TMI Blog1985 (5) TMI 256X X X X Extracts X X X X X X X X Extracts X X X X ..... ons. 2. The particular provision of the statute which is under consideration here, has a short, though significant history. A judgment of this Court led to its enactment. That judgment, to which one of us, Bhagwati J, was a party, was delivered on October 3, 1974 in Kanwar Lal Gupta v. Amar Nath Chawla. [1975]2SCR259 Section 77(1) of the Act, as it stood then, read thus: Every candidate at an election shall, either by him self or by his election agent, keep a separate and correct account of all expenditure in connection with the election incurred or authorised by him or by his election agent, between the date of publication of the notification calling the election and the date of declaration of the result thereof, both dates inclusive. 77(3) provides that the total of the said expenditure shall not exceed such amount as may be prescribed, that is to say, the amount prescribed by the Rules framed under the Act. The expenditure prescribed for a Parliamentary constituency in the Union Territory of Delhi was ₹ 10,000. The question before the Court in Kanwar Lal Gupta was whether the successful candidate, Amar Nath Chawla, had incurred or authorised expenditur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tes and the Union territories. Clause (6) of Section 123 of the Representation of the People Act has specifically included the incurring or authorizing of expenditure in contravention of Section 77 as a corrupt practice, which, if established, would not only vitiate the election, but also result in disqualifying the candidate for a period of six years under Section 8A of the said Act. In the Election law, the emphasis has been on imposing a curb on an individual incurring expenditure in connection with his election in excess of the prescribed limit. The provision contained in Section 77 of the Act is very specific in this respect and the intention that the curb is on the expenditure incurred or authorized by the candidate has found support in the judicial pronouncements on the point. The expression incurred or authorized had not been construed so as to bring within its purview the expenditure incurred by a political party in its campaign or by any person other than the candidate unless incurred by such third person as the candidate's agent. In other words, the provisions of Section 77 and Clause (6) of Section 123 have been intended and understood to be restraints on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d void or set aside before the commencement of the said Ordinance if no appeal has been preferred to the Supreme Court against such judgment, order or decision of the High Court before such commencement and the period of limitation for filing such appeal has expired before such commencement. Explanation 2. - For the purposes of Explanation 1, political party shall have the same meaning as in the Election Symbols (Reservation and Allotment) Order, 1968, as for the time being in force. 4. The argument of Mr. Sorabjee, who appears on behalf of the petitioner, may be summed up thus : (1) It is the essence of fair elections that any individual or any political party, howsoever small, should be able to contest an election on a footing of equality with any other individual or political party, howsoever rich and well financed it may be, and no individual or political party should be able to secure an advantage over others by reason of its superior financial strength. (2) The rationale of imposing a limit on expenditure incurred or authorised by a candidate in an election is to eliminate, as far as possible, the pernicious influence of big money in the electoral process whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of this Court, prior to the decision in Kanwar Lal Gupta. Those decisions, according to learned Counsel, are : Rananjaya Singh v. Baijnath Singh [1955]1SCR671 , Ram Dayal v. Brijraj Singh [1970]1SCR530 and Magraj Patolia V. R.K. Birla [1971]2SCR118 . It is urged that though these decisions have been considered in Kanwar Lal Gupta, the Court was not right in holding that the view taken in those decisions was not at variance with the view taken by it. In support of this argument, our attention was drawn to the observations made by Beg J. in Smt. Indira Gandhi v. Raj Narain [1976]2SCR347 to the following effect : After examining the catena of cases, I think, with great respect, that the decision of this Court in Kanwar Lal Gupta's case could be understood to point in a direction contrary to that in which the previous cases were decided. Hence, it appears to me that the amendment made by Act 58 of 1974 by adding the Explanation 1 to Section 77 of the Act could be justified as merely an attempt to restore the law as it had been understood to be previous to the decision of the Court in Kanwar Lal Gupta's case. Counsel also relies on various decisions of the Hig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act by deleting, inter alia, Explanation 1 which was introduced in Section 77(1) by Amending Act 58 of 1974. The Statement of Objects and Reasons of that Bill, insofar as it relates to the proposed deletion of Explanation 1 says: It is considered that the amendments made in the Representation of People Act, 1951 far from ensuring free and fair elections may have the effect of increasing money power. It is, therefore, proposed to amend this Act to restore the position that obtained earlier . The Bill eventually lapsed. 7. In Kanwar Lal Gupta one of us, Bhagwati J., observed : (1) Vol. XLVII, No. 21-27, 12-20 December, 1974 page 279. The other objective of limiting expenditure is to eliminate, as far as possible, the influence of big money in the electoral process. If there were no limit on expenditure, political parties would go all out for collecting contributions and obviously the largest contributions would be from the rich and affluent who constitute but a fraction of the electorate. The pernicious influence of big money would then play a decisive role in controlling the democratic process in the country. This would inevitably lead to the worst form of pol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fought without large funds. But these funds should come openly from the supporters or sympathisers of the parties concerned. If even one family in three pays one rupee a year to a political party, the total annual contribution will be more than what is needed for all legitimate purposes of all political parties in India It is the reluctance and inability of these parties to make small collections on a wide basis and the desire to resort to short cuts through large donations that constitutes the major source of corruption and even more of suspicion of corruption. 10. The Report of the Expert Committee headed by Justice Sacher on 'Companies and Monopolies Restrictive Trade Practices Acts' deals 1978, Chapter XIII, pages 99-104 extensively with the evils flowing out of the donations made to political parties by big business houses and points out the dangers involved in allowing the money power to play a role in the electoral process of our country, (paragraph 13.12). The Committee recommended that Section 293A of the Companies Act which prohibited contribution by companies to political parties should be further strengthened in the manner indicated by it in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... litical parties or, politically motivated associations or bodies of persons or, individuals interested in political happenings, are characterised by common attributes, the dominant attribute being that they engage themselves in activities of a political nature. Elections constitute the core of such activities. A classification of this nature bears reasonable relationship with the object of the statute that expenses incurred by those who fall within the particular group should not be regarded as expenditure incurred or authorised by the candidate or his election agent. It is then no answer to say that all political parties are not equally situated in the wealth which they command. Were such an argument open, the limit set upon election expenses by Rule 90 shall also have to be regarded as violative of the guarantee of equality because, a fairly large number of contesting candidates, particularly the independents, would not be in a position to spend as large an amount as rupees one lakh, which is the permissible limit in large constituencies. Classification has to be broadly reasonable in order to sustain the challenge of unconstitutionally. One cannot dissect that process and discov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... discharge the benign role of a guardian, leave alone the angelic part of it. It is through them that the generality of people attempt to voice or ventilate their grievances. Considering, also, the power which they wield in the administration of Governmental affairs, a special conferment of benefits on them in the matter of modalities governing the election process cannot be regarded as unreasonable or arbitrary. That may, perhaps, help explain why in Kanwarlal Gupta the Court drew a distinction between the expenses incurred by a political party specifically in connection with the election of a particular candidate and the expenditure incurred by it on general party prepaid ganda, the latter not being includible in the return of election expenses which the candidate has to file. The rationale of that decision, though not expressed in so many words, is that by reason of the important position which political parties occupy in the democratic set up, they are entitled to incur expenditure for projecting their programmes and popularising their policies. Explanation 1 only takes one step ahead, important though. It obliterates the dividing line drawn in Kanwarlal Gupta, between expenses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ional standard is the one in which the State would have to allocate funds from its own exchequer in order to enable the various candidates to contest elections. That would be the fairest form of fairness. But, that is a far cry. 15. Counsel for the petitioners urged that Explanation 1 renders the main provision in Section 77(1) nugatory, by taking away with one hand what is given by the other. Assuming that this is so, the Explanation would not become unconstitutional for that reason. The argument really bears upon the interpretation of the section and the Explanation, and not upon the validity of the Explanation. We do not agree that the Explanation denudes the section of its meaning and makes it purposeless. Section 77(1) deals with the expenditure 'incurred or authorised by' a candidate or his election agent, in connection with the election. It is obligatory to keep a separate and correct account of such expenditure. Explanation 1 deals with the expenditure incurred or authorised by a political party or any other association or body of persons or by an individual other than the candidate or his election agent. It is not obligatory for the candidate or his election ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rty. That would be tantamount to creating a fiction. The object of the Explanation is to ensure that the expenditure incurred, for example, by a political party on its own, that is, without using the funds provided by the candidate or his election agent shall not be deemed to be expenditure incurred or authorised by the candidate or his election agent. If the expenditure is incurred from out of the funds provided by the candidate or his election agent Section 77(1) and not Explanation 1 would apply. It is necessary to make this clarification since, the use in Explanation 1 of expressions which are generally used when the legislative intent is to create a fiction, is apt to cause confusion and misunderstanding. The reason why the expression shall not be deemed to be is used in Explanation 1 is that the Parliament wanted to get over the effect of the judgment of this Court in Kanwar Lal Gupta. Similarly, the reason why the expression shall not ever be deemed to have been is used in the Explanation is that the intention of the Parliament was to get over the effect of that judgment retrospectively, except to the extent mentioned in Clauses (a) and (b) of the Proviso to the Explanat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quity. We see that we must seek an answer to the question within the four corners of the Statute. What does the Act say ? What does the Act say ? It says through Explanation 1 that persons other than the candidate or his election agent may, on their own, release their purse strings and never tie them again. 20. We have already said that the question as regards the constitutional validity of Explanation 1 has to be determined regardless of the consideration as to whether the said Explanation restores the law as it stood before the decision of this Court in Kanwar Lal Gupta or whether it introduces a new provision altogether. We have decided upon the constitutionality of the Explanation on its own terms. It is, therefore, unnecessary to consider the pre-Explanation decisions of this Court in Rananjaya Singh v. Baijnath Singh, Ram Dayal v. Brijraj Singh and Magraj Patolia v. R.K. Birla, except to extract a passage from the last of these three cases, which reads thus : Now coming to the corrupt practice of incurring expenditure beyond the prescribed limit, in several decisions this Court has ruled that it is not sufficient for the petitioners to prove merely that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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