Bhikraj Jaipuria v Union of India
Rule established
The constitutional form prescribed for government contracts is mandatory and not directory. A contract that does not comply is void and unenforceable against the Government, and because the requirement exists for the protection of the public it cannot be waived, nor can the contract be ratified by conduct.
Facts
- The appellant firm dealt in foodgrain.
- A Divisional Superintendent of the railway placed orders with the firm for the supply of large quantities of foodgrain.
- The orders were not expressed to be made by the Governor-General, as the constitutional provision then in force required, and were not executed by a person duly authorised to contract on his behalf.
- Goods were supplied against the orders, and the administration accepted them and made part payment.
- Disputes arose as to the balance and as to the quantity to be taken, and the firm sued the Union.
- The Union defended on the ground that the contracts were void for non-compliance with the prescribed form, notwithstanding that it had received and used the goods.
Issue
- Whether the prescribed constitutional form for government contracts is mandatory; and whether non-compliance can be cured by waiver or by ratification through acceptance of the goods and part payment.
Held
- The provision is mandatory and the contracts were void. The Court held that the requirement is not a mere formality regulating the internal procedure of Government, but a provision for the protection of the general public: its object is to ensure that the State is not saddled with liability for unauthorised acts, and that public funds are not committed except by a person duly empowered. A provision enacted for the benefit of the public cannot be waived by the officers of the Government, and the void contract cannot be ratified, whether expressly or by conduct such as receiving the goods or paying part of the price. No suit on the contract therefore lay against the Union.
Ratio Decidendi
Where a statute or the Constitution prescribes the manner in which a public authority may bind itself, that manner is the measure of its capacity, and an act done otherwise is not an imperfect exercise of the power but no exercise of it at all. Since there is nothing in law to ratify, subsequent conduct cannot supply what was absent at the outset. The interest protected is that of the public rather than of the parties, which is why the officers concerned cannot dispense with it.
How to use it in an exam
- The leading authority on the mandatory character of Art.299(1). State the three consequences: the contract is void, there is no waiver, and there is no ratification.
- The reason to give is that the provision protects the public, not the parties. That reason is what excludes waiver and ratification, and it should always be stated.
- Read immediately with Mulamchand v State of Madhya Pradesh 1968, which supplies the remedy that survives: no action lies on the contract, but restitution lies under S.70 of the Indian Contract Act, 1872 for the value of the benefit the Government has enjoyed.
- Note the related proposition that there can be no implied contract with the Government, since Art.299(1) requires an expressed and executed instrument in the prescribed form.
- In a problem, apply the three requirements of Art.299(1) in order: expressed to be made by the President or Governor, executed on his behalf, and executed by a person authorised by him in the manner directed. All three are cumulative.
- Note also Art.299(2), under which neither the President nor the Governor, nor the person executing the contract on his behalf, is personally liable.
Source
Source: AIR 1962 SC 113; (1962) 2 SCR 880; Constitution Bench of five Judges; the leading authority on the mandatory character of the form prescribed for government contracts; citation verified; authorship by J C Shah J and the exact date of judgment NOT confirmed
This is an educational summary, not the judgment itself. Cite the reported version in professional or academic work.