This article is written by Ananya Jha.
The Constitution of India, apart from enlisting certain qualifications for Members of Parliament and Legislative Assembly, also enumerates certain disqualifications. One of these disqualifications is holding an “office of profit”. In a democracy, it is desirable that there is proper separation of power between the Executive, the Legislative and the Judiciary. For this, it is important that only suitable legislators are elected to and remain in the Parliament and the State Legislatures. Disqualifying the holders of offices of profit is also an effort in this direction for protecting the independence of the legislators. A person may not be able to discharge his functions as a legislator and critique to the government if the government is in a position to influence him. This understanding has led to the development of the concept of ‘office of profit’.
This concept has evolved from the British Parliamentary model. One of the earliest laws on this issue was the English Act of Settlement enacted in 1700. By the beginning of the eighteenth century, three broad principles were developed affecting the law on this subject:
- Certain non-ministerial offices are incompatible with membership of the Parliament.
- The influence of the Executive over the House of Commons, through the undue proportion of office-holders who are members of the House, should be limited.
- Certain number of ministers should be members of the House for the purpose of ensuring control of the Executive by the Parliament.
The Indian law is based on these three principles. Articles 102(1)(a) and 191(1)(a) govern the law in this regard for the Members of Parliament and State Legislative Assemblies respectively. There a few legislations for the same purpose but these were not considered enough. Therefore, to address the lack of a single, comprehensive law, the Bhargava Committee on Offices of Profit was constituted under the Chairmanship of Pt. Thakur Das Bhargava in 1954. The Committee recommended enactment of the Parliament (Prevention of Disqualification) Act. This Act was passed in 1959 and presently governs the law on offices of profit in India. This legislation specifies which offices would not disqualify their holders.
Although, the legislation has clarified the law on some counts, for instance by defining what constitutes “compensatory allowance”, it has not defined an “office of profit”. Neither the Constitution nor any other piece of legislation has defined this term. The main source for understanding what constitutes an office of profit is judicial rulings. Apart from the Judiciary, Joint Committee on Offices Profit has also contributed in defining the term.
Even though there is no explicit definition of “office of profit”, it can be inferred from a reading of Articles 102 and 191 that the disqualification arises when:
- There is an office;
- The office is one of profit; and
- The office is under the Central or State government.
1. There is an “Office”
The term “office” has nowhere been expressly defined. However, from many judicial verdicts, an “office” refers to an employment which is permanent in nature and exists independent of the holder. In Kanta Kathuria v. Manak Chand Surana it was held that a Member of Legislative Assembly cannot be disqualified for holding an ‘office of profit’ unless it is proved that an office exists independent of the holder of the said office. In the above case, Mrs. Kathuria’s election was questioned on the ground that she was employed as a Special Government Pleader for the State of Rajasthan which was allegedly an office of profit under the government. The court held that the post did not constitute an office as the appellant was simply appointed to do certain duties assigned to her instead of holding a permanent post.2.
2. The office is one of “profit”
If a legislator receives any pecuniary benefit apart from the “compensatory allowance” as given in section 2(b) of Parliament (Prevention of Disqualification) Act, 1959, he becomes disqualified.
In Divya Prakash v. Kultar Chand Rana and Another, the respondent was appointed as the Chairman of the State Board of School Education in an honorary capacity. His election was challenged on the ground that he held an office of profit. It was contended that although the respondent did not receive any salary but the post carried a scale of pay. However, this argument was rejected by the court. It was held that the respondent never received any profit by way of salary and furthermore, he did not become entitled to any salary due to his appointment in honorary capacity. Importantly, the Board, which fixed the pay scale for the post of Chairman, was not authorised to do so.
Ramakrishna Hegde v. State of Karnataka: In this case, the petitioner, Mr. Hegde, was appointed as the Deputy Chairman of the Planning Commission. According to the respondents, there was ‘profit’ attached to the office as he enjoyed a Cabinet rank and got various allowances including well furnished free accommodation, chauffeur-driven car and could travel anywhere in India having the facility of the State Guest. However, the court held to the contrary as the allowances given to Hegde were included within the meaning of “compensatory allowance” given in s. 2b of the Parliament (Prevention of Disqualification) Act. The respondents could not prove that the petitioner had profited by gaining more than the actual expenditure by way of allowances. Also the court opined that “Merely because the petitioner had some privileges as a State Guest or a rank of a Cabinet Minister, it cannot be said that he had pecuniary gain”.
Jaya Bachchan v. Union of India, in which the court held that the Chairperson of the Film Development Council of a state holds an office of profit as some pecuniary gain is receivable by virtue of the post even though the said pecuniary gain may not actually be received. Here, the petitioner was sanctioned the rank of Cabinet Minister and received monthly honorarium, daily allowances, free accommodation, staff car, medical treatment etc. The petitioner, however, neither received any payment nor did she use any facilities that she was entitled to as the Chairperson. However, since the post was capable of yielding profit to the petitioner, she held an office of profit. Two factors which emerged in this case were: a) the form of payment is not relevant as monetary gain may be merely disguised as honorarium; b) it is not relevant whether any remuneration was actually received, it is only enough if such remuneration was receivable.
“[T]he view expressed by the Karnataka High Court in Ramkrishna Hegde’s case does not appear to be good in law in view of the recent pronouncement of the Supreme Court in Jaya Bachchan where it was held that “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”.”
3. The office is under the government
Satrucharla Chandrasekhar Raju v. Vyricherla Pradeep Kumar Dev and Another: In this case, the election of a primary school teacher in a school run by the Integrated Tribal Development Agency (ITDA) was challenged. The appointing authority was a Government officer. Members of the governing body of the school, who controlled its activities, were officers of the government. Also, the government sanctioned funds to the school. However, the court held that the post was not one under the government. Although, the government had some control over the ITDA, but it did not directly control the teachers. Moreover, it was not the appointing authority.
Some tests were laid down in the same case. These were:
- Whether the government has the power to appoint or revoke the appointment of the office-holder. Mere control of the government over the authority having the power to appoint or dismiss is not decisive.
- Whether the office-holder is paid out of government revenues.
- Whether the body which employs the office-holder is independent of the government.
- The degree/extent of control the government has over the body.
Maulana Abdul Shakur v. Rikhab Chand and Anr : The appellant was the Manager of a school run by Committee of the Durgah Endowment. Apellant’s election was challenged on the grounds that the appointing body could be appointed and dismissed by the Central government. The government could also supersede the Committee. The court held that the post is not an office of profit as the Committee was a body corporate independent of the government with perpetual succession. The court held that, “the appellant is neither appointed by the Government of India nor is removable by the Government of India nor paid out of the revenues of Government of India”.
The Honourable Supreme Court has highlighted that none of the decisions have conclusively laid down the definition of an office of profit “under the government” even though various tests have been formulated for determining whether a post is “under the government” or not. In Biharilal case, the appellant, who was an Assistant Teacher in a primary school, was ruled to hold an office of profit under the state government. The school was run by the Zila Parishad and thus was allegedly under governmental control. This case also evolved certain tests for determining whether the office is under the government:
- Whether the government makes the appointment;
- Whether the government has the right to remove or dismiss the office-holder;
- Whether the government pays remuneration;
- Whether the office-holder performs functions for the government;
- Whether the government controls the duties and functions of the office-holder.
However, there is no cut-and-dried test for determining what constitutes an office of profit. Each case has to be decided in light of the relevant provisions of the Acts governing the law.
The Judiciary has time and again laid emphasis on the need to avoid conflict between the duty and interest of an elected member in judgments like Ashok Kumar Bhattacharya v. Ajoy Biswas and Others and Biharilal Dobray v. Roshanlal Dobray. The court in Ashok Bhattacharya case, while referring to Articles 102 and 191, has held that, “The true principle behind this provision…is that there should not be any conflict between the duties and the interest of an elected member”. The elected legislator should feel free to fearlessly fulfill his duties without coming under any governmental pressure. “If such a person is holding an office which brings him remuneration and the Government has a voice in his continuance in that office, there is every likelihood of such person succumbing to the wishes of Government”.
The Judiciary has also tackled the issue of Parliament’s authority to retrospectively exempt offices of profit from disqualification. Consumer Education and Researh Society v. Union of India is a very important case which addresses this issue. In 2006, the Parliament passed the Parliament (Disqualification of Prevention) Amendment Act whereby 55 offices whose holders would otherwise have been disqualified for holding offices of profit were exempted from disqualification. The constitutional validity of this Amendment Act was challenged by way of PIL on the ground that the Act had been passed solely for allowing the elected members, who would otherwise be disqualified, to continue as Members of Parliament; the petitioners therefore argued that this was a piece of colourable legislation. They also contended that a Constitutional convention of referring the question of exempting offices of profit to the Joint Committee on Offices of Profit had evolved over time which was completely disregarded in this case. The court however held that it was for the Parliament to decide what would constitute an office of profit and that the Parliament was empowered to pass a legislation having retrospective effect. It was further ruled that the practice of reference to Joint Committee was a mere Parliamentary procedure and not a Constitutional convention. Thus, absence of such reference does not invalidate the legislation. “It has been held in numerous cases by this Court that the State Legislatures and Parliament can legislate retrospectively subject to the provisions of the Constitution. Apart from the question of fundamental rights, no express restriction has been placed on the power of the Legislature of the State, and we are unable to imply, in the context, any restriction.”
JOINT COMMITTEE ON OFFICES OF PROFIT
Joint Committee on Offices of Profit is a Standing Committee of Parliament whose mandate is to examine the offices which should be granted exemption from disqualification under the Parliament (Prevention of Disqualification) Act. This Committee submits its report in every Lok Sabha term; 2016 saw the submission of the thirteenth report of this Committee. These reports have also helped in shaping the law regarding offices of profit. The Committee finds its roots in the recommendations of the Bhargava Committee in 1955. This Committee had recommended that the legislation governing this issue should also contain a schedule which would include the offices exempt from disqualification. According to the Committee, such schedule could not be exhaustive due to ever-dynamic situation. Therefore, the Committee also proposed setting up of a Standing Committee of the Parliament which would continuously scrutinise various offices. The Joint Committee on Offices of Profit is constituted on a government motion for the duration of each Lok Sabha and comprises ten members of Lok Sabha and five members of the Rajya Sabha.
The Committee itself places reliance on judicial pronouncements while deciding what constitutes an “office of profit”. “The broad criteria for the determination of the question whether an office held by a person is an office of profit have been laid down in judicial pronouncements”. The tenth report stressed that if the Government exercises control over appointment and dismissal, performance and functions of the office and if there is any pecuniary gain attached with the office, irrespective of whether the gain is tangible or intangible, the office “should be held to be an office of profit under the Government”. Also, it is immaterial whether the pecuniary gain is actually received or is only receivable. The most recent report of the Committee has outlined some broad criterions for determining whether an elected member holds an office of profit. These criterions are:
- Whether the person receives any remuneration apart from the “compensatory allowance” as given in the Parliament (Prevention of Disqualification) Act? This remuneration may be in the nature of honorarium, salary, sitting fee etc.
- Whether the person is enabled to wield influence by way of patronage by virtue of holding the said office?
- Whether the body holding the office exercises executive, legislative or judicial powers or confers powers of disbursement of funds, allotment of lands, issue of licences, etc, or gives powers of appointment, grant of scholarships etc?
“If reply to any of the above criteria is in affirmative then the office in question will entail disqualification”.
The Bhargava Committee in its report has demarcated five categories of offices which may constitute an office of profit from the angle of “profit”. The report enlisted the following five situations where a person holds an office of profit:
- Where the remuneration granted to the office-holder is less than the expenses incurred by him.
- Where the person does not take any remuneration.
- Where the payment of remuneration has fallen into disuse.
- Where the office of profit is not financed from government funds.
- Where the person comes in a position to exercise influence or patronage due to the the office although there may not be any monetary gain.
The Bhargava Committee in its report in 1955 had felt that when Parliament itself elects one of its Members to serve on committees, councils etc, the question of receiving patronage from Government which will affect the independence of the Member does not arise and therefore, they recommended that such Members should be saved from disqualification.
The Second Administrative Reform Commission in its report had observed that whether the office carries remuneration or not is a crude criterion and the real decisive factor in this regard is whether “executive authority is exercised in terms of decision making or direct involvement in deployment of public funds.” This report has also highlighted that the objective criterions employed by the Judiciary while defining an “office of profit” do not cover legislators who are empowered to sanction public works and authorise expenditure of funds under Local Area Development Schemes. According to the report, the legislator becomes the executive through such schemes which gives rise to a conflict of interest.
The Commission has made following recommendations regarding offices of profit:
- Offices in purely advisory bodies should not be treated as offices of profit, irrespective of any remuneration attached with the office.
- Offices whose holder has executive decision-making power and control over public funds should be treated as offices of profit. The executive decision-making power may include deciding policy, managing or approving expenditure etc.
- If the office-holder is the Head or Member of such organisation where close coordination between the Council of Ministers and the organisation is essential for functioning of the Government, the office should not be treated as an office of profit.
The Joint Committee on Offices has approvingly quoted Shri P.D.T. Achary from his book “Practice and Procedure of Parliament” while defining office of profit: “It has also been held by the Supreme Court that all the determinative factors need not be conjointly present. The critical circumstances, not the total factors, prove decisive. A practical view, not pedantic basket of tests, should guide in arriving at a sensible conclusion.” The same report also reaffirms Judiciary’s stand on the issue by enumerating the various tests for deciding what constitutes an office of profit: whether the Government makes appointment, power of dismissal, payment of remuneration, nature of functions and governmental control over performance of those functions.
However, the Parliament is free to exempt an office of profit from disqualification. The Constitution itself grants this power to the Parliament by stating that an elected member will be disqualified if he holds an office of profit unless the office is “declared by Parliament by law not to disqualify its holder.” The schedule to the Parliament (Prevention of Disqualification) Act lists the offices which do not fall within the purview of disqualification. This rule has been provided for as it is believed that Members of Parliament and Legislative Assemblies can guide the Executive in formulating public policy in a better way. “..[I]t is for the Parliament to examine the offices whether those offices are useful, where the representation of the Members of Parliament in those offices are useful for guiding and providing guidance for the benefit of taking policy decisions”. It has been time and again emphasised that these Members in no way should come under the control of the Government. A balance is thus required to be achieved and maintained.
CONFLICT OF OPINIONS
Both the Judiciary and the Joint Committee on Offices of Profit are almost unanimous on the issue of what constitutes an office of profit. The Committee has in fact affirmed the Judiciary’s stand on this issue. Other sources like the Second Administrative Reforms Commission, although apparently differing from the Judiciary while regarding remuneration and power of appointment and dismissal as unimportant factors, have nevertheless re-emphasised that the Members should not be under the control of the Executive by becoming a part of the Executive.
However, there is some difference of opinion when it comes to the Parliament’s power to exempt offices from disqualification. The Judiciary has repeatedly maintained that the Parliament is perfectly enabled to retrospectively exempt any office of profit from disqualification. The practice of exempting offices of profit in the face of impending disqualification has been upheld in various judicial rulings. “The apprehension that it may not be a healthy practice and this power might be abused in a particular case are again no grounds for limiting the powers of the State Legislature (or the Parliament).” According to the Judiciary, only limitations on the Parliament are that the constitutional provisions should be adhered to and there should be not be any violation of fundamental rights. In CESR v. Union of India, the court had ruled that disqualification of an MP under Article 102(1)(a) is not automatic and can only occur when the President, on advice of the Election Commission, declares that Member as disqualified. Therefore, till the time the President declares so, the Parliament can bring an amendment for retrospectively exempting the disqualification.
The Second Judicial Reforms Commission has however opined that by exempting numerous offices from disqualification without any clear rationale, Articles 102 and 191 have been violated in spirit. “There does not appear to be a clear rationale to such a list (of offices in the exemption from disqualification), except perhaps the expediency to protect holders of certain offices from time to time. Similar laws have been enacted by State Legislatures under Article 191, exempting hundreds of offices from disqualification for the State Legislature. Each time a legislator is appointed by the executive to an office which might be classified an office of profit, a law is enacted including that office in the list of exempted categories.” The Joint Committee too, although not explicitly declaring this as an unconstitutional or even an unethical practice, has nevertheless stated that the Parliament should ensure that the exempted offices should not come under the control of the Executive.
There is a need to reconcile such differing opinions so as to arrive at a clear and unambiguous law. On analysing the relevant portion of Articles 102 and 191, we find the expression “shall be disqualified…if he holds any office of profit” which implies that the disqualification is mandatory and immediate. This means that if an MP or MLA assumes an office which is an office of profit, he will automatically become disqualified from the moment he assumes the office, irrespective of whether the President declares so or not. This conclusion is at complete odds with the opinion of the Judiciary.
 Shruti Bedi, Amendment in “Office of Profit”- A Dilution of the Spirit of the Indian Constitution, 48 JILI 409, 410 (2006).
 Id. at 1.
 (1969) 3 SCC 268.
 AIR 1975 SC 1067.
 AIR 1993 Kant 54.
 MANU SC 2395 2006.
 M.P. Jain, Indian Constitutional Law 32 (7th ed. 2010).
 MANU SC 0383 1992.
 MANU SC 0074 1957.
 Maulana Abdul Shakur v. Rikhab Chand and Anr, MANU SC 0074 1957.
 Biharilal Dobray v. Roshanlal Dobray, 1984 SCR (1) 877.
 Id. at 11.
 Ashok Kumar Bhattacharya v. Ajoy Biswas and Others, 1985 SCR (2) 50.
 Id. at 13.
 Maulana Abdul Shakur v. Rikhab Chand and Anr, MANU SC 0074 1957.
 Biharilal Dobray v. Roshanlal Dobray, 1984 SCR (1) 877.
Supra note 11, at 5.
 MANU SC 1499 2009.
 Supra note 3, at 2.
 Lok Sabha Secretariat (2016), 13th Report on Review of the Schedule to the Parliament (Prevention of Disqualification) Act, 1959, New Delhi.
 Lok Sabha Secretariat (1955), Report of the Committee on Offices of Profit, Government of India, New Delhi.
 Lok Sabha Secretariat (1984), 10th Report on Review of the Schedule to the Parliament (Prevention of Disqualification) Act, 1959, Government of India, New Delhi.
 Id. at 21.
Supra note 20, at 7.
 Supra note 22, at 7.
Second Administrative Reforms Commission (2007), 4th Report on Ethics in Governance, Government of India, New Delhi.
 Supra note 20, at 7.
 INDIA CONST. art. 102, cl. 1.
Supra note 20, at 7.
Supra note 20, at 7.
Supra note 3, at 2.
Supra note 18, at 6.
Supra note 26, at 9.
 Sachin Sachdeva, Office of Profit: Is Parliament Empowered to Exempt Retrospectively?, Elsevier (Jan. 20, 2017, 11:00 AM), https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1446182&download=yes.