Contracts

Article 273, Draft Constitution of India 1948

(1) All contracts made in the exercise of the executive power of the Union or of a State for the time being specified in Part I of the First Schedule 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 of a State, 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 such contract or assurance on behalf of any of them be personally liable in respect thereof.

Article 299, Constitution of India 1950

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 or the Rajpramukh 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 or the Rajpramukh by such persons and in such manner as he may direct or authorise.

⁠(2) Neither the President nor the Governor nor the Rajpramukh 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.

Draft Article 273 (Article 299, Constitution of India 1950) was debated on 15 June 1949. The Draft Article stated that the contracts entered into by the Union or State governments will be made and executed in the name of the President or Governor of the State respectively. However, it also declared that the President or Governor would not be personally liable for these contracts.

The Draft Article only dealt with States which were former British provinces and so the Drafting Committee Chairman introduced an amendment to include the Princely States in this provision.  The Assembly adopted this amendment without any discussion.

A Member was concerned that the Parliament was not involved in finalising these contracts and proposed that these contracts be ratified by Parliament. Other Members responded suggesting that this was not necessary as the contracts would (have to) adhere to laws made by Parliament.

Another Member felt that the impunity granted to the President and Governor under clause (2) of the Draft Article was not required. Countering this, the Drafting Committee Chairman argued that the President and Governor would be acting as agents of the Union and the State and therefore cannot be held personally liable.

The Assembly adopted this Draft Article 273 on 15 June 1949.