Hello, My name is Lawmsangpuia, My Roll No is 38 and I am 2nd semester LLB, Government

Mizoram Law College.

My topic would be State Liability in Government Contract, Article 299.

First of all, the Meaning of the Government contract is a contract to which the Central
Government or State Government is a party. It means if a central or state government is a party
in any kind of contract that becomes a government contract.

Let us try to understand two important article that is article 298 and 299,

Article 298 gives the power to carry any trade or business and the acquisition, holding and
disposal of property and and the making of contracts for any purpose. This is about article 298.
But, we shall not define this article.

Article 299 provides three important condition and as far as government contract are concern.

- First point is every contract must be expressed to be made by the president or the
Governor(as the case may be). In this point the keyword is must be expressed, it is very
important.
- The Second point is that every contract must be executed on behalf of the President or
the Governor. Here the keyword is “Must be executed on behalf of”.
- And the Third point is every contract must be executed by a person authorized by the
president or the Governor.

As we already said that Article 299 provides every contract must be expressed to be made,
executed on behalf of and must be executed by a person authorized by the President or the
Governor.

When we say President that is central level contract, when we say Governor that is state level
contract.
Now, I shall try to discuss about the government contract under Article 299 with leading case
laws.

1. Union of India v. N.K Pvt. Ltd. – In this case it was held that the Director of Railway
Board was suppose to sign a contract on behalf of President of India. But instead, the
Secretary sign a contract so the contract become invalid,

2. The Second case is karamshi Jethabhai v. State of Bombay – The owner of cane farm
and govt. enter into an agreement for supply of water canal. As there were no formal
signed, the agreeemnet is not valid. It was just an agreement, there is no legal
document, the contract become invalid.

3. Bhikraj Jaipuria v. Union of India – In this case a contract came into existence but in the
contract the Supirentendent forgot to mention “on behalf of the governor General” so
the contract become invalid. Remember all the contract are sign on behalf of President
and Governor.

As we know that the government contract should be made on the name of the President and
Governor, but in this context Neither the President nor the Governor shall be personally liable
in respect of any contract.