TaxTMI 
TaxTMI 
2011 (4) TMI 1319
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....ituency. The last date for filing the nomination papers was April 20, 2006. The date of scrutiny of the nomination papers was April 21, 2006 and the election was to be held on May 8, 2006. The appellant filed his nomination papers on April 17, 2006. So also the respondent filed his nomination papers on April 17, 2006. The nomination papers, filed by both, i.e., the appellant and the respondent were accepted by the Returning Officer. During the scrutiny of the nomination papers on April 21, 2006, the appellant raised an objection that since the respondent had subsisting contracts with the Government, his nomination papers should not be accepted. The respondent filed his counter stating that the contracts entered into by him with the Government were terminated before filing of the nomination papers and, therefore, his nomination papers were not liable to be rejected. The Returning Officer passed an order dated June 26, 2006 over-ruling the objections filed by the appellant. The election for the Tamil Nadu Legislative Assembly took place on the scheduled date, i.e., on May 8, 2006. The results were declared on May 11, 2006 and the respondent was declared elected. Therefore, f....
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....n. What was maintained by the respondent was that even if it was assumed that the conditions enumerated in the G.O. were not followed, that would not nullify the termination of the contracts if made. According to the respondent the Divisional Engineer (Highways) NABARD and Rural Roads, Nagercoil had terminated the contract on April 17, 2006 and had freezed as well as forfeited the deposits of the amount made by him for crediting the same into Government account. Thus, according to the respondent, it was not correct to say that any contract was subsisting as far as the works relating to Tirunelveli Division was concerned. After mentioning that only a procedure as mentioned in G.O. dated November 16, 1951, was left to be followed by the subordinate officials of the Government, it was stated that non-observance of the said G.O. would not nullify the order terminating the contract issued by the Divisional Engineer on April 17, 2006. The respondent maintained that he was no longer a registered contractor with the Tamil Nadu State Highways Department nor was he having any subsisting contract in respect of the works referred to in the Election Petition and, therefore, his electio....
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....as to be done in that manner alone and in no other manner and concluded that the G.O. dated November 16, 1951, issued by the Government of Tamil Nadu, was only an administrative instruction but not a statute enacted by the Legislature and, therefore, the ratio laid down in the above mentioned decision was not applicable to the facts of the case. The learned Judge held that it was rightly pointed out that the Government Order dated November 16, 1951 contained only administrative instructions and while communicating the said Government Order to the Superintending Engineers and Divisional Engineers, it was specifically mentioned that the said administrative instruction was for information and guidance. What was deduced by the learned Single Judge was that the Government Order did not say that the Chief Engineer was the authority to terminate the contract of a contractor, entered into with the Government, nor the Government Order stated that an order of termination could be issued only when Chief Engineer had accepted a person, who was available and was willing to enter into a contract on the same terms and conditions. The learned Judge was of the opinion that a contractor,....
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....vailable a substitute contractor to step into his shoes to perform the remaining part of the contract, the respondent had got the contract validly terminated. The learned Judge interpreted the Government Order dated November 16, 1951 to mean that the Chief Engineer was not vested with the power to terminate the contract. According to the learned Judge the said G.O. did not say that only after the Chief Engineer had accepted such a substitute contractor, an order terminating contracts should be passed. The learned Judge noticed that the Chief Engineer was not a party to the contract and even if it was assumed for the sake of argument that there was a breach of the conditions laid down in the Government Order dated November 16, 1951, failure to follow the procedure or breach of the said Order would not nullify the order terminating the contracts passed by the Divisional Engineer and subsequently ratified by the Superintending Engineer. 6. In view of the above mentioned conclusions and findings, the learned Judge has dismissed the Election Petition by judgment dated December 2, 2008, which has given rise to the instant appeal. 7. This Court has heard the learned counsel fo....
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....ey should remain payable to him and nothing should remain liable to be supplied or done by him; 2. Substitution of a fresh contract in regard to the unfinished part of the work should not involve the Government in loss or extra expenditure with a view to enabling any particular person to stand for election as a candidate; and 3. The contractor who is allowed to back out of his contract should do so at his own risk and should be made liable to make good any loss to the Government arising out of the necessity to enter into a fresh contract. 4. The instructions now issued will apply also to the termination of contracts under similar circumstances in the Public Works and Electricity Departments. M. Gopal Menon Deputy Secretary to Government To The Chief Engineer (Highways) /True Copy/ Copy of Endt. No. 55868/D2/51 HR dated 16.11.1951 from the Chief Engineer (Highways and Rural Works) Madras-5 to the Superintending Engineers and Divisional Engineers (H) @@@@@ Copy communicated to the Superintending Engineers (H) and Divisional Engineers (H) for information and guidance. K.K. Nambiar Chief Engineer (Highways)" According to the appellant the respondent was disquali....
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....ns in the preliminary specification to Madras Detailed Standard Specifications did not permit the contractors to withdraw from their existing contracts so as to enable them to contest the election. Therefore, the Chief Engineer by letter dated November 13, 1951 requested the Government to issue instructions and general policy to be adopted in such cases. The Government considered the proposal made by the Chief Engineer and provisions of Madras Detailed Standard Specifications. After careful examination, His Excellency the Governor of Madras issued directions that the contractors, who desired to stand for election as candidates for the Legislature, be permitted to terminate their subsisting contracts and also get their names deleted from the list of approved contractors, provided other persons acceptable to the Chief Engineer were available and were willing to enter into a contract to execute the works under the existing terms and conditions so that no loss was suffered by the Government. In view of the directions given by His Excellency the Governor of Madras, the Government issued G.O. dated November 16, 1951. By the said G.O. the Chief Engineer was informed that while termi....
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....e, the Chief Engineer was directed that the contractors, who desired to stand for election as candidates for the Legislature, should be permitted to terminate their subsisting contracts and also get their names deleted from the list of approved contractors only if other contractor acceptable to the Chief Engineer was available and was willing to enter into contract to execute the works under the existing terms and conditions so that no loss was suffered by the Government. The Government specifically mentioned in paragraph 3 of the said Government Order that the Chief Engineer should consider the following three points before terminating the contracts existing: - a) that there should be final and complete settlement of rights and liabilities between the Government and the existing contractor; b) the Chief Engineer must ensure that no sum of money remained payable to the contractor; and c) nothing remained liable to be supplied or done by the contractor. The G.O. further required the Chief Engineer to ensure that the substitution of a fresh contract in regard to the unfinished part of work should not cause any loss to the Government nor the Government should be made....
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....arked copy of Exhibit P-13 to the Superintending Engineer, Tirunelveli with instructions to take appropriate action. He explained to the Court that appropriate action meant cancelling of ongoing contract works of the respondent. He further stated that the Superintending Engineer, NABARD and Rural Roads, Tirunelveli, had entered into the contracts. In cross-examination this witness clarified that there was no connection between the act of removal of name of contractor from the list and termination of the contract and the two issues were different. In his further examination-in-chief by the learned counsel for the appellant, he was put a question as to who was the competent authority for approving the substitute contract as per G.O.Ms. 4682. In answer to the said question he replied that the Chief Engineer, NABARD and Rural Roads, was competent authority for approving the substitute contract. Again, Mr. P. Velusamy, who was Superintending Engineer, NABARD and Rural Roads, Tirunelveli, was examined by the appellant as PW-4. He stated in his testimony that between September, 2005 and August, 2006, he was Superintending Engineer, NABARD and Rural Roads, Tirunelveli and was working under....
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....reas Exhibit C-16 dated July 4, 2006 was the original agreement entered into with Rajagopal with respect to three balance works to be completed in Nagercoil Division. The witness stated that under Exhibit C-7 the Chief Engineer had required him to send his acknowledgement for having received the ratification order passed by him. In his examination-in-chief the witness had mentioned that every contractor was required to take steps to bring his name on the list of approved contractor from 1st April of every year within a period of three months therefrom and if a criminal case was pending against any contractor, his name would not be included in the list of approved contractors. The witness in no uncertain terms admitted that from the file he was able to say that in the year 2000 Rajagopal was involved in a criminal case of assault but there was no data available in the records showing that pursuant to the said criminal case his name was ever removed from the list of contractors. He denied the suggestion that on April 17, 2006 Rajagopal was not a registered contractor. 14. Mr. Y. Christdhas, who was Divisional Engineer at the relevant time, was examined on behalf of the re....
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....ower to terminate the contract, he had forwarded the papers to his superior officers. The witness stated that Exhibit C-13 was forwarded to the Superintending Engineer only after he passed order Exhibit P-17 cancelling the contracts awarded to the respondent. According to him the urgency of the situation was also the reason for making Exhibit P-17 order. He further clarified that in Exhibit P-17 he had not mentioned that his order was subject to ratification by the Superintending Engineer. 15. The evidence of the above mentioned witnesses clearly indicates that the power to terminate the contract in terms of Government Order dated November 16, 1951 was only with the Chief Engineer and neither the Divisional Engineer was competent to terminate the contracts awarded to the respondent nor the Superintending Engineer was competent to ratify an order passed by the Divisional Engineer cancelling the contracts awarded to the respondent. The record nowhere shows that the contracts entered into between the respondent and the Superintending Engineer, Tirunelveli were ever terminated by the Chief Engineer in terms of Government Order dated November 16, 1951 by passing an order.....
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....ct should be permanently terminated seeking orders from the Superintending Engineer. The record further shows that on April 19, 2006 the Divisional Engineer had forwarded a letter to the Superintending Engineer, Tirunelveli mentioning inter alia that since the contract of the respondent was cancelled, the fourth and final list of approval was given to him and deposit amount of Rs. 2,02,341 was kept in kind-IV deposit. The Government Order dated November 16, 1951, which is quoted above, clearly requires that no sum of money should remain payable to the contractor and nothing should remain liable to be supplied or done by the contractor. Keeping the amount of more than two lakhs in kind-IV deposit can hardly be said to be compliance of clause 1 of the Government Order dated November 16, 1951. In fact as held earlier, everything was required to be done by the Chief Engineer himself. There is nothing on record to show that the steps and/or actions, which were taken by the Divisional Engineer, were ever ratified by the Chief Engineer except that the Chief Engineer had accepted the proposal of the Superintending Engineer to accept Rajagopal as substitute of the respondent. Thus,....
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....n regard to that matter through officers subordinate to him. Secondly, the vesting in the Governor with the executive power of the State Government does not create any embargo for the Legislature of the State from making and/or enacting any law conferring functions on any authority subordinate to the Governor. Once a law occupies the field, it will not be open to the State Government in exercise of its executive power under Article 162 of the Constitution to prescribe in the same field by an executive order. However, it is well recognized that in matters relating to a particular subject in absence of any parliamentary legislation on the said subject, the State Government has the jurisdiction to act and to make executive orders. The executive power of the State would, in the absence of legislation, extend to making rules or orders regulating the action of the Executive. But, such orders cannot offend the provisions of the Constitution and should not be repugnant to any enactment of the appropriate Legislature. Subject to these limitations, such rules or orders may relate to matters of policy, may make classification and may determine the conditions of eligibility for receiv....
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.... date when the respondent had filed his nomination papers and also on the date when the nomination papers of the respondent with other candidates were scrutinized by the Returning Officer. 20. The argument that the contracts were validly terminated by the Divisional Engineer, which action was subsequently ratified by the Superintending Engineer and, therefore, it should be held that there were no subsisting contracts on the date of submission of the nomination papers, has no merits and cannot be accepted. On true interpretation of the Government Order dated November 16, 1951 this Court has held that only the Chief Engineer was competent to terminate the contracts and, therefore, the termination of the contracts by the Divisional Engineer, which was subsequently ratified by the Superintending Engineer, cannot be treated as valid termination of contracts. The record of the case shows that on April 10, 2006, the respondent had addressed a letter to the Divisional Engineer, NABARD informing him about his intention to contest the Assembly election and requesting him to cancel the contracts immediately. In the said letter a request was made to issue a certificate indica....
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....06 by which the Divisional Engineer (H) NABARD had terminated the contracts entered into by the respondent with the Government. The Superintending Engineer had informed the respondent that the Divisional Engineer was competent to terminate the contracts. However, it is an admitted position that the contracts were entered into by the respondent with the Superintending Engineer and under the terms and conditions of the contracts, the Superintending Engineer was competent to terminate the contracts. The Government Order dated November 16, 1951 nowhere provides that the Divisional Engineer was competent to terminate the contracts. Having noticed the Government Order dated November 16, 1951 the Superintending Engineer could not have informed the respondent that the Divisional Engineer was competent to terminate the contracts entered into by him with the Government nor the Divisional Engineer was competent to terminate the contracts entered into by the respondent with the Government. 21. Normally, the Superintending Engineer would be competent to terminate the contracts when breach of the terms and conditions is committed by a contractor. However, in the present case the cour....