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Judgment
Subba Rao, C.J.—This is a petition under Article 226 of the Constitution of India to quash the order of the Election Commissioner, Guntur, setting aside the election of the Petitioner as counselor to Ward No. 23 of the Guntur Municipality and declaring the first respondent duly elected in his stead.
The Petitioner, 1st Respondent, v. Nara simha Rao and K. Venkatramiah, filed nominations as candidates for election as Counselors for Ward No. 23 of the Guntur Municipality. The scrutiny of nominations took place on 4th November, 1952. V. Narasimha Rao objected to the nomination of the Petitioner on the ground that he was in arrears of tax due to the Municipality by the date of the nomination. The Election Com missioner overruled the objection of Narasimha Rao and declared Petitioner''s nomination as valid. Thereafter. V. Narasimha Rao and K Venkatra miah withdrew their nominations leaving the Petitioner and the 1st Respondent in the field. At the elections, the Petitioner got 868 votes and the 1st Respondent secured only 160 votes and the Petitioner was duly declared as the successful candy date by the Returning Officer the 1st respond dent filed O.P. No. 126 of 1952before the Election Commissioner. Guntur, seeking to set aside the election of the Petitioner'' on various grounds. The following points raised before the commissioner reflect the contentions of the parties.
(1) Whether the nomination of the Petitioner is invalid on account of arrears of taxes due to the Municipality by the firm, of the Petitioner and K. Sambasivrao?
(2) Whether the Petitioner is an uncertified bankrupt; if so, is his nomination valid?
(3) Whether the voters Nos. 406 and 995 were falsely personated and if so, is the Petitioner and his agents responsible for the same?
(4) Whether the voter No. 410 was dead and whether the said vote was cast for the Petitioner?
(5) Whether the election of the Petitioner is liable to be set aside?
(6) Whether the 1st Respondent is entitled to the declaration prayed for?
(7) To what relief?
The Commissioner held against the Petitioner on points 2, 3 and 4 and nothing now turns upon the question covered by those points. On point! he held, on a consideration of the entire evidence that the Petitioner and one Karamsetti Sambasivrao were partners of two firms styled K Subbayya Son Rice Factory and K. Sambasivrao and Partners and that the said two firms were in arrears of profession tax and property tax to the Municipality on the date when the nominations .were filed. He further held that notices for payment of arrears were served on one �f the partners K. Sambasivrao and that the arrears were not paid by the time of the nominations. On those findings, he held that the Petitioner was disqualified to stand for election u/s 49 (2) of the Madras District Municipalities Act, 1920. Under points 6 and 7, he set aside the election of the Petitioner and declared the 1st Respondent duly elected as Municipal Counselor for Ward No. 23 on the ground that there was no other candidate. The aforesaid petition was filed to quash that order.
The argument of the learned Counsel for the Petitioners may be briefly stated thus: The District Municipalities Act makes a distinction between a person and a firm. A firm is a separate legal entity from the persons constituting the firm. A person to be disqualified u/s 49 (2(g) of the Act should be in arrears to the Municipality in his personal capacity in respect of which a bill or notice has been duly served upon him. In the present case, the arrears of profession and property taxes were due by the firm and further the sateen respect of those arrears was only served on the other partner Sambasivrao and therefore the n arrears were neither due by the Petitioner to or did he make any default in respect of any notice served on him. Further being only a partner he was in arrears only in a fiduciary capacity, and . therefore he was not disqualified under Section, 49(2). The partners of the firms executed a trust . deed in respect of the assets of the firm in favour of a 3rd party & for that reason, they ceased to have any legal interest in the partnership property or the business carried on by the firms. In any view other Commissioner went wrong in declaring the 1st Respondent as duly elected as Municipal Councilor without considering the crucial question whether the voters cast their votes in favour of the Petitioner with knowledge of the disqualification, and therefore they threw out their votes.
The scope of the words "errors of law apparent on the face of the record" in the context of a writ of certiorari has been considered and restated by the Supreme Court in Hari Vishnu Kamath Vs. Syed Ahmad Ishaque and Others, . Venkatarama Ayyar, J., summarised the position at p. 1123 as follows:
It may therefore be taken as settled that a writ of certiorari could be issued to correct an '' error of law. But it is essential that it should be I ''I,. something more than a mere error; it must be it of one which must be manifest on the face of the record. The real difficulty with reference to this matter, however, is not so much in the statement'' of the principle its application to the facts, of a particular case. When does an error cease to be mere error and become an error apparent on the face of the record. Learned Counsel on.; either were unable to suggest any clear-cut rule: by which the boundary between the two classes of i errors could be demarcated. Mr. Pathak for the first Respondent contended on the strength Of certain observations of Chagla, C.J., in Batuk K. Vyas Vs. Surat Borough Municipality and Others, . that no error would be said to be apparent on the face of the record if it was not self-evident and if it required an examination or argument to establish it. This test might afford a satisfactory basis for decision in the majority of cases.'' But there must be cases in which even this test; might break down, because judicial opinions also differ -and an error that might be considered by one Judge as self-evident might not be so considered by Anr. . The -; fact is that what is an: error apparent on the face of the record cannot be defined precisely or exhaustively, there being an element of indefiniteness inherent in its very '' nature and it must be left to be determined judicially on the facts of each case."
We cannot improve upon this clear re-statement of the law.
Before we consider whether there is an error apparent on the face of the record, it is as well that ''we should clear the ground. The judgment of the Commissioner clearly indicates that evidence was adduced and arguments were advanced only in regard to six points. The two questions, namely, (i) the partner was in arrears of his fiduciary capacity and (ii) that the partners-executed a trust deed transferring the firm''s property in favour of a third person, were neither raised nor considered by the Commissioner. It Is not, therefore, open to the learned Counsel to raise those points before us now.
The main question, namely, that under the District Municipalities Act Arm is a different legal entity from the persons constituting it and therefore the arrears due by the firm cannot disqualify any of the partners from standing for election is a difficult question. Can it be said that a wrong'' decision on the said question is an error apparent on the face of the record. It is not self-evident on the face of the record but it requires an examination or argument to establish it. To arrive at a satisfactory conclusion, the provisions of the District Municipalities Act have to be scrutinised to discover whether the Act Intends to make a departure from the well-recognised) judicial consent that a firm is not a legal entity but a group of persons. The lengthy argument advanced before us indicates that the point raised is not only, a debatable one but is such that there could be two honest opinions on the matter. We cannot,; therefore hold that the said error is manifest or, self-evident on the face of the record. But the last point; raised, namely, that the Commissioner declared the 1st Respondent as duly elected without considering the crucial question whether the votes cast in favour of the Petitioner were thrown away is an error apparent on the face of the record.
Though the main question raised in the case, not being an error apparent on the face or the record does not fall to be considered untie'' we shall consider the argument in so far as it relates to profession tax more in respect to the argument." advanced than "in an attempt to solve it.'' At the outset it is necessaries to ascertain the legal characteristics of a firm. It Is settled law that a firm J4 not a legal entity but only consists of the individual partners for the time ''being. The essential characteristic of a firm is that each partner is a representative of the other partners. Each of the partners is an agent and a principal. He is an agent in so far as he can bind the other partners by his acts within the scope of the partnership business arid he is a principal to the extent that he is bound by the acts of the other partners. The liabilities of the firm can be enforced against each of the partners personally. The aforesaid legal concept is the foundation of the decision of the Judicial Committee in the matter of Stuart Samuel (1913) ACC 514 (C). There the question arose whether Sir Stuart Samuel has vacated his seat as a member of the House of Commons in consequence of the firm of, Samuel Montagu & Co., of which firm ''he .is a partner having entered into transactions with the Secretary of State for India in Council. The Privy Council held that he was disqualified because of his being a partner in the firm of Samuel Montagu & Co.
Though the question now raised before us was not raised before their Lordships, that decision is authority for the position that ordinarily the transactions of the firm would be treated as those of the partners and if a firm enters into any disqualifying transaction it attaches itself to the partners of that firm. At the same time a particular statute may specifically lay down that a disqualification must be attached to the partner in his individual capacity. The argument of the learned Counsel for the Petitioner is that the Madras District Municipalities Act in express terms circumscribes the scope of the disqualification and limits it only "to the individual transactions of a partner The disqualifying section, Section 49 (2) reads:
A person shall be disqualified for election as a councilor if such person is at the date of nomination or election.
(K) in arrears of any kind due by him (otherwise than in a fiduciary capacity) to the municipality upto and inclusive of the previous year, in respect of which a bill or notice has been duly served upon him and the time if any specified therein for payment has expired.
This section does not in express terms say that a partner is not disqualified if the Arm is in arrears. If the Legislature intended to say so, they would have specifically mentioned that fact as they did in the case of a person being in arrears in his fiduciary capacity. Nor are the words "upon him" in Vie clause "in respect of which a bill or notice has been duly served upon him" decisive on the question that the notice should be served on the partner as distinguished from the firm. If the firm is a group of individuals and if in law every partner is an agent of the Ors. , service upon one of the partners can reasonably be construed as service upon all the partners. Further Section 94 substituted for the original Section 94 by Act X of 1930 prescribes the manner of levy of profession tax in the case of Arms. Under that section the profession tax loveable from a firm association or joint Hindu family may be levied from any adult member of the firm, association or family. Therefore, if the levy is made on the firm in the manner prescribed by Section 94 or otherwise in law it should be held that the levy .was properly made on all the partners.
Strong reliance is placed upon some of the sections in the Act and the rules in Schedule IV annexed to the Act in support of the contention that the Act differentiated a partner from a him. u/s 3(8) a company is defined to mean a company as defined in the Indian Companies Act, 1913, or formed in pursuance of an Act of Parliament of the United Kingdom or of Royal Charter or Letters Patent, or of an Act of the Legislature of a British possession and includes any firm or association carrying on business in the Presidency of Madras whether incorporated! or not and whether its principal place of business is situated in the said Presidency or not. It is said that the definition of a company includes a firm and therefore the legal incidents of a limited company are ''also attached to a firm. The section does not say that a firm is a limited company with a separate legal .entity. It is brought in only under the comprehensive word "company" or the purpose of the convenient application of the provisions of the Act for assessment and collection. If in law, a firm is only a group of persons, the definition of a. company does not clothe it even for the limited purpose of the Act with a separate legal entity. Section 50 (hh) dealing with the disqualification of a sitting councilor says that he shall cease to hold his office if he fails to pay arrears of any kind due by him otherwise than in a fiduciary capacity to the Municipality within three months after a bill or notice has been served upon him under the Act. It does not carry the case of the Petitioner further for this only repeats the provisions of Section 49 in a different context. Section 95 prescribes the mode of service in the case of profession tax due from any company or person. Under that section, if the profession tax due from any company or person is not paid, the executive authority shall cause a notice to be served on such company or person to pay it within fifteen days of the date of such service. For the purpose of service the fact that a firm is treated as different from a person does not lead to the conclusion that if the service is made on the company in the manner prescribed the service is not deemed to be made on all the persons constituting the firm.
Schedule IV lays down rules prescribing the levy of assessment and the mode of collection of taxes in respect of a company as well as a person. Rule 16 classifies for the purpose of profession tax companies and persons having regard to the income received by them and also describes the other incomes liable td be assessed to tax under that heading. Rule 29 .and subsequent rules lay down the procedure for the collection of taxes. under Rule 29 in regard to a tax not being a tax in respect of which a notice has to be served u/s 95, 102 or 108 a bill will have to be served on the Assessee. Under "Rule 30 if within the time prescribed after the service of the notice or bill the tax is not paid the executive authority may recover it by distrait under his warrant and by sale of the movable property of the defaulter. The rules providing for the mode of collection of tax, though they do not specifically mention the word "firm" will certainly apply also for the collection of taxes due from a firm.
Prom the aforesaid sections and the rules, it is manifest that the Municipality for the purposes of assessment and collection of profession tax made a convenient division between a company and a person. The Act also provides for levy of assessment on an adult, member of the firm on behalf of the firm.. But the sections or the rules have not abrogated the well-recognised principle that a firm is not a separate entity but only a group of persons. The result therefore is that, however the assessment is made and whatever the procedure is followed for re Covering it the liability is that of the group of the birdsong constricting the firm and the arrears are Ma formic the said group of persons. If the assessment is made on the company a notice can legally beggared . On one partner of the firm or even under . Section 94 the levy itself can be made on behalf of that firm on any adult member of the firm. In this view -if the arrears are due from the firm in law the arrears are due from the group of persons constituting-the firm. We cannot discover any logical principle behind the distinction sought to be made between affirm. and a partner of a firm in .regard to the arrears due from the firm vis-a-vis the-''disqualification laid down u/s 48 (1) of the Act We believe that the disqualification is based upon: the salutary principle that a member of .the Municipal Council shall not be under an obligation pecuniary or otherwise to the Municipality for in that contingency he cannot be expected to discharge, r his functions uninfluenced by any other considerations. If that was the principle, that will apply equally to the case of the individual liability of camembert to the Municipality or the Joint liability of the member to the Municipal by along with Others. Nor can we agree with the con-tenting that as Section 48 mentions only person, the a Deland being a member of the firm is not disqualified under that section: It is true that Section,48 does not disqualify the firm for the simple reason that the firm cannot stand for the election. It disqualifies only the persons constituting the firm and if the Appellant being a person is in arrears of profession texturing the prescribed period individually or as a member of the firm he is disqualified by reason of this section. We, therefore; held that the Appellant being a member of the fact which was admittedly in arrears of profession tax for the prescribed period before the date-pf the nomination was disqualified to stand -for election.
The next question is whether the Commissioner was right in declaring the 1st Respondent as duly elected in the circumstances of the case Some Pf the relevant facts may be restated. Porn candidates stood for election to the ward in question,: the Petitioner, 1st Respondent, V. Narasimharao and K. Venkatramiah. Narasimharao objected to the . Validity of the nomination filed by the Petitioner but the objection was not accepted by the Returning Officer. Thereafter Narasimharao and Ven-iSatramiah presumably because they might have .had no chance or because they did not want to divide the votes which would otherwise be polled in favour of one or the other of the remaining J two contesting candidates withdrew (heir nominations. Thereafter the election was held and the Petitioner got 868 votes where the 1st Respondent -secured only- 160 votes. There is no evidence on record to show that the voters had any knowledge -Of the fact that the Petitioner was a partner in a firm which was in arrears in respect of profess1 on tax On the aforesaid facts the question is whether the Returning Officer had to exercise his discretion under Rule 12 of the Rules for the decision of election disputes., Rule 12 reads:
(1) At the conclusion of the inquiry, the Election Commissioner1 shall declare whether the election of the returned candidate or candidates is void under Rule 11.
(2) If he declares the election of the returned lipid date or candidates void, he shall further was an order either (a) declaring that any other ''''party'' to the petition who has under these rules Claimed the seat has been duly elected; or (b) ''''party'' to the petition who has under these rules Claimed the seat has been duly elected; or (b) ordering a fresh election.
(3) The order- of the Election Commissioner under sub-rules 1 and 2 shall be final." The rule does not lay down any principles to guide the exercise of the discretion by the Commissioner. The Commissioner in his judgment says:
There being; no other valid nomination, the two Ors. having withdrawn their nominations, the election of the first Respondent is set aside and the Petitioner is declared elected as Municipal Councilor for Ward No, 23.
It is obvious from the said observations that he; did not have in his mind any settled principles on the subject affording a guide to the exercise of discretion but .automatically declared, the 1st''Respondent as duly elected because by reason of his judgment, it should be deemed to be an uncontested seat.
The judgment of Kennedy, J., in Hobbs v. Morey, .1904-1 KB 74"(P),'' is rather instructive. There the Petitioner and the Respondent were nominated in proper form for election to the-office of councilor for a ward in a borough and the" Respondent obtained the majority of votes and was declared elected. . Both at the time of his nomination and of the election, however, he was disqualified by reason of his- interest in a contract with the Council. The Petitioner claimed the seat on the ground that his being the only valid nomination he should be declared elected.
The learned Judge held that as the disqualification was not apparent on the face of the nomination paper, and as it was not alleged that the electorate had notice of the disqualification the Petitioner was not entitled-to claim the seat. The learned Judge gave his reasons for his decision at page 78 as follows:
The expression ''valid nomination'' therefore, includes the case of a person who is disqualified in fact, but whose disqualification is not apparent on the nomination paper, and whose nomination has been sustained by the Mayor. That being so, the election must proceed, and the question-as has been pointed out in some of the cases-becomes, not a question between the two candidates, but between the successful candidate and the electorate. The election of such an unqualified person can toe objected to in only one way, namely, by election petition to the Court.
The Court on the hearing of the petition cannot, I think, declare that a candidate who has a minority of votes is elected, unless it has first decided that the votes given to the candidate who is returned at the head of the poll are votes thrown away. I agree, however, that there are cases in which the Court has power so to decide. Alike in municipal and in Parliamentary elections if a person is a candidate who is manifestly disqualified then in such a case the votes given for him may be treated as having been thrown away, since they were perversely and willfully given to a candidate whom the electors knew to be disqualified.
In regard to the nomination itself, as Wright, J., says in Harford v. Linskey 1899 1 QB 852 862 (E). ''If the nomination paper is, on the face of it, a mere abuse of, the right of nomination or an obvious unreality, as, for instance. If it purported to nominate a woman or a deceased sovereign, there can be no doubt that it ought to be rejected, and no petition could be maintained in respect of its rejection
From the aforesaid'' passage these principlesiemerse. A nomination if accepted by the Returning Officer as valid forms the basis of the election. Though it is liable to be held invalid in an election petition there is real election on the basis of the said nomination paper and the voters are en-� 1 titled to vote for one or the other of the contesting. parties. If an election had been held, the defeated candidate cannot be declared as elected unless it held that the electors with the knowledge of the disqualification of one of the candidates had thrown away their votes.
For the application of this principle, it is immaterial whether there are two candidates including the disqualified candidate or if there are more than two candidates, for when there is an election the question really becomes one between the successful candidate and the electorate/This principle has been accepted and followed by a Full Bench of the Madras High Court in S. Gopala Ayyangar and Another Vs. M.K. Mahomed Ebrahim Rowther, V.N. Sesha Iyengar and Another, . It is not clear from the facts of that case whether there were more than two candidates in that case. But the Pull Bench in ex-Dress terms accepted the view so felicitously expressed by Kennedy, J., in the judgment cited supra. At page 783 (of Mad WN): (at p. 1119 of AIR), the Pull Bench restated the principles as .follows:
That seems to us a quite untenable view and we do not think that the draftsmen of these rules -and it is a matter of common knowledge that ''both the District Municipalities Act (V of 1920) and the rules drawn under it were very largely based on English precedents and English decisions -could have meant to overlook the fundamental principles which have governed English Electoral Courts for many years. The principles appear to be these, and we cannot put them better than they were put in the argument of Mr. Corry Grant in 1904-1 KB 74 (D). He says: ''the principle of election law is that, when there has been an election he candidate who is declared to be elected must be shown to have the majority of votes''." Then the learned Judges noticed the passage in the judgment of Kennedy, J., cited already and expressed their respectful assent to the view expressed by that learned Judge. We are bound by this decision. The Commissioner, in the present case, declared the 1st Respondent as duly elected without adverting to the fundamental principle that where there has been an election and where ''it- had not been shown that the electors have -thrown away their votes the successful party can-snot be declared as duly elected unless has secured the majority of the . There is therefore an error apparent on the face of the record.
In the result the order of the Commissioner in so far as it set aside the election of the Petitioner is sustained and that part of the order .declaring the first Respondent duly elected is set aside. The result is that there should be a new election to the seat. As the parties have succeeded and failed in part, they are directed to bear their own costs.