JUDGMENT A.H. Saikia, J. 1. Heard Mrs. R. Bora, learned C.G.C. appearing for the Union of India/Appellants. Also heard Mr. P. Mahanta, learned Counsel appearing for the Respondent No. 1 None appears for the Respondent No. 2. 2. This second appeal is directed against the judgment and order dated 11.3.99 passed by the Additional District Judge, Sonitpur at Tezpur in Title Appeal No. 2/96 affirming the judgment and decree dated 20.12.95 passed by the Asstt. District Judge, Sonitpur at Tezpur in Title Suit No. 31/88. 3. The Respondent No. 1 as Plaintiff instituted the instant suit being T.S. No. 3188, against the (i) Union of India represented by the Secretary to the Govt. of India, Ministry of Defence, New Delhi, (ii) Commanding Officer, 180 Military Hospital, C/O. 99 APO and (iii) Giridharilal Gupta, Wet Canteen Contractor, 180 Military Hospital, C/O. 99 APO praying the relief by decreeing the suit as follows: (a) for of mandatory and prohibitory injunction restoring the status of the Plaintiff as canteen contractor permitting him to run the Wet Canteen at 180 Military Hospital C/o. 99 A.P.O. (located somewhere at Missamari within the jurisdiction of the Hon'ble Court) and stopping forthwith the Defendant No. 3 from running the business of the said canteen and if necessary, for a declaratory decree holding the Plaintiff to be the wet canteen contractor of the said Hospital with the consequential restraint decree as before-stated: (b) for recovery of damages being compensation for loss of business amounting to Rs. 12,000/- (Rupees Twelve thousand), for loss of investment on accommodation and furniture incurred at the time of installation amounting to Rs. 10,000/- for loss incurred in writing off debts amounting to Rs. 1600/- for loss incurred upon theft of articles and account books amounting to Rs. 3000/- and for an amount of Rs. 3000/- that the Plaintiff may be required to incur for making the canteen workable, in all amounting to Rs. 29600/- (Rupees Twenty nine thousand six hundred) only and (c) for costs of the suit and any other relief/s as to the Hon'ble Court seem fit. 4. The case of the Plaintiff/the Respondent No. 1 was that he was running the Wet Canteen in question at 180 Military Hospital by dint of an agreement executed between him and Defendant No. 2/Appellant No. 2 herein on 20.2.82 (Ext. 1). However, suddenly by communication dated 26.7.85 (Ext. 4. The case of the Plaintiff/the Respondent No. 1 was that he was running the Wet Canteen in question at 180 Military Hospital by dint of an agreement executed between him and Defendant No. 2/Appellant No. 2 herein on 20.2.82 (Ext. 1). However, suddenly by communication dated 26.7.85 (Ext. 2) issued by the Appellant No. 2, the Plaintiff was informed that though his contract broke down on 1.12.84 as intimated earlier vide letter dated 21.11.84, he had neither removed his shop nor paid the dues and accordingly he was advised to remove his shop before 10.8.85 failing which the area would be cleared dismantling his shed. 5. Being aggrieved by the said action the Respondent No. 1 started the related suit with the prayer as already indicated above. 6. The suit was contested by the Union of India/Appellants herein by filling their written statement raising preliminary question as regards the maintainability of the suit itself on the ground that the agreement dated 20.2.82 (Ext. 1) itself was not a valid contract document as the same was executed without complying with the provision of Article 299 of the Constitution of India and hence the Union of India is not bound by the said contract agreement entered into between the Appellant No. 2 and the Respondent No. 1 herein. 7. The learned trial Court framed as many as seven issues including Issue No. 2 as under: 1. Is there any cause of action? 2. Is the suit is maintainable in its form? 3. Is the suit is time barred? 4. Does any contract subsists between the Plaintiff and the Defendant No. 2? 5. Is there any contract between the Defendant 6. Is the Plaintiff entitled to a decree as prayed for? 7. To what relief if any is either party entitled? 8. Upon hearing learned Counsel for the parties and also on appreciation of the evidences on record, the learned Asstt. District Judge by his order dated 20.12.95 decreed the suit declaring the Plaintiff/Respondent No. 1 as Wet Canteen contractor at 180 Military Hospital and the Defendants were restrained from ousting the Respondent No. 1 from running the said canteen with further direction to the Defendants to put the Plaintiff in the said canteen as canteen contractor. District Judge by his order dated 20.12.95 decreed the suit declaring the Plaintiff/Respondent No. 1 as Wet Canteen contractor at 180 Military Hospital and the Defendants were restrained from ousting the Respondent No. 1 from running the said canteen with further direction to the Defendants to put the Plaintiff in the said canteen as canteen contractor. The Defendants were also further directed to pay compensation to the Plaintiff @ 200/- per month from 26.7.85 till the date of putting him as canteen contractor as well as Defendant No. 3 (Proforma Respondent No. 3 herein) was restrained to run the Wet canteen at 180 Military Hospital. 9. Against the above judgment and decree of the trial Court, the Union of India moved the appellate Court i.e. learned District Judge, Sonitpur at Tezpur through T.A. No. 2/96. However, the learned Addl. District Judge by the impugned judgment and order dated 11.3.99 dismissed the appeal upholding the judgment and decree passed by the trial Court as already indicated above. 10. Both the Court of facts above mentioned while dealing with the issue No. 2 as already indicated herein above, came to the finding that the Commanding Officer of the Hospital, the Appellant No. 2, entered into a contract not in his personal capacity but in the capacity of the Commanding Officer of the hospital being a Central Govt. Servant under the Ministry of Defence, Govt. of India as the canteen was meant for the welfare of the Union of India and as such this contract agreement between the Appellant No. 2 and the Plaintiff could be regarded as the contract as if made between the President of India represented by the Union of India and the Plaintiff because the hospital and other land belongs to the Union of India and controlled by the Commanding Officer and the Canteen was meant for the welfare of the officer of either Central Govt. or State Govt. 11. This Court on 3.1.2000 at the time of admission of this second appeal formulated the following substantial question of law: Whether in the original memorandum of Agreement contracted between commanding officer. or State Govt. 11. This Court on 3.1.2000 at the time of admission of this second appeal formulated the following substantial question of law: Whether in the original memorandum of Agreement contracted between commanding officer. 180 Military Hospital was entitled to contract on behalf of the Union of India thereby making the Union of India liable and the learned courts below not having taken this point into consideration having acted illegally in context of the clear provisions of Article 299 of the Constitution of India hereby most arbitrarily and illegally proceeding on the assumption that a suit therefore arises against the Union of India. 12. In order to answer the above substantial question of law, Mrs. R. Bora, learned CGC, has forcefully argued that the contract agreement dated 20.2.82 (Ext. I) entered into between the Appellant No. 2, the Commanding Officer of the Hospital and the Respondent No. 1 cannot be said to be a valid contract under Article 299 of the Constitution of India inasmuch as the same was not executed on behalf of the Union of India. To bolster up her such submission, she has drawn attention of this Court to Ext. No. 1 the contract agreement and stated that ex-facie the said agreement does not reveal any thing as to whether the said contract was made on behalf of the President of India. 13. On close perusal of the contract agreement (Ext. I), it clearly transpires that this agreement was executed between the Commanding Officer 180 Military Hospital hereinafter called the officer on the one part and M/s Raghunath Ram Choudhury hereinafter called as contractor on the other part. This explicitly goes to show that this is a simple contract between the Officer concerned and the contract was ever made between the contractor and the Union of India in the name of the president to attract Article 299 of the Constitution of India. 14. It is settled law that the provision of Article 299 of the Constitution of India is mandatory and the contract must be expressed as to be made by the President or the Governor and that apart, the contract must be executed by the competent person in a prescribed manner. 15. 14. It is settled law that the provision of Article 299 of the Constitution of India is mandatory and the contract must be expressed as to be made by the President or the Governor and that apart, the contract must be executed by the competent person in a prescribed manner. 15. In the case of State of West Bengal v. M/s B.K. Mandal and Sons reported in AIR 1962 SC 779 , the Apex Court in paragraph 6 in its clear term ruled that in enacting the provisions of Section 175(3) of the Government of India Act, 1935, (for short, 'the Act') being almost equivalent to present Article 299 of the Constitution of India, the Parliament intended that the state should not be burdened with liability based on unauthorised contracts and the plain object of the provision, therefore, was to save the State from spurious claims made on the strength of such unauthorised contracts. It was also observed therein that the provision was made in the public interest and so the word "shall" used in making the provision was intended to make the provision itself obligatory and not directory and as such failure to comply with the mandatory provisions of Section 175(3) makes the contract invalid. 16. For ready reference Section 175(3) of the Act may be quoted as under: All contracts made in the exercise of the executive authority of the Province shall be expressed to be made...by the Governor of the Province...and all such contracts and all assurances of property made in the exercise of that authority shall be executed on behalf of the.... Governor by such persons and in such manner as he may direct or authorize. 17. The view expressed in B.K. Mandal's case (supra) was reiterated in another case reported in AIR 1964 SC 1714 (Karamshi Jethabhai Somayya v. State of Bombay (now Maharastra) wherein the Apex Court in para 10 held that non compliance of provisions of Section 175(3) of the Act with regard to agreement executed between the Superintending Engineer and the private party would render the agreement void. 18. Again in a case reported in AIR 1977 SC 2149 (The Bihar Eastern Gangetic Fishermen Cooperative Society Ltd. v. Sipahi Singh and Ors.) the Supreme Court in paragraph 8 held as under: 8. 18. Again in a case reported in AIR 1977 SC 2149 (The Bihar Eastern Gangetic Fishermen Cooperative Society Ltd. v. Sipahi Singh and Ors.) the Supreme Court in paragraph 8 held as under: 8. Re: Contention No. 1: It is now well settled that the provisions of Article299 of the Constitution which are mandatory in character require that a contract made in the exercise of the executive power of the Union or of a State must satisfy three conditions viz. (i) it must be expressed to be made by the President or by the Governors of the state, as the case may be: (ii) it must be executed on behalf of the President or the Governor, as the case may be and (iii) its execution must be by such person and in such manner as the President or Governor may direct or authorize. Failure to comply with these conditions nullifies the contract and renders it void and unenforceable. 19. In Bishandayal and Sons v. State of Orissa and Ors. reported in AIR 2001 SC 544 wherein the Apex Court in paragraph 14 held that if any Govt. contract or agreement was not in compliance with the constitutional requirement under Article 299 of the Constitution of India, the same was not enforceable in law. 20. In the case in hand, as already notice hereinabove, the contract agreement was executed between the Commanding Officer and the private party i.e., Respondent No. 1 and it also appears that it was not executed in a prescribed manner. Even there was no mention at any part or in any paragraph of the said agreement that the same was expressed as to be made by the President. The contract, not having been expressed to be entered into by the President and not having been executed on his behalf, is not valid. 21. After scrutiny of the findings arrived at by the Courts below, it appears that the learned Courts below lost sight of the provision of Article 299 of the Constitution and the contentions made in the agreement itself. When no contract is made on behalf of the Union of India, by mere presumption it cannot be said that the officer concerned was acting on behalf of the Union of India. 22. It would be necessary to refer to Article 299 of the Constitution of India and the same may be quoted as under: 299. When no contract is made on behalf of the Union of India, by mere presumption it cannot be said that the officer concerned was acting on behalf of the Union of India. 22. It would be necessary to refer to Article 299 of the Constitution of India and the same may be quoted as under: 299. Contracts - (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 President, or by the governor [***] of the State, as the case may, 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. 23. From an ordinary reading of the provision mentioned above, it appears that this Article envisages three conditions for the validity of such a contract namely, (i) it should be expressed to be made by the President of India or by the Governor of the State (ii) it should be executed on behalf of the President or the Governor, as the case may be and (iii) its execution must be by such person and in such manner as the President or Governor may direct or authorize. 24. The position resulting from Article 299 can be stated in this form: (a) Government contracts must be expressed as to be made by the President or the Governor. (b) They shall be executed by the competent person and in the prescribed manner. (c) If the above requirements are not complied with (i) Government is not bound by the contract, because Article299 is mandatory; (ii) The officer executing the contract would be personally bound; (iii) The Government, however, if it enjoys the benefit of performance by the other party to the contract, would be bound to give recompense on the principle of "quantum merit or quantum valebat" (service or goods received). This is on quasi-contract (Sections 65 and 70 of the Indian Contract Act, 1872). (iv) Besides this, the doctrine of promissory estoppel may apply on the facts: (d) In any case, the President or the Governor is not personally liable on the contract. (See The Constitution of India with Selective Comments by P.M. Bakshi, Fifth Eduction.) 25. This is on quasi-contract (Sections 65 and 70 of the Indian Contract Act, 1872). (iv) Besides this, the doctrine of promissory estoppel may apply on the facts: (d) In any case, the President or the Governor is not personally liable on the contract. (See The Constitution of India with Selective Comments by P.M. Bakshi, Fifth Eduction.) 25. This Court has found thing on record to disclose whether the Commanding Officer was ever authorized by the President or under any relevant rules to enter into such a contract as in the instant case. Then, can it be said that the said contract was expressed to be made in the name of the President? Ex-facie it cannot be said so. 26. In view of the discussion, this Court has not hesitation to hold that the contract agreement in question is not covered by the Article 299 of the Constitution of India and as such the same is not binding on the Union of India. Accordingly it is held that the suit was not maintainable. 27. The substantial questions of law so formulated hereinabove is answered accordingly. 28. The impugned judgments and decrees of the Courts below stand set aside. 29. In the result, this second appeal succeeds and stands allowed. No costs. Appeal allowed