Case Note & Summary
The appeal arose from an election petition challenging the election of the first respondent to the Maharashtra State Legislative Assembly from Shirdi Constituency. The election was held on March 7, 1972, and the first respondent was declared elected. The appellant, a voter from that constituency, filed an election petition before the Bombay High Court on two grounds: first, that the successful candidate had committed several corrupt practices, and second, that he was disqualified for election because he was holding an office of profit under the State Government as a member of the Wage Board for the Sugar Industry constituted by the Government of Maharashtra under section 86-B of the Bombay Industrial Relations Act, 1946. The High Court dismissed the election petition on September 22, 1972, holding that the first respondent did not hold an office of profit. The appellant then appealed to the Supreme Court by special leave. The material facts showed that the first respondent was nominated as a member of the Wage Board on April 13, 1971, to represent employers. The Wage Board was constituted under Chapter 12A of the Bombay Industrial Relations Act, 1946, introduced by Amending Act No. 43 of 1948. The Board had powers to decide industrial matters and disputes, and its orders were appealable to the Industrial Court. The first respondent filed his nomination for the legislative assembly election. The last date for filing nominations was February 8, 1972, and the last date for withdrawal was February 11, 1972. He resigned as a member of the Wage Board on February 20, 1972, and the resignation was received by the authorities on February 22, 1972. At the time of filing nomination and until after the withdrawal date, he was a member of the Wage Board. The Wage Board members were entitled to travelling allowance and daily allowance at the rate prescribed in Scale 1 of the Bombay Civil Services Rules, and also to an honorarium of Rs. 25 per day of meeting. The daily allowance was Rs. 18 per day. The first respondent's evidence, accepted by the High Court, showed that when he attended meetings in Bombay, he had to spend Rs. 20 for taxi fare, Rs. 25 for meals, and Rs. 40 for lodging, staying in a modest hotel. The aggregate of honorarium and daily allowance was hardly sufficient to meet these personal expenses. The legal issues before the Supreme Court were whether the membership of the Wage Board constituted an office under the State Government and, if so, whether it was an office of profit. The appellant contended that the honorarium was remuneration and therefore the office was of profit. The respondent argued that the office, though under the Government, was not of profit because the payments were compensatory and not a source of pecuniary gain. The Court first applied the well-established tests for determining whether an office is held under the Government: appointment by the Government, power to remove or dismiss, payment from Government revenue, functions performed for the Government, and control over performance. The Court found that all these tests were satisfied because the first respondent was appointed by the Government, could be removed by it, performed judicial functions, and was subject to Government and Industrial Court control. Therefore, he held an office under the State Government. On the question of profit, the Court observed that the word 'profit' connotes pecuniary gain. The matter had to be considered in substance rather than form. The Court examined the nature of the honorarium and allowances. It noted that the daily allowance and travelling allowance were clearly compensatory and excluded from disqualification under item 11 of Schedule I read with section 2 of the Bombay Legislature Members (Removal of Disqualifications) Act, 1956. The controversy centered on the honorarium. The Court rejected the appellant's argument that honorarium was necessarily remuneration, stating that the dictionary meaning was not decisive and that the essence of the payment was important. The evidence showed that the combined honorarium and daily allowance barely covered the first respondent's personal expenditure for attending meetings. Therefore, the payment did not result in any pecuniary gain; it was compensatory in nature. The Court distinguished the case of Mahadev v. Shantibhai, where the honorarium was found to be a source of profit. Applying the principles from Ravanna Subanna v. G. S. Kaggeerappa and Umrao Singh v. Darbara Singh, the Court held that the first respondent did not hold an office of profit. The Supreme Court dismissed the appeal and affirmed the High Court's judgment. It held that the first respondent was not disqualified from being elected, as his membership of the Wage Board was an office under the Government but not an office of profit. The election was upheld.
Headnote
A) Constitutional Law - Office of Profit - Tests for Holding Office Under Government - Constitution of India, Articles 102 and 191 - The first respondent was appointed by the Government of Maharashtra as a member of the Wage Board for Sugar Industry under section 86-B of the Bombay Industrial Relations Act, 1946. The Government had the power to continue or revoke the appointment, and the Wage Board performed judicial functions for the State. Applying the tests in Maulana Abdul Shakur v. Rikhabchand, Ramappa v. Sangappa, Gurugobinda Basu v. Sarkari Prasad Ghosal, and Shivamurthy Swami v. Agadi Sanganna Andanappa, the Court held that the first respondent held an office under the State Government. Held that membership of the Wage Board is an office under the Government. B) Constitutional Law - Office of Profit - Meaning of Profit and Pecuniary Gain - Constitution of India, Articles 102 and 191 - The word 'profit' connotes pecuniary gain. The Court emphasized that the matter must be considered as a matter of substance rather than of form, of the essence of payment rather than its nomenclature. The honorarium of Rs. 25 per day plus daily allowance of Rs. 18 was found to barely cover the first respondent's personal expenditure for attending meetings in Bombay, including taxi fare, meals, and lodging. Therefore, there was no pecuniary gain. Held that the office was not an office of profit. C) Constitutional Law - Office of Profit - Compensatory Allowance and Honorarium - Bombay Legislature Members (Removal of Disqualifications) Act, 1956, Section 2 and Schedule I Item 11 - The Act excluded from disqualification any office where the holder receives only compensatory allowance, defined as travelling allowance, daily allowance, or such other allowance for meeting personal expenditure. Although honorarium was not expressly mentioned, the Court interpreted the payments in substance as compensatory, intended to reimburse expenses rather than remunerate services. Held that the honorarium in this case was compensatory and not a source of profit. D) Election Law - Disqualification of Candidate - Membership of Wage Board - Bombay Industrial Relations Act, 1946, Chapter 12A - The first respondent filed nomination while serving as member of the Wage Board and resigned after the last date for withdrawal of candidature. The Court examined whether holding such office disqualified him under Articles 102 and 191. Since the office was not an office of profit, no disqualification arose. Held that the election was valid and not liable to be set aside. E) Constitutional Law - Office of Profit - Distinction Between Office and Office of Profit - Constitution of India, Articles 102 and 191 - The Court distinguished the two aspects: appointment and control make an office 'under the Government', but profit requires actual pecuniary gain. The first respondent satisfied the former but not the latter. Held that the two elements are distinct and must be independently established.
Issue of Consideration
Whether membership of the Wage Board for the Sugar Industry constituted under Chapter 12A of the Bombay Industrial Relations Act, 1946 is an office of profit under the State Government, disqualifying the holder under Articles 102 and 191 of the Constitution of India.
Final Decision
Supreme Court dismissed the appeal and upheld the High Court's judgment, holding that the first respondent did not hold an office of profit. The membership of Wage Board, though an office under the State Government, was not an office of profit as the honorarium and allowances were compensatory in nature and not a source of pecuniary gain. The election of the first respondent was valid.
Law Points
- An office is held under the Government if appointment
- removal
- and control vest in the Government
- office of profit requires pecuniary gain
- payments compensatory in nature do not constitute profit
- substance over form
- honorarium can be compensatory if it merely reimburses expenses
- daily allowance and travelling allowance are compensatory allowances
- Tests for office under Government include appointment
- remuneration
- functions
- and control.
