A contract with the Union Government or the State Government made without complying with the formalities prescribed by Section 175(3) of the Government of India Act, 1935, or Article 299(1) of the Constitution of India, is void and cannot be ratified at a subsequent stage by the Government. However, if goods are supplied or services are rendered in terms of the void contract, the provisions of Section 70 of the Indian Contract Act may be applicable, provided the conditions imposed by Section 70 are satisfied.

1. In the suit out of which this appeal arises the plaintiff alleged that the State of Bihar required bricks, Jhama and brickbats for the construction of (1) Muzaffarpur-Hajipur Road, (2) Muzaffar-Border Champaran-Sagauli Road, (3) Buildings at Muzaffarpur, (4) Buildings at Darbhanga, and (5) Buildings at Lohata (Motihar). The plaintiff offered tenders in response to the notification by the Public Works Department for supply of bricks etc. for the execution of the aforesaid schemes. The tenders of the plaintiff were accepted and accordingly bricks were laid and the necessary process for the supply of materials was taken in hand by the plaintiff. It is said that one of the terms of the contract between the parties was that the Public Works Department would arrange for the supply of the proper quantity of coal for burning the bricks in various kilns. The defendant, however, failed to fulfil this part of the contract with regard to the supply of the requisite quantity of coal. As a result of this the bricks were not burnt and a huge quantity of imburnt bricks was damaged and destroyed by the rains which caused considerable loss to the plaintiff. The plaintiff, therefore, brought the suit claiming damages for breach of contract. The plaintiff also made an additional claim for the price of burnt bricks which were actually supplied to the defendant, but the price of which was not paid. The suit was resisted by the defendant mainly on the ground that the contracts were void as they did not comply with the requirements imposed by Sec.175(3) of the Government of India Act and the plaintiff cannot be granted damages For breach of such contracts. With regard to the claim of the plaintiff for the price of the burnt bricks actually supplied to the Government, the defence was that the amount has already been paid. The suit was dismissed by the learned Subordinate Judge of Muzaffarpur and the plaintiff preferred an appeal to the High Court against the decree and judgment of the learned Subordinate Judge.

The appeal to the High Court was heard by Misra and Anant Singh, JJ. It was argued on be half of the appellant that the provisions of Sec.175(3) of the Government of India Act were not mandatory in character and it is open to the State Government to waive the irregularities and to ratify the contracts. It was contended that the plaintiff was entitled to damages from the defendant for its failure to supply the requisite quantity of coal and the consequent loss to the plaintiff with regard to the huge quantity of unburnt bricks destroyed by the rains. With regard to the claim of the plaintiff for the price of the burnt bricks actually supplied to the Government, the argument was that the finding of the learned Subordinate Judge was erroneous and the plain tiff has not been paid the price of the fully burnt bricks actually supplied. In support of these contentions counsel on behalf of the plaintiff relied upon the decision of a Division Bench of the High Court in State V/s. K. T. and Brothers Ltd., ILR 35 Pat 1067 where it was held that non-compliance of the formalities of Sec.175(3) of the Government of India Act 1935, only rendered the agreement between the parties unenforceable and not void.

It was also held by that Bench that such a contract might be ratified by the Government, which ratification may not be in accordance with the provisions of Sec.175(3) of the Government of India Act. Reliance was also placed on behalf of the appellant on the observations of Bose, J. in Chaturbhuj Vithaldas v. Moreshwar Parashram, AIR 1954 SC 236. On behalf of the respondent the learned Government Pleader relied upon a decision of another Division Bench of this High Court in Dominion of India V/s. Bhikraj Jaipuria, (S) AIR 1957 Pat 586 where it was held that the provisions of Sec.175(3) of the Government of India Act were mandatory in character and, therefore, a contract in order to he binding and enforceable against the Union Government must be ma