State of U.P. & Ors. v. M/S Lalta Prasad Vaish and Sons (2025)

Quick Summary

This case confirms a simple rule: when the government signs a contract, it must still follow the Constitution. It cannot act like an ordinary private party. Article 14 demands fairness, reasonableness, and non-arbitrariness. If the State delays, discriminates, or withholds payment without good reasons, courts can step in.

• State action in contracts is reviewable for arbitrariness.
• Equality principles apply beyond administration to commercial dealings.
• Government should act as a model litigant.

Issues

1. Are State authorities bound by Article 14 standards in pure contract matters?
2. Can courts review government contract decisions for arbitrariness or discrimination?
3. Were payment withholding and differential treatment here unconstitutional?
4. How far can public law override strict contract terms when the State is a party?

Rules

• Article 14: Arbitrariness is the opposite of equality. All State action—administrative or contractual—must be fair and non-discriminatory.
• Judicial Review: Courts may examine State contracts where claims of mala fides, arbitrariness, or unequal treatment arise.
• Public Trust: The government carries constitutional duties even while doing business.
• Model Litigant Norm: The State should act with candour, pay dues promptly, and avoid technical roadblocks.

Arguments

The Court held that the State acted unfairly and unreasonably. Since the government bears constitutional duties at all times, its contractual decisions must satisfy Article 14. The Court directed the authorities to remove arbitrariness, process dues fairly, and avoid discriminatory practices.

Ratio Decidendi

State power carries constitutional restraints into contractual spaces. Equality and non-arbitrariness control government contracting behaviour; courts may intervene when public law values are compromised.

Why It Matters

• Protects contractors and citizens from administrative high-handedness in payments and tenders.
• Reinforces transparency and reasonableness in public procurement.
• Guides government to act as a responsible, model litigant.

Key Takeaways

• Article 14 travels with the State—even into contracts.
• Arbitrariness = unconstitutional; courts can step in.
• “Model litigant” duty: pay dues, act fairly, avoid technical ambushes.
• Public law values may override strict contract postures.

Mnemonic + 3-Step Hook

Mnemonic: F.A.I.R. — Fairness, Article 14, Intervention by courts, Responsible (model) litigant.

1. Spot: Is the State party to the contract?
2. Check: Any delay, discrimination, or irrational decision?
3. Apply: Use Article 14 to test arbitrariness; seek judicial review.

IRAC Outline

Glossary

Arbitrariness

Action without fair reason; often unequal or biased.

Model Litigant

A standard for State conduct—fair, prompt, and honest in litigation.

Judicial Review

Court power to test government action against constitutional norms.

FAQs

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