Constitution of India: The First to the Rescue of Contractors

Theme: Legal Framework; Module: Law & Contracts

Author: Dr. Pradeep Reddy Sarvareddy

Published Date: 26 Jan 2026

Republic Day Special

Whenever a Contractor is facing legal problems from tendering, work execution, Bank Guarantees invocation, Blacklisting or Termination, most people start searching remedies in various Laws and Statutes.  But understand that India, our country, was built on the Constitution.  Know that the Constitution has several provisions that can protect Contractors.  On this Republic Day, let us learn how to protect Contractors by relying upon the Constitution of India.

In the realm of Government Tenders and Contracts, Constitution of India has rescued Contractors numerous times.  Various High Courts and also the Supreme Court of India have applied Constitution of India and ensured justice to Contractors.  Following is a simplified legal version of various Articles of the Constitution of India as applicable to Government Tenders and Contractors.  By knowing these rights, Contractors can make informed decision and choose to seek justice, instead of suffering silently.

  1. Tendering Stage

Article 14 (Right to Equality) is applied during the Government Tenders.  The Government Tenders conditions should be fair and reasonable, without favouring any one Contractor.  Any unreasonable Tender conditions can be challenged and would most likely be removed from the Tenders. 

  1. Blacklisting of Contractors

Article 21 (Right to Life) is applied for the process of Blacklisting including proper notice (not just any notice, but proper notice), details of the allegations against the Contractor, potential action like Blacklisting and a reasonable opportunity to be heard.  Further, even if the Contractor is found to be guilty, the period of Blacklisting has to be reasonable.  Except for the rarest cases, Blacklisting cannot be forever.  Mostly, the period of Blacklisting varies between 1 year to 5 years.

  1. Right to carry on Business

Article 19 (Protection of Certain Rights) is also applied for Tender conditions, more particularly to eligibility criteria.  Such eligibility should be reasonable and should not be excessive or shut out competition.  This Article may also apply to cancelling Tenders midway and then applying new eligibility criteria that appears unreasonable or favouring someone.

  1. Government’s Power to Contract

Article 298 (Power to carry on Trade) and Article 299 (Power to Contract) allows Government to enter into commercial Contracts with Contractors.  The Contracts have to be in writing and should be signed by authorised persons by the Government.  So, don’t trust or accept verbal assurances or promises of Government Officers.  Some exceptions exist, but mostly, it will be impossible to enforce verbal Contracts with Government.  Also, note that the Government Officers that sign the Contracts have immunity and you cannot file a case against such Government Officers (exceptions exist, but let us not complicate it). 

  1. Quick action against the Government

Articles 32 and 226, both known as Writ Remedies, are for quick action against the Government when you need something to be done or not done urgently.  For example, stopping Blacklisting or allowing you to participate in Tender, Bank Guarantee issues, etc.  But note that for every situation, you cannot file a Writ.  Also, Writs can be filed only in High Courts or the Supreme Court.  Writs are quick and powerful, so rely upon them very judiciously.  Respect the Courts process.

  1. Right to file a case against the Government

Article 300 (Suits and Proceedings) allows the Government to file a case against Contractors or for Contractors to file a case against the Government.  In commercial disputes, Government will NOT have any special rights but will be treated equal to a Contractor.  This ensures a fair legal battle.  Legal Notice and such procedure should be followed strictly before filing a case against the Government. 

The above Articles are some of the most “critical” constitutional Rights that Contractors should be aware of to protect themselves.  But in addition, the following Articles also provide additional Powers to Contractors. 

  1. Who is the Government?

Article 12 explain who the Government means.  So, every “Department” is not Government.  Many times, corporations are formed by Government for certain special situations.  Such corporations may or may not qualify as Government.  Knowing this distinction ahead of time will allow you to act properly and seek the correct legal action.  This concept can get complicated very quickly and let us leave it at that.

  1. Money and more

Article 300A applies for immovable property like land or buildings, and it also applies for money, Bank Guarantees, Security Deposits, Materials, Machinery, etc.  So, any time some Government action is involved in relation to Property, then, there has to be a due process and sufficient cause.  Government cannot just deprive a Contractor of something at its whims and fancies, as noted by Courts, against some errant / overzealous Government Officers.  As we say, both good and bad co-exist.  Let us not blame all for the actions of a few.

  1. Tax and the Authority

Article 265 requires that only through proper authority Tax can be levied.  So, when Government tries to introduce new Taxes midway, check your Contract and the new Tax laws.  Maybe you can save a lot of money.  For example, the new GST or some kind of Cess.  But at the end of the day, remember that Einstein said that no one can escape from death or taxes.

  1. Rules of Business

Articles 77 and 166 are related to the Rules of Business, or in other words, was the Government Officer duly authorised?  Anyone in the Government cannot terminate a Contract or issue Notices.  There is a hierarchy defined and that must be followed.  So, when you see a notice that says “competent authority” has decided something, question or try to find out who the “competent authority” was and may be, you can save yourself. 

  1. Follow the Money

Article 282 allows for additional financial grants for public purpose.  This can help you understand the flow of funds, and maybe you could get extra money for the Projects.  In some situations, diversion of funds can be questioned. 

  1. Forced Labour and Child Labour

Articles 23 and 24 are rights against forced labour and child labour.  Understand that some types of Contracts, involving labour, can rely on this and not work without reasonable conditions, including payments.  When someone tells you that “labour” is available somewhere cheaply, be sure and check it out.  Maybe they were misleading you with potential unlawful action.  Contractors have a right to demand the law, and at the same time, a duty to follow the law.

  1. Centre vs State standoff

Articles 131 and 300 is a niche area wherein the Government is fighting among itself, i.e., Centre vs State or State vs State.  So, in special projects where the funding is shared through two or more Governments, understand who is funding you.  Otherwise, get stuck between this fight.  Know the risks before accepting them.

  1. Legal Doctrines and Treaties

Though not necessarily directly from the Constitution, but through various judgements, Courts in India have developed some Doctrines.  Similarly, there could be Treaties with various other Countries.  Some of these could be applicable to Contracts on a situational basis.  Some important ones are as follows: the Principles of Natural Justice, Doctrine of Proportionality, Doctrine of Reasonableness, Doctrine of Promissory Estoppel, Doctrine of Legitimate Expectation, Doctrine of Public Trust and Doctrine of Public Accountability. 

Towards the end, does this mean that the Contractor should know the law like an Advocate?  No, but basic understanding is required.  Also know that a few Articles or Doctrines mentioned here are not applied in isolation.  Further, some of the Articles are for awareness while others are for Rights / Duties.  Oversimplification may sometimes mislead and exceptions may be missing.  The concepts are all clear:  involve Advocates for serious business, ask questions, conduct your due diligence, do not believe anyone but verify for yourself and understand that Courts may be your final recourse for justice.  

Many experts say that: Courts in India are the only beacon of hope today.  That is why, even when there are about 5.5 Cr cases pending in Courts, people still trust Courts and continue to approach Courts.

Jai Hind.