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It will be seen that in Karamshi's case it was not the argument that if the Government itself enters into an agreement in the exercise of a statutory power the provisions of Section 175(3) will not be attracted. Be that as it may, the Supreme Court did not decide the point argued as it came to the conclusion that the agreement on which the appellant's claim was based was entered into by the State Government outside the provisions of the Act. It is difficult to understand how this case can support the argument that when the State Government enters into an agreement in the exercise of a statutory power the provisions of Article 299(1) are not attracted. In the Punjab case of AIR 1969 Punj 4 certain lands vesting in the Central Government and forming part of the compensation pool were transferred by it to the State Government but no document was executed in the manner required by Article 299(1). Section 16(1) of the Displaced Persons (Compensation and Rehabilitation) Act, 1954 authorises the Central Government to take such measures including that of disposal of the compensation pool in order that it may be effectively utilised in accordance with the provisions of the Act. It was contended in that case that the transfer by the Central Government to the State Government was ineffective as Article 299(1) was not complied with. The High Court did refer to the statutory power under Section 16 as also to Rule 34, but it did not hold that Article 299(1) did not apply to the transfer. It was only held that even though the requirements of Article 299(1) were not complied with, the transfer was valid on the principles laid down in the case of Chatturbhuj Vithaldas v. Moreshwar Parashram, AIR 1954 SC 236.

45. I must also refer to the case of AIR 1967 SC 203 which was relied on by the petitioner. In that case a forest contract was auctioned by the Divisional Forest Officer, but he was not competent to accept the bid finally which had to be accepted by the Chief Conservator of Forests. Before the Chief Conservator could accept the bid the contractor in that case resiled from the contract and no contract as required by the Forest Contract Rules was executed. The conditions of auction provided that the contract would be reauctioned in case of default of the contractor who would be liable for any loss occasioned to the Government in the reauction. Because of the default of the contractor the contract was reauctioned, and he was sought to be made liable for the loss. The question that fell for consideration was whether the conditions of auction constituted an implied contract which could be enforced against the contractor and this question was answered in the negative on the ground that no contract was executed as required by Article 299(1) of the Constitution. This case is distinguishable for two reasons. First, it does not appear that the Divisional Forest Officer who auctioned the contract was acting under any statutory authority; at any rate this point was not at all raised in the case and was not considered by the Supreme Court. Secondly, the Forest Contract Rules provide for execution of a formal contract in the name of the Governor as required by Article 299. In my opinion, therefore, K.P. Chowdhry's case, AIR 1967 SC 203 cannot be taken to be an authority for the proposition that a contract entered into by an authority subordinate to the Governor in the exercise of a statutory power must also conform to the requirements of Article 299. Another case relied upon by the petitioner is a decision of a Division Bench in 1968 Rev Nir 564 (Madh. Pra.) which does support the petitioner on facts. But in that case the question whether Article 299(1) is applicable to a case where an authority enters into a contract in exercise of a power conferred by a statute was not argued. The casa is, therefore, not of much assistance.

48. For these reasons, I agree that the petition be dismissed in terms proposed by my Lord the Chief Justice, Raina, J.

49. I have had the benefit of perusing the separate orders recorded by My Lord the Chief Justice and my learned brother Singh, J. Both have come to the conclusion that the petition should be dismissed in the terms proposed by My Lord the Chief Justice; and I agree with this conclusion. But, they have expressed divergent views in regard to the construction of Article 299(1) of the Constitution. According to Singh, J., where a State Government itself enters into a contract in exercise of statutory power, Article 299(1) is applicable; but when an authority subordinate to the Governor is conferred power by statute to enter into a contract, Article 299(1) is inapplicable, My Lord the Chief Justice, on the other hand, has expressed the view that contracts made in exercise of statutory power by the Union or a State do not fall within the purview of Article 299(1) of the Constitution; and I am inclined to agree with him for the following reasons :

"The words of a statute, when there is a doubt about their meaning are to be understood in the sense in which they best harmonise with the subject of the enactment and the object which the legislature has in view. Their meaning is found not so much in a strictly grammatical or etymological propriety of language, nor even in its popular use, as in the subject or in the occasion on which they are used, and the object to be attained."

59. So far as contracts made in the exercise of a statutory power are concerned, they are regulated by the provisions of the statute itself and, therefore, it would not be necessary to make any express provision in regard to them in the Constitution itself. It, therefore, appears that Clause (1) of Article 299 was enacted to regulate contracts made in the exercise of the non-statutory executive power. It would here be pertinent to refer to the decision of the Supreme Court in AIR 1964 SC 1714. From the observations made by their Lordships in paragraph 8 of the said judgment it would appear that the argument that the provisions of Section 175(3) of the Government of India Act, 1935, which corresponded to Clause (1) of Article 299 of the Constitution, would not be attracted if the agreement was made under the provisions of the Bombay Irrigation Act was impliedly accepted, though the question was not expressly decided. In AIR 1971 Orissa 158 a Division Bench of the Orissa High Court held that the provisions of Clause (1) of Article 299 are not attracted in a case where the contract was made in exercise of the statutory power. These decisions support the view that the words "executive power" as used in Clause (1) of Article 299 of the Constitution mean the non-statutory executive power.