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2006 Supreme(Gau) 650
IN THE HIGH COURT OF GAUHATI
Aftab H. Saikia, J.
Union of India (UOI) and Anr.
Vs.
Raghunath Ram Choudhury and Anr.
RSA No. 66 of 1999
Decided On: 20.07.2006
For Appellant/Petitioner/Plaintiff: R. Bora, Adv.
For Respondents/Defendant: P. Mahanta, Adv.
Non-compliance with the requirements of Article 299 of the Constitution of India renders a government contract invalid and unenforceable, and the Union of India is not bound by such contracts.
Headnote:
Contract - Validity of Contract under Article 299 of the Constitution of India - [Wet Canteen Contractor] - [Article 299 of the Constitution of India] - [Article 299, as interpreted by various court cases, mandates that government contracts must be expressed as made by the President or the Governor, executed by the competent person and in the prescribed manner. Non-compliance with these requirements renders the contract invalid and unenforceable. The Union of India is not bound by the contract, and the officer executing the contract would be personally bound. The doctrine of promissory estoppel may apply, and the President or the Governor is not personally liable on the contract.]
Fact of the Case:
The Respondent No. 1, as Plaintiff, filed a suit against the Union of India and others seeking restoration of the status as the wet canteen contractor at 180 Military Hospital and claiming damages for loss of business and investment. The Plaintiff's contract was terminated by the Appellant No. 2, and the Plaintiff sought relief through the suit.
Finding of the Court:
The trial Court decreed the suit in favor of the Plaintiff, declaring the Plaintiff as the wet canteen contractor and restraining the Defendants from ousting the Plaintiff. The appellate Court upheld the judgment and decree of the trial Court.
Issues: The issues included the maintainability of the suit, time bar, existence of a valid contract, entitlement to a decree, and relief for either party.
Ratio Decidendi: The Court found that the contract agreement between the Commanding Officer and the Plaintiff was not valid under Article 299 of the Constitution of India as it was not expressed to be made by the President and was not executed on behalf of the President. The Court held that the contract was not binding on the Union of India, rendering the suit not maintainable.
Final Decision: The second appeal succeeded, and the impugned judgments and decrees of the Courts below were set aside. No costs were awarded.
A.H. Saikia, J.
1. Heard Mrs. R. Bora, learned C.G.C. appearing for the Union of India/Appellants. Also heard Mr. P. Mahanta, learned Counsel appearing for the Respondent No. 1 None appears for the Respondent No. 2.
2. This second appeal is directed against the judgment and order dated 11.3.99 passed by the Additional District Judge, Sonitpur at Tezpur in Title Appeal No. 2/96 affirming the judgment and decree dated 20.12.95 passed by the Asstt. District Judge, Sonitpur at Tezpur in Title Suit No. 31/88.
3. The Respondent No. 1 as Plaintiff instituted the instant suit being T.S. No. 3188, against the (i) Union of India represented by the Secretary to the Govt. of India, Ministry of Defence, New Delhi, (ii) Commanding Officer, 180 Military Hospital, C/O. 99 APO and (iii) Giridharilal Gupta, Wet Canteen Contractor, 180 Military Hospital, C/O. 99 APO praying the relief by decreeing the suit as follows:
(a) for of mandatory and prohibitory injunction restoring the status of the Plaintiff as canteen contractor permitting him to run the Wet Canteen at 180 Military Hospital C/o. 99 A.P.O. (located somewhere at Missamari within the jurisdiction of the Hon'ble Court) and stopping forthwith the Defendant No. 3 from running the business of the said canteen and if necessary, for a declaratory decree holding the Plaintiff to be the wet canteen contractor of the said Hospital with the consequential restraint decree as before-stated:
(b) for recovery of damages being compensation for loss of business amounting to Rs. 12,000/- (Rupees Twelve thousand), for loss of investment on accommodation and furniture incurred at the time of installation amounting to Rs. 10,000/- for loss incurred in writing off debts amounting to Rs. 1600/- for loss incurred upon theft of articles and account books amounting to Rs. 3000/- and for an amount of Rs. 3000/- that the Plaintiff may be required to incur for making the canteen workable, in all amounting to Rs. 29600/- (Rupees Twenty nine thousand six hundred) only and (c) for costs of the suit and any other relief/s as to the Hon'ble Court seem fit.
4. The case of the Plaintiff/the Respondent No. 1 was that he was running the Wet Canteen in question at 180 Military Hospital by dint of an agreement executed between him and Defendant No. 2/Appellant No. 2 herein on 20.2.82 (Ext. 1). However, suddenly by communication dated 26.7.85 (Ext. 2) issued by the Appellant No. 2, the Plaintiff was informed that though his contract broke down on 1.12.84 as intimated earlier vide letter dated 21.11.84, he had neither removed his shop nor paid the dues and accordingly he was advised to remove his shop before 10.8.85 failing which the area would be cleared dismantling his shed.
5. Being aggrieved by the said action the Respondent No. 1 started the related suit with the prayer as already indicated above.
6. The suit was contested by the Union of India/Appellants herein by filling their written statement raising preliminary question as regards the maintainability of the suit itself on the ground that the agreement dated 20.2.82 (Ext. 1) itself was not a valid contract document as the same was executed without complying with the provision of Article 299 of the Constitution of India and hence the Union of India is not bound by the said contract agreement entered into between the Appellant No. 2 and the Respondent No. 1 herein.
7. The learned trial Court framed as many as seven issues including Issue No. 2 as under:
1. Is there any cause of action?
2. Is the suit is maintainable in its form?
3. Is the suit is time barred?
4. Does any contract subsists between the Plaintiff and the Defendant No. 2?
5. Is there any contract between the Defendant
6. Is the Plaintiff entitled to a decree as prayed for?
7. To what relief if any is either party entitled?
8. Upon hearing learned Counsel for the parties and also on appreciation of the evidences on record, the learned Asstt. District Judge by his order dated 20.12.95 decreed the suit declaring the Pl
