P.H.PAUL MANOJ PANDIAN Vs P.VELDURAI
Bench: J.M. PANCHAL,GYAN SUDHA MISRA, , ,
Case number: C.A. No.-004129-004129 / 2009
Diary number: 354 / 2009
Advocates: Vs
V. N. RAGHUPATHY
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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
2
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
3
(“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
4
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
5
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
6
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
7
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
8
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
9
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
1
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
1
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
1
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
1
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
1
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.
1
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.
1
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
1
and Rural Works) Madras-5 to the Superintending Engineers and Divisional Engineers (H)
@@@@@
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: -
1
“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;
1
(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
2
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: -
2
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
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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
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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
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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.
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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.
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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
4
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
4
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
4
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
4
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
4
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
5
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
5
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
5
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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