V. Nagalingam vs Sivagnanam and Another

P.S. Kailasam, J.—This petition is filed by a member of the Orthanad Panchayat Union Council representing Kakkarai Panchayat to quash

the order of the Election Tribunal (District Munsif), Pattukottai, holding that the election of the respondent as the Chairman of the aforesaid

Panchayat Union Council is valid and that he is not disqualified to stand for the election. The petitioner and the respondent, by virtue of their being

elected as Presidents of Kakkarai Panchayat and Mela Ulur Panchayat respectively, became members of the Orthanad Panchayat Union Council.

The Panchayat Union Council consists of 58 Panchayats. In the election held for the Chairmanship of the Orthanad Panchayat Union Council, the

respondent was declared as the Chairman of the Panchayat Union securing 34 votes as against 17 votes got by the petitioner. The petitioner

challenged the election of the respondent as the Chairman of the Panchayat Union in an election petition, O.P. No. 56 of 1965 on the file of the

Election Tribunal, Pattukottai, and on the election petition being dismissed, the petitioner has filed this writ petition.

The facts are not in dispute. The respondent was a member as well as Director of the Labour Contract Society, Mellur, which was registered

under the Cooperative Societies Act. Before the date of the election, the respondent resigned his post as Director of the Labour Contract Society.

But on the date notified for filing of nomination papers, the respondent continued to be a member of the Labour Contract Society. It is not disputed

that the aforesaid Labour Contract Society in which the respondent was a member, has two subsisting contracts with the Panchayat Union

Council, one for construction of Veterinary Hospital and another for construction of certain roads.

The contention of V. V. Raghavan, the learned Counsel for the petitioner, is that the respondent was disqualified for election as the Chairman of

the Panchayat Union u/s 25(2)(c) of the Madras Panchayats Act, 1958, as on the date of his nomination he was interested in subsisting contracts

with the Panchayat Union Council. Section 25(2)(c) provides that, a person will be disqualified for election as a member, if at the date of

nomination or election he is interested in a subsisting contract made with, or any work being done for, any Panchayat or any Panchayat Union

Council, except as a shareholder (other than a director) in a company. Construing the sub-section, it is seen that a person interested in a subsisting

contract with Panchayat Union Council is disqualified. The subsection does not say that the interest must be by way of personal contract. The

respondent is admittedly a member of the Labour Contract Society owning certain shares. The result of the subsisting contracts of the Labour

Contract Society with the Panchayat Union Council would be financial gain or loss to the respondent, however small it may be. It cannot be denied

that the respondent is interested in subsisting contracts with the Panchayat Union Council. The sub-section is worded in wide terms and it would

include any kind of interest, direct or indirect. If the interest should be only direct or personal and not indirect interest, there is no reason for the

sub-section making an exception in the case of shareholders of a company. Reading the sub-section as a whole and giving it its plain meaning, there

can be no difficulty in coming to the conclusion that a person taking any kind of interest direct or indirect, personal or through being a member of a

society which has subsisting contract with any Panchayat or Panchayat Union--at the date of nomination or election will be disqualified.

V.K. Thiruvenkatachari, the learned Counsel for the respondent submitted that, if so construed, it would adversely affect running of Co-

operative Societies, and that the Legislature would not have intended such construction. He also submitted that in modern conditions many persons

living in towns would be members of one or other Co-operative Society and that if the co-operative society has any subsisting contract with the

Municipality a member of the Co-operative Society will be disqualified to stand for election; on such construction of the subsection. The

submission of the learned Counsel is not without force. But the Court is bound to construe the sub-section according to the rules relating to

interpretation of statutes. When the meaning is clear, it is not for the Court to take into consideration the consequences of such construction. Mr.

V. K. Thiruvenkatachari submitted that the wording of Section 7(2) of the Representation of the People Act, 1951, before its amendment, was

similar to that of Section 25(2)(c) of the Panchayat Act. It was felt that the language of Section 7(d) of the 1951 Act which provided for

disqualification in case of contracts with the Government was wide and vague enough to bring any kind or category of contract within its scope and

it had been a fruitful source of election disputes in the past. This state of affairs made the Legislature amend the section. The amended section

provides that if there subsists a contract entered into in the course of his trade or business by him with the appropriate Government for the supply

of goods to, or for the execution of any works undertaken by that Government, the disqualification will attach. No such amendment had been

effected in respect of Section 25(2)(c) of the Panchayats Act and so, the learned Counsel for the petitioner submits the meaning that was given to

Section 7(d) of the Representation of the People Act, 1951, before its amendment should be given to Section 25(2)(c) of the Panchayats Act. A

reference to the provisions of the section in the Representation of the People Act before and after its amendment, in fact, supports the contention

of the petitioner that the respondent was disqualified on the date of his election. Mr. V. K. Thiruvenkatachari very strongly relied on Lapish v.

Braithwaite L.R. (1925) 1 K.B. 470. In that case, the Court of Appeal was considering the disqualifications enacted in Section 12(1) and (2) of

the Municipal Corporation Act, 1882. Section 12(1) of the Act disqualified a person for being a Councillor if and while he has directly or indirectly

any share or interest in any contract with the Council. By Sub-section (2) of Section 12 a person shall not be disqualified or be deemed to have

any share or interest in such a contract by reason only of his having any share or interest in any company. The majority took the view that, as

managing director of the company, apart from being a shareholder therein, the defendant had not directly or indirectly any share or interest in the

contract, within the meaning of the section. They held that the expression ""interest in a contract"" would not include such an interest as a paid official

of an incorporated company necessarily took in a contract by reason of the fact that it was part of his duty to make the contract and to superintend

the execution of it, and that as such paid official he was interested in the success of the company. The Court observed.

To adopt the view of the statute contended for by the respondent is to adopt a construction the result of which is that the Legislature has exempted

the appellant from disqualification in respect of his real and substantial interest in the company and in the contract which arises from the fact of his

being a large shareholder, and has disqualified him for a less real and substantial interest in the contract which arises from the fact o/his being

managing director.

It was found in that case that as managing director the defendant had no interest, though as shareholder he might have interest. In that case the

interest was that of drawing salary as an official of the company and nothing further. This decision will have no application to the facts of the

present case. The position of the respondent in the present case is that of a member of a Co-operative Society and he has financial stake in the

contracts entered into by the Co-operative Society with Panchayat Union. Section 25(2)(c) of the Panchayats Act has not exempted a director or

managing director of a company from being disqualified, though a shareholder of the company is exempted, from being disqualified. On a

consideration of the facts in this case I have no doubt that the respondent was disqualified at the time of his election as the Chairman of the

Panchayat Union Council.

It is next contended by V. K. Thiruvenkatachari, the learned Counsel for the respondent, that under Rule 1 of the Panchayat Rules relating to

decisions of election disputes an election of a member of a Panchayat can be called in question only by way of an election petition presented in

accordance with the Rules and under Rule 2(1) the election petition should be presented within fifteen days from the date of the declaration of the

result of the election. In this case, the learned Counsel submits, the election of the respondent as a member of the Panchayat was not questioned

but when he was elected as Chairman of the Panchayat Union Council the petitioner preferred an election petition challenging the respondent''s

election as Chairman of the Panchayat Union. The submission of V. K. Thiruvcnkatachari is that, once the validity of the respondent''s election as a

member of the Panchayat was not challenged within the time fixed, the validity of the respondent''s election as Chairman of the Panchayat Union

cannot be, challenged on future occasion. Per contra the submission of V. V. Raghavan, the learned Counsel for the petitioner, is that the petitioner

was not a candidate nor did he contest the election of the respondent as a member of the Panchayat, that therefore the petitioner was not entitled

to challenge the election of the respondent as a member of the Panchayat, and that the only remedy of the Petitioner was to challenge the validity of

the election of the respondent as Chairman of the Panchayat Union Council. This question on similar facts came up for consideration in W.P. No.

2261 of 1966, and it was held that the election as Chairman of the Panchayat Union Council can be challenged. An appeal is preferred against the

decision in W.P. No. 2261 of 1966 and the same is pending disposal. In the circumstances, V. K. Thiruvenkatachari fairly stated that it would not

be proper for him to ask for review of the decision in W.P. No. 2261 of 1966. Following the decision in W.P. No. 2261 of 1966, I reject the

contention of the learned Counsel for the respondent and hold that the petitioner is entitled to question the validity of the election of the respondent

as Chairman of the Panchayat Union Council.

In the result the writ petition is allowed. A writ will issue quashing the order of the Election Tribunal declaring the respondent elected as

Chairman of the Panchayat Union Council. The plea of the petitioner to declare him elected as Chairman of'' the Panchayat Union Council cannot

be accepted. No order as to costs in the writ petition.