Britse Overheid Pleit voor Afschaffing van de Vierdaagse Werkweek bij Lokale Overheden, wat tot veel discussie heeft geleid over de rol en verantwoordelijkheden van de overheid op het gebied van de werkgelegenheid. Terwijl Britse functionarissen beweren dat de vierdaagse werkweek de efficiëntie van de openbare diensten belemmert, onderstreept dit de verantwoordelijkheid van de regering om de openbare diensten op hun best te houden. Deze verklaring weerspiegelt de grondwettelijke verplichting van de Indiase regering om diensten te verlenen die voldoen aan de behoeften en verwachtingen van haar burgers, waaronder het waarborgen van de integriteit en stabiliteit van contracten en overeenkomsten met haar werknemers. Het werkweekdebat herinnert ons eraan dat regeringen over de hele wereld een evenwicht moeten vinden tussen economische efficiëntie en het naleven van de beginselen van rechtvaardigheid en grondwettelijke verplichtingen als het gaat om contractuele verantwoordelijkheden, en benadrukt uiteindelijk de complexiteit die inherent is aan het besturen en waarborgen van het welzijn van burgers. in moderne samenlevingen.

Introduction:

Contract desirably marks the first overt action taken by parties which brings the parties under an obligation to perform such act. An agreement gets a legal validity only if it is written down as a contract. Though a contract can be written or oral, it is always desirable to have a written contract to avoid any misunderstandings in future. All the contracts are regulated and governed under Indian Contract Act, 1872. Section 2(h) clearly states that a contract is an agreement which is enforceable by law[1]. The Act entails all the essentials of how a contract should be formed and what are the essentials[2] and capacity of parties entering into a contract. Such is the importance of entering into a valid legal contract as all the disputes shall be resolved only in accordance with the terms and conditions laid down in the contract.

Government Contracts

In the modern era, Government undertakes lot of financial activities and collaborates with private sector for a wide ambit of functions. So it is imperative that all the activities undertaken by government should also be regulated to avoid any future dispute and discrepancies. But since the government is much bigger entity than an individual party there has to be more regulation than a normal contract, so the constitution of India lays down the procedure and requisites to be followed to enter into a valid contract with Government[3]. This regulation is an additional requirement along with all the general principles laid down in the Indian Contract Act and all the regulation laid down in that statute will also hold good for a Government contract. Thus it is clear that a Government contract is governed by both the provisions of Indian Contract Act and the Constitution of India.[4]

Analysis Of The Provision Of The Constitution

Chapter XII Part III of the Constitution deals with the Government Contracts, its liabilities, properties, obligations etc… The provisions relevant to government contracts are Article 298 and Article 299 of Indian Constitution

Article 298 of Indian Constitution:

Article 298 of Indian Constitution empowers the government and its executives to carry on any kind of trade, acquire properties and enter into contracts with other parties which comes with a proviso that such trade activity must not be once in respect of which the Parliament/State legislature has right to make laws. Thus the Constitution provides the Government to carry on trade[5] and for effective functioning of a trade, a legally binding contract is indispensible. Thus the regulation for entering into a legally valid contract is laid down in Article 299 of Indian Constitution.

Article 299 of Indian Constitution:

Article 299(1) lays down that the contract entered by the Government should bear the name of either President (in case of Central Government contract) and the name of Governor (in case of State Government contract) and should be executed in the manner, it is executed by them.[6]. This has been upheld in the landmark judgment of Lalji Khimji v. State of Gujrat where the court explicitly held that As a matter of fact, Article 299(1) applies only to a contract made in exercise of the executive power of the Union or of a State.[7] However it is not possible for every petty contract to entail the name of the president/ governor as there are many contracts entered by Government Department in one day, hence an officer can enter into a contract in his own name if stated in a statute[8] The Article does not prescribe the manner in which the authorization must be conferred, however it’s an established rule by Judicial precedents that it may be conferred Ad-hoc on any person[9]

Article 299(2) explicitly states that though President and Governor are to be made parties to contract, they are not personally liable to satisfy any debts neither are liable for any breach occurred by a public official[10] as it is not possible for executives to look into each and every contract entered and made accountable for each, thus it will be the liability of the Government as a whole to satisfy the claims[11] and the executives are not personally liable for any contract entered in such capacity.[12]

Mandatory Requirements:

A contract entered in the name of Government makes the government liable which is eventually People’s money, therefore the intensity of such contract is very high and on the other hand it is also important for the other contracting party to enter into valid legal contract so that he can enforce his claims without complexities. As rightly held in the case of Hindusthan Sugar Mills v. State of Rajasthan, that in a Democratic setup like India, it is the duty of the state to what is in the best interest of the citizens and also not defeat any legitimate claims of any party and provide him his remedy through a proper Judicial process.[13] Thus the degree of responsibility in such Governmental claims is so high and thus the process mentioned in the constitution is ought to be followed strictly. The court in the case of Seth Bhikraj Jaipuria v. Union of India, while analyzing the scope of Article 299(1) clearly stated that words ‘expressed to be made’ and ‘executed’ in Article 299 it is clear that the Government contract should be made by a formal written contract. The court stated that the provisions are mandatory in nature and if these provisions are contravened then the whole contract shall stand nullified and will not be legally enforceable.[14] The court in the case of Chaturbhuj Vithal Das Jasani v. Moreswar Parashram while analyzing the object of enacting and intention of legislation came into the conclusion that the Government contract should be made in a procedure laid down under the act as irregular mode of creating a contract using government as a party may result in the depletion of public funds due to the fault of one public officer, thus the procedure laid down must be strictly adhered to.[15] It has been held that an oral contract shall not be binding on the government.[16] In the landmark judgment of K.P Chowdry vs. State of Madhya Pradesh, the court held that ther can be no implied contract made in the name of government and implied contract cannot be enforced by either of the parties in court of law.[17] However over the time the procedural complexities have been liberated to protect the parties and the Doctrine of promissory estoppels has also been evolved over the period of time.

Evolution Of Doctrine Of Estoppel

In the law of contracts, the Doctrine of Promissory Estoppel provides that if a party changes his or her position substantially by acting or forbearing from acting in reliance upon a gratuitous promise, then that party can enforce the promise although the essential elements of the contract are not fulfilled.[18] The Doctrine of Promissory Estoppel is applicable against the Government, as against a private person, even though there has been no contract according to the requirements of Article 299 of the Constitution of India.[19] The court in the case of General Mills Ltd. v. Union of India has further stated that acting upon the promise or assurance is enough to apply the doctrine and actual prejudice need not be proved by the promise[20]. The intention behind the same being Government or some other public body or its officials makes a representation or a promise and an individual acts upon such promise and alters his position, Government or the public body must make good that promise and shall not be allowed to fall back upon the formal defect in the contract.[21]

Contractual Liability Of The Government:

If the requisites of Article 299 are not fulfilled, the other party can still approach the court and get its claim satisfied against the Government as per the regulations laid down under Section 70 of the Indian Contract Act. The clear intention behind this is to protect the innocent parties whose claims are not just nullified due to complex procedure and also not let the government advantage of unjust enrichment. The other party will be compensated to the extent of benefit received by the Government through the performance of the contract. These contracts are to be treated as Quasi contracts and the following conditions[22] laid down below must be satisfied as per Section 70 of the Indian Contract Act so as to be eligible to claim:

There must be a lawful act by one party for the benefit of the other party.
The act must not be gratuitous act
The other party who receives the benefit must enjoy the benfit.

If these three conditions are fulfilled a party can claim under this provision even if the requisites of Article 299 are not met. If the contract entered by the Government is void, it can claim under Section 65 of Indian Contract Act, 1872.[23]

Judicial Review:

Judicial Review is courts authority to examine an executive or legislative act and to invalidate that act if it is contrary to constitutional principles.[24] Thus in simple works it is the power of the court to review the actions of the executive and legislative branches of the Government. The principle of Judicial review is of utmost importance to gather the confidence of public, increase transparency and reduce arbitrariness, nepotism, favoritism etc…The concept of Judicial review in the ambit of Government contracts is narrow and the court cannot interfere with the merits of the decision of contract but can only check the mode/procedure in which the Government has entered the contract into, thus judicial review does not review the merit of the decision of the government entering into a particular contract but scrutinizes the process the whole decision making process itself.[25] The grounds on which the administrative actions can be reviewed by judicial authority are as follows:

Irrationality
Procedural impropriety
Illegal

However these grounds are not exhaustive and are only directory but the court cannot enter into the merits of the contract and can check only the procedural regularity thus conferring the government independence of decision making process and also has a check on arbitrariness and procedural irregularity.[26] Thus such is the power of court to review the contract entered by the government.

Conclusion

It can be inferred that the contractual liability of the government is guided by the principles and provisions laid under both Constitution of India, 1949 and Indian Contract Act, 1872. The peculiarity to the government contracts is bought with the intention of safeguarding the government from the liability which otherwise might be caused due to the fault of one public official, thus the degree of care and diligence laid down in the contract entered by government needs to be more than that of other normal contracts and thus Article 299 lays down the procedure of how to enter into valid legal contract with the Government to make it enforceable in the court of law.

[1] Indian Contract Act, S.2(h), 1872.

[2] Indian Contract Act, S. 10, 1872.

[3] The Constitution Of India, Article 299, 1949.

[4] State of Bihar v. Majeed & Ors. AIR 1954 SC 786.

[5] The Constitution Of India, Art. 298, 1949.

[6] The Constitution Of India, Art. 299(1), 1949.

[7] Lalji Khimji v. State of Gujrat (1993) Supp. (3) SCC Pg. 567.

[8] State of Haryana v. Lalchand (1984) 3 SCC 634.

[9] State of Bihar v. Karam Chand Thapur AIR 1963 SCC 110

[10] State of Bihar v. Sonabati & Ors. AIR 1954 PAT 513

[11] Maneka Gandhi v. Union Of India AIR 1978 SCC 597.

[12] The Constitution Of India, Art. 299(2), 1949.