Constitution of India
Article 299: Contracts
Part XII — Finance, Property, Contracts and Suits
Clause (1)
WHAT IT SAYS: All contracts made in exercise of the executive power of the Union or a State shall be expressed to be made by the President or Governor respectively, and executed on their behalf by authorized persons in the manner they direct. WHAT IT MEANS: No government contract is valid unless it is formally expressed in the name of the President/Governor and executed by a duly authorized person — oral or informal agreements cannot bind the government. KEY DOCTRINE: Doctrine of Mandatory Compliance — Article 299(1) is mandatory, not directory; non-compliance renders the contract void ab initio (K.P. Chowdhary v. State of MP, 1966).
Clause (2)
WHAT IT SAYS: Neither the President nor the Governor shall be personally liable for any contract or assurance made for the purposes of the Constitution or any prior enactment, nor shall any person executing such contract on their behalf be personally liable. WHAT IT MEANS: Personal immunity is granted to the President, Governor, and their agents — all contractual liability falls on the Government as an entity, not on individuals acting in official capacity. KEY DOCTRINE: Doctrine of Official Immunity — the President and Governor act as agents of the State and cannot be sued personally for official contracts.
Constitutional Inspiration
SOURCE(S): 1. Government of India Act, 1935 — Section 175(3) Original provision: Section 175(3) required all contracts made in exercise of executive authority to be expressed in the name of the Governor-General or Governor and executed by authorized persons. What India kept: Article 299(1) reproduces Section 175(3) almost verbatim, retaining the same mandatory form requirements for government contracts. INDIA'S SPECIFIC ADAPTATIONS: 1. Replaced 'Governor-General' with 'President' — To reflect India's republican form of government post-independence. 2. Originally included 'Rajpramukh' for Part B States (princely states) — To accommodate the transitional federal structure integrating princely states; removed by the 7th Amendment Act, 1956 after states reorganization. 3. Extended immunity under Clause (2) to all persons executing contracts on behalf of the President/Governor — To ensure no individual officer faces personal liability, thereby encouraging efficient administration without fear of personal consequences.
Constituent Assembly Debate
DEBATED ON: 15 June 1949 (CAD Volume VIII) KEY SPEAKERS: 1. Dr. B.R. Ambedkar — Moved amendments to include Part III (princely) states by inserting 'or the Ruler' after 'Governor'; explained that 'assurance' is an old conveyancing term covering all kinds of property transfers. 2. Shri Mahavir Tyagi — Raised concern that contracts under Article 273 were different from property dispositions in Article 272 and questioned whether Parliament should ratify government contracts. 3. Prof. Shibban Lal Saksena — Argued parliamentary ratification was unnecessary since contracts would adhere to laws made by Parliament; questioned the necessity of immunity under Clause (2). MAJOR DISAGREEMENTS: 1. Parliamentary oversight of contracts — Mahavir Tyagi proposed that contracts be ratified by Parliament; this was opposed as impractical since contracts would already be subject to legislative laws. 2. Necessity of personal immunity under Clause (2) — Prof. Shibban Lal Saksena questioned why the President and Governor needed special exemption from liability. FINAL OUTCOME: Ambedkar's amendments to include princely states were adopted; the article was passed as amended without removing Clause (2), as Ambedkar argued that President and Governor act as agents of the State and cannot be personally liable. AMBEDKAR'S KEY QUOTE: "The President and the Governor are acting as agents of the Union and the State and therefore cannot be held personally liable."
Landmark Judgments
LANDMARK JUDGMENTS: 1. Chatturbhuj Vithaldas Jasani v. Moreshwar Parashram (1954) — Held that Article 299(1) requires a definite procedure for government contracts to safeguard public funds; contracts not in the President's name are not void merely because government cannot be sued on them. 2. K.P. Chowdhary v. State of Madhya Pradesh (1966) — Laid down three essential requirements: (a) contract must be expressed in the name of President/Governor, (b) must be in writing, (c) must be executed by an authorized person; ruled out all implied contracts with the government. 3. State of Bihar v. Karamchand Thapar (1962) — Held that in absence of specific authorization, implied authorization may amount to substantial compliance with Article 299(1). 4. Glock Asia-Pacific Ltd. v. Union of India (2023) — Held that a contract made in the name of the President does not grant immunity from statutory prescriptions; Article 299 only governs formalities, not substantive contractual liability. NOTABLE DISSENTS (if any): 1. None widely reported — the jurisprudence on Article 299 has been largely consistent across benches. SCHOLARS & JURISTS: 1. M.P. Jain & S.N. Jain (Principles of Administrative Law) — Article 299(1) is in pari materia with Section 175(3) of the Government of India Act, 1935; its requirements are mandatory and not merely directory. 2. D.D. Basu — Article 299 provides the essential constitutional framework distinguishing government contracts from ordinary contracts; non-compliance is fatal but equitable relief under Section 70 of the Contract Act (quasi-contract) may be available.