CONTRACTUAL LIABILTY OF STATE IN INDIA: A COMPARITIVE ANALYSIS

Abstract

 “In the present modern world where most of the Democratic state has assumed the function of the Welfare State which lead to the change of the policy of the state from Laissez Faire to Dispenser of Services and benefits, which in turn requires necessary intervention of the state and active role of the state by providing employment, free health services, Government subsidized Educational Institutions, licenses, Rights to exploit natural resources, Construction of roads etc. All of these activities require State to take services of Private Individuals or Organizations and consequently state has to enter in to contract with them. In awarding Contract by the state by those who put in Authority by the state for the purpose may misuse their power by discriminating or by violating constitutional Provisions specially fundamental rights by the use of the powers which has not been conferred on them or failing in carrying out the duties which has been entrusted on them, here the question as to the liability of the state arises in the contractual matters. The basic question is therefore is to regulate, structure and discipline Government discretion to enter into contracts or confer such benefits so that it is not exercised in an arbitrary manner. It is necessary to ensure in order to ensure that injustice is not done to an individual by the state or its instrumentalities.”