M. P. THAKKAR, J. ( 1 ) SOME interesting questions raised by this petition are: Should the Court in exercise of its jurisdiction accede to the request of Ahmedabad merchants who refused to submit tenders for the purchase of goods worth about Rs. 7 0 0 on one occasion and Rs. 15 0 0 on another to restrain the Gujarat State Textile Corporation Limited (respondent No. 1) to from disposing of the accumulated goods worth about Rs. 20 0 0 through a Calcutta agent (respondent No. 3) by inviting tenders from Calcutta merchants ? Merely because there is a minor difference in terms and conditions of sale arising mainly because the goods are sold in far away Calcutta market ? Because the operations have to be carried out through an agent (as the Corporation has no office at Calcutta) and commission has to be paid for services rendered ? Can the Corporation be obliged to carry stocks worth about Rs. 20 0 0 for months because the Ahmedabad merchants initially refuse to submit tenders and then invoke the constitutional jurisdiction of the Court ? What about loss of interest on Rs 20 0 0 ? What about financial stringency the Corporation has to suffer ? From where will the Corporation pay to its creditors and labourers ? Will a public sector undertaking be able to function if in day to day business matters its hands are shackled even when it is acting in good faith on business principles and policy considerations ?. . . . . . . . . . . . . . . ( 2 ) IT will be seen that 1 1/2% commission is payable to respondent No. 3 for the services rendered by him namely for securing offers for the pur chases of the goods from the Corporation and for taking responsibility for payment. 12% commission specified in Annexure C is not to be paid to the merchants of Calcutta who submit the tenders and whose tenders are accepted by the Corporation. In other words this commission is paid not to the merchants who effect the purchase but it is paid to respondent No. 3 an Agent of the petitioner who secures the orders. In essence it is something like a brokerage or a commission paid for securing orders. The petitioners are not similarly situated as respondent No 3. In other words this commission is paid not to the merchants who effect the purchase but it is paid to respondent No. 3 an Agent of the petitioner who secures the orders. In essence it is something like a brokerage or a commission paid for securing orders. The petitioners are not similarly situated as respondent No 3. They are not the agents of the Corporation for the purpose of effecting sales They are the local merchants who themselves submit tenders for the purchase of the goods offered for sale by the Corporation. IF is therefore futile to contend that making a provision for payment of 11% commission to respondent Nos. 3 results in hostile discrimination vis a vis the petitioners It may be stated that as disclosed by the record the compulsion to explore new avenues for sale of Rents and Rags arose because the Corporation was not able to secure any offers for purchase from the local merchants. The Corporation could not have remained at the mercy of the merchants of Ahmedabad for disposing of its goods worth about Rs. 20 0 0 which resulted in a loss of interest and in financial stringency. The Corporation was therefore acting in good with in exploring a new avenue for effecting sales. If in this connection it had to pay 11% commission to the Agent or broker who secured the orders it cannot be said that the Corporation was indulging in hostile discrimination vis a vis the petitioners. It is not for this Court to examine whether or not on business principles or in view of the exigencies of circumstances the Corporation was justified in offering 12% commission. That is beyond the scope of the present dispute. So far as the petitioners are concerned they used to submit tenders for the purchase of the goods offered for sale at Ahmedabad and if they have not submitted their tenders the) cannot thwart the proposal to sell the goods through respondent No. 3 at Calcutta. In fact the terms and conditions of sale to the Calcutta merchants do not provide for payment of and discount to them at all whereas the petitioners get 7050 discount. As the petitioners are not simil any situated vis a vis respondent No. 3 it cannot be said that any hostile discrimination has been practised vis a vis them on this score. As the petitioners are not simil any situated vis a vis respondent No. 3 it cannot be said that any hostile discrimination has been practised vis a vis them on this score. ( 3 ) THE second ground on which the complaint about hostile discrimination is made is that when the goods were sold to the Ahmedabad merchants on the basis of cash payment at the time of the acceptance of the tenders by the new sales policy sought to be adopted by the Corporation more liberal terms were being offered to the Calcutta merchants. This grievance is made in the context of the fact that the terms and conditions of sale to Calcutta merchants provide for despatch of goods by transport receipts through Banks. The merchants at Calcutta would be able to take delivery of the transport receipts on payment of the bills drawn against the transport receipts. Thus they would have to pay only at the time of delivery of goods whereas according to the petitioners they were required to make payment at the time of the acceptance of their tenders at Ahmedabad and that there was usually a timelag of about a week or 10 days between the date of the acceptance of the tender and the date of the actual delivery of the goods. This argues counsel for the petitioners constitutes hostile discrimination. The argument does not deserve any serious consideration as it is obvious that the petitioners are not similarly situated as the Calcutta merchants. In the first place the petitioners being residents of Ahmedabad where the Head Office of the Corporation is situated on the spot transactions on cash basis are possible unlike in the case of Calcutta merchants. Again transportation to Calcutta a far away place would naturally take a very long time whereas transportation from Baroda to Ahmedabad would take only a few hours. By the very nature of the operations at Calcutta a different policy of sending transport receipts against bills through Bank has to be adopted. It would have been a different matter if the petitioners were merchants of Calcutta who had submitted tenders and they were required to make cash payment on a basis different from the basis offered to the others. It would have been a different matter if the petitioners were merchants of Calcutta who had submitted tenders and they were required to make cash payment on a basis different from the basis offered to the others. Under the circumstances since the petitioners are not similarly situated it is not possible to uphold the contention that the proposed sale would constitute hostile discrimination vis a vis the petitioners. ( 4 ) IT was then contended that the petitioners were discriminated against inasmuch as the Corporation had not invited tenders from the petitioners. Now the affidavit filed by the Corporation shows that all the 45 registered merchants of Ahmedabad were informed about the proposed sale and tenders were invited from them. With regard to the first offer dated August 12 1979 and the second offer dated August 29 1979 the petitioners have not been able to place on record the affidavit of any of the 45 merchants to show that they were not informed about the proposal to sell. The Corporation has placed on record an affidavit sworn by Ramanlal Ravishanker Ravel an employee of the Corporation on November 5 1979 which is in the following terms:" I had in fact delivered these tenders personally to about 45 local merchants in Ahmedabad in respect of Fents and Rags on or about 12th August 1979. Subsequently also on or about 29th August 1979. I had delivered personally the tenders in respect of Fents and Rags to all the merchants registered with the Corporation" no affidavit has been placed on record in order to controvert the positive averment made by Shri Raval. In any case it is not possible to proceed on the footing that tenders were not invited from the merchants of Ahmedabad including the petitioners. The stand taken by the petitioners in their affidavit dated October 30 1979 in a way lends support to the contention of the Corporation that the merchants of Ahmedabad had taken a collective decision not to submit any tenders. It has been stated in paragraph 3 that the Circular issued by the Ahmedabad Fents and Rags Cloth Merchants Association was directed generally against all the Mills and not particularly against the Mills of the Corporation. It also makes a mention of the negotiations which were going on with the Textile Mills of Ahmedabad in connection with their demands. It has been stated in paragraph 3 that the Circular issued by the Ahmedabad Fents and Rags Cloth Merchants Association was directed generally against all the Mills and not particularly against the Mills of the Corporation. It also makes a mention of the negotiations which were going on with the Textile Mills of Ahmedabad in connection with their demands. A grievance is made that the Corporation had taken a very strange and startling attitude and had not discussed the grievances made by the merchants. Further onwards a statement of some importance has been made. It has been stated that the petitioners were willing to fill up tender of the goods mentioned in the petition provided the same sale policy as of respondent No. 3 was adopted in relation to them by the Corporation. By implication it means that the petitioners were not prepared to effect purchases on the hitherto prevailing terms and conditions. The question of offering them the same terms and conditions as were offered to respondent No. 3 did not arise because respondent No. 3 was a Commission Agent or broker who had been appointed to secure orders for the corporation at the Calcutta end whereas the petitioners were themselves merchants who used to effect purchases directly from the Corporation at Ahmedabad. In any view of the matter since the petitioners had adopted this attitude no fault can be found with the Corporation for taking a decision to explore other avenues of sales in other parts of India. In fact even on considerations of business policy there was nothing wrong in the Corporation exploring other avenues of sales. If they did not explore other markets in the other parts of India they would be at the complete mercy of the merchants at Ahmedabad. It is not inconceivable that the merchants of Ahmedabad can form themselves into a cartel and insist on sales being effected to them on their own terms at prices offered by them. It must be clearly understood that I am not saying that the merchants of Ahmedabad have done so. All I wish to stress is that such a situation can arise. Under the circumstances the Corporation acting on business principles may well take a decision to explore other avenues. They cannot be prevented from doing so. It must be clearly understood that I am not saying that the merchants of Ahmedabad have done so. All I wish to stress is that such a situation can arise. Under the circumstances the Corporation acting on business principles may well take a decision to explore other avenues. They cannot be prevented from doing so. The petitioners have no right to insist that the corporation should sell its goods only to the merchants at Ahmedabad and not to others. In fact in order to open new vistas for sale if a businessman were to effect sales in other parts of India (and in order to capture a new market) at a price lesser than that which could be fetched in the local market perhaps even that cannot be taken exception to because in the long run it would be more advantageous to have a market all over India. Be that as it may; merely because the Corporation under the aforesaid circumstances decided to effect sales at Calcutta through respondent No. 3 the decision taken by the Corporation cannot be rendered illegal or unconstitutional. A grievance was also made by the learned counsel for the petitioners on the ground that the selection of merchants at Calcutta was left to respondent No. 3. This allegation has been denied by the Corporation. So far as the impugned transaction is concerned it cannot be set aside on this ground. The Court cannot interfere with the day to day working of the Corporation in its business affairs unless it is shown that it is acting with mala fides or that it is practising hostile discrimination with deliberation. In the present case the petitioners themselves were responsible for creating the situation where the Corporation was obliged to look to other parts of India for effecting the sales. They have under the circumstances no good ground for taking exception to the proposed course on the part of the Corporation to effect sales at Calcutta. It may be mentioned that the learned counsel for the Corporation made a statement to the effect that notwithstanding the attitude adopted by the petitioners hereafter whenever there was an occasion to effect sales the merchants of Ahmedabad would be given an opportunity to submit their tenders before a final decision was taken. It may be mentioned that the learned counsel for the Corporation made a statement to the effect that notwithstanding the attitude adopted by the petitioners hereafter whenever there was an occasion to effect sales the merchants of Ahmedabad would be given an opportunity to submit their tenders before a final decision was taken. In fact such an order was made when the Corporation moved Civil Application No. 3074 of 1979 for interim orders seeking clarification of the interim order granted by the Court earlier. An order in the following terms was passed in disposing of the said Civil Application :"it is clarified that the interim order granted by the Court on October 12/19 1979 does not prevent the Gujarat State Textile Corporation Limited from disposing of the goods mentioned in the application provided however that they shall take into consideration the tenders if any submitted by the petitioners. Order accordingly. Civil Application disposed of. No order regarding costs". It is thus clear that the Corporation does not want to practise any hostile discrimination against the merchants of Ahmedabad in general or the petitioners in particular in respect of the sale of their goods hereafter. It may be that the merchants of Ahmedabad may submit their tenders in response to the invitation to do so. May be they do not do so. If they do so as stated by the learned counsel for the Corporation their tenders would be taken into consideration before taking a final decision on the offers received from other parts of India. This is a sufficient safeguard so far as the future is concerned. It may be stated that it may not be incumbent on the Corporation to inform the merchants individually. The Corporation can even inform the Association of which the aforesaid merchants are members or issue an advertisement in a well known local newspaper. This is a sufficient safeguard so far as the future is concerned. It may be stated that it may not be incumbent on the Corporation to inform the merchants individually. The Corporation can even inform the Association of which the aforesaid merchants are members or issue an advertisement in a well known local newspaper. So far as the sales concerning 454 bales proposed to be sold to the Calcutta merchants in pursuance to the offers secured by respondent No. 3 is concerned the administrative decision to effect the sales was already taken on October 15 1979 It could not be implemented in view of the interim order granted by this Court on October 16 1979 The transactions have therefore not been effected for about a month As discussed earlier there is no illegality in effecting sales through respondent No. 3 in the context of the aforesaid offers. The Corporation cannot be asked to invite fresh tenders from the petitioners and other merchants at Ahmedabad before implementing the aforesaid decision having regard to the fact that this situation has mainly arisen on account of the attitude adopted by them in the past and in any case if no decision is taken in respect of the tenders submitted by the Calcutta merchants for about a month the Corporation would lose its reputation and its prospects of opening a new avenue for effecting sales would be prejudiced substantially. The Corporation must be permitted to implement the decision and to supply the goods for otherwise the merchants of Calcutta might well withdraw their offers or refuse to honour their commitments and the Corporation would be put to a loss. There is no guarantee that if the goods are sold after inviting the tenders from the petitioners they would fetch a higher price. In any view of the matter the decision taken in good faith without violating aay principle of law cannot be annulled merely because the petitioners have now come forward and stated that they are willing to submit their tenders. ( 5 ) IT was argued by the learned counsel for the petitioners that the decision to sell goods through respondent No. 3 at Calcutta was irrational. ( 5 ) IT was argued by the learned counsel for the petitioners that the decision to sell goods through respondent No. 3 at Calcutta was irrational. Reliance was placed in this connection on Ramana v. The International Airport Authority of India A. I. R. 1979 Supreme Court 1628 in support of the proposition that even a statutory Corporation cannot act arbitrarily or in an irrational manner in the conduct of its business affairs. It appears that in the said matter tenders were invited in the prescribed form from Registered IInd Class Hoteliers having 5 years experience for putting up and running a IInd Class Restaurant and two Snack Bars at the Bombay Airport. The tender of a party who did not fulfil any of the two preconditions in the sense that a party who was not a Registered IInd Class Hotelier and who did not have 5 years experience was accepted. The challenge to the said transaction was made in the context of these facts. Counsel has placed reliance on the observations made in paragraph 34 of the judgment wherein the Supreme Court has observed that having regard to the constitutional mandate of Article 14 as also having regard to the judicially evolved rule of administrative law it was not competent to the 1st respondent to act arbitrarily in accepting a tender which did not conform to the standard or norm laid down in the notice inviting tenders. It was observed that if there was no acceptable tender from a person who satisfied the condition of eligibility the 1st respondent could have rejected the tenders and invited fresh tenders on the basis of a less stringent standard or norm but it could not depart from the standard or norm prescribed by it and arbitrarily accept the tender of the 4th respondent. The principle laid down therein is not attracted to the facts of the present case. There is no question of acceptance of the tender of a rival bidder who did not fulfil the eligibility criteria. The sales are being effected to merchants at Calcutta. The petitioners are local merchants. No merchant of Calcutta has made a grievance that he was wrongly excluded from submitting his tender or someone who was similarly situated as himself was preferred on arbitrary grounds. The sales are being effected to merchants at Calcutta. The petitioners are local merchants. No merchant of Calcutta has made a grievance that he was wrongly excluded from submitting his tender or someone who was similarly situated as himself was preferred on arbitrary grounds. The tenders were not invited locally from the petitioners once again because of the fact that on last two occasions no tenders had been submitted though the merchants at Ahmedabad were invited to submit their tenders presumably because they had decided upon of collective boycott till their demands were met and the Corporation bad on that account to turn to Calcutta for a new market. Merely because the sales are effected through a Commission Agent or broker to whom 1 1/2 % commission is being paid it cannot be said that hostile discrimination in the present case is being practised against the petitioners or that the Corporation is acting arbitrarily and in an irrational manner. It is next argued that the goods are being sold at less than their market value. This averment has been denied by the other side. In fact the affidavit of the other side is to the effect. (paragraph 10 of the affidavit dated 5th November 1979) that the sales have fetched a price bigger than the price obtained by the National Textile Corporation which is also in the same field. In any view of the matter there is no evidence to show that the goods are being sold at a price less than the price which could have been fetched. It is a disputed question of fact which cannot be resolved in the present proceedings on the basis of the present affidavits. It has been satisfactorily shown by the Corporation that it has been driven to adopt this course of action on account of the attitude adopted by the merchants at Ahmedabad and that it is acting in complete good faith on business principles and in a business like manner. Under the circumstances the petitioners cannot successfully stall the implementation of the decision to effect sales to merchants at Calcutta through respondent No. 3 of 454 bales valued at Rs 20 0 0 ( 6 ) AND it is now the appropriate time for a final word of clarification. Under the circumstances the petitioners cannot successfully stall the implementation of the decision to effect sales to merchants at Calcutta through respondent No. 3 of 454 bales valued at Rs 20 0 0 ( 6 ) AND it is now the appropriate time for a final word of clarification. Dos and Donts must be broadly but sufficiently defined lest the Management of Public Undertaking feels bewildered and the growth of such Undertakings is stultified on account of the fear of Court actions. And the present petition provides an opportunity for clearing the mist of uncertainty. Public Sector Undertakings it must be realised cannot be prevented from showing enterprise or charting out a bold or new course or from taking initiative or from making experiments research or innovations in the sphere of their business activities if the public sector is to survive and succeed. In fact they must he encouraged to do so and to benefit by the trial and error method. To say that it must not act arbitrarily or unreasonably is not to say that the aforesaid case is denied to them. What has to be guarded against is the temptation to succumb to favouritism nepotism or patronage for oblique considerations. Subject to this restraint the public Sector is not shackled by any constraints in the matter of enterprise or innovation so long as it is acting in good faith and so long as it is not indulging in hostile discrimination between citizens. And it must be realised that the question has to be viewed pragmatically from the perspective of day to day business operations. Surely a Public Sector Undertaking is not expected to invite tenders from all over India before disposing of the goods manufactured by it from day to day. It can certainly sell its goods through 2gents like other private Sector concerns. No doubt the selection of agents must not be on arbitrary or irrational grounds. It must be on business principles. So long as people are not excluded or preferred on grounds which would offend Article 14 or the rationality test so long as decisions are taken in good faith and not for any oblique purpose a Public Undertaking would have full freedom to act. So also in decisions pertaining to business affairs its freedom is not truncated beyond the aforesaid limitations. So also in decisions pertaining to business affairs its freedom is not truncated beyond the aforesaid limitations. For instance if a vast stock of goods has accumulated and finances are needed urgently or if purchases of raw materials have to be effected urgently a Public Undertaking can bona fide act like any other businessman on business principles. Hamlet like vacillation need not be counselled and cannot be forced on it and its enterprise and initiative cannot and need not be killed merely because it is a Public Undertaking. ( 7 ) THE petition fails and is rejected. Rule is discharged with costs. [ Rest of the judgment is not material for the reports. ]petition dismissed. .