JUDGMENT

Thomas, J.-Can the government unilaterally rescind a contract if the terms thereof provide ? A Single judge of the Madras High Court has held that any such term in the agreement is null and void being repugnant to the essence of the contract. Upon such a finding learned single judge granted a decree in favour of the appellant for a sum of nearly Rupees Thirty Six lacs with future interest. But a division bench of the same High Court, before which the government appealed, reversed the decree and dismissed the suit of the appellant mainly on the strength of the provisions of the Government Grants Act, 1895 (for short the Grants Act ). Appellant has preferred this appeal after obtaining a certificate from the High Court under Article 134-A of the Constitution of India.

2. Facts, bereft of elaborate details but necessary for this appeal, are the following:

Pursuant to acceptance of the offer made by the appellant, being the highest bid, agreements were executed between Government of Tamil Nadu and the appellant as per which right to collect "chank shells" from four different coastal sites situated in four different districts in Tamil Nadu was granted to the appellant for a perio