent had not succeeded in making out bis case that the appellant was guilty of corrupt practices.
33. For the above reasons, we think that thepreliminary objection cannot be sustained and has Ito be repelled.
34. We will now proceed to consider the impact of Section 7 on the mining lease, which the appellant obtained from the State Government shortly before the elections. Section 7, in so far as it is of immediate relevancy, runs as follows:
'A person shall be disqualified for being chosen as, and for being, a member of either House of Parliament or of the Legislative Assembly or Legislative Council of a State:
* * *
(d) if there subsists a contract entered into in the course of his trade or business by him with the appropriate Government for the supply of goods to or for the execution of any works undertaken by that Government.'
35. How does this clause impinge on the mining lease in question? Is the mining lease hit at by this clause? This document contains several conditions and stipulations but nothing turns upon most of the terms except the one which we will advert to presently. There can be little doubt thatthe chief object of this lease was to exploit the mine by extracting iron ore to the best advantage of the lease, subject to the terms and conditions contained therein. But that is not decisive of the matter. There are stipulations which have potentialities of becoming contracts.
36. The clause in the document which is the crux of the problem and upon which the result of this appeal chiefly turns is Clause 21 and it runs as follows:
'21 (a): The State Government shall from time to time and at all times during the said term have the right (to be exercised by notice in writing to the lessee) of pre-emption of the said minerals (and all produces thereof) lying in or upon the said lands hereby demissed or elsewhere the control of the lessee and by the lessee shall with all possible expedition deliver all minerals or products or minerals purchased by the State Government under the powers conferred by this provision in the quantities; at the time, in the manner and at the place specified in the notice exercising the said right.
(b) Should the right to pre-emption conferred by this present proviso be exercised and a vessel chartered to carry the minerals or products thereof procured on behalf of the State Government or the Central be detained on demurrage at the port of loading, the lessee shall pay the amount due for demurrage according to the terms of the charter party of such vessel unless the State Government shall be satisfied that the delay is due to cause beyond the control of the lessee.
(c) the price to be paid for all minerals or products of minerals taken in pre-emption by the State Government in exercise of the right hereby conferred shall be the fair market price prevailing at the time of pre-emption provided that in order to assist in arriving at the said fair market price the lessee shall, if so required, furnish to the State Government for the confidential information of the Government particulars of quantities, description and prices of the said minerals or products for carriage of the same and small produce to such officer or officers as may be directed by the State Government original or authenticated copies of contracts charter parties entered into for the sale of freightage of such minerals or products.'
37. As clause (d) does not play any role in the context of this enquiry, it is not necessary to estract it here.
38. The short question for consideration is whether there is anything in this clause, which can lead to the conclusion that a contract of the description envisaged in Section 7(d) of the Act subsists between State Government and the appellant.
39. At the forefront of the arguments on this topic, it was urged by Sri Krishna Menon, learned counsel for the appellant that this mining lease does not possess any of the postulates of a contract. A mining lease is a lease within the ordinary legal acceptance of the word and falls within Sections 105 - 108 of the Transfer of Property Act and it does not constitute a contract governed by the provisions of the Contract Act. Once a document transferring immoveable property has been registered, the transaction passes out of the domain of merecontract into one of the conveyance and such completed transactions are governed by the provisions of the Transfer of Property Act, continued the learned counsel, basing upon Kamakshaya Narain v. I.T. Commissioner B. and O., AIR 1943 PC 153 and Dip Narain Singh v. Nageshar Prasad, AIR 1930 All 1 (FB). The learned counsel says that a lease, which is a demise of land, may be preceded by a contract i.e., there may an offer by the lessee to take the property on lease and the acceptance of that offer by the lessor, the Government, which ultimately ends in the lease. But when the contract has ripened into a lease, it becomes an executed contract and not an executory contract, which alone is within the connotation of Section 7(d) of the Act.
40. On the other hand, it is maintained by Mr. Chinnappa Reddy, learned counsel for the respondent that a mining lease like the present one, taken as a whole, contains all the elements of a contract. When once Government decided to grant a lease, it accepted the offer of the appellant to take the land on lease and the lease itself had become the executed consideration for several of the promises including the one embodied in Clause 21.
41. We are not called upon to answer the larger questions thus posed as to whether the lease by itself could be regarded as a contract and to determine the character of the mining lease. This matter can be disposed of on a shorter ground.
42. The problem to be solved is whether there is any stipulation or condition in the mining lease which has ripened into a contract so as to attract the provisions of Section 7(d) of the Act. We might incidentally mention here that the Tribunal made much of the description of the document as an indenture. The mere use of the word 'indenture' does not determine the character of the document. However, as we have already said, we need not pause here any more to test the soundness of the propositions advanced on either side.
43. The next point presented by the learned counsel for the appellant is that at any rate the primary object of the lease being the extraction of iron ore, and that supply of mineral to Government is only ancillary or incidental to the exploitation of the mine, the transaction in question should be treated as falling outside the scope of Section 7(d). Since Section 7(d) is a disabling provision and deprives citizens of India of the right to stand for election and serve the community, it should receive a very strict interpretation. Statutes, which encroach on the rights of the subject, whether as regards person or property, are subject to a strict construction and it is a recognised rule that they should be interpreted, if possible so as to respect such rights and if there is any ambiguity as to the meaning of the section, inasmuch as it is a disabling section, the construction which is in favour of the freedom of the individual should be given effect to as stated by Maxwell in his Interpretation of Statutes 11th Edition, page 275, argues the learned counsel for the appellant.
44. On the other hand, Sri Chinnappa Reddy says that the right to vote or stand as a candidate for election is not a fundamental right nor a civil or natural right but is a creature of statute and must be subject to the limitations imposed by it.
There is therefore no question of the invasion of the rights of a subject by giving it a liberal interpretation.
45. Learned Counsel for the respondent further says that a beneficial construction should be placed upon the section so that it might harmonise with the intent of the legislature. The object of Parliament in enacting Section 7 was to preserve the integrity and the independence of the members of the legislatures and to prevent any possible conflict between public duty and private gain. An interpretation which suppresses the mischief and advances the remedy should be adopted. Any restricted interpretation would result in defeating the object of the Parliament which was anxious that members of legislature should not be exposed to temptations or even semblance of temptation.
46. In the context, reliance is placed by the learned counsel on the principles stated by Atkin, L.J., in regard to the prohibition contained in Section 7(d) in Lapish v. Braith Waite, 1925-1 KB 474.
'The object is manifest. It is to obtain for the public body concerned the disinterested advice of its members, so that they are not put in a position where their duty and interest conflict. It is intended also to prevent the possibility of members' votes and other matters being influenced by the promise or receipt of beneficial contracts. And it is further intended to secure the honour and dignity of the corporation itself by securing that there shall be no suspicion of the integrity of its members, and no ill-will amongst burgesses not members of the corporation, because they are passed over in business in preference to favoured councillors.'
47. He maintains that the paramount object in interpreting statutes is to ascertain the legislative intent and to allow the works to have full meaning or the more extensive of the two meanings which best effectuates the intention or the purpose. A construction, which gives effect to the policy of the Parliament underlying the section, namely, to remove any possible conflict between duty and interest of persons who enter legislatures should be adopted. Where the ordinary meaning of an expression falls short of the whole object of the legislatrue, a more extended meaning may be ascribed to it if it is susceptible to it.
48. No exception could be taken to these rules as stated thus. But at the time, we cannot overlook the cardinal rule that Courts should not strain the language of a statute in order to cover cases which are plainly excluded from the natural meaning of the words. (Maxwell's Interpretation of Statutes 10th Edition page 68).
49. The first primary duty of a Court is to pay attention to the language of the statute with a rational regard to the aim and object of the legislature as manifested in the language of the section. Under the guise of effectuating the policy and intent of the legislature, Courts cannot either unduly enlarge the scope of statutory provision, especially when it has the effect of curtailing the right or the freedom of a person to stand for election. It is true that the right to stand for election is not a natural right but is only a creature of statute. But, it cannot be forgotten that Section 7(d) restricts the right to seek election and as such it isa disabling provision. So, that provision has to be strictly construed and an interpretation which interferes with the rights of subjects bad to be avoided.
50. There is authority for this position in Ram Padarath v. Mishri Sinha, : [1961]2SCR470 . It was observed by Gajendragadkar, J., speaking for the Court:
'..... in dealing with statutory provision,which imposes a disqualification on a citizen it would be unreasonable to take merely a broad and general view and ignore the essential points of distinction on the ground that they are technical.'
51. Assuming for the sake of argument that itis permissible to take a broad view of the section, it does not advance the case of the respondent as there will be no justification to extend that provision to things plainly excluded from its natural meaning. The terms of the section do not show that every kind of connection with Government activities on every benefit received by a person from Government falls within the sweep of Section 7(d). It is only contracts within the connotation of that section that will serve as grounds of disqualification. Parliament, which is aware of the necessity to maintain the integrity and independence of the legislators, has chosen to confine the area of disqualification only to contracts for the supply of goods to the appropriate Government and the execution of works undertaken by Government. It must be taken that Parliament has advisedly limited the operation of the prohibition only to those two kinds of contracts.
52. This opinion gains support from the pronouncement of the Supreme Court in : [1961]2SCR470 already referred to. There, a candidate was sought to be disqualified under Section 7(d) as he had entered into a contract with the appropriate Government for the performance of service undertaken by the State Government, namely the sale of food-grains pursuant to the grain supply scheme of the Government. To give effect to the scheme, the Government needed a proper custodian and bailee. The candidate's firm was appointed as bailee in that behalf. By and under the contract, the firm had to stock and store food-grains belonging to the Government. The remuneration of the bailee was also to be fixed on the value of the stocks moved or taken over from his custody. On these facts, it was decided by the Supreme Court that the contract did not attract the application of Section 7(d). As regards the circumstances that the remuneration of the bailee was fixed on the value of the stocks moved or taken over from his custody, it was said that they merely showed the mode or method adopted by the contractor for determining the remuneration and that it did not establish the relationship of the contract with the sale of the goods even indirectly.
53. We will now proceed to consider the question in the light of these canons of interpretation of statutes. It is to be borne in mind that the clause confers on the lessor, the State Government, the right of pre-emption. The lessor is given the right of preferential purchase. That clause does not go any further than that. It does not proprio vigore create a contract between the parties. A scrutiny of the language of that clause firmly establishes that the appellant has merely undertaken to sell to the Government, out of the ore brought to the surface, such quantity as would be required by the Government after the desire of the latter is notified, to him. The obligation undertaken by him was contingent upon the mineral being brought to the surface and the lessor thereupon requiring the lessee by notice in writing to supply the latter the needed ore. This was only in the realm of potentiality. There was no certainty that the potentiality or possibility would become an actuality. This would only amount to an offer by the lessee and till it is accepted by the Government by exercise of option of preferential purchase by notice in writing to him, it would not tantamount to a contract. The concept of a contract involves two elements -- offer and acceptance. The idea that the clause contemplates only an offer runs through the whole of Clauses (a) and (b). Apart from the recital in Clause (1) that the Government should have the right of pre-emption to be exercised by notice in writing, clause (b) also says 'should the right of pre-emption conferred by this provision be exercised''. Thus, this clause has merely vested a right to call upon the lessee to supply the required quantity of mineral after it is extracted. The Government could exercise this right of pre-emption only after the iron ore is extracted from the mine and that exercise should be by a notice in writing to the lessee. Till these two conditions are fulfilled, there can be no question of a contract being formed. The contract springs into existence only after the iron ore is won and the Government intimates the lessee the quantity of ore required by him. Until then, it remains only in the domain of offer. As it stands it lacks one of the essential ingredients of a contract, namely, acceptance. Indisputably so far no ore has been extracted and the question of requiring the lessee to sell any quantity of the mineral to Government has not yet arisen. In fact no such notice has been issued to the lessee-appellant.
54. We do not think that Sections 4, 6, and 9 of the Sale of Goods Act relied on by the learned counsel for the respondent tend to establish the proposition that..... de hors of the acceptanceof an offer, a contract is formed. Section 4 recites:
'(1) A contract of sale of goods is a contract whereby the seller transfers or agrees to transfer the property in goods to the buyer for a price. There may be a contract of sale between one part owner and another.
(2) A contract of sale may be absolute 01 conditional.
(3) Where under a contract of sale the property in the goods is transferred from the seller to the buyer the contract is called a sale but where the transfer of the property in the goods is to take place at a future time or subject to some condition thereafter to be fulfilled, the contract is called an agreement to sell.
(4) an agreement to sell becomes a sale, when the time elapses or the conditions are fulfilled subject to which the property in the goods is to be transferred.
55. This section does not lay down any rule contrary to what has been indicated above. It defines, a contract, of sale and says when an agreement becomes a sale. It also postulates that there could be an agreement of sale of goods in future or subject to certain conditions.
56. Section 6 postulates that future goods could form the subject-matter of a contract of sale and there could also be a contingent contract. This section does not imply that the formation of a contract is independent of the acceptance of the offer.
57. Section 9, which bears on the assessment of the price is perhaps useful, if at all to the respondent, only for the purpose of repelling the contention of the appellant that in the absence of fixation of price in the lease itself, there can be no completed contract. It does not serve any further purpose.
58. We shall now refer to the cases, cited by the learned counsel for the respondent.
59. In Satyanathan v. Subramanyam, : [1955]2SCR83 , there was a condition in a permit for stage carriage that if the postal department should require the permit holder to carry postal articles, he was obliged to undertake the service. Pursuant to this condition of the permit, the permit-holder entered into an agreement with the Central Government for the conveyance of all the articles for a period specified therein. As consideration for the same, the Government had agreed to pay Rs. 200/- per month during the subsistence of the agreement as his remuneration for the services to be rendered by him. Later on, the contractor contested the elections successfully. This led to the controversy whether it subjected the contractor to the disqualification contained in Section 7(d). It was argued for the contractor that he had not voluntarily entered into any agreement with the appropriate Government but he was merely carrying out the obligation imposed by the rules aforesaid under the Motor Vehicles Act and in such a position, it cannot be said that he had entered into a contract for the performance of a service undertaken by Government. This was negatived by the Supreme Court in the view that, though the permit contained a condition that the permit-holder could be called upon to undertake the transport of mail bags and postal articles, that was only a notice to the intending applicants for a transport vehicles that the permit holder will have to run additional service for additional remuneration as and when required by the postal authorities and if any one was not willing to undertake such a responsibility, he was free not to take any application for such a 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.'
60. In our opinion, this judgment does not lend any countenance to the proposition contended for on behalf of the respondent. Pursuant to the pre-existing obligation in regard to the transit of postal bags, etc., the permit holder had actually entered into a contract and in fact was fulfilling the terms of the contract. It is this agreement that formed the basis of the ruling there. That it is the existence of the contract entered into between the permit-holder and the postal department and not a mere condition in the permit that ledto this result is apparent from the remarks of Sinha, J. (as he then was], who delivered the opinion of the Court :
'At the time the appellant entered into the contract with the Government in the postal department he may not have had any idea of standing for election to the House of the People when in future the general elections came to be held. If be wished to steer clear of the difficulty created by Section 7 of the Act, he could have given due notice to Government under Clause 18 of the contract referred to above. On the expiry of the term of the notice, he would have been free to stand for election to a State or Central Legislature.'
61. The succeeding paragraph also emphasises this conception. It was said by the learned Judge:
'On the face of the transaction the agreement was between two competent parties with their free consent. There was no question but that there was lawful consideration. The permit for the stage carriage had been granted by the authority under the Motor Vehicles Act, and the agreement for transport of postal articles and mail bags was between the Government of India in the Postal Department and the appellant for a cash consideration.'
It was held there that the agreement had 'all the ingredients of a valid contract'. It thus appears that what attracted the prohibition underlying Section 7(d) was the subsequent agreement entered into between the contracting parties and not the mere existence of a condition in the permit under which the permit-holder undertook to carry the mail bags of the postal department, if the latter should call upon him to do so.
62. Hillas and Co. Ltd. v. Arcos Ltd., 1932 All ER 494 relied on by the Counsel for the respondent also does not render any assistance to him. There, the plaintiffs, timber merchants carrying on business at Hull, entered into an agreement with the defendants for buying 22,000 standards softwood goods of fair specification over the season 1930 under the following condition :
Clause 9 of that agreement provided.
Buyers shall also have the option of entering into a contract with sellers for the purchase of 100,000 standards for delivery during 1931. Such contract to stipulate that, whatever the conditions are, buyers shall obtain the goods on conditions and at prices which show to them a reduction of 5 per cent, on the f.o.b. value of the official price list at any time ruling during 1931. Such option to be declared before Jan 1, 1931.
On Dec. 22, 1930, the plaintiffs wrote to the defendants : 'We beg to give you formal notice that we hereby exercise the option conferred upon us under our agreement with you for the purchase of 100,000 standards of softwood of fair specification for delivery during 1931. The terms of this option are set out in Clause 9 of the contract of which our part bears date May 21, 1930.
63. On receipt of this letter, the defendants repudiated their liability to supply 100,000 standards softwood goods. Thereupon, the plaintiffs laid the action for breach of contract and ultimately succeeded in recovering damages for the breach. The point that arose for consideration was whether the clause in the agreement vesting the rightof option was merely an agreement to enter into a contract and therefore not enforceable. The first passage called in aid by the Counsel for the respondent as substantiating his proposition that a condition like the one in Clause 21 of the instant case is sufficient to bring the matter within the terms of Section 7, occurs at page 503 :
'The document of May 21, 1930, cannot be regarded as other than inartistic, and may appear repellent to the trained sense of an equity draftsan. But it is clear that the parties both intended to make a contract and thought they had done so. Businessmen often record the most important agreements in crude and summary fashion; modes of expression sufficient and clear to them in the course of their business may appear to those unfamiliar with the business far from complete or precise. It is accordingly the duty of the Court to construe such documents fairly and broadly, without being too astute or subtle in finding defects; but, on the contrary, the Court should seek to apply the old English law Verba Ita Suet Intelligenda Ut Res Magis Vilnath Quam Pereat That maxim, however, does not mean that the Court is to make a contract for the parties, or to go outside the words they have used, except in so far as there are appropriate implications of law, as for instance, the implication of what is just and reasonable to be ascertained by the Court as a matter of machinery where the contractual intention is clear but the contract is silent on some detail'..... Furtherance, even if the construction of words used may be difficult, that is not a reason for holding them too ambiguous or uncertain to be enforced if the fair meaning of of the patties can be extracted.'
64. Again it is said at page 505 :
'That clause must not be construed as if it stood by itself; it is an integral part of the whole agreement; the option under it is given as one of the conditions under which the appellants agree to buy the 22,000 standards, and is part of the consideration for their agreeing to do so'.
The other passage called in aid and occurring at page 507 are :
'The conclusion of Scrutton L.J. would in very many cases exclude in law the possibility of business man making big forward contracts for furture goods over a period because in general in such contracts it must be. impossible, as I have already indicated, to specify in advance all the details of a complicated performance.'
65. Again: When the learned Lord Justice speaks of essential terms not being precisely determined i.e., by express terms of the contract, he is, I venture with respect to think, wrong in deducing as a matter of law that they must, therefore, be determined by a subsequent contract; he is ignoring as it seems to me, the legal implication in contracts of what is reasonable; which runs throughout the whole of modern English law in relation to business contracts.
The same Law Lord said 'Promissory expressions reserving an option as to the performance do not create a contract.
66. We fail to appreciate how these remarks or the judgment as a whole comes to the reasonsof the respondent. It cannot be ignored in this case that the option given to the plaintiffs in tie case was exercised by them by letter dated 22nd December 1930. It is in this exercise of option that gave rise to the contractual obligation between the parties and enabled the plaintiffs to sue for damages for breach of the contract. Reference to the exercise of this option is also made in the judgment of Lord Tomlin who observed that the contract for the sale and purchase of timber was constituted by a document in writing signed by the representatives of the parties on May 21, 1930 and letter dated December 22, 1930 written by the appellants to the respondents and purporting to exercise an option expressed to be conferred by clause 9.
67. Stress is laid by the same learned Law Lord on the circumstances that option contained in clause 9 subsisted when the plaintiffs wrote the letter dated 22nd December 1930. Reliance was placed by the learned Judge again on the letter of the plaintiffs exercising the option. At page 499 of the report, it is stated :
'It is plain that the letter of Dec. 22, 1930 together with the earlier document of May 21, 1930 constituted a binding contract.'
To the same effect are the observations at page 500 of the report.
68. Similar observations made by Lord Wright are pointers in the same direction, namely, that it is the offer of the defendants in conjunction with the letter of the plaintiffs accepting that offer that made the contract. The learned Law Lord said at page 505 :
'That clause (referred to clause 9) must not be construed as if it stood by itself; it is an integral part of the whole agreement; the option under it is given as one of the conditions under which the appellants agree to buy the 22,000 standards and is part of the consideration for their agreeing to do so. It is accordingly a binding offer, which the appellants are entitled by accepting before January 1, 1931, to turn into a contract if other objections do not prevail.'
69. The sentence 'promissory expressions reserving an option as to the performance did not create a contract' far from advancing the case of the plaintiffs has the effect of destroying it as it is clearly stated there that a mere option as to the performance does not amount to a contract.
70. This pronouncement of the House of Lords therefore is not of any help to the respondent. On the other hand, it furnishes an effective answer to his contention.
71. In Jwala Prasad Misra v. Mahadeo, 3 Ele. LR 473 (Ele. Tri. Rajnandgaon) the 1st respondent was the partner of a firm which acted as procurement agent of the Madhya Pradesh Government under a contract dated 23-1-1951 undertaking to supply foodgrains and rendering incidental services to the State Government and which contract was subsisting and operative on the 15th of November 1953 on which date the ist respondent filed his nomination-paper before the Returning Officer for a general seat. It was in that set up that it was held that he was disqualified to stand as a candidate for that seat under Section 7(d) ofthe Act. That case has no analogy here since it was a clear case of a contract to supply goods to Government.
72. Another decision relied on by the respondent is Maharaja of Parlakimedi v. Bijay Chandra Das, 4 Ele. LR 101 (Ele. Tri. Cuttack). In that case, the Governor-General in Council granted a lease to the Maharaja of Parlakimidi under which the Government demised to him for a period of 25 years a certain piece of land together with all salt pans and brine pans, described as a salt factory. The relevant clause in the lease provided that the lessor i.e., the Central Government would have the option to purchase at such rate as may be decided by the Collector from time to time 50 per cent, of the salt produced by the lessee in the factory. It was held by the Election Tribunal that the clause in question contained a contractual obligation, that the agreement was not merely a standing offer which became a contract when the Government exercised its option to purchase the sale but a binding contract to supply goods and consequently the Maharajah was interested in a contract for the supply of goods to the appropriate Government within the meaning of Section 7(d) of the Representation of the People Act, 1951. The Tribunal observed :
'The clause appears to contemplate acceptance by the Government year after year by giving notice. The Government is not bound to convert the proposal into a promise by acceptance. On the other hand, there is an obvious difficulty in construing the clause as merely a standing offer. It is an offer (made with a view to acceptance by the Government) it is, under the law of contract, revocable. In all those cases, of which R. v. Demers, 1900 AC 103 is the type, neither the offeree was forced to accept, nor was the offeror bound to continue offer; the offer was revocable. But it is hardly possible to contend that the petitioner can relieve himself of this covenant contained in the lease by giving notice of revocation. That Clause 1 of the lease gives the parties the right to determine the lease is immaterial.'
73. We think on this reasoning the Tribunal should have held that there was no subsisting contract and that notwithstanding the fact that the lessee could not revoke the offer, it would ripen into a contract only when the offer was accepted. The Tribunal failed to appreciate that the constituent elements of a contract were absent in the case. We cannot accept the principle adumbrated there as correct.
74. To the same category belongs Shankar Nanasahcb v. Maruti Sitarama, 1 Ele. LR 302 (Ele. Tri. Kolaba). That was a case of a person taking forest coupes from the Government and undertaking to re-sell fire-wood and charcoal when demanded by the Government. The Election Tribunal took a view similar to the one in 4 Ele. LR 101 (Ele. Tri. Cuttack).
75. For the reason mentioned above, we are not inclined to assent to the rule stated there. It will presently appear that several of the Election Tribunals have expressed an opinion quite contrary to this.
76. Now coming to the rulings cited by Sri Krishna Menon, learned Counsel for the appellant, they established the contention urged by him. The test to be observed in cases of this kind was laid down by the Supreme Court in Chatur-bhuj Vithaldas v. Moreshwar Parashram, : [1954]1SCR817 . What happened there was this. The election of a successful candidate from the Bhandara Parliamentary Constituency which was then in Madhya Pradesh was challenged on the ground that he was subject to the disqualification set out in Section 7(d) of the Act as he was interested in a contract for the supply of goods to the Central Government being a partner of a firm which manufactures beedies. The Central Government which was interested in selling beedies to the troops through canteen stores placed the two of the brands of beedies manufactured by the Company on its approved list and entered into an arrangement under which the latter was to sell and the Government was to buy the two brands of beedies from time to time. On these facts, it was argued that this amounted to a contract for the supply of goods within the meaning of Section 1 and the contract was embodied in four letters. The Supreme Court observed that no binding engagement could be spelt out of those letters except to the extent that the firm undertook to sell to the Canteen contractors only through the Canteen Stores and not direct and to pay a corn-mission on all sales and that constituted a continuing arrangement under which the Government would be entitled to commission on all orders placed and accepted in accordance, with the arrangement. Their Lordships added that the letters only showed that the parties were ready to do business with each other if and when orders were placed and executed. As soon as an order was placed and accepted, a contract arose and such a contract would be governed by the terms set out in the letters but, until an order was placed and accepted, there was no contract and each separate order and acceptance constituted a different and distinct contract. The principle enunciated is that a contract would not come into being till an order was placed by one party and accepted by the other party. No doubt, in that case it was held that there was a subsisting contract within the terms of Section 7(d) of the Act for the reason that orders for the goods were placed and accepted between the date of nomination and the date of the poll and that apart therefrom the firm was paid for the goods supplied by them. A judgment of a Division Bench of the Bombay High Court in Jethelal v. R.N. Kapur, : AIR1956Bom74 , is also of considerable assistance to us. That case brought out in clear terms the distinction between a case where there was present obligation under a contract hut the performance postponed to a later date and a case where there was no present obligation at all and obligation arose by reason of some condition being complied with or some contingency occurring. They held that, in the latter kind of cases, a contract would come into existence only after a contingency occurred. The facts there were that by a contract dated 19-3-48, B undertook to sell his 1000 shares to A at Rs. 50/- per share within 12 months from the date when the International Bank of India was to be converted into a Finance Corporation. He then promised that in case of his not selling hisshares, he would take delivery of 1000 shares himself belonging to A and pay for these shares at the same rate. A sued B on the second part, which had come into operation by reason of B failing to get the shares sold. The action was resisted mainly on the plea that this agreement offended against the provisions of Section 6 of the Bombay Securities Contracts Control Act which defined ready delivery contract as a contract for the purchase or sale of securities for the purpose of which no time was specified and which was to be performed immediately or within a reasonable time. According to the defendants, the contract between the parties did not satisfy the definition of ready delivery contract and therefore the document fall within the mischief of Section 6 of the Act and was therefore void. Chief Justice Chagla, who delivered the opinion of the Division Bench said that at the time when the contract was entered into, there was no present obligation with regard to the purchase or sale of the shares and as such it could not be posited that it was not a case of ready delivery. It was not a case where a present obligation having been created the parties agreed to postpone the performance. The parties intended and made their intention clear by the language of the contract itself that there was no obligation by the defendant to purchase these shares until the contingency contemplated took place. The learned Judge said that in such a situation it could not be said that it was a contract for the purchase or sale of shares which came within the mischief of the Act and that the obligation undertaken by the parties was only in the realm of potentiality. The learned Judge extracted the following passage from Salmond and Williams on Contracts, 2nd Edition page 53 with approval.
'What then does the expression conditional obligation really mean? The true answer would seem to be that a conditional obligation is not in truth a real obligation at all; it is merely the chance or possibility or potentiality of an obligation. The only real obligations are these which are absolute. But the chance or possibility or potentiality of an obligation is itself called an obligation by way of anticipation or prolepsis and is distinguished from a genuine or absolute obligation by the qualifying epithet conditional'.
77. In the same trend of thought is the Bengal Coal Co. Ltd. v. Homee Wadia and Co., ILR 24 Bom 97. The Bengal Coal Company Limited,' carrying on business in Bombay through their agents, the Bombay Company Limited, undertook to supply Messrs. Homee Wadia and Co., the plaintiffs for a period of 12 months from 1st September 1897 to 31st August 1898 a particular brand of coal as required by the plaintiffs, provided reasonable notice of the requirements was given to the defendants. The total quantity indented for during the year should not exceed, without the seller's consent, the maximum average of 350 tons per month. Under this contract, the plaintiffs intended for and the defendants delivered total quantity of 1652 tons. By subsequent letters, they indented for further quantities. The defendants supplied a part of the requirements but refused to deliver any more coal beyond what was already delivered. The plaintiffs then brought an action for damages for nondelivery of coal.
78. It was held by a Division Bench of the Bombay High Court that the memorandum dated 19-8-1897 signed by both parties under which the parties entered into an arrangement was not a contract but simply a continuing offer made by the defendants to the plaintiffs and that each successive order given by the plaintiffs under it while it remained in force was an acceptance of the offer as to the quantity indented for. Chief Justice Jenkins, who spoke for the Court observed :
'It is an invariable principle of the law of contracts that an offer by one person made to another imposes no obligation on the former until it is accepted by the latter according to the terms in which the offer is made.'
The doctrine of Coope v. Ridout, 1921-1 Ch. 291 is in consonance with this principle. It was decided there that if an offer contained a condition that a written agreement made inter partes should be formally entered into there was no enforceable contract in the absence of such a document.
79. A similar rule is stated in Gian Chand v. Sri Ram Bansal, 2 Ele. LR 136 (Ele. Tri. Patiala). It was held there that a lease of a Government quarry for the extraction of ore did not amount to a contract for the supply of goods to the Government within the terms of Section 7(d) of the Act notwithstanding a term therein that if the Government should require any quantity of stone or sand, the contractor would not refuse to sell the same to the Government at the current rate.
80. To a like effect in the ruling of the Election Tribunal, Faizabad, in Bholanath v. Krishna Chandra, 6 Ele LR 104 (Ele. Tri. Faizabad), one of the questions that posed itself there was whether a lease given by the Deputy Commissioner Sitapur on behalf of the U.P. Government under Section 3(4) of the Land Utilisation Act on a particular yearly rental and which contained a term that the tenant has to sell to the State Government on demand by the Collector half of the grain produced over the land at such rate as may be fixed from time to time, would come within the mischief of Section 7(d) of the Act. They field that this clause did not operate to disqualify the tenant under Section 7(d) of the Act.
81. The same principle is contained in Khushwaat Rai v. Karan Singh, 11 Ele LR 1 (Ele. Tri. Lucknow). One of the members of the Tribunal, who was a party also to 6 Ele LR ro4 (Ele. Tri. Faizabad), went back upon the view taken by him in the earlier case and struck a dissenting note. He thought that he should reconsider his earlier view as he came to feel that 4 Ele LR 101 (Ele. Tri. Cuttack), represented the correct law.
82. It is cot necessary to refer to the rulings of the other tribunals, which are in accord with this doctrine. On a consideration of the language of Section 7(d) and the ruling cited above, we have reached the decision that the undertaking given by the appellant in Clause 21 of the mining lease does not constitute a subsisting contract within the mischief of Section 7(d) and that it is merely an arrangement having potentiality or possibility of becoming a contract. Consequently, he had not incurred the disqualification contemplated by that section and he was entitled to stand for election.
83. In the result, we allow the appeal and reverse the decision of the Election Tribunal. The respondent will pay a sum of Rs. 100/- by way of costs of the appellant, C.M.P. 3496/63 : Ordered.