Appeal No 486 of 1963
Appeal from the judgment and order dated September 27 1962 of the Calcutta High Court in Appeal from Original Decree No 424 of 1962
SChaudhuri R C Deb and section section Shukla for the appellant
Hari  Prosonna Mukherjee K G Hazra Chaudhari and D N Mukherjee for the respondents Nos 1 and 2
August 14 1963
This is an appeal on a certificate granted by the High Court of Calcutta under article 1331c of the Constitution
No preliminary objection having been taken as to the competency of the certificate we have heard the appeal on merits
The short facts giving rise to the appeal are these The appellant before us is Gurugobinda Basu who is a chartered accountant and a partner of the firm
of auditors carrying on business under the name and style of G Basu and Company
This firm acted as the auditor of certain 313 companies and corporations such as the Life Insurance Corporation of India the Durgapur Projects Ltd and the Hindustan Steel Ltd on payment of certain remuneration
The appellant was also a Director of the West Bengal Fi nancial Corporation having been appointed or nominated as such by the State Government of West Bengal
The appointment carried with it the right to receive fees or remuneration as director of the said corporation
In February March 1962 the appellant was elected to the House of the People from Constituency No 34 Burdwan Parliamentary Constituency which is a single member constituency
The election was held in February 1962
There were two candidates namely the appellant and respondent No 3 to this appeal
The appellant was declared elected on March 1 1962 he having secured 155485 votes as against his rival who secured 123015 votes
This election was challenged by two voters of the said constituency by means of an election petition dated April 10 1962
The challenge was founded on two grounds  1 that the appellant was at the relevant time the holder of offices of profit both under the Government of India and the Government of West Bengal and this disqualified him from standing for election under article 102 1a of the Constitution and 2 that he was guilty of certain corrupt practices which vitiated his election
The second ground was abandoned at the trial and we are no longer concerned with it
The election Tribunal held that the appellant was a holder of offices of profit both under the Government of India and the Government of West Bengal and was therefore disqualified from standing for election under article 1021a of the Constitution
The Election Tribunal accordingly allowed the election petition and declared that the election of the appellant to the House of the People was void
There was an appeal to the High Court under section 116 A of the Representation of the People Act 1951
The High Court dismissed the appeal but granted a certificate of fitness under article 1331 c of the Constitution
The only question before us is whether the appellant was disqualified from being chosen as and for being a member of the House of the People under article 1021A of the Constitution
The answer to the question depends 21 2 S C India6 314 on whether the appellant held any offices of profit under the Government of India or the Government of any State other than such offices as had been declared by Parliament by law not to disqualify their holder
It has not been seriously disputed before us that the office of auditor which the appellant held as partner of the firm of G Basu and Company was an office of profit
It has not been contended by the appellant before us that the office of profit which he held had been declared by Parliament by law not to disqualify the holder
Therefore the arguments before us have proceeded entirely on the question as to the true scope and meaning of the expression under the Government of India or the Government of any State occurring in cl
a of article 1021 of the Constitution
The contention on behalf of the appellant has been that on a true construction of the aforesaid expression the appellant cannot be said to hold an office of profit under the Government of India or the Government of West Bengal
On behalf of the respondents the contention is that the office of auditor which the appellant holds is an office of profit under the Government of India in respect of the Life Insurance Corporation of India the Durgapur Projects Ltd and the Hindustan Steel Ltd and in respect of the West Bengal Financial Corporation of which the appellant is a Director appointed by the Government of West Bengal he holds an office of profit under the Government of West Bengal
These are the respective contentions which fall for consideration in the present appeal
It is necessary to state here that if in respect of any of the four companies or corporations it be held that the appellant holds an office of profit under the Government be it under the Government of India or the Government of West Bengal then the appeal must be dismissed
It would be unnecessary then to consider whether the office of profit which the appellant holds in respect of the other companies is an office of profit under the Government or not
We would therefore take up first the two companies namely the Durgapur Projects Ltd and the Hindustan Steel Ltd which are 100 Government companies and consider the respective contentions of the parties before us in respect of the office of auditor which the appellant holds in these two companies
If we hold that in 315 respect of any of these two companies the appellant holds an office of profit under the Government of India then it would be unnecessary to consider the position of the appellant in any of the other companies
It is not disputed that the Hindustan Steel Ltd and the Durgapur Projects Ltd are Government companies within the meaning of section 218 read with section 617 of tile Indian 
It has been stated before us that 100 of the shares of the Durgapur Projects Ltd are held by the Government of West Bengal and 100 of the shares of the Hindustan Steel Ltd are held by the Union Government
We may now read section 619 of the Indian  1 In the case of a Government company the following provisions shall apply notwithstanding any thing contained in sections 224 to 233
2The auditor of a Government company shall be appointed or re appointed by the Central Government on the advice of the Comptroller and Auditor General of India
3The Comptroller and Auditor General of In dia shall have power ato direct the manner in which the company s accounts shall be audited by the auditor appointed in pursuance of sub section 2 and to give such auditor instructions in regard to any matters relating to the performance of his functions as such  b to conduct a supplementary or test audit of the company s accounts by such person or persons as he may authorise in this behalf and for the purposes of such audit to require information or additional information to be furnished to any person or persons so authorised on such matters by such person or persons and in such form as the Comptroller and Auditor General may by general or special order direct
4 The auditor aforesaid shall submit a copy of his audit report to the Comptroller and Auditor General of India who shall have the right to comment upon or supplement the audit report in such manner as he may think fit
5 Any such comments upon or supplement 316 the audit report shall be placed before the annual general meeting of the company at the same time and in the same manner as the audit report
 It is clear from the aforesaid provisions that not with standing section 224 of the Act which empowers every company to appoint an auditor or auditors at each annual general meetings the appointment of an auditor of a Government company rests solely with the Central Government and in making such appointment the Central Government takes the advice of the Comptroller and Auditor General of India
Under section 2247 of the Act an auditor appointed under section 224 may be removed from office before the expiry of his term only by the company in general meeting after obtaining the previous approval of the Central Government in that behalf
The remuneration of the auditors of a company is to be fixed in accordance with the provisions of sub section
8 of section 224
It is clear however that sub section
7 of section 224 does not apply to a Government company because the auditor of a Government company is not appointed under section 224 of the Act but is appointed under sub section
2 of section 619 of the Act
It is clear therefore that the appointment of an auditor in a Government company rests solely with the Central Government and so also his removal from office
Under sub section
3 of section 619 the Comptroller and Auditor General of India exercises control over the auditor of a Government company in respect of various matters including the manner in which the company s accounts shall be audited
The Auditor General has also the right to give such auditor instructions in regard to any matter relating to the performance of his functions as such
The Auditor General may conduct a supplementary or test audit of the company s accounts
by such person or persons as he may authorise in this behalf
In other words the Comptroller and Auditor General of India exercises full control over the auditors of a Government company
The powers and duties of auditors in respect of companies other than Government companies are laid down in section 227 of the Act but by virtue of sub section
1 of section 619 of the Act the provisions in section 227 of the Act do not apply to a Government company because a Government company is subject to the provisions of section 619 of the Act
Under section 619 A of the Act where the 317 Central Government is a member of a Government company an annual report of the working and affairs of the company has to be prepared and laid before both Houses of Parliament with a copy of the audit report and the comments made by the Comptroller and Auditor General
Under section 620 of the Act the Central Government may by notification direct that any of the provisions of the Act other than sections 618 619 and 639 shall not apply
to any Government company
The net result of the aforesaid provisions is that so far as the Durgapur Projects Ltd and the Hindustan Steel Ltd are concerned the appellant was appointed an auditor by the Central Government he is removable by the Central Gov ernment and the Comptroller and Auditor General of India exercises full control over him
His remuneration is fixed by the Central Government under sub section
8 of section 224 of the Act though it is paid by the company
In these circumstances the question is does the appellant hold an office of profit under the Central Government We may now read article 1021 of the Constitution
1 A person shall be disqualified for being chosen as and for being a member of either House of Parliament a if he holds any office of profit under the Government of India or the Government of any State other than an office declared by Parliament by law not to disqualify its holder b c d We have stated earlier that the sole question before us is whether the office of profit which the appellant undoubtedly holds as auditor of the Durgapur Projects Ltd and the Hindustan Steel Ltd is or is not under the Government of India
According to Mr Chaudhuri who has argued the appeal on behalf of the appellant the expression under the Government occurring in article 1021a implies sub ordination to Government
His argument is that ordinarily there are five tests of such subordination namely 1 whe ther Government make  the appointment to the office 2 whether Government has the right to remove or dis 318 miss the holder of office 3 whether Government pays the remuneration 4 what are the functions which the holder of the office performs and does he perform them for Government and 5 does Government exercise any control over the performance of those functions
His argument further is that the tests must all co exist and each must show subordination to Government so that the fulfillment of only some of the tests is not enough to bring the holder of the office under the Government
According to him all the tests must be fulfilled before it can be said that the holder of the office is under the Government
His contention is that the Election Tribunal and the High Court were in error in holding that the appellant was a holder of office under the Government because they misconstrued the scope and effect of the expression under the Government in article 1021a of the Constitution
He has contended that tests 3 4 and 5 adverted to above are not fulfilled in the present case
The appellant gets his remuneration from the company though fixed by Government he performs functions for the company and he is controlled by the Comptroller and Auditor General who is different from the Government
On behalf of the respondents it is argued that the tests are not cumulative in the sense contended for by the appellant and what has to be considered is the substance of the matter which must be determined by a consideration of all the factors present in a case and whether stress will be laid on one factor or the other will depend on the circumstances of each particular case
According to the respondents the tests of appointment and dismissal are important tests in the present case and in the matter of a company which is a 100 Government company the payment of remuneration fixed by Government the performance of the functions for the company and the exercise of control by the Comptroller and Auditor General looked at from the point of view of substance and taken in conjunction with the power of appointment and dismissal really bring the holder of the office under the Government which appoints him
One point may be cleared up at this stage
On behalf of the respondents no question has been raised that the Durgapur Projects Limited or the Hindustan Steel Limi 319 ted is a department of Government or an emanation of Governments question Which was considered at some length in Narayanaswamy vs Krishnamurthi1
Learned counsel for the respondents has been content to argue before us on the basis that the two companies having been incorporated under the Indian are separate legal entities distinct from Government
Even on that footing he has contended that in view of the provisions of section 619 and other provisions of the Indian  an auditor appointed by the Central Government and liable to be removed from office by the same Government is a holder of an office of profit under the Government in respect of a company which is really a hundred per cent Government company
We think that this contention is correct
We agree with the High Court that for holding an office of profit under the Government one need not be in the service of Government and there need be no relationship of master and servant between them
 The Constitution itself makes a distinction between the holder of an office of profit under the Government  and the holder of a post or service under the Government  see articles 309 and 314
The Constitution has also made a distinction between the holder of an office of profit under the Government  and the holder of an office of profit under a local or other authority subject to the control of Government  see article 582 and 664
In Maulana Abdul Shakur vs Rikhab Chand and another1 the appellant was the manager of a school run
by a committee of management formed underthe provisions of the Durgah Khwaja Saheb Act 1955
He was appointed by the administrator of the Durgah and was paid Rs 100 per month
The question arose whether he was disqualified to be chosen as a member of Parliament in view of article 1021a of the Constitution
It was contended for the respondent in that case that under sections 5 and 9 of the Durgah Khwaja Saheb Act 1955 the Government of India had the power of appointment and removal of members of the committee of management as also the power to appoint the administrator in consultation with the committee therefore the appellant was under the control and super 1 ILR 1958 Mad 513
2 1958 SCR 387 320 vision of the Government and that therefore he was holding an office of profit under the Government of India
This contention was repelled and this court pointed out the distinction between the holder of an office of profit under the Government  and the holder of an office of profit under some other authority subject to the control of Government 
Mr Chaudhuri has contended before us that the decision is in his favour
He has argued that the appellant in the present case holds an office of profit under the Durgapur Projects Ltd and the Hindustan Steel Ltd which are incorporated under the Indian  the fact that the Comptroller and Auditor General or even the Government of India exercises some control does not make the appellant any the less a holder of office under the two companies
We do not think that this line of argument is correct
It has to be noted that in Maulana Abdul Shakur s case2 the appointment of the appellant in that case was not made by the Government nor was he liable to be dismissed by the Government
The appointment was made by the administrator of a committee and he was liable to be dismissed by the same body
In these circumstances this Court observed No doubt the Committee of the Durgah Endowment is to be appointed by the Government of India but it is a body corporate with perpetual succession acting within the four corners of the Act
Merely because the Committee or the members of the Committee are removable by the Government of India or the Committee can make bye laws prescribing the duties and powers of its employees cannot in our opinion convert the servants of the Committee into holders of office of profit under the Government of India
The appellant is neither appointed by the Government of India nor is removable by the Government of India nor is he paid out of the revenues of India
The power of the Government to appoint a person to an office of profit or to continue him in that office or revoke his appointment at their discretion and payment from out of Government revenues are important factors in determining whether that person is holding an office of profit under the Government though pay 1958 SCR 387
321 ment from a source other than Government revenue is not always a decisive factor
But the appointment of the appellant does not come within this test
 It is clear from the aforesaid observations that in Maulana Abdul Shakur s case1 the factors which were held to be decisive were a the power of the Government to appoint a person to an office of profit or to continue him in that office or revoke his appointment at their discretion and b payment from out of Government revenues though it was pointed out that payment from a source other than Government revenues was not always a decisive factor
In the case before us the appointment of the appellant as also his continuance in office rests solely with the Government of India in respect of the two companies
His remuneration is also fixed by Government
We assume for the purpose of this appeal that the two companies are statutory bodies distinct from Government but we must remember at the same time that they are Government com panies within the meaning of the Indian and 1000 of the shares are held by the Government
We must also remember that in the performance of his functions the appellant is controlled by the Comptroller and Auditor General who himself is undoubtedly holder of an office of profit under the Government though there are safeguards in the Constitution as to his tenure of office and removability therefrom
Under article 148 of the Constitution the Comptroller and Auditor General of India is appointed by the President and he can be removed from office in like manner and on the like grounds as a judge of the Supreme Court
The salary and other conditions of service of the Comptroller and Auditor General shall be such as may be determined by Parliament by law and until they are so determined shall be as specified in the Second Schedule to the Constitution
Under cl
4 of article 148 the Comptroller and Auditor General is not eligible for further office either under the Government of India or under the Government of any State after he has ceased to hold his office
5 of the said Article lays down that subject to the provisions of the Constitution and of any law made by Parliament the administrative powers of the Comptroller and Auditor 11958 SCR 387
322 General shall be such as may be prescribed by rules made by the President after consultation with the Comptroller and Auditor General
Under article 149 of the Constitution the Comptroller and Auditor General shall perform such duties and exercise such powers in relation to the accounts of the Union and of the States and of any other authority or body as may be prescribed by or under any law made by Parliament and until provision in that behalf is so made shall perform such duties and exercise such powers in relation to the accounts of the Union and of the States as were conferred on or exercisable by the Auditor General of India immediately before the commencement of the Constitution in relation to the accounts of the Dominion of India and of the Provinces respectively
The reports of the Comptroller and Auditor General of India relating to the accounts of the Union have to be submitted to the President and the reports of the Comptroller and Auditor General relating to the accounts of 2 State have to be submitted to the Governor
From the aforesaid provisions it appears to us that the Comptroller and Auditor General is himself a holder of an office of profit under the Government of India being appointed by the President and his administrative powers arc such as may be prescribed by rules made by the President subject to the provisions of the Constitution and of any law made by Parliament
Therefore if we look at the matter from the point of view of substance rather than of form it appears to us that the appellant as the holder of an office of profit in the two Government companies the Durgapur Projects Ltd and the Hindustan Steel Ltd is really under the Government of India he is appointed by the Government of India lie is removable from office by the Government of India he performs functions for two Government companies under the control of the Comptroller and Auditor General who himself is appointed by the President and whose administrative powers may be controlled by rules made by the President
In Ramappa vs Sangappa1 the question arose as to whether the holder of a village office who has a hereditary right to it is disqualified under article 191 of the  Constitution which is the counterpart of article 102 in the matter 1 19591 SCR 1167
323 of membership of the State Legislature
It was observed therein The Government makes the appointment to the office though it may be that it has under the statute no option but to appoint the heir to the office if he has fulfilled the statutory requirements
The office is therefore held by reason of the appointment by the Government and not simply because of a hereditary right to it
The fact that the Government cannot refuse to make the appointment does not alter the situation
 There again the decisive test was held to be the test of appointment
In view of these decisions we cannot accede to the submission of Mr Chaudhury that the several factors which enter into the determination of this question the appointing authority the authority vested with power to terminate the appointment the authority which determines the remuneration the source from which the remuneration is paid and the authority vested with power to control the manner in which the duties of the office are discharged and to give directions in that behalf must all co exist and each must show subordination to Government and that it must necessarily follow that if one of the elements is absent the test of a person holding an office under the Government Central or State is not satisfied
The cases we have referred to specifically point out that the circumstance that the source from which the remuneration is paid is not from public revenue is a neutral factor not decisive of the question
As we have said earlier whether stress will be laid on one factor or the other will depend on the facts of each case
However we have no hesitation in saying that where the several elements the power to appoint the power to dismiss the power to control and give directions as to the manner in which the duties of the office are to be performed and the power to determine the question of remuneration are all present in a given case then the officer in question holds the office under the authority so empowered
For the reasons given above we have come to the conclusion that the Election Tribunal and the High Court were right in coming to the  conclusion that the appellant as an auditor of the two Government companies  held an 324 office of profit under the Government of India within the meaning of article 1021a of the Constitution
As such he was disqualified for being chosen as and for being a member of either House of Parliament
It is unnecessary to consider the further question whether he was a holder of an office of profit either under the Government of India or the Government of West Bengal by reason of being an auditor for the Life Insurance Corporation of India or a Director of the West Bengal Financial Corporation
The appeal accordingly fails and is dismissed with costs
Appeal dismissed


Summary:
The appellant was a chartered accountant and a partner of a firm of auditors
This firm acted as auditors of two companies among others registered under the Indian  the entirety of the shares of one of which are owned by the Union Government and the entirety of the shares of the other by the West Bengal Government
The appellant was declared elected to the Lok Sabha
His election was challenged by two voters of the constituency by means of an election petition
The main ground raised was that the appellant was at the relevant period the holder of an office of profit under the Government of India as well as the State Government and hence he was disqualified from standing for election under article 1021a of the Constitution
The Election Tribunal accepted this contention and declared the election of the appellant void
The appellant filed an appeal before the High Court in which he did not succeed
The present appeal was by virtue of a certificate granted by the High Court under article 1331c of the Constitution
It was contended before this Court that on a true construction of the expression under the Government of India or the Government of any State occurring in cl
a of article 102 I of the Constitution the appellant could not be said to hold an office of profit under the Government of India or the Government of West Bengal
It was argued that the various tests namely who has the power to appoint who has the right to remove who pays the remuneration what are the functions and who exercises the control should all co exist and each must show subordination to the Government
The fulfillment of some of the tests alone would not be sufficient to determine that a person holds an office of profit under the Government
It was contented on behalf of the respondent that the tests were not cumulative and that the court should look to the substance rather than to the form
Held  iFor holding an office of profit under the Government a person need not be in the service of the Government and there need not be any relationship of master and servant between them
312 iiThe examination of the various provisions of the Com panies Act 1956 sections 224 227 618 and 619 showed that so far as the two companies in question were concerned the appellant was appointed as an auditor by the Central Government was removable by the Central Government that the Comptroller and the Auditor General of India exercised full control over him and that his remuneration was fixed by the Central Government under sub section
8 of section 224 of the though it was paid by the companies concerned
iiiWhere the several elements the power to appoint the power to dismiss the power to control and give directions as to the manner in which the duties of the office are to be performed and the power to determine the question of remuneration are all present in a given case then the officer in question holds the office under the authority so empowered
It is not necessary that all these must co exist nor is the fact that the source from which the remuneration is paid is not from public revenue decisive
ivThe appellant held an office of profit under the Government of India within the meaning of article 1021a of the Constitution of India and as such he was disqualified for being chosen as a member of Parliament
Maulana Abdul Shakur vs Rikhab Chand 1958 SCR 387 distinguished
Ramappa vs Sangappa   referred to