Businessmen Will Be Hesitant To Enter Govt Contracts If Undertakings Are Altered On Mere Change Of Person In Power
Case: The Vice Chairman and Managing Director, City and Industrial Development Corporation Maharashtra and another vs Shishir Realty Private Lt.
Coram: Chief Justice of India NV Ramana, Justice Vineet Saran and Justice Surya Kant
Case No: Civil Appeal Nos. 39563957 Of 2017
Court Observation: “…it is pertinent to remember that, by merely using grounds of public interest or loss to the treasury, the successor public authority cannot undo the work undertaken by the previous authority. Such a claim must be proven using material facts, evidence and figures. If it were otherwise, then there will remain no sanctity in the words and undertaking of the Government. Businessmen will be hesitant to enter Government contract or make any investment in furtherance of the same. Such a practice is counterproductive to the economy and the business environment in general”
“When a contract is being evaluated, the mere possibility of more money in the public coffers, does not in itself serve public interest. A blanket claim by the State claiming loss of public money cannot be used to forgo contractual obligations, especially when it is not based on any evidence or examination. The larger public interest of upholding contracts and the fairness of public authorities is also in play. Courts need to have a broader understanding of public interest, while reviewing such contracts.”
“Equity demands that when the State failed to produce an iota of evidence of either financial loss or any other public interest that has been affected, it should be compelled to fulfill its promises. In fact, it is respondents lessees who shall be gravely prejudiced if the order of cancellation is upheld by this Court after investing a significant amount and facing prolonged litigation.”
“At this juncture, it is pertinent to remember that, by merely using grounds of public interest or loss to the treasury, the successor public authority cannot undo the work undertaken by the previous authority. Such a claim must be proven using material facts, evidence and figures. If it were otherwise, then there will remain no sanctity in the words and undertaking of the Government. Businessmen will be hesitant to enter Government contract or make any investment in furtherance of the same. Such a practice is counterproductive to the economy and the business environment in general.”
[doc id=12361]
Previous Posts
Arbitrator Cannot Modify Award On An Application Under Section 33 Arbitration Act: Supreme Court
Irregularity In Order Taking Cognizance Will Not Vitiate Criminal Proceedings: Supreme Court
Sale Deed Executed Without Payment Of Price Is Void; Has No Legal Effect: Supreme Court
Consumer Commission Should Issue Bailable Warrant Only If Party Is Not Represented At All Through Counsel Or Representative: Supreme Court Download Judgement
Keywords
Businessmen, Govt Contracts, Change Of Person In Power
