Hidayatullah, J. - (1.) The respondent Dentu Bhaskara Rao was returned to the Andhra Pradesh Legislative Assembly from Kakinada constituency at the last general election. The appellant C.V. K. Rao was his closest competitor. There were two other candidates but they obtained very few votes and they have not shown any further interest. The appellant filed an election petition to question the election of the respondent on many grounds:one such ground was that the respondent was disqualified under S. 7(d) of the Representation of the People Act, 1951 (43 of 1951). The respondent had obtained a mining lease from the State of Andhra Pradesh on April 13, 1960, though on the date he filed his nomination paper he had not begun operations under that lease. The appellant took objection to the nomination of the respondent on the ground that he held a contract from the Andhra Pradesh Government within the prohibition by S.7(d) of the Act, but the Returning Officer overruled his objection. The Election Tribunal later held that he was disqualified under S. 7(d) of Act 43 of 1951 and declared the election void. On appeal, the High Court of Andhra Pradesh reversed the decision and the present appeal has been filed on a certificate granted by the High Court.
(2.) Section 7(d) reads as follows:- "7. A person shall be disqualified for being chosen as and for being, a member of either House of Parliament or the Legislative Assembly or Legislative Council of a State (a) ********** (b) ********** (c) ********** (d) if there subsists a contract entered into in the course of his trade or business by him with the appropriate Government for the supply of goods to, or for the execution of any works undertaken by, that Government". The mining lease was in the standard form and after setting out the consideration for the lease, it described in Parts I to III, the area of the lease, the description of the area, liberties, powers and privileges to be exercised and enjoyed by the lessee and the restrictions and conditions as to their exercise. In Part IV it described the liberties, powers and privileges reserved to the State Government and in Part V and VI the rents and royalties reserved by the lease and certain other provisions relating to them. Part VII then dealt with the covenants of the lessee in respect of payment of rents, royalties, taxes etc. One such covenant was in Cl. 21 and was headed "Right of Pre-emption" and it conferred on the State Government a right, of pre-emption of the minerals lying in or upon the land demised or elsewhere under the control of the lessee. That clause was interpreted by the Tribunal as a contract entered in the course of trade or business by the respondent with the State Government for the supply of goods to that Government. The High Court held that there was no such contract.
(3.) The disqualification which results from S.7(d) is conditioned by a number of circumstances. First, there must be a subsisting contract (that is to say in actual existence) between the appropriate Government and the candidate. Then the contract must be in the course of the trade or business of the candidate and, finally, it must be inter alia for the supply of goods to such Government. The appropriate Government according to the definition of the expression is the Government of Andhra Pradesh. The High Court in reaching its conclusion interpreted Cl. 21 of Part VII of the lease and held that the mining lease was not a contract, that Cl.21 did not amount to a contract and that Cl. 21 even if a contract was not a contract for the supply of goods to the Government. The conclusion is assailed by the appellant. It is convenient to quote the clause at this stage: "21(a) The State Government shall from time to time and at all times during the said term have the right (to be exercised by notice in writing to the lessee) of pre-emption of the said minerals (and all products thereof) lying in or upon the said lands hereby demised or elsewhere under the control of the lessee and the lessee shall with all possible expedition deliver all minerals or products or minerals purchased by the State Government under the power conferred by this provision in the quantities, at the times in the manner and at the place specified in the notice exercising the said right. (b) Should the right to pri-emption conferred by this present provision be exercised and a vessel chartered to carry the minerals or products thereof procured on behalf of the State Government or the Central Government be detained on demurrage at the port of loading the lessee shall pay the amount due for demurrage according to the terms of the charter party of such vessel unless the State Government shall be satisfied that the delay is due to causes beyond the control of the lessee. (c) The price to be paid for all minerals or products of minerals taken in pre-emption by the State Government in exercise of the right hereby conferred shall be the fair market price prevailing at the time of pre-emption provided that in order to assist in arriving at the said fair market price the lessee shall, if so required, furnish to the State Government for the confidential information of the Government particulars of quantities, descriptions and prices of the said minerals or products for carriage of the same and shall produce to such officer or officers as may be directed by the State Government original or authenticated copies of contracts and charter parties entered into for the sale of freightage of such minerals or products. (d) ********** ;