Law:

Section:

(a) Contract---When a Government enters into a contract it does so as the mouthpiece of the State and, thus, the State lends its quality of continuity to such contracts which survive any change of Government which also encompasses international contracts. (b) Eradication of Corrupt Business Practices Ordinance (V of 1998)--- ----Preamble---Object of promulgation of Eradication of Corrupt Business Practices Ordinance, 1998---Ordinance was specially designed for contracts in energy sector if there were reasons to believe that corruption at a massive scale had occurred in any power project so that appropriate proceedings might be taken against the defaulters. (c) Mala fides--- ---- Once a mala fide act has been perpetrated by one Government that can be interfered with by next Government when there were proofs of such mala fides. (d) Fraud --- ----Proof---Fraud cannot be lightly presumed and has to be proved. (e) Contract Act (IX of 1872)--- ----S. 23---Term "public policy "---Difficult to define---Term "public policy" is a relative terminology inasmuch as while one particular measure could be regarded as in accordance with public policy during the tenure of one Government, same could easily be regarded as contrary to public policy by another Government--­Rules of "public policy" are by no means immutable. (f) Contract Act (IX of 1872)--- ----S. 23---Interpretation---Section 23, Contract Act, 1872 is couched in a positive form and not in a negative form- --Presumption, thus, is that the consideration or subject of an agreement is lawful unless the Court regards the same as immoral or opposed to public policy in which event such agreement would be void---Agreement being opposed to public policy is something which has to be decided by the Court and actual fact of agreement being contrary to public policy has to be proved before the Court---Agreement, however, would be void, on the ground of being contrary to public policy only when the agreement was between two parties of which the State was not a part. Section 23, Contract Act, 1872 is couched in a positive form and not in a negative form that is to say that it would be presumed that the consideration or object of…

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