Constitutional Validity of PM SHRI MoU Challenged Under Article 299

The Hindu - Opinion · 26 Jun 2026 · 2 min read
Prelims · Polity Mains · GS2 Polity and constitution High relevance

The Kerala UDF government's stance on PM SHRI scheme MoU faces constitutional scrutiny as it violates Article 299's mandate for contracts to be executed in the name of the Governor/President, raising questions about federal governance and executive accountability.

Key points

Article 299 of the Constitution mandates all Union contracts be made in the President's name and State contracts in the Governor's name, with the Supreme Court consistently ruling non-compliant contracts as null and void since 1961.

The PM SHRI MoU was signed by education secretaries of Kerala and India without Governor/President authorization, making it legally unenforceable under constitutional provisions and judicial precedents like State of Bihar vs Karam Chand Thapar (1962).

Rule 10 of Kerala's Business Rules requires Finance Department consent for decisions with financial implications - a condition not met for PM SHRI where Kerala bears 40% costs, rendering the agreement void ab initio per Bal Kalyani vs Maharashtra (1993).

Article 166 mandates policy decisions be taken by State Cabinets, not individual ministers - the unilateral MoU signing bypassed this requirement despite the previous LDF government deferring the policy decision.

This connects to GS2-Federalism as it highlights tension between central schemes and state autonomy, with constitutional procedures acting as safeguards against executive overreach.

[GS3-Economy] The 40% state funding requirement for PM SHRI raises fiscal federalism questions about unfunded mandates and their impact on state budgets.

The case exemplifies doctrine of constitutional morality where even politically expedient actions must conform to prescribed legal procedures to maintain institutional integrity.

Judicial precedents from Kerala High Court (Trivandrum Golf Club case) and others establish clear jurisprudence that non-compliant contracts lack legal sanctity, binding current administration.

Way Forward: States should establish clear protocols for inter-governmental agreements, including mandatory legal vetting for constitutional compliance. The Centre must amend scheme guidelines to ensure Article 299 adherence. A federal oversight mechanism should review all centrally sponsored schemes for procedural and financial constitutionality.

Key terms

Federalism

Constitutional division of powers between Centre and States. This case highlights its operational challenges when central schemes impose financial obligations on states without proper procedural compliance, testing the balance between cooperative federalism and state autonomy.

Article 299

Constitutional provision mandating all government contracts be executed in the name of the President (Union) or Governor (State) by authorized persons. Its strict compliance ensures executive accountability and prevents unauthorized commitments of public funds, forming the legal basis for government contract enforceability.

Doctrine of Nullity

Legal principle established through judicial precedents declaring actions taken in violation of mandatory constitutional/statutory procedures as void ab initio (from inception). This doctrine protects constitutional governance by invalidating non-compliant executive decisions, as seen in this PM SHRI case.

Rules of Business

Framed under Article 166, these rules govern state administration procedures. They mandate cabinet approval for policy matters and financial decisions, preventing unilateral actions by individual ministers - a key issue in this Kerala case where financial implications required Finance Department clearance.