Holding

A contract transferred to a statutory corporation ceases to be a contract with the State Government, and statutory bodies like GMIDC and MJP are not "appropriate Government" under Section 9A, so the appellant was not disqualified.

Summary

The appellant, Shrikant, was elected to the Maharashtra Legislative Council but his election was challenged on the ground that he held subsisting government contracts, which under Section 9A of the Representation of the People Act, 1951, would disqualify him. The contracts involved work for the State Government, one of which had been transferred to the Godawari Marathwada Irrigation Development Corporation (GMIDC) and the other two were with Maharashtra Jeevan Pradhikaran (MJP), both statutory bodies. The High Court held that these bodies fell within the definition of "State" under Article 12 and therefore constituted the "appropriate Government", disqualifying the appellant. The Supreme Court rejected this view, holding that "appropriate Government" in Section 9A means the State Government itself, not its instrumentalities or statutory corporations, and that the statutory transfer of the contract to GMIDC terminated the contract's subsistence with the State Government. Consequently, the appellant had no disqualifying contract with the appropriate Government and his election was upheld.

Issues considered

Whether a statutory corporation that qualifies as "State" under Article 12 can be treated as "appropriate Government" for the purpose of Section 9A of the Representation of the People Act, 1951.
Whether a contract originally entered into with the State Government, but later transferred to a statutory corporation under a specific statute, continues to be a subsisting contract with the State Government.
Whether the appellant incurred disqualification under Section 9A of the Act on the basis of the three contracts in question.

Legislation cited

General Clauses Act, 1987s. 2(60)
Representation of the People Act, 1951s. 100(1)(a), s. 100(1)(d), s. 101(1)(a), s. 10A, s. 2, s. 7, s. 8, s. 8A, s. 9, s. 98, s. 9A

Subjects

election lawdisqualificationRepresentation of the People Actstatutory corporationappropriate governmentcontract transferLegislative CouncilMaharashtra

Judgment

A SH RI KANT
v.
VASANTRAO AND ORS.

JANUARY 20. 2006

B [Y.K. SABHARWAL, CJ., B.N. SRIKRISHNA AND
R.V. RAVEENDRAN, JJ.]

Representation of the People Act, 1951; Ss. 2. 7, 8, 8~A, 9, 9-A, JO, 10-
C A and 116-A/General Clauses Act, 1987; Section 2(60):

Election Petition-Election for legisla1ive Council-Re/urned candidate
having subsisling comracls with a s/atulory body as on 1he dale offiling of
nominalion--Disqualificalion--Held: Disqualificalion as defined under the
provisions of the 1951 Act is very clear and specific-A candidate having a
D subsisting contract with the Staie/State Government for supply ofgoods/works
contracts could only disqualifY him from con'<'sting the election-Meaning of
the term 'State/State Governmem · defined in the context of its ordinary and
normal sense and not in the broader sense in /erms of Ar1icle 12 of the
Constitution-Since the term 'S1a1e Governmenl' in its ordinary sense does
not emphasize in its field a local/statutory authority. lhe slalutory authority in
E question cannot be termed as Slate Governmem-Since all rights and
obligations of the State Government under the contracts in question stood
/rans/erred to a statutory body, no separate instruclionfor transfer/assignment
necessary-The contracts though subsisting as on the date of filing of
nomination were not conlrac/s with the Siale Governmenllappropriate
F Government but with a stalutory body--Hence. 1he returned candidate did not
incur any disqualification.under Section 9A of the Ac1--(:onsti1ution of India,
1950--Articles 12, 58, 6./, 102 and 191.

Disqualification--Seclion 9(A) of lhe Acl-Scope of

Words and Phrases:
G
'Appropriate Governmenl' and 'Suhsisting Con/rac/ '-Meaning of in
lhe context of Section 9(A) of the Represen/ation of /he People Act, 1951.

The first respondent, rival candidates, filed Election Petition in the
H 496

'
I
SHRlKANT v. VASANTRAO 497
• ·-, High Court challenging the election ·of the appellant-returned candidate A
under the provisions of Sections 9-A, 98, IOO(l)(a) and (d) and IOl(l)(a)
of the Representation of the People Act, 1951. It was alleged that the
appellant was a government contractor as on the date of filing of
nomination as ·he had entered into three contracts for execution of works,
with the State Government, and the contracts were subsisting as on the B
dates of filing of nomination, scrutiny of the nomination papers and on
declaration of result. According to the returned candidate one of the
contracts stood transferred to Godawari Marathwada Irrigation
Development Corporation (MGMIDC), a statutory body and other two
contracts were already entered into with another statutory body, viz.
Maharashtra Jeevan Pradhikaran (MJP). Therefore, as on the date of C
filing of nomination, he had no subsisting contracts with the State
Governments/appropriate Government and thus he did not suffer from
any disqualification under Section 9-A of the 1951 Act.

The High Court allowed the election petition and declared the
election of the appellant void holding that GMIDC and MJP were statutory D
corporations wholly controlled by the State Government and therefore fell
within the expression 'State' as defined in Article 12 of the Constitution.
The High Court also held that GMIDC and MJP being 'State' under
Article 12 of the Constitution, therefore, these statutory corporations could
be termed as 'appropriate Government'. Consequently, the appellant had E
subsisting contracts with the appropriate government ·and therefore,
incurred disqualification under Section 9-A of the Act. He~ce the present
appeal.

Allowing the appeal, the Court
F
HELD: I. I. A person cannot be disqualified unJess he suffers a
disqualification laid down in Article 191 of the Constitution or under
Sections 8, 8-A, 9, 9-A, I 0 or 10-A of the Representation of the People
Act. It is not possible to add to or subtract from the disqualifications, either
on the ground of convenience, or on the grourids of equity or logic or
perceived legislative intention. The disqualifications under Sections 8 to G
IO-A of the Act are clear and very specific. 1507-A-B; 508-CI

.~voli 8<1.rn v. Dehi Ghosa/, AIR (1982) SC 983; S. Narayana.mami v.
G. Panneerse/\'l/111, AIR (1972) SC 2284 and N.S. Varadachari v. G. I·. Pai.
AIR (1973) SC 38, relied on.
H
498 SllPREME COLRT REPORTS [2006] I S.C.R.

A 1.2. Section 9-A only disqualifies person having a subsisting contract •
with the State Government either for supply of goods or for execution of
any works undertaken by that government, but does not disqualify persons
who have such contracts with any local or other authority nor disqualifies
persons having subsisting contracts with the State Government if such
B contracts are not for supply of goods or for execution of any works
undertaken by the State Government.1508-F-GI

1.3. While Articles 102 (l)(a) and 191(1)(a) of the Constitution
disqualify any person holding any office of profit under the Government
of India or Government of any State, Articles 58(2) and 66(4) disqualify
C any person holding any office of profit under the Government of India or
the Government of any State or under any /ocul or other authority subject
to the control of any of the suid <Jovernmems. There is thus a conscious and
deliberate omission of the words 'office of profit under any local or other
authority subjected to the control of any of the said Governments' while
listing the disqualifications for membership of Houses of Parliament and
D membership of Legislative Assembly/Council of a State. Holding an 'office
of profit under local or other authority' is not a disqualification for being
elected to either house of Parliament or State Legislative Assembly/
Council, but disqualification for being elected as the President or Vice-
President. The above brings into focus that 'State Government' is different
E from 'local or other authorities under the control of the State Government'
for purposes of disqualification. 1509-A-B-C; 510-CI

Gurushanthappa v. Abdul Khuddus, AIR (1969) SC 744, referred to.

2. Having reached the conclusion that both GMIDC and MJP answer
F the definition of State under Article 12, the High Court wrongly, without
any logical basis, assumed that they are 'appropriate government' and
consequently held that the appellant had subsisting contracts with GMIDC
and MJP, therefore, incurred disqualification under Section 9-A of the Act.
Neither Article 12 nor the decisions rendered with reference to Article 12
is of any assistance for interpreting Section 9A of the Act. The term 'State
G Government' (as also the term 'Central Government') is used in the
various provisions relating to disqualification, in contradistinction from
its instrumentalities or local or other authorities. While it is true that the
meaning of the terms 'State' and 'State Government' may depend on the
context in which they are used, the manner in which the said terms are
H used in the various provisions relating to disqualification leaves no doubt
SHRIKANT v. VASANTRAO 499
•·---. that 'State' refers to an entity described in the First Schedule to the A
Constitution of India and 'State Government' refers to the three w.ings of
governance of the 'State' that is Executive, Legislature and Judiciary. The
term 'State Government' in Section 9A read with Section 7 of the 1951
Act should, therefore, be understood in its ordinary and normal sense, and
not with reference to the extended meaning under Article 12 of the B
Constitution oflndia. [511-F-G-H; 512-A-B]

3. A body would answer the definition of State under Article l 2 if it
is financially, functionally and administratively dominated by or under
all pervasive control of the "Government". On the other hand, where the
control by the "Government" is merely regulatory, whether under any C
statute or otherwise, it would not serve to make the body 'State'. Thus
the very decisions relied on by the High Court make it clear that
'instrumentalities of State' are different from 'State Government', though
both may answer the definition of 'State' under Article 12 for the limited
purpose of Part-III of the Constitution. Further, the very inclusive
definition of 'State' under Article 12 by referring to Government of India, D
the Government of each of the States and the local and other authorities,
makes it clear that a 'State Government' and a local or other authorities,
are different and that they fall under a common definition only for the
purpose of Part-Ill of the Constitution. This Court has consistently refused
to apply the enlarged definition of 'State' given in Part-Ill (and Part-IV) E
of the Constitution, for interpreting the words 'State' or 'State
Government' occurring in other parts of the Constitution. While the term
"State" may include a State Government as also statutory or other
authorities for the purposes of part-III (or Part-IV) of the Constitution,
the term "State Government" in its ordinary sense does not en com pass in
- its fold either a local or statutory authority. It follows, therefore, that F
though GMIDC and MJP may fall within the scope of 'State' for purposes
of Part-Ill of the Constitution but they are not "State Government" for
the purposes of Section 9"A read with Section 7 of the 1951 Act.
[512-E-F-G-H; 513-A]

Pradeep Kumar Biswas v. Indian Institute ofChemical Biology and Ors., G
[2002] 5 sec 111, relied on.

4.1. The object and intent of Section 9A of the Act is to maintain
the purity of the legislature and to avoid conflicts between duty and
interest of members of Legislative Assembly and Legislative Council. The H
500 SUPREME COURT REPORTS [20061 I S.C.R.

A object is sought to be achieved by ensuring that a person who has entered
•
into a contract with the State Government liable to perform certain
obligations towards the State Government, is not elected as a member of
the Legislative Assembly or Legislative Council, lest he should use his
influence as an elected member of Legislature to dilute the obligations or
B to seek and secure undue advantages and benefits in respect of the
subsisting contracts. It seeks to ensure that personal interests will not
override his duties and obligations as a member of Legislature or
Legislative Council. For the purpose of Section 9-A, what is relevant is
whether the candidate has a subsisting contract with the appropriate
Government, the State Government either for supply of goods to the State
C Government or for execution of any work undertaken by the State
Government. [513-B-C-D[

Kartar Singh Bhadana v. Hari Singh Nalwa, [2001 I 4 SCC 661,
referred to.

D 4.2. It is clear from Section 9A of the Act that only certain type of
contracts with the State Government will result in disqualification.
[514-B[

Kartar Singh Bhadana v. Hari Singh Nalwa, (2001[ 4 SCC 661; Dewan
Joynal Abedin v. Abdul Wazed, (19881 Supp. SCC 580 and Ranjeet Singh v.
E Harmohinder Singh Pradhan, (1999[ 4 sec 517, relied on.

4.3. The term 'appropriate Government' in Section 9-A of t:ie Act
refers to the State Government alone, and not to any instrumentality of
the State Government. Hence, GMIDC and MJP constituted under the
F MGMIDC Act and MJA Act respectively, are not 'State Government' and,
therefore, any contracts with them are ·not contracts entered into by the
candidate with the appropriate government. [514-F-G[

5. A contract subsists till the rights and obligations thereunder are
finally performed. The general rule is that though an employer may assign
G 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/Government
H Company/other specified person and provides that as a consequence, the
SHRIKANT "· VASANTRAO 501

'~ rights and obligations of the State relating to such assets shall stand A
transferred to such statutory corporation/ Government Company/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
B
of the contracting party and the assignment/transfer of the contract is not
necessary. (515-F-G-H; 516-A-BI

6. When all rights and obligations of the State Government under
the contract were transferred and vested in the statutory corporation,
Godawari Marathwada Irrigation Development Corporation, by virtue of
c
the statute, no separate instrument of transfer or assignment is necessary,
nor the consent of the contractor is necessary for the transfer and vesting,
as the statute engrafts itself over the subsisting contract. The contract, on
such statutory transfer and vesting, though originally entered with the
State Government ceased to be a subsisting contract with the State D
Government from the date of such transfer and vesting and will be
considered as a subsisting contract with the statutory corporation.
Therefore, the contract in question though subsisting on the date of filing
of nominations and scrutiny of nomination, was not a contract with the
appropriate Government, but with the statutory corporation. Hence, the
E
appellant had no subsisting contract with the appropriate government
either for supply of any goods or for execution of any work undertaken
by that government on the date of filing the nomination, the date of
scrutiny of nominations and the date of declaration of result. Consequently,
\ the appellant did not incur any disqualification under Section 9A of the
Act. (517-F-G-H; 518-B-C( F
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 5895 of2004.

from the Judgment and Order dated 31.8.2004 of the Bombay High
Court in Election Petition No. I of 2002.

G.L. Sanghi, S.V. Deshpande, Prag Barde and Ms. Anuradha Rustagi G
for the Appellant.

D.A. Dave, S.U.K. Sagar, Ms. Bina Madhavan and Ambagh for Mis.
lawyer's Knit & Co. for the Respondents.

The Judgment of the Court was delivered by H
502 SUPREMF COURT REPORTS f2006J I S.C.R.

A RAVEENDRAN, J. This appeal under section 116-A of the f

Representation of the People Act, 1951 [for short the ·Act'] is by the returned
candidate against the judgment dated 3 1.8.2004 passed by the learned single
Judge of the Bombay High Court in Election Petition No. I of 2002 filed by
the first respondent herein.

B 2. Notice of Election dated 29.5.2002 was given by the Returning officer
in respect of an election to be held to elect a member to the Maharashtra
Legislative Council from Aurangabad Division Graduates' Constituency. As
per calendar, the last date for filing nominations was 5.6.2002, the scrutiny
of nomination papers was taken up on 6.6.2002 and the poll was held on
C 23.6.2002. The appellant. who was one of the candidates, was declared elected
on 26.6.2002. On 9.8.2002, the first respondent. one of the rival candidates,
filed Election Petition No. 1/2002 in the High Court of Bombay, Aurangabad
Bench, challenging the election of the appellant under section 9-A. 98, I00( I)
(a) & (d) and IOl(l)(a) of the Act.

D 3. In the said election petition, the first respondent alleged that the
appellant was a government contractor carrying on business under the trade
name of Mis. Precision Press Fabricon at Aurangabad. He further alleged that
the appellant had entered into three contracts with the State Government, in
the course of his business for execution of works undertaken by the appropriate
E Government. and such contracts were subsisting, on the date of filing of
nomination/scrutiny of the nomination papers/declaration of result [in June,
2002]. The said contracts were :

(a) Contract as per work order dated 19.5.1996 issued by the
Executive Engineer, Medium Project Irrigation Division. Latur,
F for the work of designing, fabricating, and erecting the Automatic
stilt doors at the canal of Tawarja Project.
(b) Contract as per work order dated 3 1.12.1998 issued by the
Executive Engineer, Maharashtra Jeevan Pradhikaran. Works
Division No.2. Latur. for execution of the work relating to water
G supply scheme in ten villages surrounding Pangaon.
(c) Contract as per work order dated 12.4.1999 issued by the
Executive Engineer, Maharashtra Jeevan Pradhikaran for the work •
relating to water supply scheme, Stage-II Taluk Geora. District
Beed.
H The first respondent contended that Maharashtra Jeevan Pradhikaran is
Sl-IRIKANT v_ VASANTRAO IRAVEENDRAN, J.] 503
part and parcel of the State Government and therefore, contracts with the said A
Pradhikaran are in effect contracts with the State Government. First Respondent
contended that as these three contracts (the first with the State Government
and the other two with Maharashtra Jeevan Pradhikaran) were subsisting in
June, 2002, the appellant was disqualified for being chosen as a Member of
Legislative Council, under section 9 A of the Act.
B
4. The appellant did not dispute that he had entered into such contracts
_,, and that they were subsisting in June, 2002. He, however, submitted that the
correct position in regard to the three contracts was thus:

(a) The contract dated 19.5.1996 with the State Government, stood
transferred to "Godawari Marathwada Irrigation Development C
Corporation [for short 'GMIDC'], an authority constituted under
the Maharashtra Godawari Marathwada Irrigation Development
Corporation Act 1998 [for short 'MGMIDC Act'] with effect
from 1.10.1998.
(b) Contracts dated 3 1.12. ! 998 and 12.4_ 1999 were entered into with D
Maharashtra Jeevan Pradhikaran (for short 'MJP'), an authority
constituted under the Maharashtra Jeevan Authority Act, 1976
(for short 'MJA Act') and not with the State Government.

He contended that the question of disqualification under section 9-A of the
Act would arise only if any contract entered into by him [in the course of his E
trade or business] with the appropriate government (State Government) for
the supply of goods or for execution of any wo-rks undertaken by that
\ government, subsisted on -the date of filing of nomination/scrutiny of
nominations/ declaration of results. He pointed out that the first contract had
been transferred to GMIDC in the year 1998 itself, and the second and third F
contracts were with MJP and not with the State Government. He, therefore,
contended that he had no subsisting contract with the appropriate government
in June, 2002 and therefore, did not suffer disqualification under section 9-
A of the Act.

5. After considering the provisions of MGMTDC Act and MJA G
Act, the High Court allowed the election petition by order dated 31.8.2004
and declared the election of Appellant as void. It held that GMIDC and MJP.
were statutory corporations wholly controlled by the State Government and -
therefore, fell within the expression 'State' as defined in Article 12 by applying
the principles laid down by this Court in Rwnuna Dayaram Shetty v. The H
504 SUPREME COURT REPORTS [2006] I S.C.R.
•
A International Airport Authority of India, AIR ( 1979) SC 1628; Ajay Hasia v.
Khalid Mujib Sehravardi, [ 1981] I SCC 722; The Mysore Paper Mills Ltd.
v. The Mysore Paper Mills Officers Association and Anr., [2002] 2 SCC 167
and Pradeep Kumar Biswas v. Indian Institute uf Chemical Biology and Ors ..
(2002] 5 SCC 111. The High Court also held that GMIDC and MJP being
B 'State' under Article 12, they are the same as being 'State Government' and
therefore, GMIDC and MJP can be termed as 'appropriate Government'.
Consequently, the High Court held that the Appellant had subsisting contracts
with the appropriate government and therefore, incurred disqualification under
section 9-A of the Act.

c contentions
6. Feeling aggrieved, the appellant has tiled this appeal. On the
raised, the following questions arise for consideration:

(i) Whether a statutory body or authority which answers the definition
of'State' under Article 12, for purposes of Part-Ill and IV of the
Constitution of India, is an 'appropriate government' for purposes
D of section 9-A of the Act.

AND

Whether GMIDC and MJP can be termed as 'appropriate
government' (that is 'State Government' having regard to
definition under section 7 of the Act) for purposes of section 9-
E A of the Act.
(ii) Whether the contract dated 19.5.1996 entered into by the
Appellant with the State Government, continued to be a contract
with the State Government, after its transfer to GMIDC with
effect from I. I0.1998.
F
(iii) Whether the Appellant incurred any disqualification under section
9-A of the Act, on account of his contracts dated 19.5.1996,
31.12.1998 and 12.4.1999.

Re : Question (i)
G
7. Article 191 of the Constitution of India prescribes the
disqualifications for a person being chosen as, and for being. a member of r"
the Legislative Assembly or Legislative Council of a State. Apart from
specifying four grounds of disqualifications, it provides that a person can be
disqualified by or under any law made by the Parliament. The Representation
H of the People Act. 1951, a law made by the Parliament. has introduced six
SHRIKANl " VASANTRAO (RAVEENDRAN. J.] 505

disqualifications for a person being chosen as and for being Member of A
Legislative Assembly of Legislative Council of a State under sections 8, 8-
A, 9, 9-A, I 0 and I0-A of the Act.

8. In Jyoti Basu v. Debi Ghosal, AIR ( 1982) SC 983, this Court clarified .
that the right to elect, the right to be elected and the right to dispute an
election, though fundamental to democracy, are neither fundamental rights B
nor Common Law Rights, but are pure and simple statutory rights. This
Court held :-

"Outside of statute, there is no right to elect, no right to be elected
and no right to dispute an election. Statutory creations they are, and
therefore, subject to statutory limitation. An election petition is not an C
action at Common Law. nor in equity. It is a statutory proceeding to
which neither the common law nor the principles of equity apply but
only those rules which the statute makes and applies. It is a special
jurisdiction, and a special jurisdiction has always to be exercised in
accordance with the statute creating it. Concepts familiar to Common D
Law and Equity must remain strangers to Election Law unless
statutorily embodied. A Court has no right to resort to them on
considerations of alleged policy because policy in such matters, as
those, relating to the trial of election disputes, is what the statute lays
down. In the trial of election disputes, Court is put in a straight
jacket. " E
9. In S. Narayanaswami v. G. Panneerselvam, AIR (1972) SC 2284,
\, the correctness of a decision of the Madras High Court which held that a non-
graduate was not qualified to be a candidate for election to the Graduates'
Constituency, (though the Constitution or any law made by the Parliament
did not prescribe graduation as a qualification for electio~ to Graduate's F
constituency), fell for consideration of this Court. A Constitution Bench of
this Court reversed the decision of the High Court, on the following reasoning:

"It could hot even be said that qualifications of the electors as well
as of those to be elected were not matters to which the attention of G
the law makers. both in the Constituent .Assembly and in Parliament,
was not specially directed at all or that the omission must be by mere
oversight. The provisions discussed above demonstrate amply how
legislative attention was paid to the qualifications of the electors as
well as of the elected in every case. Hence, the correct presumption,
in such a case would be that the omission was deliberate. H
A
506 SUPREME COURT REPORTS (20061 I S.C.R.

We think that the view contained in the judgment under appeal,
necessarily results in writing some words into or adding them to the
' .
relevant statutory provisions. to the effect that the candidates from
graduates' constituencies of Legislative Councils must also possess
the qualification to having graduated. This contrav('nes the rule of
"plain meaning" or "literal" construction which must ordinarily prevail.
B A logical corollary of that rule is that "a statute may not be extended
to meet a case for which provision has clearly and undoubtedly not
been made" (See Craies on Statute Law-6th Edn. P. 70). An
application of the rule necessarily involves that addition to or
modification of words used in statutory provisions is not generally
c permissible.

We think that the language as well as the legislative history of Articles
171 and 173 of the Constitution and Section 6 of the Representation
of People Act, 1951, enable us to presume a deliberate omission of
the qualification that the representative of the Graduates should also
D be a graduate. In our opinion, no absurdity results if we presume such
J
an intention. We cannot infer as the learned Judge of the Madras
High Court had done, from the mere fact of such an omission and
opinions about a supposed scheme of "functional representation"
underlying Article 171 of our Constitution, that the omission was
either unintentional or that it led to absurd results. We think that, by
E adding a condition to be necessary or implied qualifications of a
representative of the Graduates which the Constitution-makers, or, in
any event the Parliament, could have easily imposed, the learned
Judge had really invaded the legislative sphere. The defect, if any, in •
the law could be removed only by law made by Parliament."
F
10. In N. S. Varadachari v. G. V. Pai, AIR (1973) SC 38, this Court
held thus:-

"Section 8 to I0-A of the Act set out the grounds which disqualify
a person from being a candidate. If a person possesses all the
G qualifications prescribed in the Constitution as well as in the Act and
has not incurred any of the disqualifications mentioned therein then
he is qualified to be a candidate. It may look anomalous that a non-
graduate should be a candidate in a Graduates· Constituency. But if
a candidate possesses the qualifications prescribed and has not incurred
any of the disqualifications mentioned in the Constitution or in the
H
SHRIKANT 1·. VASANTRAO [RAVEENDRAN. J.] 507

Act other consideration becomes irrelevant. A
11. A person cannot, therefore, be disqualified unless he suffers a
disqualification laid down in Article 191 of the Constitution or under sections
8, 8-A, 9, 9-A, I0 or I0-A of the Act. It is not possible to add to or subtract
from the disqualifications, either on the ground of convenience, or on the
grounds of equity or logic or perceived legislative intention. A combined B
reading of Article 191 of the Constitution of India and Chapter Ill of the
Representation of the People Act, 1951 makes it clear that a person can be
'i held to be disqualified for being chosen as, and for being, a Member of the
Legislative Assembly or Legislative Council of a State only OQ. the following,
and no other, grounds :
c
Disqualificalions under lhe Conslilution of India :

(i) If he holds any office of profit under the Government of India
or the Government of any State [specified in the First Schedule),
other than an office declared by the Legislature of the State by D
law not to disqualify its holder vide Article 191 ( 1) (a);
(ii) If he is of unsound mind and stands so declared by a competent
court vide-Article 191 (1 )(b);
(iii) If he is an undischarged insolvent vide Article 191(1) (c);
(iv) If he is not a citizen of India, or has voluntarily acquired the E
citizenship of a foreign State, or is under any acknowledgment
of allegiance or adherence to a foreign State-vide Article
19l(l}(d);

Disqualifications under the Ac/ :
F
(v) If he is convicted and sentenced for any offence as provided/
enumerated in Section 8 of the Act;
(vi) lfhe is found guilty of corrupt practices by an order under section
99 of the Act-vide section 8-A of the Act;
(vii) lfhe is a person who having held an office under the Government G
of India or under the Government of any State has been dismissed
for corruption or for disloyalty of the State-vide section 9 of
the Act:
(viii) If he is a person having a subsisting contract with 1the State
H
508 SlJPREMI COllR I REPOR rs [2006] I S.C.R.

A Government for the supply of goods to or for the execution of f 1
any works undertaken by that Government.~vide section 9-A of
the Act;
(ix) If he is a person who is a managing agent, manager or secretary
of any company or corporation. in th..: capital of which the State
B Government has not less than twenty-five per cent share-vide
section I0 of the Act;
(x) If he is a person who has been declared as disqualified by the
Election Commission for having failed to lodge account of
election expenses with in the time and in the manner required by
c or the under the Act ·vi de section I 0-A of the Act.

12. The disqualifications under sections 8 to I0-A of the Act are clear
and very specific. They do not leave any room at ·elbow joints' to widen or
narrow the disqualifications. For example, section I0 of the Act disqualifies
only persons who are working or functioning as managing agent, manager or
D secretary of a company or corporation in which the State Government has not
less than twenty-five per cent shares, but does not disqualify other employees
of such company or corporation. Section 9 disqualifies a person who had
held an office under the Government of India or any State Government and
who has been dismissed for disloyalty to the State or for corruption, but it
does not disqualify a person who had held an office under a local or other
E authority and who has been dismissed for corruption. Similarly, all and every
conviction do not lead to disqualification under Section 8. The disqualification
will be attracted under section 8 only in cases where (i) the conviction is
followed by sentence of not less than two years; or (ii) the conviction is for
;
the offences enumerated in sub-section (I); or (iii) the conviction is in respect
F of a contravention of a law referred in sub-section (2) and the sentence is not
less than six months. Section 9-A only disqualifies person having a subsisting
contract with the State Government either for supply of goods or for execution
of any works undertaken by that government. but does not disqualify persons
who have such contracts.with any local or other authority nor disqualifies
persons having subsisting contracts with the State Government if such contracts
G are not for supply of goods or for execution of any works undertaken by the
State Government.

13. At this juncture, it is of some relevance to notice the distinction
between Articles I02( I )(a) and 191 (I )(a) which deal with disqualification for
H membership of Houses of Parliament and the membership of the State
SHRIKANT v. VASANTRAO IRAVEENDRAN . .1.j 509
; 1
Legislative Assembly/Council on the one hand and Articles 58(2) and 66(4) A
which deal with disqualification for election as President and Vice President,
on the other hand. While Article 102(1)(a) and 19l(l)(a) disqualify any
person holding any office of profit under the Government of India or
Government of any State, Articles 58(2) and 66(4) disqualify any person
holding any office of profit under the Government of India or the Government B
of any State or under any local or other authority subject to the control of
any of the said Governments. There is thus a conscious and deliberate omission
of the words 'office of profit under any local or other authority subjected to
the control of any of the said Governments' while listing the disqualifications
for membership of Houses of Parliament and membership of Legislative
Assembly/Council of a State. Holding an 'office of profit under local or other C
authority' is not a disqualification for being elected to either house of
Parliament or State Legislative Assembly/Council, but disqualification for
being elected as the President or Vice-President. In Gurushanthappa v. Abdul
n
Khuddus, AIR 969) SC 744, this difference between disqualification under
Article 58(2)/66(4) and Article 102(1)/191(1)(a) was highlighted thus:
D
"In this connection, a comparison between Article 58(2) and 66(4)
and Articles 102(1) and 191(1) (a) of the Constitution is of significant
help. In Arts. 58(2) and 66(4) dealing with eligibility for election as
President or Vice-President of India, the Constitution lays down that
a person shall not be eligible for election if he holds any office of E
profit under the Government of India or the Government of any State
or under any local or other authority subject to the control of any of
the said Governments. In Articles 102(1)(a) and 191(1)(a) dealing
with membership of either House of Parliament or State Legislature,
the disqualification arises only if the person holds any office of profit
under the Government of India or the Government of any State other F
than an office declared by Parliament or State Legislature by law not
to disqualify its holder. Thus, in the case of election as President or
Vice-President, the disqualification arises even if the candidate is
holding an office of profit under a local or any other authority under
the control of the Central Government or the State Government, G
whereas, in the case of a candidate for election as a Member of any
of the Legislatures. no such disqualification is laid down by the
Constitution if the office of profit is held under a local or any other
authority under the control of the Governments and not directly under
any of the Governments. This clearly indicates that in the case of
eligihility for election as a member of a legis/a/l/re. the holding of H
510 Sl/PREME COURT REPORTS (20061 1 S.C.R.

A an office ofprofit under a corporate body like a local authority does
not bring about disqualification even if that local authority be under
the control of the Government. The men: control of the Government
over the authority having the power to appoint, dismiss, or control
the working of the officer employed by such authority does not
disqualify that officer from being a candidate for election as a member
B of the Legislature in the manner in which such disqualification comes
into existence for being elected as the President or the Vice-President."

(Emphasis supplied)
..
The above brings into focus that 'State Government' is different from 'local
c or other authorities under the control of the State Government' for purposes
of disqualification.

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
D 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 goods to, or for the execution of any
E works undertaken by, that Government.

Explanation : For the purpose of this section, where a contract has
been fully performed by the person 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
F has not performed its part of the contract either wholly or in part."

Se'ction 7 defines the tenns ·appropriate government' and 'disqualified'
used in Chapter III (which includes section 9-A) of the Act, thus :-

"7. Definitions. - In this Chapter.-
G (a) 'appropriate Goi-ernment · 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
Legislative Assembly 0r Legislative Council of a State, the State
H Government:"'
SHRIKANT v. VASANTRAO [RAVEENDRAN. J.[ 51 I
> \ (b) 'disqualified' means disqualified for being chosen as, and for A
being, a member of either Houses of Parliament or of the
Legislative Assembly or Legislative Council of a State".

As we are dealing with disqualification for being chosen as a Member of the
Legislative Council, the term 'appropriate government' in section 9-A refers
to and means the 'State Government'. B
15. The term 'State Government' is not defined either in the Constitution
of India or in the Act (that is Representation of the People Act, 1951 ). Clause
(a) of sub-section (I) of section 2 of the Act provides that unless the context
otherwise requires, each of the expressions defined in section 2 or sub-section
(I) of section 27 of the Representation of the People Act. 1950, but not C
defined in the Act, shall have the same meaning as in that Act. Section 2U)
of the Representation of the People Act, 1950 defines "State Government" as
follows :-

"2(j). 'State Gov<!fi1ment'.- State Government in relation to Union D
Territory means the administration thereof."

Section 2(60) of the General Clauses Act, 1897, provides that the term
"State Government", as respects anything done or to be done, shall mean in
a State, the Governor.

16. The High Court after an exhaustive consideration of the provision E
of MGM IDC Act and MJA Act, and the principles laid down by this Court
with reference to Article 12, has held that GMIDC and MJP answer the
definition of"State" under Article 12 of the Constitution. This is not seriously
disputed by the Appellant. Having reached the conclusion that both GMIDC
and MJP answer the definition of State under Article 12, the High Court F
wrongly and if we may say so, without any logical basis, assumed that they
are 'apprQpriate government' and consequently. the appellant who had
subsisting contracts with GMIDC and MJP incurred disqualification under
section 9-A of the Act. Neither Article 12 nor the decisions rendered with
reference to Article 12 is of any assistance for interpreting Section 9A of the
Act. The term 'State Government' (as also the tern1 'Central Government') G
is used in the various provisions relating to disqualification. in contradistinction
from its instrumentalities or local or other authorities. While it is true that the
meaning of the terms 'State' and 'State Government" may depend on the
context in which they are used, the manner in which the said terms are used
in the various provisions relating to disqualification leaves no doubt that H
512 Sl'PREMI: COURT REPORTS [2006 I I S .C.R.

A 'State' refers to an entity described in the First .Schedule to the Constitution ' '
of India and ·state Government' refers to the three wings of governance of
the 'State' that is Executive. Legislature and Judiciary. The term 'State
Government' in section 9A (read with section 7 of the Act) should, therefore.
be understood in its ordinary and normal sense, and not with reference to the
B extended meaning under Article 12 of the Constitution of India.

17. Article 12 provides that in Part III of the Constitution dealing with
fundamental rights, the word ·state' would refer to and include not only the
Government of India, Parliament cf India, the Government and Legislature
of each of the States, but also all local and other authorities within the
C territory of India and all local and other authorities under the control of
Government of India. The significance of Article 12 lies in the fact that it
occurs in Part 111 of the Constitution which deals with Fundamental Rights.
The various Articles in Part Ill have placed responsibilities and obligations
on the "State" vis-a-vis the individual, to ensure constitutional protection of
the individual's rights against the ·•state", including the right to equality
D under Article 14, and equality of opportunity in matters of public employment
under Article 16 and most importantly the right to enforce all or any of those
fundamental rights against the .. State" as defined in Article 12, either under
Article 32 or Article 226 of the Constitution [vide l'radeep Kumar Biswas
(supra}]. The decisions rendered under Article 12 lay down that a body
E would answer the definition of State under Article 12 if it is financially,
functionally and administratively dominated by or under all pervasive control
of the "Government". On the other hand, where the control by the
"Government" is merely regulatory, whether under any statute or otherwise,
it would not serve to make the body ·state'. Thus the very decisions relied ,
on by the High Court make it clear that 'instrumentalities of State' are different
F from 'State Government', though both may answer the definition of 'State'
under Article 12 for the limited purpose of Part-III of the Constitution. Further.
the very inclusive definition of ·state' under Article 12 by referring to
Government of India, the Government of each of the States and the local and
other al)thorities, makes it clear that a 'State Government' and a local or
G other authorities. are different and that they fall under a common definition
only for the purpose of Part-Ill of the Constitution. This Court has consistently
refused to apply the enlarged definition of 'State' given in Part-Ill (and' Part-
IV) of the Constitution, for interpreting the words 'State' or 'State Government'
occurring in other parts of the Constitution. While the term "State" may
include a State Government as also statutory or other authorities for the
H purposes of part-Ill (or Part-IV) of the Constitution. the term "State
SHRIKANT v. VASANTRAO [RAVEENDRAN, J.] 513
) ' Government" in its ordinary sense does not encompass in its fold either a A
local or statutory authority. It follows, therefore, that though GMIDC and
MJP may fall within the scope of 'State' for purposes of Part-III of the
Constitution, they are not "State Government" for the purposes of section 9-
A (read with section 7) of the Act.

18. The object and intent of section 9A of the Act is to maintain the B
purity of the legislature and to avoid conflicts between duty and interest of
members of Legislative Assembly and Legislative Council. The said object
is sought to be achieved by ensuring that a person who has entered into a
contract with the State Government and therefore liable to perform certain
obligations towards the State Government, is not elected as a member of the C
Legislative Assembly or Legislative Council, lest he should use his influence
as an elected member of Legislature to dilute the obligations or to seek and
secure undui: advantages and benefits in respect of the subsisting contracts.
It seeks to ensure that personal interests will not override his duties and
obligations as a member of Legislature or Legislative Council. For the purpose
of section 9-A, what is relevant is whether the candidate has a subsisting D
contract with the appropriate Government (in this case, the State Government)
either for supply of goods to the State Government or for execution of any
work undertaken by the State Government. The six requirements for application
of disqualification under section 9A of the Act where a candidate holds a
contract for execution of works undertaken by the appropriate Government E
have been listed by this Court in Kartar Singh Bhadana v. Hari Singh Nalwa,
[200 I] 4 SCC 661] as follows :-

(i) There should be a contract entered into by the candidate;
(ii) Such contract should be entered into by him in the course of his F
trade or business;
(iii) The contract should be entered into with the appropriate
Government;
(iv) The contract should subsist;
(v) The contract should relate to the works undertaken by the G
appropriate Government; and
(vi) The contract should be for execution of such works.

This Court in KARTAR SINGH (supra) also clarified that:
H
"the provisions of Section 9A disqualify a citizen from contesting an
514 SUPREME COURT REPORTS (2006 I I S.C.R.
f \

A election; a citizen may, therefore, be disqualified only if the facts of
his case squarely fall within the conditions prescribed by Section
9A."

[Emphasis supplied]

B 19. It is clear from section 9A of the Act that only certain type of
contracts with the State Government will result in disqualification. For example
subsistence of a mining lease granting by a government to the candidate to
win minerals from a specified area was held not to attract section 9A in
Kartar Singh Bhadana (supra). A contract for collection of tolls at a
C government ferry was held to be not a contract for execution of any work
undertaken by the appropriate government in Dewan Jayna! Abedin v. Abdul
Wa:ed. (1988] Supp. SCC 580. A subsisting contract for sale of liquor with
the appropriate government was held to be not a contract falling under section
9A in Ranjeet Singh v. Harmohinder Singh Pradhan, [ 1999] 4 SCC 517]. In
Ranjeet Singh (supra), this Court reiterated the following observations in
D Ram Padaralh Mahto v. Mishri Sinha, AIR (1961) SC 480) :-
,
" ....... section 9-A is a statutory provision which imposes a
disqualification on a citizen. It would, therefore, be unreasonable to
take a general or broad view, ignoring the essentials of the section
and the intention of the legislature. Purposive interpretation is
E necessary."

20. Therefore, when section 9-A provides that subsistence of a contract
with the appropriate government (either for supply of goods or for execution
of any work undertaken by that government) will disqualify a candidate for
F being elected as a member of the Legislative Assembly or Legislative Council,
the term 'appropriate Government' refers to the State Government alone, and
not to any instrumentality of the State Government. We, therefore, hold that
GMIDC and MJP constituted under the MGMIDC Act and MJA Act
respectively, are not 'State Government' and, therefore, any contracts with
them are not contracts entered into by the candidate with the appropriate
G government. We accordingly answer both pai1s of question (i) in the negative.
Re : Question (ii)

21. We will next consider the question as to whether the contract dated
19.5.1996 entered by the appellant with the Maharashtra State Government
H which stood transferred to GMIDC in the year 1998 could be considered to
SHRIKANT v. VASANTRAO [RAVEENDRAN, J.] SIS
;
\ be a subsisting contract with the State Government in the year 2002. The first A
respondent contended that the said contract dated 19.5.1996 was between the
appellant and the state government; that the said contract was not amended
substituting 'GMIDC' as the employer in place of 'State of Maharashtra';
that the said contract was eniered by the appellant in the course of his business·
with the State Government for execution of work undertaken by the State .
Government; and that the said contract was subsisting as on the date of
B
scrutiny and acceptance of the nomination; and that the subsistence of the
'i said contract attracted the disqualification under section 9-A of the Act.

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 c
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 tran>ferred 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 D
' 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
E
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 section 9-A of the Act. F

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
G
with novation, (a new contract between the assignee and the contractor). But
i I 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 H
516 SUPREME COURT REPORTS [2006] I S.C.R.

A (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
B contractor for the substitution of the contracting party and the assignment/
transfer of the contract is not necessary.

25. The Maharashtra State Legislature enacted the Maharashtra Godawari
Marathwada Irrigation Development Corporation Act, 1998 (published in the
Maharashtra Government Gazette dated 17.8.1998). The object of the Act
C was to make special provisions for promotion and operation of irrigation
projects, command area development and schemes for generation of hydro-
electric energy to harness the water of Godawari river pertaining to State of
Maharashtra and other allied and incidental activities by establishing the
Godawari Marathwada Irrigation Development Corporation. Section 3 required
the State Government to establish a Corporation by notification in the Official
D Gazette. Accordingly, by Notification dated 28.8.1998, the Corporation )

(GMIDC) was so established under the Act. Sub-section (2) of section 3
provides that Corporation established under sub-section (I) of section 3 shall
be a body corporate having perpetual succession and a common seal, with
power to contract, acquire, hold and dispose of property and to do all things
E necessary for the purpose of the Act and may sue and be sued in its corporate
name. Section 15 relates to vesting and transfer of property, assets, liabilities
and obligations to the Corporation. It reads thus:

"15( I). From such date as may be specified, from time to time, by the
State Government (hereinafter in this section referred to as "the
F appropriated date"),

(a) !he properlies and assets comprising movables and immovables
including /rrigalion Projecrs. Hydro-Electric Power Projects, works
under construction and management of completed schemes, specified
in that behalf, situated in the area of operation of the Corporation,
G which immediarely before rhe appoinled dale vested in the State
Government and were under rhe control of rhe Irrigation Department,
shall vest in and s1a11d /rans/erred 111 1he Corporation and all income > •
derived and expenses incurred in that behalf be brought on books of
the Corporation; and
H (b) the rights. liabilities and obligations of the State Government.
SHRIKANT v. VASANTRAO [RAVEENDRAN. J.] 517

whether arising out of any contract or otherwise pertaining to the said A
projects of the State Government shall be deemed to be the rights,
liabilities and obligations of its corporation.

(2) Such properties, assets, rights, liabilities and obligations shall be
valued in such manner as the State Government may determine.
B
(3) All suits and other legal proceedings willl respect to any scheme
for the development of Irrigation Projects and Hydro-Electric power
Projects vested in the Corporation, under sub-section (I), instituted
against or defended by the State Government before the appointed
date may be continued, or defended by or against, the Corporation."
c
The projects that stood transferred to and vested in GMIDC from the
State Government are described in the Schedule to the Act, namely, "all
completed, on-going and major, medium and minor irrigation projects within
the area of operation of the Corporation (excluding Bhandaradara Hydro-
Electric Power Project and Ghatgar Hydro-Electric Power Projects)" in the
districts of Aurangabad, Jaina, Parbharri, Beed, Usmanabad, Latur, Nanded, D
Ahmednagar and Nashik.

26. It is not in dispute that from the appointed date (1.10.1998), the
Tawarja Project (a Medium Irrigation Project in Latur Division) with all
rights, liabilities and obligations of the State Government stood vested in and E
transferred to the Corporation (GMIDC). As a consequence, all r~ghts, liabilities
and obligations relating to the said project, including the rights, liabilities,
and obligations under the contract dated 19.5.1996 (which was one of the
contracts relating to the said project) statutorily vested in and stood transferred
to GMIDC, and the contract ceased to be a contract with the State Government.
When all rights and obligations of the State Government under the contract F
were transferred and vested in the statutory corporation (GMIDC) by virtue
of the statute, no separate instrument of transfer or assignment is necessary,
nor the consent of the contractor is necessary for the transfer and vesting, as
the statute engrafts itself over the subsisting contract. The contract. on such
statutory transfer and vesting, though originally entered with the State G
Government ceased to be a subsisting contract with the State Government
from the date of such transfer and vesting and will be considered as a subsisting
contract with the statutory corporation (GMIDC). Therefore, the contract
dated 19.5.1996 though subsisting on the date of filing of nominations and
scrutiny of nomination, was not a contract with the appropriate Government,
but with GMIDC. H
518 SUPREME COURT REPORTS (2006] I S.C.R.

A Re : Question (iiiJ
27. Out of the three subsisting contracts, the contract dated 19.5.1996
was with GMIDC and contracts dated 31.12.1998 and 12.4.1999 were with
MJP. We have already held that neither GMIDC nor MJP is 'appropriate
government'. Therefore, the appellant had no subsisting contract with the
B appropriate government either for supply of any goods or for execution of
any work undertaken by that government in June, 2002 (on ihe date of filing
the nomination, the date of scrutiny of nominations and the date of declaration
of result). Consequently, the appellant did not incur any disqualification under
Section 9A of the Act.
c 28. Accordingly, we allow this appeal and set aside the order of the
High Court and reject the challenge to the election of appellant by the first
respondent in Election Petition No. I of 2002 on the file of the High Court
of Bombay, (Aurangabad Bench). The said Election Petition stands dismissed.
Parties to bear their respective costs.
D
S.K.S. Appeal allowed.

' .