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3. Shri. Sugunapalan, learned counsel for the petitioner submitted that after the petitioner withdrew his offer, before the sale was confirmed there was no contract with the Government and there could be no breach of that contract. It was also submitted, assuming that there was a contract, the petitioner did not execute any agreement as contemplated under the auction or in conformity with Article 299 of the Constitution and thus there was no valid contract to sustain a claim for its breach. The Government, it is stated, cannot in any case, be the arbiter regarding the quantum of damages and the claim now made is not sustainable in law.

Before we attempt to resolve the conflict, if any, between the decisions of this Court, it is necessary to note that there are three decisions of the Supreme Court which lay down the law on this aspect and which are sufficient to settle the controversy in this case. We have been taken through these three decisions, K. P. Chowdhry v. State of M. P.. AIR 1967 SC 203, A. Damodaran v. State of Kerala, AIR 1976 SC 1533 and State of Haryana v. Lai Chand. (1984) 3 SCC 634 : (AIR 1984 SC 1326).

19. Thus. Article 299 of the Constitution applies to all contracts made in the exercise of the executive power of the Union or a State. The contracts in such cases have to be executed on behalf of the President or Governor by such persons and in such manner as he may direct or authorise. A contract not in compliance with this constitutional requirement is null and void. There can thus be no implied contract and the contract which is void admits of no ratification either. The mandate of Article 299, therefore, applies only to contracts made in exercise of the executive power. It can have no application to contracts which are statutory in nature: Nor can it have any application for the enforcement of any statutory liability, for the liability arises not under the contract but under the statute.

20. The decision in K. P. Chowdhry v. State of M. P., AIR 1967 SC 203 of a Bench of five Judges is authority for the proposition that Article 299 does not countenance implied contracts. There is no implied contract either before the bidding or after the auction. This was a case of a forest auction. It was held thus : --

"The first is that in view of Article 299(1) there can be no implied contract between the Government and another person, the reason being that if such implied contracts between the Government and another person were allowed, they would in effect make Article 299(1) useless, for then a person who had a contract with Government which was not executed at all in the manner provided in Article 299(1) could get away by saying that an implied contract may be inferred on the facts and circumstances of a particular case. This is of course not to say that if there is a valid contract as envisaged by Article 299(1). there may not be implications arising out of such a contract. The second consequence which follows from these decisions is that if the contract between Government and another person is not in full compliance with Article 299(1) it would be no contract at all and could not be enforced either by the Government or by the other person as a contract. In the present case it is not in dispute that there never was a contract as required by Article 299(1) of the Constitution. Nor can the fact that the appellant bid at the auction and signed the bid-sheet at the close thereof or signed the declaration necessary before he could bid at the auction amount to a contract between him and the Government satisfying all the conditions of Article 299(1). The position therefore is that there was no contract between the appellant and the Government before he bid at the auction nor was there any contract between him and, the Government after the auction was over as required by Article 299(1) of the Constitution. Further in view of the mandatory terms of Article 299(1) no implied contract could be spelled out between the Government and the appellant at the stage of bidding for Article 299 in effect rules out all implied contracts between Government and another person. The view taken by the High Court that Section 155(b) of the Madhya Pradesh Land Revenue Code which provides for recovery of money as arrears of land revenue would therefore ensure (enure?) in favour of the Government and enable it to recover the deficiency cannot be sustained. That clause provides for recovery of all moneys falling due to the State Government under any grant, lease or contract and says that they shall be recoverable in the same manner as arrears of land revenue. The High Court was of the view that the word "contract" in this clause includes an implied contract. But if there can be no implied contract between the Government and another person in view of the mandatory provision of Article 299(1) of the Constitution there can be no question of recovery of any money under an implied contract under Clause (b) of Section 155".

22. The decision in State of Haryana v. Lal Chand, (1984) 3 SCC 634 : (AIR 1984 SC 1326) was again an "Excise case" regarding the enforcement of a statutory liability. It was held thus : --

"We are clearly of the opinion that in the case of a statutory contract like the one under the Excise Act. the requirements of Article 299(1) cannot be invoked. In A. Damodaran v. State of Kerala. (AIR 1976 SC 1533). the Court interpreting Section 28 of the Kerala Abkari Act. 1967 which was in pari materia with Section 60 of the Punjab Excise Act. 1914 held that even if no formal deed had been executed as required under Article 299(1). still the liability for payment of the balance of the licence amount due could be enforced by taking recourse to Section 28 of the Act. The Kerala High Court rejected the contention of the appellants by holding that the liability to satisfy the dues arising out of a bid was enforceable under Section 28 quite apart from any 'contractual liability and this view was upheld by this Court on the ground that the word 'grantee' in Section 28 has a wide connotation to mean a person who had been granted the privilege by acceptance of his bid. It was further held that the statutory duties and liabilities arising on acceptance of the bid at a public auction of a liquor contract may be enforced in accordance with the statutory provisions and that it was not a condition precedent for the recovery of an amount due under Section 28 of the Act. that the amount due and recoverable should be under a formally drawn up and executed contract. This is in recognition of the principle that the provisions of Article 299(1) of the Constitution are not attracted to the grant of such a privilege to vend liquor under the Act".