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Section 65 of the Indian Contract Act, 1872 plays a role when a Government contract is discovered to be void under Article 299(1). What does Section 65 provide?
Answer & Solution
Correct answer: D.
1. Section 65 of the Indian Contract Act, 1872 provides: '**When an agreement is discovered to be void, or when a contract becomes void, any person who has received any advantage under such agreement or contract is bound to restore it, or to make compensation for it, to the person from whom he received it.**'
2. So if a contract with the Government is void for non-compliance with Article 299(1), the party who received an advantage is bound to restore it or make compensation to the other side under Section 65.
3. This is the equitable response to the strict requirement of Article 299(1) — neither side can profit from a constitutional defect.
4. Option A is incorrect: a void contract cannot be specifically enforced. Options C and D are not in the constitutional or statutory scheme.
_Source: ICSI CS Executive — Lesson 5, 'Liability of State or Government in Contract', p. 129._
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