Petitioner sought writ to enforce a void Memorandum of Agreement executed in violation of Article 299(1) and claimed damages. Court held the contract unenforceable but directed a civil suit for compensation under Section 70 of the Contract Act.
Contract declared unenforceable; petitioner directed to sue for damages in Civil Court.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA
CWP No. 2081 of 2013.
Reserved on : 08.12.2022. Date of decision: 16.12.2022.
Powai Labs Technology Private Limited …..Petitioner.
Versus
State of Himachal Pradesh and others
…..Respondents.
Coram
The Hon’ble Mr. Justice Tarlok Singh Chauhan, Judge. The Hon’ble Mr. Justice Virender Singh, Judge. Whether approved for reporting?1 Yes
For the Petitioner : Ms. Shalini Thakur, Advocate. For the Respondents : Mr. Rajinder Dogra, Senior Additional Advocate General with Mr. Vinod Thakur, Additional Advocate General and Mr. Bhupinder Thakur, Deputy Advocate General.
Tarlok Singh Chauhan, Judge
The instant petition has been filed for grant of the following substantive reliefs:-
1 Whether the reporters of the local papers may be allowed to see the Judgment?Yes
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“1) For issuing a writ of Mandamus or any other appropriate writ, order or direction to the respondents for releasing 100% payment i.e. Rs. 99,93,984/- to the petitioner as agreed in terms of MoA annexure P-3 dated 16.3.2010 within a time bound schedule along with 15% interest w.e.f. April 2010 till the date of payment.
received by respondent No.3 from Indian Institute of
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Technology, Mumbai, signed by one Professor Madhav P. Desai wherein it was informed that the Micro Processor and VLSI are the emerging areas of technology and benefits under the distance education programme of IIT Mumbai could be achieved by setting up of VLSI Lab for which the representatives of the petitioner-company would liaison with IIT Mumbai Professors, who shall, in turn conduct courses for the students of remote locations. The total cost was stated to be Rs.96,09,600/- and it was desired to contact the petitioner an IIT Mumbai incubated entity at their phone number and e-mail.
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and faculty. Yet, another certificate purportedly signed by Professor Madhav P. Desai was issued wherein the petitioner had been shown to be the coordinator of the IIT Mumbai distance education programme. Not only this, the petitioner wrote a letter dated 22.12.2009 on the pad depicting the IIT logo contending to deliver IIT Course to the Technical Education Institutes of the State. The petitioner made an oral presentation on 10.02.2010 wherein the scope and benefits of the lab were discussed and feedback forms from the faculty were taken.
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Institute of Engineering and Technology Bombay which again according to the respondents demonstrates an attempt on the part of the petitioner to believe that it was an enterprise of IIT Mumbai and its integral part. A MOU was drawn wherein the petitioner had been stated to be IIT Bombay incubated entity in bold words as is evident from Annexure P-3. A supply order was placed with the respondents for setting up VLSI lab and not for the supply of hardware and software. A communication was received by the respondents from IIT Mumbai wherein it was clearly stated that IIT Mumbai is under no obligation and has no legal relationship with the petitioner. It was then that the matter was appropriately referred to the Government and examined at various stages including Law Department and
the following opinion was given by the Advisory Department of State of Himachal Pradesh:-
“Examined in the Law Department. The S/D (State Director) has sought the advice of this department as to whether the Government can give approval to the Memorandum of Agreement (MOA) signed between Principal of the College and Director-cum-CEO of VLSI Lab?”
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“(1) 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, as the case may be, and all such contracts and all assurances of property made in the exercise of that power shall be executed on behalf of the President or the Governor by such persons and in such manner as he may direct or authorise.
(2) Neither the President nor the Governor shall be personally liable in respect of any contract or assurance made or executed for the purposes of this Constitution, or for the purposes of any enactment relating to the Government of India heretofore in force, nor shall any person making or executing any such contract or assurance on behalf of any of them be personally liable in respect thereof.”
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8. It is more than settled that a contract is void for
non-compliance with Article 299(1) of the Constitution. Therefore, the petitioner cannot seek enforcement of the contract.
“Where a person lawfully does anything for another person, or delivers anything to him, not intending to do so gratuitously; and such other person enjoys the benefit thereof, the latter is bound to make compensation to the former in respect of, or to restore, the thing so done or delivered".
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otherwise of the contract between the parties, if the
following conditions are established-
(iv) that the defendant did enjoy that benefit.
If the above conditions are satisfied either the private
party or the Government is entitled to sue under this section.
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filed by it, has to be decreed. This would, of course, be subject to the rights and contentions of the respondents. 13. In view of the aforesaid discussion, the contract being in contravention of Article 299 cannot be enforced by
the petitioner against the respondents. However, the petitioner, if so advised, can sue the respondents for damages, but the same shall be subject to all the defences
as are open to the respondents, both legal as also factual including and not restricted to limitation, estoppel etc. etc.
(Tarlok Singh Chauhan) Judge
(Virender Singh) Judge
16th December, 2022. ( krt )
3 issues framed by the court
Whether a contract executed in violation of Article 299(1) of the Constitution is enforceable.
Whether the petitioner is entitled to claim damages for non-performance under a void agreement.
Whether the writ petition should be allowed or dismissed given the illegality of the underlying contract.
2 provisions across 2 enactments
Powai Labs Technology Private Limited
State of Himachal Pradesh
Tarlok Singh Chauhan
Virender Singh
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
