REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 4129 OF 2009

P.H. Paul Manoj Pandian       ... Appellant

Versus

Mr. P. Veldurai       ... Respondent

J U D G M E N T

J.M. Panchal, J.

This  appeal,  under  Section  116A  of  the  

Representation of  People Act,  1951,  is  directed against  

judgment  dated  December  2,  2008,  rendered  by  the  

learned Single Judge of the High Court of Judicature at

Madras in Election Petition No. 2 of 2006 by which the  

prayer  of  the  appellant  to  declare  the  election  of  the  

Returned  Candidate,  viz.,  the  respondent,  from  220  –  

Cheranmahadevi  Assembly  Constituency  of  the  Tamil  

Nadu Legislative Assembly as null and void, is refused.

2. The relevant facts emerging from the record of the  

case are as under: -

The Election Commission notified election schedule  

for  the  Thirteenth Tamil  Nadu Legislative  Assembly on  

March 3,  2006.  Pursuant to the said notification,  the  

Returning  Officer,  Cheranmahadevi  called  for  

nominations  for  Cheranmahadevi  Assembly  

Constituency.   The  last  date  for  filing  the  nomination  

papers was April 20, 2006.  The date of scrutiny of the  

nomination papers was April 21, 2006 and the election  

was to be held on May 8, 2006.  The appellant filed his  

nomination  papers  on  April  17,  2006.   So  also  the  

respondent  filed  his  nomination  papers  on  April  17,  

2006.   The  nomination  papers,  filed  by  both,  i.e.,  the  

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appellant  and  the  respondent  were  accepted  by  the  

Returning Officer.  During the scrutiny of the nomination  

papers  on  April  21,  2006,  the  appellant  raised  an  

objection  that  since  the  respondent  had  subsisting  

contracts  with the Government,  his  nomination papers  

should not be accepted.  The respondent filed his counter  

stating that the contracts entered into by him with the  

Government  were  terminated  before  filing  of  the  

nomination papers and, therefore, his nomination papers  

were  not  liable  to  be  rejected.   The  Returning  Officer  

passed  an  order  dated  June  26,  2006  over-ruling  the  

objections filed by the appellant.

The  election  for  the  Tamil  Nadu  Legislative  

Assembly took place on the scheduled date, i.e., on May  

8, 2006.  The results were declared on May 11, 2006 and  

the respondent was declared elected.  Therefore, feeling  

aggrieved, the appellant  filed Election Petition No.  2 of  

2006 under Sections 80 to 84 read with Section 100(1)(a)  

and Section 9A of the Representation of People Act, 1951  

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(“the  Act”  for  short)  read  with  Rule  2  of  the  Rules  of  

Madras High Court – Election Petition, 1967, challenging  

the election of  the  respondent  on the ground that  the  

respondent was disqualified from submitting nomination  

papers and consequently from contesting the election as  

he had subsisting contracts with the Government.  The  

appellant made reference to G.O.Ms. No. 4682 of Public  

Works Department dated November 16, 1951 and stated  

that  in  the  light  of  the  contents  of  the  said  G.O.  a  

contractor  would  be  entitled  to  terminate  a  subsisting  

contract only if other contractor acceptable to the Chief  

Engineer was available and that another contractor was  

willing  to  enter  into  a  contract  to  execute  the  works  

under the existing terms and conditions so that no loss  

was  suffered  by  the  Government.   The  case  of  the  

appellant was that as per the said G.O. dated November  

16, 1951, termination of a subsisting contract would take  

place  only  after  settlement  of  the  rights  and liabilities  

between the Government and the existing contractor, but  

in the present case no such settlement had taken place  

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between  the  respondent  and  the  Government  and,  

therefore, the election of the respondent was liable to be  

set aside.  What was maintained in the Election Petition  

was  that  the  respondent  had  not  terminated  his  

subsisting contracts in terms of G.O. dated November 16,  

1951 and mere removal of the name of the respondent  

from  the  list  of  approved  contractors  should  not  be  

construed as termination of the contracts as long as the  

contracts were not specifically terminated in terms of the  

aforesaid G.O.  The main prayer in the Election Petition  

of  the  appellant  was  to  set  aside  the  election  of  the  

respondent.

3. On service of notice, the respondent contested the  

Election  Petition  by  filing  reply  affidavit.   In  the  

reply  it  was  stated  that  the  respondent  was  not  

having  any  subsisting  contract  with  the  

Government on the date of filing of his nomination  

papers as well as on the date of the scrutiny of the  

nomination papers.  According to the respondent it  

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was  not  necessary  to  follow  the  procedure  

contemplated under the G.O. dated November 16,  

1951 before termination of contracts for contesting  

the  election.   What  was  maintained  by  the  

respondent was that even if it was assumed that the  

conditions  enumerated  in  the  G.O.  were  not  

followed, that would not nullify the termination of  

the contracts if made.  According to the respondent  

the  Divisional  Engineer  (Highways)  NABARD  and  

Rural Roads, Nagercoil had terminated the contract  

on  April  17,  2006  and  had  freezed  as  well  as  

forfeited the deposits of the amount made by him  

for  crediting  the  same  into  Government  account.  

Thus,  according  to  the  respondent,  it  was  not  

correct to say that any contract was subsisting as  

far as the works relating to Tirunelveli Division was  

concerned.  After mentioning that only a procedure  

as  mentioned  in  G.O.  dated  November  16,  1951,  

was left to be followed by the subordinate officials of  

the Government, it was stated that non-observance  

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of  the  said  G.O.  would  not  nullify  the  order  

terminating  the  contract  issued  by  the  Divisional  

Engineer  on  April  17,  2006.   The  respondent  

maintained  that  he  was  no  longer  a  registered  

contractor  with  the  Tamil  Nadu  State  Highways  

Department  nor  was  he  having  any  subsisting  

contract in respect of the works referred to in the  

Election Petition and, therefore, his election was not  

liable to be set aside.  It was further stated in the  

reply that balance work not executed by him was  

completed  by  the  substitute  contractor  S.  

Rajagopalan  on  the  same  terms  and  conditions,  

which  were  agreed  upon  by  him  with  the  

Government  to  execute  the  works  concerned  and  

thus no loss was suffered by the Government.  The  

averment  made  in  the  Election  Petition  that  the  

respondent  had  not  made  any  alternative  

arrangement  for  another  contractor  was  

emphatically  denied  by  him.   By  filing  reply,  the  

respondent  had  demanded  the  dismissal  of  the  

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Election Petition.

4. Having regard to the pleadings of  the parties,  the  

learned  Single  Judge  of  the  High  Court,  framed  

necessary  issues  for  determination.   In  order  to  

prove  his  case,  the  appellant  examined  four  

witnesses  including  himself  and  produced  

documentary evidence at Exhibits P-1 to P-21.  The  

respondent  examined  himself  as  RW-1  and  one  

another  witness  as  RW-2  and  also  produced  

documents at Exhibits R-1 to R-21 in support of his  

case pleaded in his written statement.  The record  

further  shows  that  Exhibits  C-1  to  C-32  were  

marked as Exhibits at the instance of the learned  

Single Judge.

5. On  perusal  of  the  election  petition  filed  by  the  

appellant,  the  learned  Judge  held  that  it  was  

pertinent to note that the appellant had never set  

up  a  plea  that  the  Divisional  Engineer,  Nagercoil  

had no authority to terminate the contract entered  

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into with the respondent nor any plea was raised to  

the  effect  that  there  was  collusion  between  the  

respondent  and the Divisional  Engineer,  who was  

examined  as  RW-2  nor  was  it  averred  in  the  

Election Petition that the respondent had mounted  

pressure  on  the  Divisional  Engineer,  Nagercoil  to  

terminate the contract and the Divisional Engineer  

had yielded to such pressure.  Having noticed the  

above  mentioned  defects  in  the  pleadings,  the  

learned Judge observed that in view of the failure of  

the  appellant  to  plead  necessary  facts  and  raise  

contentions, it was not necessary for him to decide  

the issues regarding which no averments were made  

in  the  Election  Petition.   The  learned  Judge  took  

into  consideration  the  evidence  adduced  by  the  

parties and the principle laid down by this Court in  

Competent Authority vs. Bangalore Jute Factory  

and others (2005) 13 SCC 477, wherein it is held  

that where a statute requires a particular act to be  

done in a particular manner, the act has to be done  

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in that manner alone and in no other manner and  

concluded that the G.O. dated November 16, 1951,  

issued by the Government of Tamil Nadu, was only  

an  administrative  instruction  but  not  a  statute  

enacted by the Legislature and, therefore, the ratio  

laid down in the above mentioned decision was not  

applicable  to  the  facts  of  the  case.   The  learned  

Judge held that it was rightly pointed out that the  

Government  Order  dated  November  16,  1951  

contained  only  administrative  instructions  and  

while communicating the said Government Order to  

the  Superintending  Engineers  and  Divisional  

Engineers,  it  was  specifically  mentioned  that  the  

said administrative instruction was for information  

and guidance.  What was deduced by the learned  

Single  Judge was that  the  Government  Order  did  

not say that the Chief Engineer was the authority to  

terminate the contract of a contractor, entered into  

with  the  Government,  nor  the  Government  Order  

stated that an order of termination could be issued  

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only when Chief  Engineer had accepted a person,  

who was available and was willing to enter into a  

contract  on the same terms and conditions.   The  

learned Judge was of the opinion that a contractor,  

who wanted to terminate his contract, had nothing  

to do with the administrative instructions issued by  

the Government  Order  dated  November  16,  1951.  

After  referring to Exhibit  C-11 it  was held by the  

learned  Judge  that  the  agreements  were  entered  

into between the Governor of Tamil Nadu on the one  

hand  and  the  respondent  on  the  other  and  on  

behalf  of  the  Governor,  Superintending  Engineer,  

NABARD had signed the agreement.   The learned  

Judge  found  that  when  the  Sub-Division  was  

brought  under  the  direct  domain  of  the  

Superintending Engineer,  the clause in agreement  

entered into between the parties that in the event of  

transfer  of  work  to  another  circle/division/sub-

division/  Superintending  Engineer/Divisional  

Engineer/Assistant Divisional Engineer, who was in  

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charge  of  the  circle/  division/sub-division  having  

the jurisdiction over the works would be competent  

to exercise all the powers and privileges reserved in  

favour of the Government, would not be applicable.  

According  to  the  learned  Judge,  the  record  

produced showed that the Divisional Engineer had  

terminated the contract only under the blessings of  

the Superintending Engineer, NABARD, which order  

was  subsequently  ratified  by  the  Superintending  

Engineer by his proceedings dated April  26, 2006  

and,  therefore,  it  was  wrong  to  say  that  the  

contracts were not terminated as required by G.O.  

dated  November  16,  1951.   The  learned  Judge  

referred to Exhibit P-17 dated April  17, 2006 and  

concluded  that  the  contract  with  the  respondent  

was already terminated by the Divisional Engineer  

whereas Exhibit C-12, the office note, was wrongly  

prepared  on  the  footing  that  the  order  of  

termination  was  yet  to  be  passed.   The  learned  

Judge found that the order of ratification passed by  

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the Superintending Engineer PW-4 being Exhibit P-

19  dated  April  26,  2006  validated  the  order  of  

termination  of  contracts  passed  by  the  Divisional  

Engineer on April 17, 2006 and the contracts stood  

validly  terminated  as  on  the  date  of  filing  of  

nomination papers by the appellant.  According to  

the  learned  Judge  the  substitute  contractor  S.  

Rajagopalan was a registered contractor as on April  

17, 2006 and at the time when the contract with the  

respondent  was  terminated  by  the  Divisional  

Engineer, a substitute contractor, who was willing  

to perform the remaining work left  behind by the  

respondent,  was made available and having made  

available  a  substitute  contractor  to  step  into  his  

shoes to perform the remaining part of the contract,  

the  respondent  had  got  the  contract  validly  

terminated.   The  learned  Judge  interpreted  the  

Government  Order  dated  November  16,  1951  to  

mean that the Chief Engineer was not vested with  

the power to terminate the contract.  According to  

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the learned Judge the said G.O.  did not say that  

only after the Chief Engineer had accepted such a  

substitute  contractor,  an  order  terminating  

contracts  should  be  passed.   The  learned  Judge  

noticed that the Chief Engineer was not a party to  

the contract and even if it was assumed for the sake  

of  argument  that  there  was  a  breach  of  the  

conditions  laid  down  in  the  Government  Order  

dated  November  16,  1951,  failure  to  follow  the  

procedure  or  breach of  the  said  Order  would not  

nullify  the order terminating the contracts passed  

by the Divisional Engineer and subsequently ratified  

by the Superintending Engineer.

6. In  view  of  the  above  mentioned  conclusions  and  

findings,  the  learned  Judge  has  dismissed  the  

Election  Petition  by  judgment  dated  December  2,  

2008, which has given rise to the instant appeal.

7. This Court  has heard the learned counsel  for  the  

parties at length and in great detail.  This Court has  

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also considered the documents forming part of the  

appeal.

8. From the pleadings of the parties, it is evident that  

the  controversy  centres  around  the  Government  

Order dated November 16, 1951 and, therefore,  it  

would  be  advantageous  to  reproduce  the  said  

Government Order, which reads as under: -

“Government of Madras

Abstract

Contracts – Highways Department – Ensuing  General Elections to Legislature – Request of  Contractors  for  withdrawal  from  Subsisting  Contracts and removal of the name from list of  approved contractors – instructions – issued.

@@@@@

Public Works Department

G.O.Ms. No. 4682

Dated 16th November, 1951

Read the following:

From  the  Chief  Engineer  (Highways)  Lr.  No.  56703/D2/51-1 dated 8th November, 1951.

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From  the  Chief  Engineer  (Highways)  Lr.  No.  55865/D2/51-2 dated 13th November, 1951.

@@@@@

Order:

In his letter first cited the Chief Engineer  (Highways)  has  reported  that  several  contractors  in  the  State  who  have  got  subsisting  contracts  under  Government  and  District Boards have applied for closing their  accounts and for removal of their names from  the  list  of  approved  contractors  in  order  to  enable  them  to  stand  for  election  as  a  candidate.   As the  existing provisions  in the  preliminary  specification  to  Madras  Detailed  Standard  Specifications  do  not  permit  the  contractors  to  withdraw  from  their  existing  contracts for the reasons now given by them,  the Chief Engineer has requested instructions  on the  general  policy  to  be  adopted  in  such  cases.

2. After careful examination His Excellency  the  Governor  hereby  directs  that  the  contractors  who  desire  to  stand  for  election as candidates for the Legislatures  be permitted to terminate their subsisting  contracts  and  also  get  their  names  deleted  from  the  list  of  approved  contractors  provided  other  persons  acceptable  to  the  Chief  Engineer  are  available and are willing to enter into a  contract to execute the works under the  existing  terms  and  conditions  without  any loss to the Government.

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3. The  Chief  Engineer  is  informed  in  this  connection  that  the  following  points  should be considered in the termination  of contracts referred to in para 2 above.

1. There  should  be  a  final  and  complete  settlement of  rights and liabilities between  the Government and the existing contractor.  No sum of money should remain payable to  him and nothing should remain liable to be  supplied or done by him;

2. Substitution of a fresh contract in regard to  the unfinished part of the work should not  involve  the  Government  in  loss  or  extra  expenditure  with  a  view  to  enabling  any  particular person to stand for election as a  candidate; and

3. The contractor who is allowed to back out of  his  contract should do so at his  own risk  and should be made liable to make good any  loss  to  the  Government  arising  out  of  the  necessity to enter into a fresh contract.

4. The  instructions  now  issued  will  apply  also  to  the  termination  of  contracts  under  similar circumstances in the Public Works and  Electricity Departments.

M. Gopal Menon Deputy Secretary to Government

To The Chief Engineer (Highways)

/True Copy/

Copy  of  Endt.  No.  55868/D2/51  HR  dated  16.11.1951 from the Chief Engineer (Highways  

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and  Rural  Works)  Madras-5  to  the  Superintending  Engineers  and  Divisional  Engineers (H)

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Copy  communicated  to  the  Superintending  Engineers (H) and Divisional Engineers (H) for  information and guidance.

K.K. Nambiar Chief Engineer (Highways)”

According  to  the  appellant  the  respondent  was  

disqualified because the contracts entered into by him in  

the course of his trade or business with the appropriate  

Government, were subsisting at the time when he filed  

his nomination papers on April 17, 2006 and, therefore,  

his  Election  Petition  should  have  been  allowed.  

Therefore,  it  would  be  relevant  to  notice  statutory  

provision which deals with disqualification of a candidate  

having  subsisting  contracts  with  the  Government.  

Section 9-A of the Act, which deals with disqualification  

for Government contracts etc., reads as under: -

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“9A. Disqualification  for  Government  contracts,  etc. –  A  person  shall  be  disqualified  if,  and  for  so  long  as,  there  subsists a contract entered into by him in the  course  of  his  trade  or  business  with  the  appropriate  Government  for  the  supply  of  goods  to,  or  for  the  execution  of  any  works  undertaken by that Government.

Explanation. – For the purposes of this  section,  where  a  contract  has  been  fully  performed by the person by whom it has been  entered into with the appropriate Government,  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.”  

9. According  to  the  appellant,  the  respondent  had  

following three contracts subsisting with the Government  

on the date of his filing of the nomination papers, which  

was quite  evident from communication dated April  17,  

2006  addressed  by  the  Divisional  Engineer  (Highways)  

NABARD  and  Rural  Roads,  Nagercoil  to  Mr.  S.  

Madasamy, the learned advocate of the appellant: -

(a) Strengthening Pothaiyadi Road Km 0/0-2/2

Estimate Rs.14.50 lakhs;

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(b) Strengthening Bethaniya Road Km 0/0-3/0

Estimate Rs.19.00 lakhs;

(c) Strengthening Eruvadi – Donavoor Road to Kattalai  

Road, Km 0/0-1/4 estimate Rs.9.50 lakhs.

10. Before  considering  the  effect  of  abovementioned  

contracts entered into between the respondent and the  

Government,  it  would  be  essential  to  analyze  the  

Government Order dated November 16, 1951.  The Chief  

Engineer  (Highways)  had  reported  to  the  State  

Government  that  several  contractors  in the  State,  who  

had got subsisting contracts under the Government and  

District  Boards,  had applied  for  closing their  accounts  

and for removal of their names from the list of approved  

contractors in order to enable them to stand for election  

as a candidate.  However, the then existing provisions in  

the  preliminary  specification  to  Madras  Detailed  

Standard Specifications did not permit the contractors to  

withdraw from their  existing  contracts  so as to enable  

them  to  contest  the  election.   Therefore,  the  Chief  

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Engineer by letter  dated November 13, 1951 requested  

the Government to issue instructions and general policy  

to be adopted in such cases.  The Government considered  

the proposal made by the Chief Engineer and provisions  

of Madras Detailed Standard Specifications.  After careful  

examination,  His  Excellency  the  Governor  of  Madras  

issued  directions  that  the  contractors,  who  desired  to  

stand for election as candidates for the Legislature,  be  

permitted  to  terminate  their  subsisting  contracts  and  

also  get  their  names  deleted  from the  list  of  approved  

contractors,  provided  other  persons  acceptable  to  the  

Chief Engineer were available and were willing to enter  

into a contract to execute the works under the existing  

terms and conditions so that no loss was suffered by the  

Government.   In  view  of  the  directions  given  by  His  

Excellency  the  Governor  of  Madras,  the  Government  

issued G.O. dated November 16, 1951.  By the said G.O.  

the Chief Engineer was informed that while terminating  

subsisting contracts of the contractors the facts and/or  

following points mentioned should be considered: -

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i) There should be a final and complete settlement of  

rights and liabilities between the Government and  

the existing contractor.  No sum of money should  

remain  payable  to  the  contractor  and  nothing  

should remain liable to be supplied or done by the  

contractor;

ii) The substitution of a fresh contract in regard to the  

unfinished part of the work should not result into  

loss to the Government or extra expenditure merely  

because  a  particular  contractor  was  to  stand  for  

election as a candidate; and

iii) The contractor, who was allowed to back out of his  

contract, should do so at his own risk and should  

be  made  liable  to  make  good  any  loss  to  the  

Government  arising  out  of  the  necessity  to  enter  

into a fresh contract with another contractor only  

because  the  existing  contractor  was  to  stand  for  

election as a candidate.

2

11. Normally,  a  contract  entered  into  between  two  

parties would come to an end (1) by performance, (2) by  

express agreement, (3) under the doctrine of frustration,  

(4) by breach and (5) by novation.  Such contingencies  

and eventualities are always contemplated while entering  

into  an  agreement  between  the  two  persons  and  a  

contract  can  be  brought  to  an  end  in  any  of  the  

aforementioned methods.  However,  in view of  the fact  

that  several  contractors  had  applied  for  closing  their  

accounts and for removal of their names from the list of  

approved contractors in order to enable them to stand for  

the election, a recommendation was made by the Chief  

Engineer  (Highways)  to  the  Government  to  issue  

instructions and lay down general policy to be adopted in  

such cases.   When a  contract  was brought  to  an end  

because contractor was desirous of contesting election, it  

was  not  a  case  of  either  breach  of  the  contract  or  

performance  of  the  same  or  novation  of  the  same  or  

2

frustration of the same and, therefore, a special method  

was  required  to  be  devised  by  the  Government  before  

terminating the existing contract to enable the contractor  

to contest the election.  The method devised was that the  

G.O.  dated  November  16,  1951  was  issued/addressed  

only to the Chief Engineer (Highways).  In order to see  

that  the  unfinished  work  of  the  Government  did  not  

suffer nor Government suffered any loss, a special care  

was  required  to  be  taken  and,  therefore,  the  Chief  

Engineer was directed that the contractors, who desired  

to  stand for  election as candidates  for  the  Legislature,  

should  be  permitted  to  terminate  their  subsisting  

contracts and also get their names deleted from the list of  

approved contractors only if other contractor acceptable  

to the Chief  Engineer was available and was willing to  

enter  into  contract  to  execute  the  works  under  the  

existing  terms  and  conditions  so  that  no  loss  was  

suffered  by  the  Government.   The  Government  

specifically  mentioned  in  paragraph  3  of  the  said  

Government  Order  that  the  Chief  Engineer  should  

2

consider the following three points before terminating the  

contracts existing: -

a) that there should be final and complete settlement  

of rights and liabilities between the Government and  

the existing contractor;   

b) the  Chief  Engineer  must  ensure  that  no  sum  of  

money remained payable to the contractor; and

c) nothing remained liable to be supplied or done by  

the contractor.

The G.O. further required the Chief Engineer to ensure  

that the substitution of a fresh contract in regard to the  

unfinished part of work should not cause any loss to the  

Government  nor  the  Government  should  be  made  to  

incur  extra  expenditure  merely  to  enable  a  particular  

contractor to stand for election as a candidate.  What was  

highlighted  in  the  said  Order  was  that  the  contractor,  

who was allowed to back out of his contract, was to do so  

at his own risk and was liable to make good any loss that  

2

may be suffered by the Government out of necessity to  

enter into a fresh contract.

12. A  reasonable  reading  of  the  above  mentioned  

stipulations  and  conditions  mentioned  in  the  

Government Order dated November 16, 1951 makes  

it  evident  that  only  the  Chief  Engineer  was  

competent to terminate the existing contracts where  

the contractor was desirous of contesting election.  

It  is  wrong  to  say  that  an  instruction  had  been  

issued  to  the  Chief  Engineer  to  see  that  another  

contractor  was  available  as  substitute  to  perform  

the remaining part of the contract without any loss  

to  the  Government  and  that  the  Order  dated  

November 16, 1951 did not provide that an order of  

termination  of  a  subsisting  contract  should  be  

issued only when the Chief Engineer had accepted a  

person, who was available and was willing to enter  

into a contract on the same terms and conditions to  

which the existing contractor had agreed.

2

13. One of the accepted principles of interpretation is as  

to  how  those,  who  are  conversant  with  the  

Government Order and are expected to deal with the  

same,  construe  and  understand  the  Order.   The  

opinion expressed by the Government officials, who  

are  expected  to  have  sufficient  knowledge  and  

experience as to how a Government Order should be  

operated and/or implemented, may be relied upon.  

In order to ascertain this, it would be necessary to  

refer to the evidence on record.  Though the High  

Court has concluded that the Chief Engineer had no  

power  to  terminate  contracts  in  terms  of  

Government Order dated November 16, 1951, this  

Court finds that the High Court has not adverted to  

the evidence on record at all.  In this case evidence  

of  G.  Shanmuganandhan  was  recorded  as  PW-3.  

His evidence indicates that in April, 2006, he was  

2

Superintending  Engineer,  Highways  Projects,  

Madurai.   According  to  him,  Tirunelveli  Division  

Projects were under his jurisdiction.  It is mentioned  

by him that he had issued Exhibit P-12 by which  

name of the respondent was deleted from the list of  

contractors.   After  looking  at  Exhibit  P-13 it  was  

stated by him that it was an erratum and he had  

marked copy of Exhibit P-13 to the Superintending  

Engineer,  Tirunelveli  with  instructions  to  take  

appropriate action.  He explained to the Court that  

appropriate  action  meant  cancelling  of  ongoing  

contract works of the respondent.  He further stated  

that  the  Superintending  Engineer,  NABARD  and  

Rural  Roads,  Tirunelveli,  had  entered  into  the  

contracts.   In  cross-examination  this  witness  

clarified that there was no connection between the  

act of removal of name of contractor from the list  

and termination of the contract and the two issues  

were different.  In his further examination-in-chief  

by the learned counsel for the appellant, he was put  

2

a question as to who was the competent authority  

for approving the substitute contract as per G.O.Ms.  

4682.   In  answer  to  the  said  question  he  replied  

that the Chief Engineer, NABARD and Rural Roads,  

was  competent  authority  for  approving  the  

substitute contract.  Again, Mr. P. Velusamy, who  

was Superintending Engineer, NABARD and Rural  

Roads, Tirunelveli, was examined by the appellant  

as PW-4.  He stated in his testimony that between  

September,  2005  and  August,  2006,  he  was  

Superintending  Engineer,  NABARD  and  Rural  

Roads,  Tirunelveli  and  was  working  under  Chief  

Engineer,  NABARD  and  Rural  Roads,  Chennai.  

According  to  him,  three  divisions  were  under  his  

control and they were (1) Nagercoil,  (2) Tirunelveli  

and (3) Paramakudi.  He further mentioned in his  

testimony  that  the  Divisional  Engineer,  NABARD  

and Rural Roads, Nagercoil was under his control.  

He was shown Exhibit C-11 and after looking to the  

same, he stated that it was the original agreement  

2

in respect of three works awarded to the respondent  

in  respect  of  Nagercoil  Division.   After  looking  to  

Exhibit  C-12,  he  mentioned  that  they  were  the  

proceedings  of  the  Divisional  Engineer,  NABARD  

and Rural Roads, Nagercoil wherein the Divisional  

Engineer had sought his orders.  According to him,  

Exhibit  C-13  was  a  letter  dated  April  18,  2006  

addressed  by  the  Divisional  Engineer  to  him  

informing  about  the  order  of  termination  of  

contracts passed by him in respect of the contracts  

entered  into  by  the  respondent  and  by  the  said  

letter  the  Divisional  Engineer  had  also  sought  

ratification from him of  the  order  terminating  the  

contract.  According to him, the ratification sought  

for  under  Exhibit  C-13  was  granted  by  him  vide  

Exhibit P-19 letter dated April 26, 2006.  He further  

stated that he had the power either to ratify or to  

refuse the ratification of any orders of the Divisional  

Engineer.  The witness stated that Exhibit C-9 was  

the  proceeding  issued  by  him  making  

3

recommendation  that  the  term of  Rajagopal  as  a  

contractor  be  renewed.   According  to  him  Mr.  

Rajagopal  had  made  an  application  on  April  18,  

2006 with a request to mention his name in the list  

of contractors again and under Exhibit C-14 dated  

June  1,  2006,  his  requested  was  granted.  

According to him by Exhibit C-6 dated May 2, 2005  

he had requested the Chief  Engineer to ratify  the  

action  of  the  Divisional  Engineer  to  substitute  

Rajagopal  in  place  of  the  respondent  to  do  the  

balance  work  whereas  Exhibit  C-15  were  the  

proceedings dated June 19, 2006 forwarded by him  

to  the  Chief  Engineer  recommending the name of  

Rajagopal  as  a  substitute  for  the  respondent.  

According to him, pursuant to the Order dated June  

26,  2006  issued  by  the  Chief  Engineer,  he  had  

imposed certain conditions for accepting Rajagopal  

as  substituted  contractor.   The  witness  further  

explained  that  Exhibit  C-8  were  his  proceedings  

dated June 26, 2006 pursuant to the orders of the  

3

Chief  Engineer  contained  in  Exhibit  C-7  whereas  

Exhibit  C-16 dated July 4,  2006 was the original  

agreement entered into with Rajagopal with respect  

to three balance works to be completed in Nagercoil  

Division.  The witness stated that under Exhibit C-7  

the  Chief  Engineer  had required  him to  send his  

acknowledgement  for  having  received  the  

ratification  order  passed  by  him.   In  his  

examination-in-chief  the  witness  had  mentioned  

that every contractor was required to take steps to  

bring his name on the list  of  approved contractor  

from 1st April of every year within a period of three  

months  therefrom  and  if  a  criminal  case  was  

pending against any contractor, his name would not  

be included in the list of approved contractors.  The  

witness in no uncertain terms admitted that from  

the file  he was able to say that in the year 2000  

Rajagopal was involved in a criminal case of assault  

but  there  was  no  data  available  in  the  records  

showing that pursuant to the said criminal case his  

3

name was ever removed from the list of contractors.  

He  denied  the  suggestion  that  on  April  17,  2006  

Rajagopal was not a registered contractor.

14. Mr. Y. Christdhas, who was Divisional Engineer at  

the  relevant  time,  was examined on behalf  of  the  

respondent  as  RW-2.   According  to  him,  the  

respondent  was  working  as  a  contractor  in  his  

Division and was nominated as a contractor for the  

works  mentioned  by  him  in  his  examination-in-

chief.   According  to  this  witness,  the  respondent  

had  addressed  a  letter  dated  April  10,  2006  and  

another letter dated April 17, 2006 to him with the  

request  to  terminate  his  subsisting  contracts  and  

both the letters of the respondent were forwarded by  

him to the Superintending Engineer by forwarding  

letter dated April  17, 2006, with his endorsement  

that order terminating contracts passed by him be  

ratified.  The witness stated in his testimony that  

the respondent wanted to contest the election and,  

3

therefore, he had addressed a letter dated April 10,  

2006  to  him  for  termination  of  contracts.   The  

witness  further  mentioned  that  pursuant  to  his  

letters the Superintending Engineer had instructed  

him to pass the order terminating the contract and  

to  get  ratification.   The  witness  stated  that  

accordingly  he  had  terminated  the  contracts  

awarded to the respondent.  He also stated that he  

had sent a letter Exhibit C-13 seeking ratification of  

the order terminating the contracts awarded to the  

respondent.   The  witness  mentioned  in  his  

testimony  that  the  Superintending  Engineer  

accorded ratification through Exhibit P-19 whereas  

under  Exhibit  C-21  Rajagopal  was  appointed  as  

substituted contractor.  According to him by letter  

dated  April  19,  2006  he  had  recommended  

Rajagopal’s  appointment  as substituted contractor  

and  along  with  the  said  recommendation  he  had  

also  sent  Exhibit  R-4,  which  was  a  letter  of  the  

respondent  for  agreeing  to  compensate  the  

3

Government for the loss, if any, which might take  

place.  This witness also mentioned that Exhibit C-7  

were the proceedings drawn by the Chief Engineer  

approving the substitution of Rajagopal in the place  

of the respondent.  It was also stated by the witness  

that  Exhibit  R-18 dated  September  21,  2006 was  

the reply given by him to the letter of the appellant  

Exhibit R-17 dated September 16, 2006, wherein he  

had  mentioned  that  the  account  with  the  

respondent was settled and no cash payment was  

made to the respondent.  In his cross-examination  

this  witness  in  no uncertain  terms admitted  that  

the power to terminate the contract awarded to a  

contractor,  who  proposed  to  contest  the  election,  

was only with the Chief Engineer and since he had  

no  power  to  terminate  the  contract,  he  had  

forwarded the papers to his superior officers.  The  

witness stated that Exhibit C-13 was forwarded to  

the  Superintending  Engineer only after  he  passed  

order Exhibit P-17 cancelling the contracts awarded  

3

to the respondent.  According to him the urgency of  

the situation was also the reason for making Exhibit  

P-17 order.  He further clarified that in Exhibit P-17  

he had not mentioned that his order was subject to  

ratification by the Superintending Engineer.

15. The  evidence  of  the  above  mentioned  witnesses  

clearly  indicates  that  the  power  to  terminate  the  

contract  in  terms  of  Government  Order  dated  

November  16,  1951  was  only  with  the  Chief  

Engineer  and neither  the  Divisional  Engineer  was  

competent  to  terminate  the  contracts  awarded  to  

the  respondent  nor  the  Superintending  Engineer  

was  competent  to  ratify  an  order  passed  by  the  

Divisional  Engineer  cancelling  the  contracts  

awarded  to  the  respondent.   The  record  nowhere  

shows that the contracts entered into between the  

respondent  and  the  Superintending  Engineer,  

Tirunelveli  were  ever  terminated  by  the  Chief  

Engineer  in  terms  of  Government  Order  dated  

3

November 16, 1951 by passing an order.  Therefore,  

the  assertion  made  by  the  respondent  that  his  

contracts  were  terminated  by  the  Divisional  

Engineer  by  passing  an  order,  which  was  

subsequently  ratified  by  the  Superintending  

Engineer  is  of  no  avail.   There  is  no  manner  of  

doubt that the contracts entered into between the  

Superintending  Engineer,  Tirunelveli  and  the  

respondent  were  not  terminated  as  required  by  

Government Order dated November 16, 1951 and,  

therefore,  it  will  have  to  be  held  that  they  were  

subsisting  on the date  of  filing  of  the  nomination  

papers by the respondent as well as on the date on  

which those papers were scrutinized.

16. As  noticed  earlier,  one  of  the  conditions  to  be  

fulfilled  before  termination  of  the  contract  of  a  

contractor,  who  was  desirous  to  contest  election,  

was that he must offer a substitute, who was willing  

to  undertake unfinished work on the  same terms  

3

and conditions but without causing any loss to the  

Government.  The former Chief Engineer, who was  

examined  in  this  case  as  PW-2,  has,  without  

mincing  the  words,  stated  that  Mr.  Rajagopal  

offered by the respondent as substitute contractor  

was substituted in place of the respondent on June  

1, 2006.  It means that the contract could not have  

been terminated earlier than June 1, 2006 and were  

subsisting at least as on June 1, 2006, which was  

the  date  beyond  the  last  date  of  filing  of  the  

nomination papers and scrutiny thereof.  Therefore,  

the  finding  recorded  by  the  learned  Judge  of  the  

High  Court  that  on  the  date  of  filing  of  the  

nomination Mr. Rajagopal was already substituted  

in place of the respondent is not born out from the  

record of the case nor the record shows that after  

June 1, 2006 the contracts were terminated by the  

authority  contemplated  under  Government  Order  

dated November 16, 1951.

3

17. At  this  stage,  it  would  be  relevant  to  again  

reproduce  clause  1  of  Government  Order  dated  

November 16, 1951, which is as under: -

“1. There  should  be  a  final  and  complete  settlement  of  rights  and  liabilities  between the Government and the existing  contractor.   No  sum  of  money  should  remain  payable  to  him  and  nothing  should  remain  liable  to  be  supplied  or  done by him.”

Mr. Y. Christdhas,  who was the Divisional Engineer at  

the relevant point of time, has, in terms, mentioned that  

under  Exhibit  C-12  it  was  noted  that  a  sum  of  

Rs.98,227/- payable to the respondent should be kept in  

the  deposit  and  the  contract  should  be  permanently  

terminated  seeking  orders  from  the  Superintending  

Engineer.   The record further  shows that  on April  19,  

2006 the Divisional Engineer had forwarded a letter to  

the  Superintending  Engineer,  Tirunelveli  mentioning  

inter alia that since the contract of the respondent was  

cancelled, the fourth and final list of approval was given  

3

to him and deposit amount of Rs.2,02,341 was kept in  

kind-IV deposit.  The Government Order dated November  

16, 1951, which is quoted above, clearly requires that no  

sum of money should remain payable to the contractor  

and nothing should remain liable to be supplied or done  

by the contractor.  Keeping the amount of more than two  

lakhs  in  kind-IV  deposit  can  hardly  be  said  to  be  

compliance of clause 1 of the Government Order dated  

November 16, 1951.  In fact as held earlier, everything  

was required to be done by the Chief Engineer himself.  

There is nothing on record to show that the steps and/or  

actions,  which  were  taken  by  the  Divisional  Engineer,  

were ever ratified by the Chief Engineer except that the  

Chief  Engineer  had  accepted  the  proposal  of  the  

Superintending  Engineer  to  accept  Rajagopal  as  

substitute of the respondent.  Thus, this Court finds that  

on the date of filing of nomination papers and scrutiny of  

the same, the respondent had not validly terminated the  

contracts entered into by him with the Government and  

was disqualified not only to file  his nomination papers  

4

but also to contest the election in question.

18. The  learned  Single  Judge  has  brushed  aside  the  

Government  Order  dated  November  16,  1951  by  

stating  that  it  was  only  an  administrative  

instruction circulated to the Engineers (Highways)  

NABARD  and  Rural  Roads  for  information  and  

guidance, forgetting the important fact that in the  

last clause of the Government Order it is specifically  

mentioned that the instructions issued by the said  

Government  Order  would  also  apply  to  the  

termination  of  the  contracts  under  similar  

circumstances entered into with the Public Works  

and Electricity  Departments.   Therefore,  the  High  

Court  was  wrong  in  holding  that  though  

Government  Order  dated  November  16,  1951 was  

an  order  by  the  Government,  at  best  it  must  be  

construed  as  an  administrative  order  for  the  

guidance of the Engineers (Highways) NABARD and  

Rural Roads in various hierarchies.  

4

19. Departmental  circulars  are  a  common  form  of  

administrative document by which instructions are  

disseminated.  Many such circulars are identified by  

serial numbers and published, and many of them  

contain  general  statement  of  policy.   They  are,  

therefore, of great importance to the public, giving  

much  guidance  about  governmental  organization  

and  the  exercise  of  discretionary  powers.   In  

themselves  they  have  no  legal  effect  whatever,  

having  no  statutory  authority.   But  they  may  be  

used as a vehicle in conveying instructions to which  

some statute gives legal force.  It is now the practice  

to publish circulars which are of any importance to  

the public and for a long time there has been no  

judicial criticism of the use made of them.  Under  

Article 162 of the Constitution, the executive power  

of  the  State  extends  to  matters  with  respect  to  

which  the  State  Legislature  has  power  to  make  

laws.   Yet  the  limitations  of  the  exercise  of  such  

executive  power  by  the  Government  are  two  fold;  

4

first, if any Act or Law has been made by the State  

Legislature  conferring  any  function  on  any  other  

authority  –  in  that  case  the  Governor  is  not  

empowered  to  make  any  order  in  regard  to  that  

matter  in exercise of  his executive  power nor can  

the Governor exercise such power in regard to that  

matter  through  officers  subordinate  to  him.  

Secondly,  the  vesting  in  the  Governor  with  the  

executive power of the State Government does not  

create any embargo for the Legislature of the State  

from  making  and/or  enacting  any  law  conferring  

functions  on  any  authority  subordinate  to  the  

Governor.  Once a law occupies the field, it will not  

be open to the State Government in exercise of its  

executive  power  under  Article  162  of  the  

Constitution  to  prescribe  in  the  same field  by  an  

executive order.  However, it is well recognized that  

in  matters  relating  to  a  particular  subject  in  

absence of any parliamentary legislation on the said  

subject, the State Government has the jurisdiction  

4

to act and to make executive orders.  The executive  

power  of  the  State  would,  in  the  absence  of  

legislation,  extend  to  making  rules  or  orders  

regulating the action of the Executive.   But, such  

orders  cannot  offend  the  provisions  of  the  

Constitution and should not be repugnant to any  

enactment of the appropriate Legislature.  Subject  

to these limitations, such rules or orders may relate  

to  matters  of  policy,  may make classification and  

may  determine  the  conditions  of  eligibility  for  

receiving any advantage,  privilege or  aid from the  

State.  The powers of the executive are not limited  

merely to the carrying out of the laws.  In a welfare  

state the functions of Executive are ever widening,  

which cover  within their  ambit  various aspects of  

social  and  economic  activities.   Therefore,  the  

executive  exercises  power  to  fill  gaps  by  issuing  

various departmental orders.  The executive power  

of the State is co-terminus with the legislative power  

of the State Legislature.  In other words, if the State  

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Legislature  has  jurisdiction  to  make  law  with  

respect to a subject, the State Executive can make  

regulations  and  issue  Government  Orders  with  

respect to it, subject, however, to the constitutional  

limitations.   Such  administrative  rules  and/or  

orders  shall  be  inoperative  if  the  Legislature  has  

enacted a law with respect to the subject.  Thus, the  

High Court was not justified in brushing aside the  

Government Order dated November 16, 1951 on the  

ground  that  it  contained  administrative  

instructions.   The respondent could not point out  

that the said order was repugnant to any legislation  

enacted  by  the  State  Government  or  the  Central  

Government  nor  could  he  point  out  that  the  

instructions  contained  in  the  said  Government  

Order dated November 16, 1951 were repugnant to  

any  statutory  rules  or  the  Constitution.   In  fact,  

there was neither any enactment nor any statutory  

rule nor any constitutional provision as to how the  

contractor, who has entered into contracts with the  

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Government,  should  be  permitted  to  contest  

election, more particularly, when a request is made  

by the contractor to terminate his contracts so as to  

enable  him  to  contest  the  election.   There  is  no  

manner of doubt that in this branch of jurisdiction  

there  was  absence  of  statutory  enactment,  

regulations and rules and, therefore, this Court is of  

the  firm  opinion  that  the  Government  had  all  

authority  to  issue  Government  Order  dated  

November 16, 1951 to fill  up the gaps.  Thus the  

case of the respondent that his three contracts were  

terminated  before  he  filed  nomination  papers  will  

have  to  be  judged  in  the  light  of  the  contents  of  

Government  Order  dated  November  16,  1951.  

Viewed  in  the  light  of  the  contents  of  the  

Government Order dated November 16, 1951, there  

is  no  manner  of  doubt  that  there  was  no  valid  

termination of the contracts by the Government and  

those contracts were subsisting on the date when  

the respondent had filed his nomination papers and  

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also on the date when the nomination papers of the  

respondent with other candidates were scrutinized  

by the Returning Officer.

20. The  argument  that  the  contracts  were  validly  

terminated by the Divisional Engineer, which action  

was  subsequently  ratified  by  the  Superintending  

Engineer and, therefore, it should be held that there  

were  no  subsisting  contracts  on  the  date  of  

submission of the nomination papers, has no merits  

and cannot be accepted.  On true interpretation of  

the  Government  Order  dated  November  16,  1951  

this  Court  has  held  that  only  the  Chief  Engineer  

was  competent  to  terminate  the  contracts  and,  

therefore,  the  termination  of  the  contracts  by  the  

Divisional  Engineer,  which  was  subsequently  

ratified by the Superintending Engineer, cannot be  

treated  as  valid  termination  of  contracts.   The  

record of the case shows that on April 10, 2006, the  

respondent had addressed a letter to the Divisional  

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Engineer,  NABARD  informing  him  about  his  

intention  to  contest  the  Assembly  election  and  

requesting him to cancel the contracts immediately.  

In  the  said  letter  a  request  was made to  issue  a  

certificate indicating that the contracts entered into  

by  the  respondent  with  the  Government  were  

cancelled.  Obviously, the Divisional Engineer had  

no authority to cancel the contracts and, therefore,  

he had forwarded the letter of the respondent to the  

Superintending Engineer immediately for necessary  

action.  The record shows that in view of the request  

made by the respondent, an orders was passed by  

the Office of Superintending Engineer cancelling the  

registration  of  the  respondent  as  a  contractor  

permanently and the respondent was informed that  

if  any  work  was  pending  on  his  side,  he  should  

obtain  a  separate  work cancellation  order  for  the  

work  pending  from  the  concerned  Highways  

Division.   It  was also informed to  the  respondent  

that  the  cancellation  of  registration  of  contractor  

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would be final  only  after  obtaining  such separate  

work cancellation order from the concerned Division  

and the order passed for cancellation of registration  

as contractor from the Register would not be treated  

as  work cancellation  order  for  any pending  work.  

The  proceedings  of  the  Divisional  Engineer  (H)  

NABARD and Rural Roads, Nagercoil dated April 17,  

2006  mention  that  the  contracts  were  absolutely  

terminated  as  per  Government  Order  dated  

November  16,  1951  and  the  respondent  was  

informed that the works entrusted to him would be  

got executed at his risk and cost and that orders for  

entrustment  of  the  works  to  the  new  contractor  

would be issued separately.  It was also mentioned  

in  the  said  letter  that  the  deposits  available  in  

favour of the respondent for the works, which were  

determined, were freezed and forfeited for crediting  

the same into Government account.  Thereafter, the  

Divisional  Engineer  had  addressed  a  

communication  dated  April  18,  2006  to  the  

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Superintending  Engineer  informing  that  as  the  

respondent  was  desirous  to  contest  Assembly  

election and had requested to cancel the contracts  

in  the  present  position  and  issue  termination  

certificate  for  the  said  works,  he  had  conducted  

proceedings for cancelling the contract on April 17,  

2006.  By the said letter the Divisional Engineer had  

requested  the  Superintending  Engineer  to  accord  

ratification  to  the  order  dated  April  17,  2006  for  

cancelling  the  contracts.   The  record  shows  that  

thereafter  by  an  order  dated  April  26,  2006  the  

Superintending  Engineer  (N)  NABARD  and  Rural  

Roads, Tirunelveli had ratified the order dated April  

17,  2006  by  which  the  Divisional  Engineer  (H)  

NABARD had terminated the contracts entered into  

by  the  respondent  with  the  Government.   The  

Superintending  Engineer  had  informed  the  

respondent  that  the  Divisional  Engineer  was  

competent to terminate the contracts.  However, it  

is  an  admitted  position  that  the  contracts  were  

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entered  into  by  the  respondent  with  the  

Superintending Engineer and under the terms and  

conditions  of  the  contracts,  the  Superintending  

Engineer was competent to terminate the contracts.  

The Government  Order  dated  November  16,  1951  

nowhere provides that the Divisional Engineer was  

competent  to  terminate  the  contracts.   Having  

noticed the Government Order dated November 16,  

1951 the Superintending Engineer could not have  

informed  the  respondent  that  the  Divisional  

Engineer was competent to terminate the contracts  

entered into by him with the Government nor the  

Divisional Engineer was competent to terminate the  

contracts entered into by the respondent with the  

Government.

21. Normally,  the  Superintending  Engineer  would  be  

competent to terminate the contracts when breach  

of  the  terms  and  conditions  is  committed  by  a  

contractor.  However, in the present case the court  

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finds that the contracts were to be brought to an  

abrupt end because the respondent was intending  

to  contest  the  election.   Such an eventuality  was  

never  contemplated  under  the  contracts  and  the  

contracts entered into by the respondent with the  

Government could have been terminated only as per  

the terms and conditions stipulated in Government  

Order dated November 16, 1951.  Therefore, neither  

the Divisional Engineer had authority to terminate  

the contracts nor the Superintending Engineer had  

any authority to terminate the contracts.  Thus, the  

action of  the Superintending Engineer  in ratifying  

the  cancellation  of  the  contracts  made  by  the  

Divisional Engineer is of no consequence.

22. The net result of the above discussion is that on the  

date  of  submission  of  nomination  papers  by  the  

respondent as well as on the date of scrutiny of the  

nomination  papers,  the  contracts  entered  into  by  

the  respondent  with  the  Government  were  

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subsisting  and,  therefore,  the  respondent  was  

disqualified from filing the nomination papers and  

contesting  the  election.   The  respondent  having  

incurred  disqualification  under  the  provisions  of  

Section 9A of the Act, his election will have to be  

declared  to  be  illegal.   Accordingly,  it  is  declared  

that  the  respondent  had  incurred  disqualification  

under  Section  9A  of  the  Act  and,  therefore,  his  

election  from  the  Constituency  in  question  is  

declared to be illegal, null and void.

23. The appeal is accordingly allowed.  There shall be  

no order as to costs.

.....................................J. [J.M. Panchal]

.....................................J. [Gyan Sudha Misra]

New Delhi; April 13, 2011.

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