Article 299 of the Constitution
Source: Indian Express
GS II: Indian Constitution, Government Policies & Interventions, Judiciary
What is discussed under Article 299 of the Constitution?
- Article 299 in the Constitution of India 1949
- About the Case
Why in News?
According to a recent Supreme Court decision, when the government enters into a contract in the name of the President, it cannot claim exemption from the legal terms of that contract under Article 299 of the Constitution.
Article 299 in the Constitution of India 1949
Article 298 and 299
- Article 298 empowers the Centre and state governments to engage in commerce or business, buy, keep, and dispose of property, and enter into contracts for any purpose.
Image by Arek Socha from Pixabay - Article 299 specifies how these contracts would be finalised.
- Articles 298 and 299 were added after the Constitution took effect, and the government entered into contracts even before independence.
- The Crown could not be sued in court for a contract it entered into, according to the Crown Proceedings Act of 1947.
About Article 299
- According to Article 299, ‘all contracts made in the exercise of the executive power of the Union or of a State shall be expressed to be made by the President or by the Governor of the State.’
- Also, ‘all such contracts and assurances of property made in the exercise of that power shall be executed’ on behalf of the President or the Governor by persons directed and authorised by them.
- ‘Expressed to be made and executed’ in Article 299 (1) indicates that a deed or contract must be in writing and signed by a person lawfully empowered by the President of the Governor on their behalf.
Objective of Article 299
- There must be a definite procedure by which contracts must be made by agents acting on behalf of the government.
- Otherwise, public funds may be depleted by unauthorised or illegitimate contracts.
- Contracts that do not comply with Article 299(1) cannot be enforced by any contractual party.
About the Case
- Glock Asia-Pacific Limited, a handgun manufacturing business, and the Centre (government) were engaged in the lawsuit.
- Glock had a deal to provide handguns to the Ministry of Home Affairs, but a disagreement occurred when the government invoked a performance bank guarantee.
- Glock requested arbitration, but the government opposed the arbitrator’s selection based on a tender condition.
- The Supreme Court ruled in favour of Glock, holding that the arbitration clause permitting a government person to serve as an arbitrator was unconstitutional.
- To resolve the disagreement, the court designated a former Supreme Court judge as the arbitrator.
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