A contractor constructed additional godowns, beyond the original contract, on the oral instruction of the Assistant Director. In a suit filed by the contractor, the Government took the defense that there was no contract binding the Government as such oral instructions contravened the provision of Article 299 of the Constitution which required a contract to be expressed to be made by the Governor. How will you decide?

Question: A contractor constructed additional godowns, beyond the original contract, on the oral instruction of the Assistant Director. In a suit filed by the contractor, the Government took the defense that there was no contract binding the Government as such oral instructions contravened the provision of Article 299 of the Constitution which required a contract to be expressed to be made by the Governor. How will you decide? [RJS 1986]

Find the answer to the mains question only on Legal Bites. [A contractor constructed additional godowns, beyond the original contract, on the oral instruction of the Assistant Director. In a suit filed by the contractor, the Government took the defense that there was no contract binding the Government as such oral instructions contravened the provision of Article 299 of the Constitution which required a contract to be expressed to be made by the Governor. How will you decide?]

Answer

In cases of Government contracts, the provisions of the Constitution specifically enumerated in Article 299 have to be followed and the formalities which are required have to be fulfilled for the formation of such contracts. Article 298 of the Constitution of India provides for contractual liability of the government and Article 299 provides the mode and manner of execution of the contracts.

Article 299 lays down the following conditions and requirements which must be fulfilled in contracts made by or with the Union or a State:

• Every contract must be expressed to be made by the President or the Governor (as the case may be);
• Every contract must be executed on behalf of the President or the Governor (as the case may be).
• Every contract must be executed by a person authorized by the President or the Governor (as the case may be);

The use of the word “executed” in proportions (2) and (3) above, indicates that the contract between the government and any person must be in writing. Thus, a mere oral agreement is not valid for the purpose of Article 299(1). This is not a mere formality but a substantial requirement of law and must be fulfilled. It, however, does not mean that there must be a formal agreement properly signed by a duly authorized officer of the Government and the second party.

It has been held by the Hon’ble Supreme Court in the case of Bhikaraj Jaipuria v. Union of India, that the words “expressed to be made” and “executed” incorporated under Article 299(1) suggests that there must be a formal written contract. The provisions are mandatory in character and any contravention thereof nullifies the contract and makes it void.

The provisions of Article 299(1) have not been enacted for the sake of mere form but they have been enacted for safeguarding the Government against unauthorized contracts. The provisions are embodied in the constitution on the ground of public policy on the ground of protection of the general public and these formalities cannot be waived or dispensed with.

Further, it was held by the SC in the case of K.P. Chowdhary v. State of Madhya Pradesh that, In view of the provisions of Article 299(1) there is no scope for any implied contract. Thus no contract can be implied under this Article. if the contract between the Government and a person is not in compliance with Article 299(1), it would be no contract at all and would not be enforceable as a contract either by the Government or by the person.

Therefore, applying the above provisions and case laws in the present proposition, it is clear that the Petitioner, i.e. contractor constructed additional godowns, beyond the original contract, on the oral instruction of the Assistant Director which is in clear contravention of Article 299(1), and hence is not enforceable in the court of law.

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Important Mains Questions Series for Judiciary, APO & University Exams

1. Constitutional Law Mains Questions Series Part-I
2. Constitutional Law Mains Questions Series Part-I
3. Constitutional Law Mains Questions Series Part-II
4. Constitutional Law Mains Questions Series Part-IV
5. Constitutional Law Mains Questions Series Part-V
6. Constitutional Law Mains Questions Series Part-VI
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