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There is authority for the view that when a Government officer acts in excess of authority Government is bound if it ratifies the excess: see 'Collector of Masulipatam v . Cavaly Venkata Narrainapah', (1859-61) 8 Moo Ind App 529 at p. 554 (N). We accordingly hold the contracts in question here are not void simply because the Union Government could not have been sued on them by reason of Art. 299(1)."

This decision therefore lays down,firstly, that an oral contract or a contract through correspondence is not void . Secondly, that even when a Government officer acts in excess of authority the Government is bound bythe contract if it ratifies the same and thirdly the contract is not void for all purposes simply because the union Government cannot be sued on it for non-compliance of the provisions of Art. 299(1) of the constn. The last proposition means that a contract which is unenforceable by the parties to the contract for non-compliance with the provisions of Art. 299(1) can still be looked into as a valid contract for other purposes . In that case the court was considering the effect of such a contract vis-a-vis section 7(d) in these terms :-

13. For the last proposition we may also usefully refer to Chitty on contracts, 24 th Edition. In paragraph 17, the learned Author has discussed , "Unenforceable contracts" and has observed that "unenforceable contracts are valid in all respects except that one or both parties cannot be sued on the contract. Instances of unenforceable contracts in English Law are afforded by certain contracts which are not evidenced by a signed writing as required by certain statutes; contracts in respect of which the right of action is barred by the Limitation Act 1939 and contracts with a foreign sovereign or ambassador. In most cases the defect of unenforceability is curable . Thus, if a written evidence of a contract of guarantee or a contract for the sale of an interest in land comes into existence , the contract becomes enforceable, though it was made orally ; a right of action barred by the Limitation Act, 1939 may revive if the defendent makes a written acknowledgment of his indebtedness, or a part payment; a foreign sovereign or an ambassador may waive his immunity. An unenforceable contract may be indirectly enforceable by other means than bringing an action . Thus a statute barred debt may be recoverable indirectly if the creditor has a lien on goods of the debtor which are in his possession. Sometimes the contract is enforceable by one party but not by the other . Thus an contract for the sale of an interest in land can be enforced by the party who has not signed the note or memorandum against the other who has . More often , however , the contract is enforceable by neither party".

In paragraph 250 whle discussing the same subject, he has observed as follows:-

"Contract unenforceable. A contract which fails to comply with the statutory formalities is not void but unenforceable. No action can be brought to enforce it directly . Nor it can be indirectly enforced by suing on some other cause of action. Thus if A orally agreed to allow B to dig for gravel on A's land and later turns B and his machinery off the land, B cannot sue A in trespass. But as the contract is not void, it can sometimes be relied upon as a defence. Thus in the above example B does not commit a trespass by entering the land and digging for the gravel : the oral contract operates as a licence and excuses the trespass. But once A withdraws the licence B will become a trespasser if he does not leave within a reasonable time ; and if A then sues B for possession B cannot, in this action rely on the oral contract as a defence. A fortiori A is entitled to turn B out or to sue for possesion if he withdraws the licence before B enters but B nonethless makes a clandestine entry.
As the contract is not void , money or property transfer under it cannot be recovered back ; thus if a purchaser pays a deposit under an oral contract, the vendor can retain the deposit , if the purchaser defaults. And a security given for the performance of the oral contract is not void for want of consideration merely because the oral contract is unenforceable ; thus an action can be brought on a cheque given in payment of a deposit under the oral contract."

14. Taking into consideration the fact that the whole purpose of the provisions of the former section 175(3) of the Government of India Act 1935, and the present Article 299(1) of the constn., is firstly to safeguard the public interests by not saddling the Government with liabilities and obligations under unauthorised contracts and secondly , to protect the interests of the third parties who enter into contracts with the Government daily, according to us, on the authorities of the supreme court discussed above. It will be proper to hold, that the contracts which do not fulfil statutory requirements are only relatively void in the sense that they are not enforceable by the parties to the contract. However, if the parties to the contract accept the obligations under them or if the formal defects in them are curable by such as ratification, the contracts need not be held to be absolutely void and can be said to exist validly for all other purposes. In particular they can be said to exist validly when third parties challenge their validity. In cases such as the present one where the validity of a contract is questioned in a collateral proceeding and for a collateral purpose by persons who have benefitted by such contracts, such as the present allottees, it will have to be held that such contracts do validly exist.