Image source: https://rb.gy/qbkcbu

This article has been written by Srijita Adak, pursuing the Diploma in Advanced Contract Drafting, Negotiation and Dispute Resolution from LawSikho.

Introduction

A breach of the contract happens when a party who owes something under the contract neglects to give that goods or services. This failure must be severe to be considered as a breach. In the event that you have gone into a contract and satisfied your commitments yet can’t get the other party to do likewise, you might need to sue the non-performing party for breach of contract. A breach of contract ordinarily happens when a party neglects to proceed as guaranteed when something makes it impossible for the one party to proceed as guaranteed, or there is a known intention that one party won’t proceed as concurred. 

The procedure of sue can be a headache. However, they’re the best way to get what you are legitimately owed. The process may appear to be overpowering, however with the correct planning, you can effectively sue somebody for breach of contract.

Government contracts

A contract in which the Central Government or a State Government is a party to the contract is called a “Government Contract”. Like other contracts, a Government Contract is also governed by the Indian Contract Act, 1872, however, in addition to the requirements of the Indian Contract Act, 1872, a Government Contract has to comply with the provisions of Article 299 of the Indian Constitution. 

While an ordinary contract can be made by express words or by implied conduct of the parties, a Government contract should be made expressly and not impliedly. This provision has been made to safeguard the Government against the fake contract which may be made on their behalf to defraud the general people and this is the reason why implied contracts do not have any scope in cases of Government contract. 

In K.P. Chowdhary v. State of M.P. (AIR 1967 SC 203), it has been made clear by the Supreme Court of India that in case a person enters into a contract with Government impliedly then neither he nor the Government will be able to enforce the contract in the court of law. 

But there is practical difficulty to form always a formal agreement in the case of government. contracts. While the Supreme Court has held in many cases that there should be a formal express contract, but many have argued that it is not practical to always have a formal agreement and many times the Government Officers has to enter into petty contracts as well and therefore it is not ideal to create a formal agreement every time even for such petty contacts. Some important principles of government. Contracts should be reasonableness, fairness, public interest, public welfare.

Constitutional provisions with respect to government contracts

Under Article 298 of the Indian Constitution, under the exercise of its executive power, the Union or a State Government can enter into various types of contracts for the acquisition, holding and disposal of property, or to carry on any trade or business or for any other purpose. 

Whereas, Article 299 of the Indian Constitution states how the Government Contract is made and who will be liable in case of breach of Government Contracts. Art. 299(1) states who are the persons authorised to execute contracts on behalf of the Union or the State government. All types of government contracts shall be expressed to be made by the President in case the Union government is concerned or by the Governor of the State if the State government is concerned and it can be executed on behalf of the President or Governor by such authorised persons. Art. 299(2) states who will be liable for the government contracts. It says neither the President nor the Governor nor the authorised person shall be held responsible in case there is a breach of contract.

The position resulting from Article 299 can be stated in this form:

  1. Government contracts must be expressed as to be made by the President or the Governor.
  2. They shall be executed by the competent person and in a prescribed manner.
  3. If the above requirements are not complied with then:
  • The Government is not bound by the contract because Article 299 of the Constitution is mandatory. 
  • The officer executing the contract would be personally bound.
  • The Government, however, if it enjoys the benefit of performance from the other party to the contract, would be bound to restore the benefit to the party from whom or on behalf the benefit had been received by the Government.

Contractual liability in government contracts

Under Article 299(2), the President, the Governor and the person who is authorized to act on their behalf are provided immunity from any personal liability which may be incurred due to non-performance of the contract. This immunity is provided to them only but it does not mean that the Government is also not liable for the contract. Therefore, the liability of the Government will be the same as in the case of a normal contract under the Indian Contract Act, 1872. Thus, a person can sue the Government or the Government can sue a person in case of breach of Contract in the Court of law.

Can the Government be sued for breach of contract?

The government, in the name of the “Union of India” or “State”, can be sued inter alia for breach of a contractual obligation by the government by virtue of Article 300 of the Indian Constitution. Article 300 basically covers the Government of India and the public authority of a state with legitimate character. Under Article 299, they are able to enter into contracts, secure, hold and discard property and do exchange trade and business as ordinary people. This normally brings them under the capacity to sue or be sued for inability to properly perform their agreed terms of conditions of a contract. 

The idea for which the Government can be sued has been dissected in a large group of cases. In P. &. O. Steam Navigation Co. v. Secretary of State for India, it was held that the Government can’t be sued for sovereign functions (which must be performed by the government. only), yet be at risk for non-sovereign functions (those performed by an individual). Nonetheless, the doctrine got overruled in N. Nagendra Rao v. Province of AP where the courts weakened this practice of sovereign-immunity if the State has been careless in carrying out its obligations.

Provisions regarding the filing of a suit against or by the government

A large number of cases forthcoming in Indian courts are documented against the government. In ordinary suits i.e., suits between individuals to individuals, notice need not be given to the defendant by the plaintiff before filing the suit. 

Whereas, 2 months prior notice should be given to the government or public officers before instituting a suit against the government or public officer. This is finished by giving notice under Sec. 80 of the CPC, illuminating different focuses which require a solution. On not getting relief, a case can be filed against the Government through the Secretary of the concerned division and the regulatory top of that division.

The subject of suits by or against public officers in their official capacity has been recognized under Section 79, Section 80 and Order 27 of CPC, 1908.

Order 27

It includes under its ambit various rules and subjects like that of recognized agents, attorney general and the procedure to be followed while the suit is being filed by or against the government or public officials in their authority limit.

Section 79

This Section characterizes the idea of suits by or against the government. Whenever an argument is filed against a government. or in the event that it is recorded by the government, the plaintiff and the respondent who will be named for the situation will be as given under:

  • Whenever the case is instituted by or against the Central Government, the Union of India will be represented as the required plaintiff or defendant respectively. 
  • Whenever the suit is filed by or against the State Government, the State Government will be required to act as the plaintiff or the defendant.

Section 80

According to Section 80 of the CPC,1908, no suit will be founded against the Government or against a public official with respect to any act done by such an official in his authority limit, until the lapse of two months after the notice recorded as a hard copy has been conveyed to, or left at the workplace of:

  • In the case of a suit against the Central Government, except where it relates to a railway, a Secretary to that Government;
  • In the case of a suit against the Central Government where it relates to a railway, the General Manager of that railway;
  • In the case of a suit against the Government of the State of Jammu and Kashmir, the Chief Secretary to that Government or any other officer authorised by that Government in this behalf;
  • In the case of a suit against any other State Government, a Secretary to that Government or the Collector of the district;
  • In the case of a public officer, delivered to him or left at his office, stating the cause of action, the name, description and place of residence of the plaintiff and the relief which he claims.

Procedure of suing

  1. The Government will get 2 months prior notice under Sec. 80 of the CPC. The Government gets 2 months’ time for plaint filing.
  2. In the case where a suit is filed by or against the government then such a plaint should be signed by any authorised person appointed by the government. It is also necessary that this person is well versed with the facts of the case. If such a person is authorised by the government then he shall be deemed to be recognised agent of the government as per the CPC. 
  3. The process of government by the side will be taken care of by the government pleaders. It has also been given in the court that multiple summons may be issued to a government pleader.
  4. There is no need for the State Council to file a Vakalatnama. 
  5. Reasonable time should be granted to the government. for filing a return statement. 
  6. Government will get exemption from arrest and personal appearance.
  7. There will be execution of decree.
  8. The course in all cases must assist the government. to show up at a settlement taking all things together in situations where it is a party. This is considered as one of the primary obligations of the court.
  9. There are instances where the suit filed may have a substantive question of law or that it may require the interpretation of the law or the Constitution. In such cases, the Court should send a notice to the Attorney General if the question is with respect to a Central law or it should send a notice to an advocate general if the suit deals with State law. 

Notice u/s 80 of CPC, 1908

  • Essentials 

A notice under Section 80 must contain the name, description, place of residence of the person giving notice. A statement of the cause of action and the relief claimed by him are another important essential of a notice.

  • Waiver of notice

This section mandates issuance of a notice for the institution of a notice. It is viewed as a simple procedural necessity and not a considerable need. In Commissioner of Taxes v. Golaknath, it was held that the facts of the case are vital to see if the right could be waived or not.  

  • Form of notice

There is no particular form prescribed in the court. The mere satisfaction of all conditions prescribed in section 80 is sufficient. In Amarnath v. Union of India, it was held that the notice must merely inform the opposite party about the nature and the basics of the claim and relief sought.

  • Mode of service

The notice submitted u/s 80 of CPC must be given to or left at the office of the appropriate authorities specified.

  • Technical defect in notice

The amendment added sub-section 3 to Sec. 80 which says no suit against the government. should be dismissed merely because of defective notice. If the notice contains basic details, it would be sufficient and it cannot be dismissed on the ground that there has been a certain technical defect or error in the notice delivered or on the grounds that such notice served in an improper way.

  • Leave of court

The amendment added sub-section 2 to Sec. 80 which says that the aggrieved party can institute a suit against the government. for obtaining urgent or immediate relief with the leave of the court even without serving the notice to the government. or public officers. The primary objective of this is to prevent any failure or miscarriage of injustice in urgent cases.

  • Writ petition

The government. can be sued by filing Writ Petitions in High Courts or Supreme Court. Writ Petition can be recorded at High Court under Article 226 and Article 227 of the Constitution of India and Writ Petition can be recorded at Supreme Court under Art. 32 against Union of India. As per Sec. 80 of CPC, it can be stated that a writ petition filed u/s Art. 226 and Art. 32 of the Constitution do not constitute a suit as per the definition and scope of the section. Hence, prior notice to the government. or public officer is not necessary before filing a writ petition in the Supreme Court or High Court.

  • Premature suit

In figuring the time of impediment for documenting a suit, the time of notice ought to be avoided. A suit instituted before the expiry of 2 months of notice as required by Sec. 80 of the court is liable to be dismissed only on that ground. 

Important Case laws

In P. O. Steam Navigation Co. v. Secretary of State for India, few workers were crossing the road with rods in their hands. While crossing the road they heard noise of horse coming in. They got scared and dropped the rods on the road. Now horse came and got accident because of the rods and died on the spot. Now the person put a case against the Secretary of the State and it was decided that the Secretary of the state is liable for the negligence.

In Vidyawati Kesoram Poddar v. State of Rajasthan, a driver was driving for the government. jeep and hit a person and that person died in hospital. Vidyawati, his wife, put a case against the state and the Supreme Court held that the Secretary of the state is liable for the negligence of the servant and she got compensation accordingly.

In Kasturi Lal v. State of Uttar Pradesh, police caught Kasturi Lal with some gold. When they were arrested, he told them he is a goldsmith and all the gold belongs to him only. But they did not hear him and put him in jail and they put all the gold in a locker. After enquiry they realised that he is a goldsmith and was telling the truth. But a constable took all the gold and ran away to Pakistan. In this case it was held that the police’s duty is a sovereign function and the state is not liable for that. So, Kasturi Lal did not get any compensation in this case.

In Shyam Sundar and others v. State of Rajasthan, a government. a servant was driving a government. truck for the purpose of famine relief work. He was very negligent and because of his negligence the truck caught fire. One person jumped out of the truck and died on the spot. It was held that the famine relief work was not a sovereign function and it could have been done by any individual. So, the state is liable to pay the compensation.

In the State of Orissa v. Padmalochan, few people were doing some protest and to control the mob, police had to use some power. While doing that one person by name Padmalochan got injured and he went to court asking for the compensation. But the court said such function of police is sovereign because they have to maintain peace and order. So, there will be no compensation to Padmalochan.

In State of Madhya Pradesh v. Chironji Lal, few students were doing some strike with the help of some loudspeakers. While police tried to control the mob the loudspeaker got damaged. The students asked for compensation however it was held that this was a sovereign function of the police. So, there will not be any compensation for the damage happening to the loudspeakers. 

In Union of India v. N K Pvt. Ltd, the Director of Railway Board was supposed to sign a contract on behalf of the President of India. But instead, the Secretary entered into the contract. So, the contract became invalid.

In Karamshi Jethabhai v. State of Bombay, there was an agreement between Cane Farm owner and the government. for the supply of canal water. But there was no formal contract signed, the agreement was held to be not valid.

In Bhikraj Jaipuria v. Union of India, the Divisional Superintendent entered into a contract without mentioning ‘on behalf of the Governor General’. So, the contract became invalid.

In State of Maharashtra v. Chander Kant, it was observed that notice must be given in all cases regarding the first class of cases. However, regarding second class cases, notice is necessary only where the suit is in respect of any act purporting to be done by such a public officer in the discharge of his duty, and not otherwise.

In State of Madras v. Chitturi Venkata Durga Parasadrao, it was observed that the expression ‘act purporting to be done according to one interpretation which is strictly grammatical, takes in part acts as well as future acts. The other interpretation based upon an idiomatic interpretation of the language is that it would be restricted to part acts.

Conclusion

Subsequent to inspecting the arrangements, one ought to comprehend that for any suit against the government. or the public official, the serving of notice is fundamental. Earlier notification of 2 months must be appropriately given before the foundation of a suit. The solitary exemption for this standard has been given under Section 80(2) of the CPC which was added after the Amendment Act of 1976. This was finished to profit those parties which looked for earnest relief with respect to their issue. In this manner, Section 80 requires a great deal of progress as the notifications go unanswered, and cases get accumulated over one another.

Sample format of notice u/s 80 of CPC

<<ON THE LETTERHEAD OF THE FIRM/ADVOCATE>>

                                                                                                              Date:

To, 

_______ (Receiver’s name)

_______

(Address)

Subject: Legal Notice for trespass and illegal construction 

Our Client:

___________

S/O_______________

R/O________________

Under the instructions from and on behalf of Tanvi P. (“My Client”) _______________we hereby serve you with the following notice: 

  1. My Client has the ownership and possession of the piece of land measuring ______________________________ (“Property”) described in more details in the Schedule vide Sale Deed dated ________. Electricity bill being paid for the hut and nobody resides on the Property. 
  2. It has come to the notice of My Client that on ___________ (Date) while she had gone to inspect the Property, the hut had been broken down/demolished and the land had been excavated. On enquiring with the construction workers present there as to who had allowed this work to be done, My Client was informed that you have begun construction on the Property after demolishing the hut, which belongs to My Client. 
  3. (Further subject matter)
  4. In the light of the above facts, you are hereby called upon to cease all illegal construction on the Property immediately and trespassing activities over the Property within a period of 21 days from receipt of this notice. In case you fail to do so, My Client shall be restrained/shall have no option but to initiate appropriate legal actions against you for which you shall bear the costs and risks. 

Yours Sincerely,

_____________

Advocate

Client

_________

Reference

  1. https://blog.ipleaders.in/
  2. https://www.lawctopus.com/
  3. http://www.legalserviceindia.com/
  4. https://curiousforlaw.com/
  5. https://indiankanoon.org/

Students of LawSikho courses regularly produce writing assignments and work on practical exercises as a part of their coursework and develop themselves in real-life practical skill.

LawSikho has created a telegram group for exchanging legal knowledge, referrals and various opportunities. You can click on this link and join:

Follow us on Instagram and subscribe to our YouTube channel for more amazing legal content.

LEAVE A REPLY

Please enter your comment!
Please enter your name here