P.H.Paul Manoj Pandian vs P.Veldurai

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

2

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

3

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

1

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;

2 (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

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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

4

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

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

4

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

5

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.