KANTILAL DHANJI NAROLA v. COLLECTOR AMRELI — 1990 DIGILAW 79 (GUJ)

G. T. NANAVATI, J. ( 1 ) RULE. Miss Rekha Doshit Assistant Government Pleader appears for the respondents and waives service of Rule. With consent of the learned Advocates this petition has been taken up for final hearing and is being disposed of by this judgment. ( 2 ) BY a notification dated 10-5-1990 respondent No. 1 who is the District Collector Amreli - the Election Authority has notified the date of election of Damnagar Nagar Panchayat and fixed dates for various stages of election. The petitioner who is eligible and qualified for being elected as a member of the Nagar Panchayat submitted four nomination forms for four different wards before the appointed day. The scrutiny of nominations took place on 25-5-1990. The petitioners nominations were objected to by one Sureshbhai Jagannath Mehta on the ground test the petitioner had a share or interest in the contract with the Panchayat and thus he is not qualified to be a member of the Panchayat. It is the petitioners allegation that the Returning Officer without holding a proper inquiry and without giving an opportunity of hearing to the petitioner by his separate orders dated 25-5-1990 rejected his nomination papers under Sec. 23 (g) of the Gujarat Panchayats Act. The petitioner there- after filed four appeals to the Election Authority against the orders of the Returning Officer. The Election Authority by its common order dated 30-5-1990 dismissed the appeals. The petitioner has therefore filed this petition challenging the orders passed by the Returning Officer and the Election Authority. ( 3 ) THE question which arises for determination is whether there was any subsisting contract between the petitioner and the Nagar Panchayat on the day on which the petitioner had filed his nomination papers for contesting the election of the Panchayat. The petitioner tad filed his nomination papers on 24-5-1990. He had earlier on 7-4-1979 entered into a contract with the Panchayat to construct six cabins. The said work was to be completed within 120 days. The petitioner constructted three cabins but the work done by him was not found to be satisfactory and therefore. on 7-8-1979 the Panchayat had informed him not to carry out further construction work. The Panchayat took possession of the three cabins which were already constructed by the petitioner As against the claim of Rs 21 0 for constructing the said three cabins the petitioner was paid Rs. on 7-8-1979 the Panchayat had informed him not to carry out further construction work. The Panchayat took possession of the three cabins which were already constructed by the petitioner As against the claim of Rs 21 0 for constructing the said three cabins the petitioner was paid Rs. 15 0 After about five years the Panchayat gave notice dated 22-5-1984 to the petitioner calling upon him to hand over possession of the throe cabins and to refund the excess amount paid to him The Panchayat then Filed Regular Civil Suit No 24 of 1984 in the Court of Civil Judge (J. D.) for obtaining the same reliefs The Civil Court hold that the Panchayat has failed to prove that the work: done by the petitioner was sub- standard The Civil Court also did not believe the Panchayats case that possession of three cabins was not handed over to it by the petitioner in 1979 The Civil Court therefore dismissed the suit on 28 Neither the petitioner nor the Panchayat had taken any action thereafter against each other in respect of that contract on these facts and circumstances it is now required to be decided whether the contract entered into between the petitioner and the Panchayat in the year 1979 can be said to be subsisting even now ( 4 ) BOTH the authorities have taken the view that the said contract is still subsisting The Election Authority in its order has stated test as rights and liabilities under the contract are still not finally settled the contract between the parties must be regarded as subsisting For coming to that conclusion the Election Authority has relied upon the decision of the Mysore High Court in H. R. Annamalal Mudaliar v. Devaraja Urs and Ors. AIR 1968 Mys. 140. AIR 1968 Mys. 140. ( 5 ) WHAT is contended by the learned Counsel for the petitioner is that in view of the facts and circumstances of this case the contract which the petitioner had entered into with the Panchayat in the year 1979 cannot be said to be subsisting on the date on which the petitioner had filed his nomination papers and therefore the Returning Officer was in error in rejecting the petitioners nominations He submitted that the contract had come to an end when in 1979 the Panchayat took over possession of the three cabins which the petitioner had already constructed and directed the petitioner not to construct the remaining three cabins He also submitted that the Panchayat had also treated the contract as having come to an end as it did nothing till 1984 when for the first time it gave a notice to the petitioner In the alternative he submitted that in any case when the Civil Court decided the suit filed by the Panchayat on 28-5-1986 the rights and liabilities of the parties can be said to have been settled because the petitioner had not raised any dispute with respect to the said contract and disputes which wore raised by the Panchayat were decided against it by the Civil Court Even the Panchayat had thereafter not raised any dispute or challenged the said decision of the Civil Court ( 6 ) AS pointed out above it is a fact that no action was taken by the Panchayat against the petitioner between 1979 and 1984 and it had neither challenged the decision of the Civil Court nor taken any other action after 28-5-1986. Thus looking to the facts and circumstances of the case it can be said that both the parties hat proceeded on the basis that the contract had come to an end If the contract had remained subsisting between the parties the Panchayat would not have directed the petitioner not to complete the remaining work and take possession of the three cabins which were already consternated. It is no doubt true that in 1984 the Panchayat did tive a notice and then file a suit but us pointed out by the Civil Court in its judgment the said action appears to have been taken as a result of personal ill-will between the petitioner and the Administrator who was in-charge of the Panchayat in the year 1984 If the Panchayat really believed that the contract was subsisting it would hare called upon the petitioner either to perform his obligations under the contract or get the remaining work done at the cost and risk of the petitioner No such notice was given to the petitioner Therefore it can safely be said that the contract had really come to an and in the year 1979 and whatever disputes had arisen as regards the rights and liabilities of the parties had also finally come to an end on 28-5-1986. ( 7 ) ON the point of law also the view taken by the Election Authority is not correct in Atma Das v. Surya Prasad 1969 (3) SCC 616 a case arising under Sec 9-A of the Representation of the People Act 1951 the Supreme Court has held that by merely proving that a candidate had at some time in the past entered into a contract to execute the works the burden of proving dis-qualification which lies upon the party contending like that cannot be said to have been discharged. It is further required to be established that the contract was subsisting at the crucial date The Supreme Court observed that failure on the part of the Government and the contractor to settle their respective claims for six years did not evidence an intention to keep the original contract as subsisting on the nomination date for the election. It is further required to be established that the contract was subsisting at the crucial date The Supreme Court observed that failure on the part of the Government and the contractor to settle their respective claims for six years did not evidence an intention to keep the original contract as subsisting on the nomination date for the election. It is further observed that the silence was evidence of acquiescence in the abandonment of the contract and not of a subsisting contract ( 8 ) IN S. Munishamappa v. B. Vanketarayappa AIR 1981 St: 1177 also a case under Sec 9-A of the Representation of the People Act the Supreme Court has observed as under even if it be held that the appellant bad committed a breach of the contract the contract could not be said to be subsistence thereafter If the contract was discharged by breach on the part of the appellant the entire contract necessarily goes and along With they the agreement if there be any with regard to the maintenance must necessarily go leaving the party aggrieved to take steps to recover damages for such Breach The contract however could not be said to be subsisting The fact that the bills of the appellant were settled at a later date and that the security deposit was refunded later on would not disqualify the appellant in view of the explanation of Sec. 9-A of the Act. ( 9 ) IN Income Tax Officer New Delhi and Ors v. Shri Rattan Lal and Ors. AIR 1984 SC 989 the contractor had unilaterally put an end to the contract and informed the department concerned accordingly The Supreme Court held that after that letter the contract came to an end by breach and the contract was no longer subsisting ( 10 ) THE learned Counsel drew my attention to the decision of the Supreme Court in Abdul Rahiman v. Sadasiva AIR 1969 SC 302 wherein it is observed that when the contract is not wholly performed then in such a case unless it is shown that the contractor will complete it or that there is determination by mutual consent of the contract the candidate cannot claim that there is no subsisting contract at the date of filing of nomination paper. He submitted this observation has to be read in the context of the facts of that case and the contentions raised therein. He submitted this observation has to be read in the context of the facts of that case and the contentions raised therein. In that case the contention which was raised on behalf of the candidate was that it is at his request that the contract was cancelled and on that account on the date of filing of his nomination there was between him and the other side no subsisting contract for execution of the works undertaken by him. It was this contention which was negatived by the Supreme Court by making the aforesaid observation. ( 11 ) THESE decisions of the Supreme Court relied upon by the learned Counsel for the petitioner support his contention that once abandonment of the contract is proved or it is shown that both the parties to the contract have proceeded on the basis that it has come to an end may be by breach thereof the contract cannot be said to be subsisting thereafter. ( 12 ) MISS Doshit appearing for the respondents relied open the following observation made by the Supreme Court in Laliteshwar Prasad v. Bateshwar Prasad AIR 1566 SC 580:we hold that a contract for the supply of goods or for the execution of aay works or the performance of any services undertaken dots lost case to subsist only because the goods had been supplied or work had been executed or services performed it continues to subsist till payment is made and the contract is fully discharged by performance on both the sides. Even this decision does next support the contention that a contract remains subsisting till the rights and liabilities arising under it are finally settled. Moreover they can have no application to a case of abandonment of contract. ( 13 ) IN view of the above decisions of the Supreme Court it is not possible to agree with the view expressed in H. R. A. Mudaliar v. Devaraja Urs (supra) that a contract should be regarded as subsisting till the rights and liabilities arising under the contract are finally settled. ( 13 ) IN view of the above decisions of the Supreme Court it is not possible to agree with the view expressed in H. R. A. Mudaliar v. Devaraja Urs (supra) that a contract should be regarded as subsisting till the rights and liabilities arising under the contract are finally settled. If the view taken by Mysore High Court is held as correct then one can visualise a case where for years together a candidate will remain disqualified only because be had in the past entered into a contract with a body to which he is seeking election and the rights and liabilities arising under the contract are not finally settled either because there is no desire on the part of the parties to settle them or because the dispute between the parties is pendency in a Court of Laws. That could not hive been the intention of the Legislature while enacting Sec. 23 (g) of the Act. Therefore it will have to be held that the Returning Officer was in error is rejecting the nomination of the petitioner and the Election Authority was in error in dismissing his appeals. ( 14 ) IN the result this petition is allowed. The orders passed by the Election Authority and the Returning Officer are quashed and set aside and the Returning Officer is directed to treat the nominations of the petitioner as valid and proceed further according to law. Rule is made absolute accordingly with no order as to costs Writ to be sent Immediately. (KMV) Rule made absolute. .