Narayan Shanker v. Shivkumar Shrivastava — 1978 DIGILAW 155 (MP)

Short Note : By this election petition, the petitioner Narayan Shanker challenges the election of Shiv Kumar Shrivastava, the first respondent in this petition, who was declared elected in the last Assembly elections to the Madhya Pradesh Legislative Assembly from the Sagar Legislative Assembly Constituency No. 39. The petitioner was also a candidate at the said election from the same constituency. The petitioner contested the election on Janta Party ticket; whereas, the first respondent was a candidate of the Congress Party. 2. A number of grounds were raised in the petition for challenging the election. On the pleadings of the parties, the following issues were framed :- 1. (a) Was respondent No. 1 proprietor of Sagar Press referred to in para 4(1) of the petition at the relevant time? (b) Was any contract for printing and supplying Electoral Rolls between the Sagar Press and the State Government subsisting during the period from 11-5-1977 to 15-6-1977 ? (c) Was respondent No. 1 disqualified to contest the election because of the subsistence of the aforesaid contract? (Other issues need not be reproduced, because neither they were pressed nor decided -Ed.) Held : Before proceeding further, it would be convenient to have an idea of the election programme. The nomination papers could be filed from 11th May 1977 to 18th May 1977. 19th May 1977 was the date of the scrutiny of the nomination papers. The polling took place on 10th June 1977 and the result was declared on 15th June 1977. 3. The petitioner's case is that the first respondent was disqualified for being a candidate at the election under section 9-A of the Representation of the People Act, 1951, as there subsisted a contract between him and the State Government for the supply of electoral rolls and lists of polling stations on the date of the scrutiny of the nomination papers. In this connection, the petitioner's allegations are that Sagar Press, Sagar, is owned by the first respondent and his brother jointly, that this press was given a contract for printing electoral rolls and lists of polling stations and that this contract subsisted on the date of the scrutiny of the nomination papers. In this connection, the petitioner's allegations are that Sagar Press, Sagar, is owned by the first respondent and his brother jointly, that this press was given a contract for printing electoral rolls and lists of polling stations and that this contract subsisted on the date of the scrutiny of the nomination papers. During the evidence, however, the petitioner has confined himself to the contract for printing lists of polling stations and no evidence was led on the point that there was any contract given to Sagar Press for printing electoral rolls during the relevant period. The first respondent meets the petitioner's case in two ways. It is first pleaded by him that although Sagar Press was originally jointly owned by him and his brother Krishna Kumar Shrivastava, on 31st July 1976 he transferred his entire interest in the press in favour of his brother and, therefore, even if there subsisted any contract between Sagar Press and the Government for priming lists of polling stations, he was not affected by it. It is next pleaded that the contract for printing lists of polling stations given to Sagar Press did pot subsist on the date of the scrutiny of the nomination papers and that the work was completed on 16th May 1977, i.e., three days before the date of the scrutiny. It may here be mentioned that the objection that the first respondent was disqualified in view of the contract given to Sagar Press for printing lists of polling stations was raised at the time of the scrutiny of the nomination papers by the propose of the petitioner. The objection was rejected on the ground that the objector failed to substantiate that the first respondent had any share or interest in Sagar Press. 4. It is common ground that Sagar Press was originally owned by the first respondent and his brother Krishna Kumar Shrivastava. To be more accurate, this press before 1959 or 1960 belonged to one Ratikant. The first respondent and his brother purchased the press from Ratikant and they and the admittedly continued to be joint owners till 31st July 1976. On this date, according to the case of the first respondent, he transferred his half interest in the press to his brother for a sum of Rs. 7,500/- and thereafter the press was solely owned by his brother. The petitioner has disputed this position. On this date, according to the case of the first respondent, he transferred his half interest in the press to his brother for a sum of Rs. 7,500/- and thereafter the press was solely owned by his brother. The petitioner has disputed this position. It is, therefore, to be decided whether the first respondent transferred his half interest in the press on 31st July 1976 as alleged by him. 5. What is significant is that the petitioner has failed to produce any evidence whatsoever to show that the first respondent participated in any manner in the business of the press after 31st July 1976. Learned counsel for the petitioner has, however, drawn my attention to four circumstances which, according to him, militate against the genuineness of Ex.R/16-0. These circumstances are; (i) no notice was given under section 176(3) of the Income-tax Act, 1961, after the transfer of his interest in the press by the first respondent; (ii) no public notice was given under section 32(3) of the Partnership Act, 1932; (iii) no fresh declaration was given under section 4 of the Press and Registration of Books Act, 1867; and (iv) the document was not produced at the time of scrutiny of the nomination papers by the first respondent. 6. As regards the failure to give notice under section 176(3) of the Income-tax Act, it is to be noticed that this provision requires notice in case of discontinuance of the business. The words "discontinued" and "discontinuance" as used in section 176 do not cover a case of mere change of ownership or a change in the constitution of the firm, but they refer to a complete cessation of business. Change of ownership, when the identity of business is preserved and the business is continued, is covered by section 170, which deals with succession. When an individual admits partners to a business which till then was solely carried on by himself; or when a partnership is dissolved and one partner or a new firm takes over and continues the business, there is no discontinuance of the business within the meaning of section 176, but there is succession within the meaning of section 170. [See Kanga and Palkhivala, The Law and Practice of Income-Tax, 7th edition, Vol. I, pp 973 & 995]. [See Kanga and Palkhivala, The Law and Practice of Income-Tax, 7th edition, Vol. I, pp 973 & 995]. No notice was, therefore, necessary under section 176(3) when the first respondent transferred his interest in the business in favour of his brother. Failure to give the notice, therefore, cannot be taken to be a circumstance throwing doubt on the genuineness of Ex.R/16-0. 7. As regards the omission to give a public notice under section 32(3) of the Partnership Act, the argument pre-supposes that the relationship between the two brothers was that of partners. They, however, do not admit that they were partners; they call themselves co-owners. Even assuming that the first respondent and his brother were partners, omission to give a public notice will only result in making the first respondent liable to third parties who have no notice of the transfer. In my opinion, it is not such a circumstance which throws any doubt as to the genuineness of the transfer. 8. As regards the failure to give a fresh declaration under section 4 of the Press and Registration of Books Act, the explanation of the first respondent is that the declaration previously given was only in the name of Krishna Kumar Shrivastava and, therefore, it was not thought necessary to give any fresh declaration. Krishna Kumar Shrivastava (R.W.4) has produced Ex.R-17, a copy of the declaration given on 10th May 1960. This declaration is only in the name of Krishna Kumar Shrivastava. The explanation of the first respondent is, therefore, justified that no fresh declaration was thought to be necessary after execution of Ex.R/16-0. Had the previous declaration been in the name of both, the first respondent and his brother, it would have been said that a fresh declaration was necessary after the first respondent transferred his half interest in the press in favour of his brother. But when the declaration already stood solely in the name of the brother, no further declaration was required after the transfer. 9. Coming to the last circumstance that the first respondent did not produce Ex.R/16-0 at the time of scrutiny of the nomination papers when the objection was taken to his nomination, his explanation is that the objector on whom lay the burden to substantiate the objection failed to produce any evidence, therefore, he did not produce Ex.R/16-0 or any other evidence to rebut the objection. In my opinion, this explanation is reasonable. 10. On the finding that the first respondent had no interest in Sagar Press after 31st July 1976, it is wholly unnecessary to consider whether any contract for printing lists of polling stations subsisted between Sagar Press and the State Government on the date of scrutiny of the nomination papers. However, as the parties have led evidence on this point, I proceed to consider the same .... 11. On a consideration of the evidence, my finding, therefore, is that the work of printing and supplying lists of polling stations was completed on 16th May 1977 and that the contract did not subsist on the date of the scrutiny of the nomination papers, which was 19th May 1977, for purposes of section 9-A of the Representation of the People Act. It is to be noted that under the explanation to this section, where a contract has been fully preformed by the person by whom it has been entered into, the contract shall be deemed not to subsist by reason only of the fact that the Government has not performed its part of the contract either wholly or in part. In the instant case, although the payment for the contract of printing was made by the Government much later, yet as Sagar Press had done all that it was required to do under the contract before the date of the scrutiny of the nomination papers, the contract did not subsist on that date for purposes of section 9-A. 12. Some doubt was also raised during arguments whether a contract for printing lists of polling stations would be a contract with the State Government and, therefore, within the mischief of section 9-A. The preparation of lists of polling stations is obviously taken by the election officers functioning under the supervision of the Election Commission for purposes of the election. The printing of the lists is, however, something different from preparation of the lists. The duty of preparation of the lists of polling stations like the preparation of electoral rolls may be on the Election Commission and the officers functioning under its supervision and control. But the law does not provide that the Election Commission should itself enter into a contract for printing the electoral rolls or the lists of polling stations. The duty of preparation of the lists of polling stations like the preparation of electoral rolls may be on the Election Commission and the officers functioning under its supervision and control. But the law does not provide that the Election Commission should itself enter into a contract for printing the electoral rolls or the lists of polling stations. A perusal of the file Article-A will show that the notice inviting tenders for printing lists of polling stations was issued on instructions from the State Government and the payment was also made by the State Government. It is, therefore, clear that the contract of printing lists of polling stations was entered into not with the Election Commission but with the State Government. In Mahendra Kumar v. Vidyavati, AIR 1956 SC 315 , the question was whether the contract for printing electoral rolls could be said to be a contract with the State Government. It was held in that case that the contract was not with the Election Commission but with the Government and, therefore, the person entering into the contract would incur a disqualification if the contract subsisted at the relevant time. On the same reasoning, it must be held in this case that the contract of printing lists of polling stations was with the State Government. This contract could have disqualified the first respondent had he not transferred his share in Sagar Press on 31st July 1976 and had the contract not been completed before the date of scrutiny of the nomination papers. Petition dismissed.