in Sujit Choudhary, Madhav Khosla & Pratap Bhanu Mehta (eds.), Oxford Handbook of the Indian Constitution (Oxford: Oxford University Press, 2016)
23 Pages Posted: 19 Apr 2017
Date Written: 2016
The Government (whether the Union of India or a state) plays a significant role in entering into contracts of various kinds with individuals and businesses. Since the contracting role of the Government could potentially put public resources at stake, the Constitution of India carefully circumscribes the exercise of contracting power by the Government. Although matters of government contracting might at first blush appear to be somewhat procedural and formalistic, they have stoked a great deal of controversy more lately due to frenetic judicial activity in the field.
The discussion surrounding government contracts may be divided into two parts. The first part deals with the formation of contracts to which the Government is a party. Being somewhat formalistic in nature, this part considers the circumstances when the Government has validly entered into a contract so as to constitute its binding contractual obligation. The second part deals with more substantive aspects as to the manner in which the Government arrives at a decision to enter into (or award) a contract with (or to) a specific individual or business, and whether that decision has been arrived at arbitrarily or not. This discussion gives rise to the more contentious question regarding the nature and extent of judicial review of government contracting.
The objective of this chapter is to provide an overview of the constitutional position relating to both the formation of contracts as well as substantive elements of government contracting. This chapter will highlight and discuss the key issues and controversies in both these areas, and conclude with some critical analysis and normative observations.
Keywords: Government contracts, Constitution of India, agency law, judicial review
JEL Classification: K30, K39
Suggested Citation: Suggested Citation