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1961 Supreme(MP) 19

High Court Of Madhya Pradesh
P. V. Dixit, C. J. , T. C. Shrivastava and K. L. Pandey, JJ.
BALLABH - Appellant
Versus
STATE OF MADHYA PRADESH - Respondents
Misc. Petn. 238 Of 1959
Decided On : 02/18/1961

Advocates Appeared:
R.J.BHAVE, Y.S.DHARMADHIKARI

The disqualification under Section 15(1) of the Central Provinces and Berar Municipalities Act, 1922, for having a share or interest in a contract with the municipality applies to all contracts, whether executed or executory, and the disqualification lasts only for the duration of the contract.

Headnote:

MUNICIPALITIES ACT - SECTION 15(1) AND 22(2) - CONSTRUCTION - DISQUALIFICATION FOR MEMBERSHIP - CONTRACT WITH MUNICIPALITY - SALE OF GOODS BY AUCTION - WHETHER A CONTRACT - DISQUALIFICATION FOR ELECTION - CONTINUING OR EXECUTORY CONTRACT - INTERPRETATION.

Fact of the Case:

The petitioner, a member and vice-president of a municipal committee, was found to have incurred a disqualification under Section 15(1) of the Central Provinces and Berar Municipalities Act, 1922, due to his father's purchase of a calf at an auction sale conducted by the petitioner on behalf of the municipality. The State Government declared the petitioner's office as member and vice-president vacant under Section 22(2) of the Act.

Finding of the Court:

The court held that the sale of the calf by auction constituted a contract between the petitioner's father and the municipality, and that the petitioner, as a member of the committee, was disqualified from holding office under Section 15(1) of the Act. However, the court found that the disqualification only lasted for the duration of the contract, and that since the petitioner had become vice-president after the auction sale, he was not disqualified from holding that office.

Issues: 1. Whether the sale of goods by auction is a contract within the meaning of Section 15(1) of the Central Provinces and Berar Municipalities Act, 1922? 2. Whether the disqualification under Section 15(1) is limited to the duration of the contract? 3. Whether the petitioner was disqualified from holding the office of vice-president after the auction sale.

Ratio Decidendi: 1. The court interpreted the word "contract" in Section 15(1) of the Act broadly to include all contracts, whether executed or executory. The court reasoned that the purpose of the provision was to prevent conflicts of interest between members of the committee and their private interests, and that this purpose would be undermined if the disqualification was limited to executory contracts. 2. The court held that the disqualification under Section 15(1) only lasts for the duration of the contract. The court interpreted Section 22(2) of the Act to mean that the office of a member or vice-president becomes vacant automatically upon the incurrence of a disqualification under Section 15, and that the vacancy continues until the disqualification is removed. 3. The court found that the petitioner was not disqualified from holding the office of vice-president after the auction sale because he had become vice-president after the disqualification had been incurred.

Final Decision: The court partly allowed the petition, quashing the State Government's order insofar as it related to the petitioner's removal from the office of vice-president. The court directed that the costs of the petition be borne by the parties as incurred.

DIXIT, C. J.

( 1 ) I agree with the construction that has been put on Sections 15 (1) and 22 (2) of the C. P. and Berar Municipalities Act, 1922, by my learned brother Shrivastava, J. I would only add a few observations on the decisions in Bikulal v. State of M. P. , ILR (1953) Nag 245 : (AIR 1953 Nag 125) and K. C. Shanna v. Ramgulam Choubey, ILR (1954) Nag 571 : (AIR 1954 Nag 255 ). Bhikulal's Case ILR (1953) Nag 245 : (AIR 1953 Nag 125) dealt with the question of the president of a municipal committee incurring a disqualification under Section 15 (1) read with Section 22 (2) because of the vice-president of the municipal committee purchasing cloth from a shop belonging to the president It was held on the basis of Tranton v. Astor (1917) 33 TLR 383, that such a purchase transaction did not amount to a contract entailing a disqualification as contemplated by Section 15 (1) of the Act. In the other case the question that was considered was whether a person was eligible lor election as president of a municipal committee because he held a lease of certain municipal land and also entered into a contract of lease with the municipal committee in respect of certain other land. It was ruled in Sharma's Case, ILR (1954) Nag 571 : (AIR 1954 Nag 255) that Section 15 (1) contemplates a continuing, lasting or executory contract and not a contract of a casual or transient nature- In this case also reliance was placed on (1917) 33 TLR 383 (Supra) and reference was made to Royse v. Birley, (1869) 4 CP 296.

( 2 ) WITH all due deference to the learned Judges deciding these two cases I must say that in those cases the very material difference between the language of Section 1 of the House or Commons (Disqualification) Act, 1782, considered in the English cases and the language of Section 15 (1) of the C. P. and Berar Municipalities Act and the significance and effect of the expression "while owning such share or interest" used in Section 15 (1) and of the words "becomes subject to any of the disqualifications in Section 15 shall forthwith cease to be president, vice-president or member" occurring in Section 22 (2) of the Act have been overlooked. Section 1 of the House of Commons (Disqualification) Act, 1782, plainly meant that the disqualification attached to the contractor only if he is elected, takes his seat and votes whilst the contract is being executed by him. The true character of that provision was pointed out by Montague Smith, J. in (1869) 4 CP 296 at pp. 316-317. He said: "i decide this case, so far as regards that contract, upon the ground that at the time of the election the contract was no longer executory, and nothing remained to be done upon it but for the Government to pay the price of the goods. Looking at this act of Parliament and the general tenor of it, I certainly am strongly of opinion that the legislature intended it to apply only to contracts of a continuing nature, such as contracts for the building of works, and contracts for a recurring supply of goods, though I do not say that a contract for a single supply of goods is not within the terms which are used. But to my mind it very plainly appears that the statute did not mean to disqualify a contractor unless the contract was in an executory state on his part, that is to say, that something remained to be done by him; and that in no other way can the act of Parliament be properly construed. The words 'undertake and execute', in Section 1, clearly apply only while the contract is executory; and, though the other words 'hold' and 'enjoy' are more general, it seems to me they refer to holding a contract or enjoying a contract which is executory, that is, a contract under which something has to be done by the contractor, either one act or recurring acts, and that he is only disqualified 'during the time that he shall execute, hold, or enjoy' any such contract. The, words 'hold and enjoy' may have been inserted to meet cases where a contractor holding a contract did not h






























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