:1: :1: :1: IN IN IN THE HIGH COURT OF JUDICATURE AT BOMBAY THE HIGH COURT OF JUDICATURE AT BOMBAY THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL CIVIL CIVIL APPELLATE JURISDICTION APPELLATE JURISDICTION APPELLATE JURISDICTION WRIT PETITION NO. 6419 OF 2007 Rajesh Krishnaji Sawant ...Petitioner Versus The State of Maharashtra, (Through the Secretary, Department of Rural Development Mantralaya, Mumbai-400 032. & Ors. ....Respondents Mr.P.C.Madkholkar with Mr.A.R.Patil Adv. for the petitioners. Ms.P.S.Cardozo,AGP for respondent nos.1 and 2. Mr.Harshad Bhadbhade for respondent no.3. Mr.Rakesh Bhatkar for respondent no.4. CORAM: S.C.DHARMADHIKARI, J. 17th January, 2008. P.C. P.C. P.C. : : : 1. The Divisional Commissioner’s order passed on 22.8.2007 in an Application preferred by respondent no.3 to Disqualify the present petitioner is impugned in the present petitions. The Application for disqualifying the petitioner has been allowed. Both the petitioner and the respondent no.3 contested the :2: :2: :2: elections to Zilla Parishad, namely, the Ratnagiri Zilla Parishad from Pachal constituency. The case of the respondent no.3 is that after counting of votes the petitioner was declared elected. The results were declared on 12.3.2007. 2. The grievance of the third respondent is that the petitioner did not disclose the fact of having a work contract with the Zilla Parishad either in his affidavit nor did he file a declaration that there is no work or dues pending with the Zilla Parishad, at the time of filing of the Nomination Form. Thus, on the date of filing of nomination or the date of its scrutiny the said disclosure was not made. 3. The Petitioner was sought to be disqualified by invoking the provisions of Section 16 (1)(i) of Maharashtra Zilla Parishad and Panchayat Samitis Act, which reads as under :- "16(1)(i) if he has directly or indirectly by himself or by his partner any share or interest in any work done by order of :3: :3: :3: the Zilla Parishad or in any contract with, by or on behalf of, the Zilla Parishad. " 4. A bare perusal of this provision would indicate that a person shall be disqualified for being chosen as and for being a Councillor if he has directly or indirectly by himself or by his partner any share or interest in any work done by order of the Zilla Parishad or in any contract with, by or on behalf of the Zilla Parishad. 5. The said election having been concluded the application for disqualification was preferred alleging this ground on 26.3.2007 and the prayer therein was that the Divisional Commissioner, Konkan Division should hold an inquiry in respect of the share or in the work order or contract given to the petitioner by Zilla Parishad, details of which are more particularly set out in para-4 of the application for disqualification and thereafter pass an order disqualifying him. 6. That application was served on the present :4: :4: :4: petitioner who filed his reply thereto. He denied that he has incurred any disqualification. In para-11 of the reply he raised a specific case of the work having been completed way back on 25.12.2006 which is a date much prior to filing of nomination i.e. 23.2.2007. Although the work was completed, what remained was a payment of a bill of Rs.36,975/- from Zilla Parishad. He has relied upon a communication/letter issued by the Information Officer and Deputy Executive Engineer, Zilla Parishad (Construction), Ratnagiri. 7. A copy of the reply is filed as Annexure to the petitioner. The said reply was filed on 28.6.2007. 8. The Application of Respondent no.3 was placed before the Divisional Commissioner and the Divisional Commissioner by the impugned order has proceeded to disqualify the petitioner. 9. Mr.Madkholkar, learned counsel appearing for the petitioner submits that the impugned order is ex-facie erroneous and deserves to be quashed and set aside. It should be set aside only on the ground that :5: :5: :5: it does not disclose any application of mind nor is the same assigning any reasons for the conclusion that is reached by the Divisional commissioner. He submits that up to para-5 of the impugned order, the rival contentions are reproduced. They are sought to be dealt with under the caption "Inference and conclusions", in the final paragraph. The Divisional Commissioner held that the petitioner was a contractor with the Ratnagiri Zilla Parishad. He had been awarded a work contract. While he filed his nomination papers for election as a Councillor, the said work was incomplete, inasmuch as, the final payment is still not made. The petitioner does not have any documents to show that the work has been completed nor has the Zilla Parishad passed any such final order. In such circumstances, the Divisional Commissioner observes that she is satisfied that the petitioner is disqualified under section 16(1)(i) of the Act. Mr.Madkholkar submits that the Divisional Commissioner was obliged to consider as to whether the contract is subsisting. Merely, because some payment is due does not mean that the contract is subsisting. That apart, the Commissioner’s order does not show as to whether :6: :6: :6: the Section covers an subsisting contract or a concluded one also. Thus, basic and fundamental aspects are not considered and dealt with. Mr.Madkolkar has relied upon the following decisions :- (i) AIR AIR AIR 1976 S.C. 1976 S.C. 1976 S.C. 1785 1785 1785 The Siemens The Siemens The Siemens Engineering Engineering Engineering and Manufacturing Co.of India Ltd and Manufacturing Co.of India Ltd and Manufacturing Co.of India Ltd vs. vs. vs. The Union of India and Anr. The Union of India and Anr. The Union of India and Anr. (ii) (2004) (2004) (2004) 5 SCC page 568 State of Orissa 5 SCC page 568 State of Orissa 5 SCC page 568 State of Orissa vs. vs. vs. Dhaniram Luhar. Dhaniram Luhar. Dhaniram Luhar. 10. Mr.Bhadbhade, appearing for the respondent no.3 supports the impugned order by urging that it is not true that the same is not a speaking order or that no reasons are assigned. He submits that the Divisional Commissioner is not expected to deliver a judgment like a court of law. If from the order, it is apparent that she has applied her mind to the controversy before her and satisfied herself from the materials produced, that the Petitioner is Disqualified, then, merely because the order is not worded like a judgment of a court of law or does not :7: :7: :7: contain elaborate reasons, it is not required to be quashed and set aside. 11. With the able assistance of learned Counsel appearing for both sides, I have perused the impugned order. I have also perused the relevant statutory provisions. I have also reproduced the gist of the case set up by the respondent no.3. I have also adverted to the case of the petitioner in his reply. To my mind, the Learned Divisional Commissioner has failed to apply her mind to a very vital and basic aspect. The petitioner if at all has to be disqualified, then, it must be for having a direct or indirect share or interest in any work done by the order of the Zilla Parishad or in contract by or on behalf of the Zilla Parishad. A reading of the impugned order shows that there is no reference to the fact that the petitioner was awarded any contract by the said Zilla Parishad or that there is any work pursuant to any work order in which he has a direct or indirect share. The impugned order also does not indicate as to whether any work done by the petitioner is an admitted fact or not. Further, assuming that :8: :8: :8: there is an admission that any work was indeed done pursuant to a contract awarded, as to whether the same was subsisting on the date of the filing of the nomination or that the same had come to an end is not clear to me at all. In this behalf, it would be interesting to reproduce the rival contentions. In para 4 of the Election Petition, Respondent no.3 alleges thus :- "4. The applicant states that after the elections were held the applicant herein applied under the Rights to Information Act to the Zilla Parishad seeking information if the Respondent herein has any interest in the work done by order of the Zilla Parishad. The applicant states that the Information Officer, Zilla Parishad vide his letter dated 17.03.2007 was pleased to inform the applicant herein that the Respondent herein had done the work by order of Zilla Parishad. The applicant states that as per the information received by the applicant as on date, the respondent herein has done the work of repairs and construction of road of 1100 meters of the Zilla Parishad to the tune of Rs.9,98,700/-. The applicant states that in the said letter it is clearly mentioned that the Respondent had done the said work somewhere around the year 25.12.2006. The applicant states that in the said letter it is also mentioned that even as on date the amount which is receivable by the respondent towards the work done by the order of Zilla Parishad is to the tune of Rs.36,975. This clearly goes to show that :9: :9: :9: when the respondent herein contested the elections for general elections of Ratnagiri Zilla Parishad, and now as elected councilor of Zilla Parishad he has interest in the work awarded to him by the Zilla Parishad. Hereto marked and annexed as Exhibit-A is the copy of the letter dated 17.03.2007. The applicant states that the relevant documents in respect of the work so awarded to the Respondent are in possession of the Zilla Parishad and the applicant herein craves leave to refer to and rely upon the relevant documents showing that the respondent herein got the work/contract from the Zilla Parishad and had share and or interest in the work awarded by the Zilla Parishad as and when produced. The applicant states that on perusal of the said letter it can be seen that the respondent herein was awarded a contract for repairs and construction of Tar road from Raypatan Titha to Parule Road......" 12. In the Reply of the Election Petition, the petitioner replies thus :- "4. With reference to para 4, the contents are false and misleading and twisted as per the convenience. The contents which are contrary to the submission made by the respondent in the forthcoming paragraphs, may be presumed to be denied if not specifically dealt with by the respondent. The exhibits annexed with the application do not constitute any cause of action much less any disqualification under the Maharashtra Zilla Parishad and Panchayat Samiti’s Act, 1961. " 11. With reference to Para 12, at the outset it is submitted that the present petition is false, misleading and maliciously filed with incomplete papers and information. :10: :10: :10: As a matter of fact the respondent herein has completed the contract work of road (mauje Raipatan Titha to Parule) way back on 25/12/2006, which date is much prior even to filing of nominations, i.e. on 23.2.2007. Though it is true that due to the Red-tapism, the Respondent has to receive a bill amount of Rs.36,975/- from Zilla Parishad, out of the said contract by no stretch of imagination, it could be said that it attracts disqualification under the Maharashtra Zilla Parishad and Panchayat Samiti’s Act, 1961. This points is squarely settled by the Division Bench consisting of Chief Justice of the Hon’ble Orrisa High Court in case of ‘Pyari Mohan Das vs. Durga Sankar Das and another’. Hereto annexed and marked Exhibit-C is the copy of the letter issued by the Information Officer and Deputy Executive Engineer, Zilla Parishad (Construction) Ratnagiri. The said exhibit sets all the three allegations on which the Applicant is mainly harping. As far as the work with respect to road (Raipathan Titha to Parule) was completed long back prior of the filing of the nominations. As far as the other allegation of having contract about the road from Devrukh Vigravali Sonavade Muchri Kalambaste is concerned though it is true the said tender was filled up by me back on 28.11.2006 but the said tender was never allotted to me. Much less as the prevailing practice when the said tender is not sanctioned within 90 days it does not remain binding on the contractor to abide by it and hence it was withdrawn on 26.2.2007 itself...." 13. In such circumstances, the Divisional Commissioner ought to have analysed the legal provisions so as to justify her ultimate conclusion. :11: :11: :11: Thus, whether Section 16(1)(i) contemplates a subsisting contract or whether any work already done is covered thereby, is not decided at all. Further, merely outstanding payment means the contract is subsisting is also not spelt out in the impugned order. On facts, whether the contract or work is complete and when, is also not clear. All conclusions ought to have been reached by the Divisional Commissioner after adverting to the rival contentions so also pleadings. She should have applied her mind by considering the contents of the documentary evidence. If the contents of the documents, so also, their existence is not in dispute, then, it is permissible for her to rely upon their contents. The impugned order does not indicate as to whether there are any such admitted documents or that if the documents are produced, their contents are proved in accordance with law. Further there is no indication as to whether the contents of the documents reveal the work was subsisting. She has also not applied her mind to the fact that the payment being outstanding or the same having been made after the filing of nomination form that the petitioner incurs a disqualification. In this behalf, a reference can :12: :12: :12: usefully be made to the observations of the Hon’ble Supreme Court in the decision reported in AIR 2006 SC AIR 2006 SC AIR 2006 SC page page page 918 (Srikant vs. Vasantrao and Ors.) 918 (Srikant vs. Vasantrao and Ors.) 918 (Srikant vs. Vasantrao and Ors.) "14. We will not deal with the disqualification prescribed under Section 9-A of the Act in more detail, as that is the subject matter of the appeal before us. The said section reads thus :- "9-A. 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 gods to, or for the execution of any works undertaken by, that Government. Explanation : for the purpose 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." Section 7 defines the terms ‘appropriate government’ and ‘disqualified’ used in Chapter III (which includes section 9-A) of the Act, thus :- "7. Definitions.-In this Chapter.- (a) ‘appropriate Government’ means in relation any disqualification for being chosen as or for being a member of either House of Parliament, the Central Government and in relation to any disqualification for being chosen as or for being a member of the :13: :13: :13: Legislative Assembly or Legislative Council of a State, the State Government." (b) ‘disqualified’ means disqualified for being chosen as, an for being, a member of either Houses of Parliament or of the Legislative Assembly or Legislative Council of a State". As we are dealing with the disqualification for being chosen as a Member of the Legislative Council, the term ‘appropriate government’ in section 9-A refers to and means the ‘the State Government’. 22. The appellant does not dispute the fact that his concern entered into the said contract dated 19.5.1996 with the State Government for execution of a work undertaken by the State Government, or the fact that the said contract dated 19.5.1996 was subsisting on the date of his nomination and scrutiny of nominations. What is contended is that the contract stood transferred to GMIDC in the year 1998 by virtue of the provisions of MGMIDC Act and, thereafter, the said contract ceased to be a contract with the State Government and therefore, what was subsisting in June, 2002 (at the time of filing nomination/scrutiny of nomination/declaration of result) was a contract with GMIDC and not a contract with the State Government. 23. What is relevant under Section 9-A of the Act is that the contractor should have some obligations to perform towards the State Government on the relevant date. In fact, the explanation to section 9-A makes it clear that where a contractor has performed all his obligations, but the government is yet to perform its obligations (for example, where the work assigned under a work order is completed by the contractor and that is duly certified, but payment therefore is not yet made by the Government) then there is no contract ‘subsisting’ within the meaning of :14: :14: :14: section 9-A of the Act. 24. A contract subsists till the rights and obligations thereunder are finally performed. The general rule is that though an employer may assign the benefits and obligations of a contract to an assignee, he will not be relieved of his obligations towards the contractor, unless the contractor is also a party to the assignment, in which event there is an assignment coupled with novation, (a new contract between the assignee and the contractor). But the exception to this general rule is where a statute vests certain assets of the State in a statutory corporation (or Government Company or other specified person) and provides that as a consequence, the rights and obligations of the state relating to such assets shall stand transferred to such statutory corporation (or Government company or specified person). In that event, the statute engrafts itself into the existing contract and as a consequence, the statutory corporation stands substituted in place of the original employer, and the existing contracts become contracts between the statutory corporation and the contractor. In case of such statutory vesting/transfer, the consent of the contractor for the substitution of the contracting party and the assignment/transfer of the contract is not necessary. " 14. It is therefore necessary to consider as to whether any such intent appears in Section 16(1)(i) or it is required to be construed in the manner suggested by the Hon’ble Supreme Court. Ultimately, these are serious proceedings. The petitioner is representing :15: :15: :15: the voters who have elected him. In such circumstances, whether he has incurred disqualification and therefore does not deserve to be continued as a Councillor is something which must be gone into in depth and the orders in that behalf must indicate proper and Independent application of mind. Merely reproducing the rival contentions and agreeing with one of them would not suffice. In the peculiar facts of this case, it was incumbent upon the Divisional Commissioner to have assigned cogent reasons in support of her conclusion. That having not been done by her, there is substance in the contention of Mr. Madkholkar that the impugned order cannot be sustained. Further, serious grievance is made by Shri. Madkholkar that before the Divisional Commissioner’s order was delivered, there was a News Item published in the local newspaper "Dainik Pudhari" on 20th August, 2007 that the petitioner is disqualified by the Commissioner. This fact is denied by Respondent no.3. Thus, the matter was hotly contested. In the result, the Writ Petition succeeds. The order under challenge is quashed and set aside. The application for Disqualification filed by Respondent no.3 is restored :16: :16: :16: to the file of the Divisional Commissioner for disposal afresh on merits and in accordance with law without in any manner being influenced by earlier observations. The parties to appear before the Divisional Commissioner on 31st January, 2008 and thereafter the Divisional Commissioner to deal with the said Application and pass orders afresh in accordance wit law. Petition allowed. The Divisional Commissioner to endeavour and dispose off the matter as expeditiously as possible and within a period of two months from the date of appearance of parties. In the facts and circumstances, there shall be no order as to costs. ****