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office of profit

Delhi High Court

Kailash Gahlot & Ors. vs Election Commission Of India & ... on 23 March, 2018

There is a detailed exposition in the opinion of the ECI dated 19th January, 2018 on interpretation of the term "office of profit under the Government" under the heading "Analysis of the Legal Position". ECI has stressed that there should not be any conflict between duties and role as an elected member of the Legislature towards the House, which would be compromised and dented if the elected member had received benefit from the Executive and consequently could come under their obligation and influence. This would be incompatible with the independence that an elected representative of people was constitutionally mandated and required to maintain, and would affect his/her duty as an elected member to fearlessly express his/her view on governance, without being subjected to governmental or Executive pressure. Opinion refers to Maulana Abdul Shakur versus Rikhab Chand and Another, AIR 1958 SC 52, Guru Gobinda Basu versus Shankari Prasad Ghosal and Others, AIR 1964 SC 254, Biharilal Dobray versus Roshan Lal Dobray, (1984) 1 SCC 551 and Pradyut Bordoloi versus Swapan Roy, (2001) 2 SCC 19 and others, and thereafter observes:


"6.The phrase "office of profit" is not defined in the Constitution. By a series of decisions (see Abdul Shakur v. Rikhab Chand [AIR 1958 SC 52 : 1958 SCR 387] ; M. Ramappa v. Sangappa [AIR 1958 SC 937 : 1959 SCR 1167] ; Guru Gobinda Basu v. Sankari Prasad Ghosal [AIR 1964 SC 254 : (1964) 4 SCR 311] and Shivamurthy Swami Inamdar v. Agadi Sanganna Andanappa [(1971) 3 SCC 870] this court has laid down the tests for finding out whether the office in question is an office of profit under a Government. These tests are (1) whether the Government makes the appointment; (2) whether the Government has the right to remove or dismiss the holder; (3) whether the Government pays the remuneration; (4) what are the functions of the holder? Does he perform them for the Government; and (5) does the Government exercise any control over the performance of those functions?

7. In Guru Gobinda Basu v. Sankari Prasad Ghosal [AIR 1964 SC 254 : (1964) 4 SCR 311] the Constitution Bench emphasised the distinction between the holder of an office of profit under the Government and the holder of a post or service under the Government and held that for holding an office of profit under the Government, one need not be in the service of Government and there need be no relationship of master and servant between them. Several factors entering into the determination of question are: (i) the appointing authority, (ii) the authority vested with power to terminate the appointment,

(iii) the authority which determines the remuneration, (iv) the source from which the remuneration is paid, and (v) the authority vested with power to control the manner in which the duties of the office are discharged and to give directions in that behalf. But all these factors need not coexist. Mere absence of one of the factors may not negate the overall test. The decisive test for determining whether a person holds any office of profit under the Government, the Constitution Bench holds, is the test of appointment; stress on other tests will depend on facts of each case. The source from which the remuneration is paid is not by itself decisive or material.

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14. Posed with the perplexed problem -- whether a person holds an office under the Government, the first and foremost question to be asked is: Whether the Government has power to appoint and remove the person on and from the office? If the answer is in the negative, no further inquiry is called for, the basic determinative test having failed. If the answer be a positive one, further probe has to go on finding answers to questions framed in Shivamurthy case [(1971) 3 SCC 870] and searching for how many of the factors pointed out in Guru Gobinda Basu case [AIR 1964 SC 254 : (1964) 4 SCR 311] do exist? The totality of the facts and circumstances reviewed in the light of the provisions of relevant Act, if any, would lead to an inference being drawn if the office held is under the Government. The inquisitive overview-eye would finally query: On account of holding of such office would the Government be in a position to so influence him as to interfere with his independence in functioning as a Member of Legislative Assembly and/or would his holding of the two offices -- one under the Government and the other being a Member of Legislative Assembly, involve a conflict of interests inter se? This is how the issue has to be approached and resolved."

96. Dwelling further, reference was made to Mr. P.D.T. Achary, former Secretary General of the Lok Sabha, note on history of "Office of Profit" and Nineteenth Report of the Joint Parliamentary Committee on Offices of Profit (Sixteenth Lok Sabha) presented to the Lok Sabha on 28 th March, 2017 and laid before the Rajya Sabha on 28th March, 2017 and Bhargava Committee Report on Office of Profit dated 22nd October, 1955 to the effect that remuneration or pecuniary gains could be tangible and intangible in nature, flow from such office irrespective of whether the holder for the time had actually received such remuneration or gain or not. To hold otherwise would be to nullify the object of imposition of disqualification, which would get frustrated.


97. Opinion refers to Jaya Bachchan versus Union of India and Others, (2006) 5 SCC 266, paragraph 6 of which reads as under:-


"6. Clause (1)(a) of Article 102 provides that a person shall be disqualified for being chosen as, and for being, a member of either House of Parliament if he holds any office of profit under the Government of India or the Government of any State, other than an office declared by Parliament by law not to disqualify its holder. The term "holds an office of profit" though not defined, has been the subject-matter of interpretation, in several decisions of this Court. An office of profit is an office which is capable of yielding a profit or pecuniary gain. Holding an office under the Central or State Government, to which some pay, salary, emolument, remuneration or non-compensatory allowance is attached, is "holding an office of profit". The question whether a person holds an office of profit is required to be interpreted in a realistic manner. Nature of the payment must be considered as a matter of substance rather than of form. Nomenclature is not important. In fact, mere use of the word "honorarium" cannot take the payment out of the purview of profit, if there is pecuniary gain for the recipient. Payment of honorarium, in addition to daily allowances in the nature of compensatory allowances, rent free accommodation and chauffeur driven car at State expense, are clearly in the nature of remuneration and a source of pecuniary gain and hence constitute profit. For deciding the question as to whether one is holding an office of profit or not, what is relevant is whether the office is capable of yielding a profit or pecuniary gain and not whether the person actually obtained a monetary gain. If the "pecuniary gain" is "receivable" in connection with the office then it becomes an office of profit, irrespective of whether such pecuniary gain is actually received or not. If the office carries with it, or entitles the holder to, any pecuniary gain other than reimbursement of out of pocket/actual expenses, then the office will be an office of profit for the purpose of Article 102(1)(a). This position of law stands settled for over half a century commencing from the decisions of Ravanna Subanna v. G.S. Kaggeerappa [AIR 1954 SC 653] , Shivamurthy Swami Inamdar v. Agadi Sanganna Andanappa[(1971) 3 SCC 870] , Satrucharla Chandrasekhar Raju v. Vyricherla Pradeep Kumar Dev [(1992) 4 SCC 404] and Shibu Soren v. Dayanand Sahay [(2001) 7 SCC 425] ."

98. Thus, the opinion holds that it was not actual receipt of profit, but potential of profit, was the deciding factor, which would prevent the holder to stand for election and incur disqualification. Reference was also made to judgment of the Supreme Court in Bimolangshu Roy (Dead) Through LRs versus State of Assam and Another, 2017 SCC Online SC 813 interpreting Articles 194 and 164(1A), and declaring that the Assembly of the State of Assam could not have enacted a law creating office of Parliamentary Secretaries. Constitutional arrangement did not authorise the State Legislature to create offices such as office of the Parliamentary Secretary. Thus, the State Legislative Assemblies do not have competence to create posts of officers of State Legislature.


99. Opinion also refers to judgments of the High Courts in Banomali Behera versus Markanda Mahapatra, AIR 1961 Orissa 205, Laljibhai Jodhabhai Bar versus Vinodchandra Jethalal Patel, AIR 1963 Guj 297 and Aires Rodrigues versus State of Goa, (2009) Supp Bom CR 16.


100. Opinion examines the factual matrix under the heading whether the office of Parliamentary Secretaries was an office that yielded profit or had the potential to yield profit. Reference was made to introduction of the Delhi Members of Legislative Assembly (Removal of Disqualification) (Amendment) Bill 2015 on 23rd June, 2015, passed by the Legislative Assembly on 24th June, 2015 that allocation of office of Parliamentary Secretaries in the Legislative Assembly Secretariat would not amount to disqualification. The argument with regard to the Bill on the principle of ex abundanti cautela (abundant caution) was rejected as legally untenable. Reference was made to documents and "voluminous reply" received from Government of NCT of Delhi, several portions of which have been quoted. Paragraphs 99 to 102 refer to specific facts against some of the disqualified petitioners. Paragraph 107 under the heading whether the office of the Parliamentary Secretary was Executive in nature or functions, summaries meetings chaired and attended by some of the disqualified members. Paragraph 113 opines that appointment of 21 members of the Legislative Assembly as Parliamentary Secretaries to the Ministers of Delhi Assembly, would mean that 40% of the elected members would become part of the Executive, which would be in flagrant violation of clause (4) of Article 239AA of the Constitution of India, which permits maximum of 10% MLAs to be appointed as Ministers. There was an attempt to bypass constitutional provisions of paramount importance. Relying on principle of purposive interpretation and construction, it was held that the very nature of office of Parliamentary Secretaries was Executive.


Supreme Court of India

Jaya Bachchan vs Union Of India And Ors on 8 May, 2006

2. The Government of Uttar Pradesh, by Official Memorandum dated 14.7.2004, appointed the petitioner as the Chairperson of Uttar Pradesh Film Development Council (for short `the Council') and sanctioned to her the rank of a Cabinet Minister with the facilities as mentioned in O.M. No. 14/1/46/87-C. Ex. (1) dated 22.3.1991 (as amended from time to time). The benefits to which she became entitled, as a consequence, are :


(i) Honorarium of Rs. 5,000 per month;


(ii) Daily allowance @ Rs. 600 per day within the State and Rs. 750 outside the State. Rs. 10,000 per month towards entertainment expenditure.


(iii) Staff car with driver, telephones at office and residence, one P.S., one P.A. and two class IV employees.


(iv) Body Guard and night escort.


(v) Free accommodation and medical treatment facilities to her and family members.


(vi) Free accommodation in government circuit houses/guest house and hospitality while on tour.


3. The Election Commission, after referring to the facts and the law enunciated by this Court in several decisions, has expressed the opinion that the office of Chairperson of the Council to which the petitioner was appointed by the State Government by O.M. dated 14.7.2004, on the terms and conditions specified therein, is an "office of profit" under the Government of Uttar Pradesh for purposes of Article 102(1)(a) of the Constitution. The Commission also found that Section 3 of the Parliament (Prevention of Disqualification) Act, 1959 did not exempt the said office of profit from disqualification under Article 102(1)(a) of the Constitution.


4. The petitioner contends that the post of Chairperson of the Council, and the conferment of the rank of Cabinet Minister, were only "decorative"; that she did not receive any remuneration or monetary benefit from the State Government; that she did not seek residential accommodation, nor used telephone of medical facilities; that though she travelled several times in connection with her work as Chairperson, she never claimed any reimbursement; and that she had accepted the Chairpersonship of the Council honorarily and did not use any of the facilities mentioned in the O.M. dated 22.3.1991. The petitioner contends that in the absence of any finding by the Election Commission that she had received any payment or monetary consideration from the State Government, she could not be said to hold any office of profit under the State Government and, therefore, her disqualification was invalid.


5. It is not in dispute that the Council is not an autonomous body or statutory Corporation, that the Council has no budget of its own, and that all its expenses are met by the Department of the State Government administratively in-change of it. Similarly, the fact that the petitioner was appointed as Chairperson of the Council, conferring on her the rank of a Cabinet Minister entitling her to all the remuneration and benefits as provided in the O.M. dated 22.3.1991 (extracted above), is also not disputed.


6. Clause (1)(a) of Article 102 provides that a person shall be disqualified for being chosen as, and for being, a member of either House of Parliament if he holds any office of profit under the Government of India or the Government of any State, other than an office declared by Parliament by law not to disqualify its holder. The term `holds an office of profit' though not defined has been the subject matter of interpretation, in several decisions of this Court. An office of profit is an office which is capable of yielding a profit or pecuniary gain. Holding an office under the Central or State Government to which some pay salary, emolument, remuneration or non-compensatory allowance is attached, is `holding an office of profit'. The question whether a person holds an office of profit is required to be interpreted in a realistic manner. Nature of the payment must be considered as a matter of substance rather than of form. Nomenclature is not important. In fact, mere use of the word `honorarium' cannot take the payment out of the purview of profit, if there is pecuniary gain for the recipient. Payment of honorarium, in addition to daily allowances in the nature of compensatory allowances, rent free accommodation and chauffeur driven car at State expense, are clearly in the nature of remuneration and a source of pecuniary gain and hence constitute profit. For deciding the question as to whether one is holding an office of profit or not, what is relevant is whether the office is capable of yielding a profit or pecuniary gain and not whether the person actually obtained a monetary gain. If the "Pecuniary gain" is "receivable" in connection with the office then it becomes an office of profit, irrespective of whether such pecuniary gain is actually received or not. If the office carries with it, or entitles the holder to, any pecuniary gain other than reimbursement of out of pocket/actual expenses, then the office will be an office of profit for the purpose of Article 102(1)(a). This position of law stands settled for over half a century commencing from the decisions of Ravanna Subanna v. G.S. Kaggeerappa, AIR (1954) SC 653; Shivamurthy Swami Inamdar v. Agadi Sanganna Andanappa, [1971] 3 SCC 870; Satrucharla Chandrasekhar Raju v. Vyricherla pradeep Kumar Dev, [1992] 4 SCC 404 and Shibu Soren v. Dayanand Sahay & Ors., [2001] 7 SCC 425.


7. The petitioner relied on the decisions in Umrao Singh v. Darbara Singh, [1969] 1 SCR 421 and Divya Prakash v. Kultar Chand Rana & Anr., [1975] 1 SCC 264.


8. In Umrao Singh (supra) the question that arose for consideration was whether payment of a monthly consolidated allowance for performing all official duties and journeys concerning the work and a mileage allowance for the journeys performed for official work outside the district and daily allowances for the days of attendance of meetings/travel/halt, would convert the office of Chairman of a Panchayat Samiti into an office of profit. This Court held that these were allowances paid for the purpose of ensuring that the Chairman did not have to spend money out of his own pocket for discharging his official duties, and therefore, receipt of such allowances did not make the office one of profit.


9. In Divya Prakash (supra), this Court held that the post of a Chairman of the Board of School Education of the State of Himachal Pradesh was not an office of profit. The candidate was appointed specifically in an honorary capacity without any remuneration. Further the post of Chairman did not carry with it a scale of pay. On the same date Bench also decided the case of K.B. Rohamare v. Shankar Rao, [1975] 1 SCC 252, where while discussing the question at length, Ravanna Subanna (supra) was cited with approval. It was held in the said case that amount of money receivable (emphasis supplied by us) by a person in connection with the office he holds is material when deciding whether the office carried any profit.


10. Learned counsel for the petitioner has also referred to Biharilal Dobrav v. Roshanlal Dobrav, [1984] 1 SCC 551 and contended that citing Divya Prakash (supra), with approval, it was held that when a candidate is appointed in an honorary capacity without any remuneration even though post carried remuneration, he cannot be said to be holding an office of profit and thus was not disqualified under Article 191 (1)(a) of the Constitution. In Biharilal Dobray's Case (supra) it was held that respondent was holding an office of profit under the State Government and his nomination was rightly rejected by the Returning Office. In that case, the only question was whether the post the respondent was holding was one under State Government or not. The observations made with reference to Divya Prakash's case were clearly obiter. Further, an error seems to have been made while noticing Divya Prakash's case. In Divya Prakash it was held that the post did not carry with it any remuneration but in Biharilal Dobrey it was said that the post carried remuneration.


11. A careful examination of the decisions relied upon the learned counsel on behalf of the petitioner shows that each of those cases turned on its own facts and did not lay down any proposition of law contrary to what has been laid down in a series of decisions starting from Ravanna Subanna to Shibu Soren. It is well settled that where the office carries with it certain emoluments or the order of appointment states that the person appointed is entitled to certain emoluments, then it will be an office of profit, even if the holder of the office chooses not to receive/draw such emoluments. What is relevant is whether pecuniary gain is "receivable" in regard to the office and not whether pecuniary gain is, in fact, received or received negligibly.


12. In this case, as noticed above, the office carried with it a monthly honorarium of Rs. 5000, entertainment expenditure of Rs. 10,000., staff car with driver., telephones at office and residence, free accommodation and medical treatment facilities to self and family members, apart from other allowances etc. That these are pecuniary gains, cannot be denied. The fact that the petitioner is affluent or was not interested in the benefits/facilities given by the State Government or did not, in fact, receive such benefits till date, are not relevant to the issue.


13. In this view, the question whether petitioner actually received any pecuniary gain or not is of no consequence. We find no merit in the writ petition and the same is, accordingly, dismissed.

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