Case: Vidya Sagar Joshi Vs. Surinder Nath Gautam

of the conduct and management of an election in any one constituency in a State in excess of the maximum amount specified in respect of that constituency in Schedule V."The words "conduct and management of election" are not as wide as the words "all expenditure in connection with election incurred or authorised by him," which now finds place in section 77. The question thus is what meaning must be given to the words used in Section 77.The critical words of Section 77 are expenditure in connection with election and incurred or authorised. Expenditure means the amount expended and expended means to pay away, lay out or spend. It really represents money out of pocket, a going out. Now the amount paid away or paid out need not be all money which a man spends on himself during this time. It is money in connection with his election. These words mean not so much as consequent upon as having to do with. All money laid out and having to do with the election is contemplated. But here again money which is liable to be refunded is not to be taken note of. The word incurred shows a finality. It has the sense of rendering oneself liable for the amount. Therefore the section regards everything for which the candidate has rendered himself liable and of which he is out of pocket in connection with his election that is to say having to do with his election.9. The candidate here put out this money for his election since he was trying to obtain a Congress ticket. If he had got the ticket and the money was refunded to him, this would not have counted as an expenditure since the expense would not have been incurred. When the candidate knowing that the money would be lost went on to stand as an independent candidate, he was willing to let the money go and take a chance independently.The case of the appellant is that this money was not used in furthering the prospect of his election. On the other hand, it was in fact used against him by the Congress Party as he was opposed to that partys candidate. He contends that such an expense cannot be regarded as expense in connection with the election. According to him the connection must be a connection of utility and not something which is of no use but rather against the chances of victory. In this connection the learned counsel draws our attention to Halsburys Laws of England Third Edition Volume 14, at page 177 paragraph 314. It is stated there as follows:"While no attempt has been made by judges to define exhaustively the meaning of expenses incurred in the conduct or management of an election, it has been said that if expenses are, primarily or principally, expenses incurred for the promotion of the interests of the candidate, they are election expenses."10. It will be seen that the above passage refers to expenses incurred in the conduct or management of an election.11. The learned counsel for the appellant and respondent relied upon two decisions of this Court. Reliance was also placed upon two decisions of the Election Tribunal. The decisions of the Election Tribunal are of the same Bench and concern Rule 117. They need not be considered. The two cases of this Court may be noticed.12. In Haji Aziz and Abdul Shakoor Bros. v. Commissioner of Income Tax, Bombay City, (1961) 2 SCR 651 = (AIR 1961 SC 663 ) the question arose under the Indian Income-tax Act. A firm importing dates was found to have breached some law and a penalty was imposed on it under the Sea Customs Act. The firm sought to treat the penalty as expenses and they were disallowed by this Court. Learned Counsel for the appellant relied on this case and claimed that the same principle applies and this penalty cannot be said to be an expenditure in connection with the election. The analogy is not apt because not only the prescriptions of the two laws are different but the underlying principle is different also. In Income-tax laws the expenditure must be laid out wholly or exclusively for the purpose of the business etc. Breaking laws and incurring penalty is not carrying on business and therefore, the loss is not for the purposes of business.Here the expenditure is to be included if it is incurred in connection with the election and the payment to secure the seat is an expenditure in connection with the election. The ruling, therefore, does not apply.13. In the second case a Congress candidate had paid a sum of Rs. 500 of which Rs. 100 were subscription for membership and Rs. 400 were a deposit. Later he paid Rs. 500 as donation to the Congress. He failed to include the two sums of Rs. 500 each in his return of expenses. The Tribunal found that both the sums were spent in connection with the election and by including them the limit was exceeded. This Court affirmed the decision of the Tribunal. The case was decided under R. 117. The two sums were considered separately. The contention was that under S. 123 (7) and R. l17 the candidate was nominated only on November 16, 1951 and the first sum was paid on September 12, 1951. The question then arose when the candidate became a candidate for the application of the Rule and S. 123 (7). It was held that the candidate became a candidate when he unequivocally expressed his intention by making the payment.14. The question of commencement of the candidature is now obviated by prescribing the two terminii between which the expense it to be counted. In so far as the case goes it supports our view. It is risky to quote the decision because the terms of the law on which it was declared were entirely different. We can only say that there is nothing in it which militates against the view taken by us here.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]9. The candidate here put out this money for his election since he was trying to obtain a Congress ticket. If he had got the ticket and the money was refunded to him, this would not have counted as an expenditure since the expense would not have been incurred. When the candidate knowing that the money would be lost went on to stand as an independent candidate, he was willing to let the money go and take a chance independently.The case of the appellant is that this money was not used in furthering the prospect of his election. On the other hand, it was in fact used against him by the Congress Party as he was opposed to that partys candidate. He contends that such an expense cannot be regarded as expense in connection with the election. According to him the connection must be a connection of utility and not something which is of no use but rather against the chances ofCounsel for the appellant relied on this case and claimed that the same principle applies and this penalty cannot be said to be an expenditure in connection with the election. The analogy is not apt because not only the prescriptions of the two laws are different but the underlying principle is different also. In Income-tax laws the expenditure must be laid out wholly or exclusively for the purpose of the business etc. Breaking laws and incurring penalty is not carrying on business and therefore, the loss is not for the purposes of business.Here the expenditure is to be included if it is incurred in connection with the election and the payment to secure the seat is an expenditure in connection with the election. The ruling, therefore, does not apply.13. In the second case a Congress candidate had paid a sum of Rs. 500 of which Rs. 100 were subscription for membership and Rs. 400 were a deposit. Later he paid Rs. 500 as donation to the Congress. He failed to include the two sums of Rs. 500 each in his return of expenses. The Tribunal found that both the sums were spent in connection with the election and by including them the limit was exceeded. This Court affirmed the decision of the Tribunal. The case was decided under R. 117. The two sums were considered separately. The contention was that under S. 123 (7) and R. l17 the candidate was nominated only on November 16, 1951 and the first sum was paid on September 12, 1951. The question then arose when the candidate became a candidate for the application of the Rule and S. 123 (7). It was held that the candidate became a candidate when he unequivocally expressed his intention by making the payment.14. The question of commencement of the candidature is now obviated by prescribing the two terminii between which the expense it to be counted. In so far as the case goes it supports our view. It is risky to quote the decision because the terms of the law on which it was declared were entirely different. We can only say that there is nothing in it which militates against the view taken by us here.