ORDER The facts of the present application may be briefly noted. 1. The petitioner nos. 2 and 3 who are citizens of India are partners of the petitioner no. 1. The partnership business of the petitioner no. 1 was commenced with effect from the 1st December, 1979 although the Deed of Partnership by and between the petitioner nos. 2 and 3 in respect of the petitioner no. 1 was executed on the 17th March, 1980. 2. Prior to the formation of the petitioner no. 1 the petitioner no. 2 along with two others had formed a partnership firm under the name and style of "Central Engineering Syndicate" (hereinafter referred to as the CES). The firm CES had, inter alia, undertaken and, successfully executed the following projects. :- (a) Teesta Bridge Project (b) Bokaro Water Treatment Plant. (c) Bokaro Central Plant. (d) Garden Reach Water Treatment Plant. According to the petition, the last mentioned work is still in progress and is about to be completed. 3. The petitioner no. 2 is the Managing Director of another sister concern of CES known as "Central Concrete and Allied Products Private Limited" (hereinafter referred to as the CCAP). The petitioner no. 2 was the Managing Director of the Company upto 30th September, 1980 and thereafter continues to be a Director. The Company CCAP has undertaken and completed the following projects :- (1) Underground Reservoir at Auckland Square, Calcutta (2) New Buckland Bridge Roads System. The following projects have been partially completed by CCAP and works are still continuing :- (1) Sealdah Fly Over Project. (2) Sections 15(B), 15C, 16A Part II and 17B of the Metropolitan Railway project. (3) A Fly over at Delhi. 4. On the 4th September, 1979 an advertisement was issued by the Calcutta Metropolitan Development Authority respondent no. 1 which was published under the caption "Enlistment of Contractors" in the Statesman, Calcutta Edition. The advertisement which is material for our purpose, may be set out hereinbelow:- "The Calcutta Metropolitan Development Authority intends to take up large scale rehabilitation works of the sewrage and drainage system in the City of Calcutta. For the purpose of drawing up the total programe the CMDA will like to have a proto-type work-cum-study project for a selected area of Calcutta which will consist of cleansings the sewers, inspecting the conditions of the sewers and taking measures of rehabilitation of the same. For the purpose of drawing up the total programe the CMDA will like to have a proto-type work-cum-study project for a selected area of Calcutta which will consist of cleansings the sewers, inspecting the conditions of the sewers and taking measures of rehabilitation of the same. The CMDA intends to select a construction organisation who have large seale experience in execution of underground projects in the complex urban setup of Calcutta. Those who are interested in participating in the above work-cum-study project are hereby requested to kindly furnish details of their experience in similar projects or at least in those projects where they have been involved in dealing with underground utilities. The work may require inducting foreign expertise in the form of specialist sewerage renovation contractors and professionals, particularly experienced in such works. The name and particulars of foreign associates/collaborators, if any, may also be indicated, stating the details of their experience and nature of working arrangements with them. The CMDA wants to utilise the current working season for launching this project and as such all particulars have to be delivered on or before 17th December, 1979 to Shri S.K. Sen Additional Director of Planning, 3A, Auckland Place (5th Floor), Calcutta 17.” 5. On the same day i.e. 4th December, 1979 Central Group under the signature of the petitioner No. 2 sent an offer to undertake the work; mentioned in the above advertisement. The offer which is Annexure “B” to the petition is important for our purpose and is set out below in full. CENTRAL GROUP Management Consultants : Project Engineers Shantiniketan 3, Camac Street, Calcutta – 1000017 INDIA Telephone 43-1554, 43-426 Telex: CENTIN 21 2331 Cable-CENTPILES CALCUTTA. Date Dec. 4, 1979 Our Reference CG/SKB/SD/3167. Your Reference: To Shri S.K. Sen Additional Director of Planning CMDA 3A, Auckland Place, Calcutta-7000017. Re: Calcutta Prototype Work-Cum-Study Project for Sewer Renovation. Dear Sir, Apropos of the Newspaper advertisement for pre-selection in the above project we hereby express our interest and give below a few details regarding our capability in this behalf. 2. We have a very substantial experience in working for many prestigious projects in the complex urban set up of Calcutta. Some of the projects which involved large scale underground engineering works are : (i) 6 (six) million gallons capacity underground Reservoir at Auckland Square, Calcutta. 2. We have a very substantial experience in working for many prestigious projects in the complex urban set up of Calcutta. Some of the projects which involved large scale underground engineering works are : (i) 6 (six) million gallons capacity underground Reservoir at Auckland Square, Calcutta. This project required giving complete protection to the heavily built-up surroundings by an ingenous method of deep sheet piling coupled with fabricated props and struts. The underground utilities in the surrounding areas were kept functioning either by diversion or by protection. (ii) Metro Rlys. Project in Calcutta in which we have three major sections. Here the major underground utilities like sewers, drains, water mains, electrical & telephone cables are being taken of in full traffic conditions by diverting, rebuilding replacing and realigning as required. For specific road junctions, prefabricated RCC road dockings are installed to allow uninterrupted flow of traffic, Even the tidal bores of the river have to be taken care of since certain drainage lines have direct connection with the river flow, This involves putting in temporary lock gates and damning flows as may be necessary. Powerful sludge pumps and well-point pumping system are deployed to take care of the over-flooding conditions arising out of severe monsoon and ground water infiltration. These weeks were never attempted before in India and we had to innovation sound technical solutions to face the situation as they arose. (iii) Garden Reach Water Treatment Plant. This is one of the largest water treatment plants in the country, comprising of major structures like 4 nos. 55 Media Clurilocculators, large filter house and chemical house complex etc, most of soil conditions and inflow of surface & ground water from the surrounding submerged areas. These problems were solved by adequate design and construction methodology particularly, in case of deep inter-connecting pipl line system of the water treatment plant, (iv) Sealdah Flyover Project. This project located as it is in the busiest area of Calcutta has many underground features. There is large brick sewer constructed about more than 100 years ago for which not even a realistic survey map was available while launching the project. We had to apply typographical survey techniques to identify not only the brick sewer but also major filtered and unfiltered water mains running side by side. There is large brick sewer constructed about more than 100 years ago for which not even a realistic survey map was available while launching the project. We had to apply typographical survey techniques to identify not only the brick sewer but also major filtered and unfiltered water mains running side by side. The project requires that the brick sewer should be left completely undisturbed while the flyover structure carrying heaviest loads will he built around it, Filtered and unfiltered water mains abutting on the alignment are being shifted to other locations and the complex underground sewer system is being realigned and reconnected without disturbance to the existing sewerage flows. We have already shifted major portion of the underground utilities and have also started piling works without affecting the main brick sewer. (v) New Buckland Bridge Roads System. This major project is a joint venture of the CMDA and the Eastern Rly. and consists of High level Flyover-cum-Road Bridge over the busiest railway yard in the country and one of the most congested Commercial-cum-Administrative Centres in the City. The underground utilities consist of all the usual facilities most of which had to be diverted realigned and re-commissioned without affecting the supplies. The above projects have been executed by us on design construct basis. It may easily be seen from above that we have expertise built up through years of experience, not only in large project management but for carrying out the very complicated and delicate task of coordinating inputs of multifarious service organisations which are responsible severally for * * facilities. * * * from above, we have a very substantive * * * as prime contractors in various projects * * * involved working as a tear with foreign professionals, technicians and specialists. As the single agency responsible for installation of the largest sintering Plant in the world for the Bokaro Steel we have worked with Russian Consultants, Equipment Suppliers and Technology and put in Commission the plant ahead of the schedule. Again, as the principal agency for installation of the largest mechanised Iron Ore Mines in India at Bailadila of the National Mineral Development Corporation, we have successfully coordinated the entire supplies from the fourteen major Japan suppliers and have worked in unision with their specialists and technicians. We have, therefore, proven capability to work in major projects where foreign inspute are involved. 5. We have, therefore, proven capability to work in major projects where foreign inspute are involved. 5. We have a strong supporting organisation of public health engineering, design & drafting. The consultancy division of this Group specialises in urban planning architecture, topographical & sub-soil surveys, design of community facilities in spot development projects. We carry out survey & studies prepare appraisal reports & recommendations undertake detailed engineering design & preparation of contract documents & supervision and engineering projects. We have facilities through associate firms in the U.S.A. & the U.K. for management & co-ordination of Indian projects having foreign components and for training of Indian personnel in those countries. It may be an integral part of the proposed prototype work-cum-study to arrange for constant interaction & training facilities for officers of the Authority and of the selected Agency in the countries wherefrom the foreign inputs will be imported. 4. We are pleased to confirm that we have established contacts with internationally reputed consultancy sewerage surveyors & contractors & manufacturer of specialised organisations, regional water authority and specialist equipments, who have each expressed their interest and agreement in working with us for the instant project. It may be of interest for you to know that the organisations who agreed to work with us, include the following : (i) Thames Water Consultancy Service, U.K.-They are responsible for management of over 50,000 kilometres of main sewers for which there is a regular programme of inspection, maintenance & remedial work. (ii) The Concrete Group M/s. Nuttals & the Rees Group of U.K.-These are the specialist firms of manufacturers of equipments, t.v. surveyors & sewerage renovation contractors. (iii) A number of internationally reputed sewarage consultants such as M/s. Halcrow-Balfour Ltd. M/s. Watson-Hawkaley M/s. Binnie & Partners, M/s. Babtie Shaw & Morton, M/s Fawoett & partners-all of the U.K. and M/s Eston International Inc & M/s. Gibbs & Hill of U.S. A have expressed their interest to assist us in the appraisal & recommendation process. As and when the CMDA becomes ready & willing to entertain our specific proposal, we will be glad to conclude final agreements with the selected parties amongst above. 5. Concluding, we may be permitted to point out two important aspects of the proposed pilot study, which must have already engaged your attention, namely. As and when the CMDA becomes ready & willing to entertain our specific proposal, we will be glad to conclude final agreements with the selected parties amongst above. 5. Concluding, we may be permitted to point out two important aspects of the proposed pilot study, which must have already engaged your attention, namely. (a) the only suitable period available for work are the dry months of the year, since during the monsoon the sewer too likely to be fully surcharged, and (b) substantial works are involved requiring a long time period. Also, sufficient investment has to be made to achieve the aims of the study & to make the work package commercially viable for the Indian agency & their foreign collaborators. We trust you will find our offer of sufficient interest to invite us to submit our detailed proposal on an exclusive basis only. Thanking you and assuring you of our best services. We remain, Enclo: Copies of letters & Yours faithfully, documents from few foreign for CENTRAL GROUP expert organisations as (S.K. BASU)', mentioned in the letter." 6. On the 17th December, 1979 the said firm forwarded to the Additional Director of Planning of the respondent No. 1 certain capability document of its foreign collaborators. 7. On or about 7th January, 1980 the Additional Director of Planning of the respondent No. 1 addressed a letter to the said firm asking for supporting evidence of the work done by the said firm and their collaborators and also supporting evidence of the working arrangement between the petitioners and their collaborators. 8. On the 21st January, 1980 the said firm replied to the letter dated the 7th January, 1980 mentioned above. Paragraph 2 of the said letter is material for our purpose and is set out hereinbelow : “With regard to our capability we have already submitted the details of our experience in major underground works in the complex urban set up of Calcutta in our above letters. You will find that most of these projects have been undertaken at the instance of the CMDA and as such we are sure that you are well aware of our performance records in this respect. Details of particularly relevant experience of our foreign collaborators are included in the attached proposal”. Another paragraph of the same letter viz. paragraph 11 is of some importance and may be set out hereinbelow. Details of particularly relevant experience of our foreign collaborators are included in the attached proposal”. Another paragraph of the same letter viz. paragraph 11 is of some importance and may be set out hereinbelow. “Concluding, we may mention that we have a long & cordial relationship with your organisation, which is based on mutual faith & trust & our performance records. We have expressed our interest in participating in the instant project and as a matter of fact have already incurred large expenditures to present before you one of the best study-teams, not only for commercial benefits but with an intent to serve the people of Calcutta to the best of our abilities.” 9. Thereafter, according to the petition, between January and February 1980 various meetings and discussions took place between the said firm and the respondent no. 1 through its different officers Technological proposals submitted by the petitioners on behalf of the said firm were discussed in detail. The supporting evidence of the working arrangement between the said firm and their foreign collaborators were carefully scrutinised. 10. On the 7th Much, 1980 the respondent no. invited the said firm to submit a commercial proposal in respect of the entire project. The said firm was informed that the respondent no. 1 had selected M/s Central Group for the said pilot study project provided their commercial proposal were considered acceptable. 11. On the 21st Mach, 1980 the said firm submitted its commercial proposals including the price for carrying out the said assignment. 12. On the 7th April, 1980 the said firm applied to the Director General of Planning and Development of the respondent no. 1 for empanelment of its name as consultants of the respondent no. 1. It was pointed out in the said application that the various projects referred to in the application were undertaken by the sister organisations of the said firm and as such the expertise built up from such assignments were readily available to the said firm. It was further pointed out that while the said firm bad back-up support from the sister concerns, it is constituted as an independent Consultancy Organisation having no financial or commercial linkage with any other Organisation. 13. It may be noted in this connection that the respondent no. It was further pointed out that while the said firm bad back-up support from the sister concerns, it is constituted as an independent Consultancy Organisation having no financial or commercial linkage with any other Organisation. 13. It may be noted in this connection that the respondent no. 1 without any further enquiry or investigation or without any further reference to the said firm informed the said firm by its communication dated the 28th October, 1980 through the Director General of Planning and Development that in pursuance of the said firm's application dated 7th April, 1980 the said firm has been included in the CMDA panel of Consultants for 1980-81. 14. Meanwhile on the 7th May, 1980 the respondent no. 1 through its Secretary called upon the said firm to proceed with Part A of the Study immediately on certain terms and conditions. 15. On the 6rh August, 1980 the said firm through the petitioner informed the Chief Executive Officer of the respondent no. 1 that Part A of Prototype Work-Cum-Study of sewer cleaning and renovation project has been completed. On the 12th August, 1980 the said firm submitted the Appraisal Study Report being Part A of the said Assignment to the respondent no. 1. 16. On the 15th September, 1980 the respondent no. 1 through its Chief Executive Officer passed an order to the following effect : "With a view to facilitate due performance of the Prototype Work-cum-Study for Sewer Cleansing and Renovation Project being undertaken currently with the help of M/s Central Group, Consultant in collaboration with foreign consultants, it has since been felt necessary to form a Work Team and a Policy Team consisting of the officials of CMDA and Calcutta Corporation." By the said order the personnel of the two teams was also announced. 17. On the 18th October, 1980 the respondent no. 1 sent to the said firm two draft copies of the agreement asking the said firm to confirm their acceptance of the terms and conditions. It was further intimated that the draft agreement, after acceptance of the terms thereof by the said firm could be examined and vested by the legal adviser of the CMDA before execution. 18. On the 4th November, 1980 the said firm was granted a Letter of Intent/Work Order awarding the pilot work-cum-study for the said project on an exclusives basis. It was further intimated that the draft agreement, after acceptance of the terms thereof by the said firm could be examined and vested by the legal adviser of the CMDA before execution. 18. On the 4th November, 1980 the said firm was granted a Letter of Intent/Work Order awarding the pilot work-cum-study for the said project on an exclusives basis. The opening paragraph of the letter of intent is material and may be set out hereinbelow: "Dear Sirs, Kindly refer to this office letter no. 208/CMDA/PL/ADP-I/28 dated 7th March, 1980 in which the CMDA had intimated to you that you had been selected for the above work, subject to the acceptability of the commercial proposal. The commercial proposal has since been received from you, examined by the CMDA and detailed negotiations have already been held with yourselves. Pursuant to the above, the CMDA is pleased to award the subject assignment to you on the following terms and conditions as agreed between you and CMDA" This paragraph was followed by the various terms of the letter of intent/work order. 19. On the 6th November, 1980 the said firm addressed the following letter to the Additional Director of Planning of the respondent no. 1. "We thank you for the letter of intent no. 942/- CMDA/PI-ADPI/LG dated 4th November, 1980 received by us on the 4th instant and hereby convey our acceptance of the same." I refrain from going further into the factual aspects of this matter because they have been more fully dealt with in a connected matter being C.R. No. 15161 (W) of 1981 (S.K. Basu alias Subir Kumar Basu v. The Commissioner of Police & ors.) in which the judgment has been delivered by me on the 20th May, 1982. 20. The subject matter of the present application is a letter dated 5th March, 1981 from the Secretary of the respondent no. 1 to the petitioner no. 1. The letter may be set out in full :- "To M/s. Central Group No. 17/Conf. P-40, Block-B March 5, 1981 New Alipore, Calcutta-700 053. Sub i Pilot Study-cum-Work-Project on Calcutta Sewers Ref: This Office No 942/CMDA/PL/ADP-I dated 4.11.80. Sir, I am directed to inform you that the letter of intent issued to you under this office memo quoted above is cancelled with immediate effect. You are also asked not to proceed with any further work. P-40, Block-B March 5, 1981 New Alipore, Calcutta-700 053. Sub i Pilot Study-cum-Work-Project on Calcutta Sewers Ref: This Office No 942/CMDA/PL/ADP-I dated 4.11.80. Sir, I am directed to inform you that the letter of intent issued to you under this office memo quoted above is cancelled with immediate effect. You are also asked not to proceed with any further work. Yours faithfully, Sd/•- 5.3.81 (Lina Chakrabori) Secretary, CMDA.” It is this letter of cancellation dated the 5th March, 1981, which is challenged before me in this application. 21. One of the principal contentions advanced on behalf of the petitioners whose case was opened by Mr. A.K. Sen and thereafter elaborately argued on different points by Mr. Subrata Roy Chowdhury and Mr. Dipakar Gupta was that the purported cancellation of the letter of intent by the letter dated the 5th March, 1981 which I have set hereinabove is arbitrary. It was contended that an arbitrary action of the "State" within the meaning of Article 12 of the Constitution of India whether in the exercise of statutory power or in the exercise of executive power is liable to be struck down. It was submitted that it makes no difference whether the action is in the contractual field either at the threshold of the formation of the contract or otherwise. 22. In support of the above proposition strong reliance was placed on a decision of the Supreme Court in the well-known case of Ramana Dayaram Shetty v. The International Airport Authority of India & ors. reported in AIR 1979 SC 1682 . In paragraph 10 of the report Bhagabati J, who delivered the judgment on behalf of the Court observed as follows; “Today with tremendous expansion of welfare and social service functions increasing control of material and economic resources and large scale assumption of industrial and commercial activities by the state, the power of the executive Government to affect the lives of the people is steadily growing. The attainment of social-economic justice being a conscious end of State policy, there is a vast and inevitable increase in the frequency with which ordinary citizens come into relationship of direct encounter with State power-holders. The attainment of social-economic justice being a conscious end of State policy, there is a vast and inevitable increase in the frequency with which ordinary citizens come into relationship of direct encounter with State power-holders. This renders it necessary to structure and restrict the power of the executive Government so as to prevent arbitrary application or exercise”, * * * * It is indeed unthinkable that in a democracy governed by the rule of law the executive Government or any of its officers should possess arbitrary power over the interests of the individuals. Every action of the executive Government must be informed with reason and should be free from arbitrariness. That is the very essence of the rule of law and its bare minimal requirement. And to the application of this principle it makes no difference whether the exercise of the power involves affectation of some right or denial of some privilege." 23. In paragraph 11 of the report the Supreme Court recognised that the new forms of wealth have been created by tremendous extension of Government's activities in a Welfare State which calls for now forms of protection. As examples of the new forms of wealth the Supreme Court gives the instances of money, benefits, services, contracts, quotas and licenses. The following passage at paragraph 11 of the report is material for our purpose and may be set out :- “All these mean growth in the Government largess and with the increasing magnitude and range of governmental functions as we move closer to a welfare State, more and more of our wealth consists of these new forms. Some of these forms of wealth may be in the nature of legal rights but the large majority of them are in the nature of privileges. But on that account, can it be said that they do not enjoy any legal protection? Can they be regarded as gratuity furnished by the State so that the State may withhold, grant or revoke it at its pleasure ? Is the position of the Government in this respect the same as that of a private giver? But on that account, can it be said that they do not enjoy any legal protection? Can they be regarded as gratuity furnished by the State so that the State may withhold, grant or revoke it at its pleasure ? Is the position of the Government in this respect the same as that of a private giver? We do not think so, * * * The Government cannot be permitted to say that it will give jobs or enter into contracts or issue quotas or licences only in favour of those having grey hair or belonging to a particular political party or professing a particular religious faith. The Government is still the Government when it acts in the matter of granting largess and it cannot act arbitrarily. It does not stand in the same position as a private individual". In paragraph 12 of therefore after referring to the earlier decision of the Supreme Court in the case of Erusian Equipment & Chemicals Ltd v. State of West Bengal reported in AIR 1975 SC 266 , Bhagwati, J. observed as follows:- “But the Court, speaking througi1 the learned Chief Justice, responded that the Government is not like a private individual who can pick and choose the person with whom it will deal, but the Government is still a Government when it enters into contract or when it is administering larges and it cannot, without adequate reason, exclude any person from dealing with it or take away largess arbitrarily.” 24. Reference was also made in this connection also to paragraphs 20, 21 and 27 of the report where similar observations occur. 25. Strongly relying on the above observations. It was contended on behalf of the petitioners that the rule inhibiting the State from indulging in any arbitrary action which rule the Supreme Court has laid down, not only follows from the protection of Article 14 of the Constitution but is also an independent rule of administrative law. It applies to all State actions whether it relates to legal rights, or rights created by contracts or privileges in the form of licences and quotas. 26. Mr. R.C. Deb appearing on behalf of the CMDA respondent sought to repel this contention by submitting that the international Airport Authorities case was limited to a situation where a party was on the threshold of the formation of a contract. 26. Mr. R.C. Deb appearing on behalf of the CMDA respondent sought to repel this contention by submitting that the international Airport Authorities case was limited to a situation where a party was on the threshold of the formation of a contract. It was submitted that before a contract has been entered into and where the parties were at the threshold of entering into a contract, if one of the parties happens to be the State, then the above decision is a clear authority for the proposition that action of the State in entering into the contract should be free from arbitrariness. But Mr. Deb submitted that once a legal relationship in the form of a concluded contract was established the rights and obligation flowing thereform should be exclusively guided by the law of contract. In such a case it was a submitted that the question of absence of arbitrariness either as a protection flowing from Article 14 of the Constitution of India or as an independent rule of administrative law would have no application whatsoever. It was further submitted that the Writ Court would have no jurisdiction to entertain any dispute with regard to the right and obligations of the parties flowing from a contract. According to this submission, such rights and obligations were in the nature of private rights and the only remedy of an aggrieved party would be by way of a suit under the provisions of the Specific Relief Act. 27. In support of this contention. Mr. Deb relied on a decision of the Supreme Court in the case of M/s. Radhakrisnna Agarwal & ors. v. State of Bihar & Ors. reported in AIR 1977 SC 1996, Strong reliance was placed on paragraph 10 of the report which is in the following terms :- “It is thus clear that the Erusian Equipment & Chemicals Ltd's case ( AIR 1975 SC 266 ) (supra) involved discrimination at the very threshold or at the time of entry into the field of consideration of persons with whom the Government could contract at all At this stage, no doubt, the State act purely in its executive capacity and is bound by the obligations which dealings of the State with the individual citizens import it to every transaction entered into in exercise of its constitutional powers. But after the State or its agents have entered into the field of ordinary contract, the relations are no longer governed by the constitutional provisions but by the legally valid contract which determines rights and obligation of the parties inter se. No question arises of violation of Article 14 or any other constitutional provision when the State or its agents, purporting to act within this field, perform any act. In this sphere, they can only claim rights conferred upon them by contract and are bound by the terms of the contract only unless some statute steps in and confers some special statutory power or obligation on the State in the contractual field which is apart from contract.” 28. A reference was also made by Mr. Deb to a more recent decision of the Supreme Court in the case of Premji Bhai v. Delhi Development Authority reported in AIR 1980 SC 738 . In paragraph 8 of the report Desai J observed as follows :- “Conceding for this submission that the Authority has the trappings of a State or would be comprehended in 'other Authority' for the purpose of Article 12, while determining price of flats constructed by it, it acts purely in its executive capacity and is bound by the obligations which dealings of the State with the individual Citizens import into every transaction entered into in the exercise of its constitutional powers. But after the State or its agents have entered into the filed of ordinary contract, the relations are no longer governed by the constitutional provisions but by the legally valid contract which determines rights and obligations of the parties inter se. No question arises of violation of Article 14 or of any other constitutional provision when the State or its agents, purporting to act within this field, perform any act. In this sphere, they can only claim rights conferred upon them by contract and are bound by the terms of the contract only unless some statute steps in and confers some special statutory power or obligation on the State in the contractual field which is apart from contract. (See Radhakrishna Agarwal v. State of Bihar, (1977) 3 SCR 249 at P 255)”. Further on in the same paragraph of the report it was observed as follows: “In a similar and identical situation a Constitution Bench of this Court in Har Shankar v. The Dy. (See Radhakrishna Agarwal v. State of Bihar, (1977) 3 SCR 249 at P 255)”. Further on in the same paragraph of the report it was observed as follows: “In a similar and identical situation a Constitution Bench of this Court in Har Shankar v. The Dy. Excise & Taxation Commr. (1975) 3 SCR 254 , has observed that those who contract with open eyes must accept the burdens of the contract along with its benefits. Reciprocal rights and obligations arising out of contract do not depend for their enforceability upon whether a contracting party finds it prudent to abide by the terms of the contract. By such a test no contract would ever have a binding force. The jurisdiction of this Court under Article 32 of the Constitution is not intended to facilitate avoidance of obligations voluntarily incurred. It would thus appear that petitions ought not to have been entertained.” The decision in Radhakrishna Agarwal v. State of Bihar's case was sought to be distinguished by learned lawyers appearing on behalf of the petitioners of several grounds which may now be noted. 29. It was submitted in the first place that the protection of Article 14 as enunciated by the Supreme Court in several recent cases covers two distinct and different fields. The first field is the field of protection against discrimination. This is the field where it has been held that equals cannot be treated unequally. The second and the more recent field of the protection of Article 14 as enunciated by the Supreme Court is in respect of arbitrariness. This field inhibits the State from acting arbitrarily not only in the field of legal rights but also in the field of contractual rights. It was pointed out that in the Radhakrishna Agarwalla's case this question of protection against arbitrariness in regard to the State action was not raised at all before the Supreme Court. 30. The decision in Radhakrishna Agarwalla was sought to be distinguished on another ground. Reference was made to paragraph 21 of the report where the following passage occurs:- “In the cases before us, allegations on which a violation of Art 14 could be based are neither properly made nor established. 30. The decision in Radhakrishna Agarwalla was sought to be distinguished on another ground. Reference was made to paragraph 21 of the report where the following passage occurs:- “In the cases before us, allegations on which a violation of Art 14 could be based are neither properly made nor established. Before any adjudication on the question whether Art, 14 of the Constitution could possibly be said to have been violated, as between persons governed by similar contracts they must be properly put in issue and established. Even if the appellants could be said to have raised any aspect of Art. 14 of the Constitution and this Article could at all be held to operate within the contractual field whenever the State enters into such contracts which we gravely doubt, such questions of fact do not appear to have been urged before the High Court. And, in any event, they are of such a nature that they cannot be satisfactorily decided without a detailed adduction of evidence, which is only possible in ordinary civil suits, to establish that the State, acting in its executive capacity through its officers, has discriminated between parties identically situated. On the allegations and affidavit evidence before us we cannot reach such a conclusion. 31. On the strength of the above observations of the Supreme Court it was submitted on behalf of the petitioner that not only was the challenge in that case based on the question of discrimination which is only one aspect of Article 14 and not of arbitrariness which is the aspect we are concerned with in the present case. The Supreme Court in that case came to the definite conclusion that on the materials before it, it could not come to any conclusion as to discrimination. Therefore, the decision of the Supreme Court that Article 14 could not be invoked in that case really turned on the facts of that case. 32. It was, therefore, submitted that the above decision did not lay down any broad proposition that a challenge under Article 14 is precluded whenever it will relate to contractual rights and obligations. On the facts of that case, the Supreme Court did not go into the question since there were neither proper averment nor proof of any discriminatory treatment by the State. On the facts of that case, the Supreme Court did not go into the question since there were neither proper averment nor proof of any discriminatory treatment by the State. Any proposition of law laid down in that case must necessarily relate to the particular aspects of the question that was actually considered by the Court. 33. It was further submitted that in the case of Radha Krishna Agarwalla when the Supreme Court observes at paragraph 10 of the report and that after the State or its agents have entered into the field of ordinary contract, the relations are no longer governed by the constitutional provisions but by the legally valid contract, which determines the rights and obligations of the parties inter se and that in such cases no question arises of violation of Article 14 or of any other constitutional provisions, the Court was not considering, as it was not called upon to consider, the effect of arbitrary action of the State in the field of contract, as that question was not before it. In other words, the Court having held that there was no proper materials on record to induce the Court to consider the question of violation of Article 14 on the ground of discriminatory treatment, the Court was only concerned in that case with the question of enforcement of a private right created under a contract. 34. Reference was made by both parties to a recent decision of the Divisional Forest Officer v. Biswanath Tea Co. Ltd. reported in AIR 1981 SC 1368 . In that case the Supreme Court held that where a Company tried to enforce through a writ petition the right to remove timber without the liability to pay royalty it was held that the Company was not enforcing its right under Regulation 37 of the Assam Land Revenue and Local Rates Regulations but was seeking to enforce a contractual right under the specific terms of the contract of lease agreed to between the Company and the Government. The Supreme Court took note of the fact that, shorn of an embellishments the relief claimed by the Company was referable to nothing else but the terms of the lease. 35. The Supreme Court took note of the fact that, shorn of an embellishments the relief claimed by the Company was referable to nothing else but the terms of the lease. 35. It was pointed out on behalf of the petitioner that in paragraph 8 of the report the Supreme Court observes as follows:- “It is undoubtedly true that High Court can entertain in its Extraordinary Jurisdiction a petition to issue any of the prerogative writs for any other purpose. But such writ can be issued where there is executive action unsupported by law or even in respect of a Corporation there is a denial of equality before law or equal protection of law”. Therefore it was submitted on behalf of the petitioner that the above decision is merely an authority for the proposition that if it is nothing more than pure enforcement of contractual rights and obligation a Writ will not lie. 36. Strong reliance was placed on behalf of the petitioners on another decision of the Supreme Court in the case of the Manager, Government Branch Press & Anr. v D.B. Belliappa reported in AIR 1979 SC 429 . In paragraph 18 of the Report the Supreme Court observes as follows:- Mr. Veerappa's first contention is that Articles 14 and 16(1) of the Constitution have no application, whatever, to the case of a temporary employee whose service is terminated in accordance with the terms and conditions of his service because the tenure or the duration of the employment of such an employee is extremely precarious being dependent upon the pleasure and discretion of the employer State. In our opinion, no such generalisation can be made. The protection of Articles 14 and 16(1) will be available even to such a temporary Government servant if he has been arbitrarily discriminated against and singled out for harsh treatment in preference to his juniors, similarly circumstanced. It is true that the competent authority had the discretion under the conditions of service governing the employee concerned to terminate the letter’s employment without notice. But, such discretion has to be exercised in accordance with reason and fair play and not capriciously. It is true that the competent authority had the discretion under the conditions of service governing the employee concerned to terminate the letter’s employment without notice. But, such discretion has to be exercised in accordance with reason and fair play and not capriciously. Bereft of rationality and fairness, discretion degenerates into arbitrariness which is the very antithesis of the rule of law on which our democratic policy is founded Arbitrary invocation or enforcement of a service condition terminating the service of a temporary employee may itself constitute denial of equal protection and offends the equality clause in Articles 14 and 16(1). In paragraph 24 of the report the following passage occurs :- “Conversely, if the services of a temporary Government servant are terminated, arbitrarily and not on the ground of his unsuitability, unsatisfactory conduct or the like which would put him in a class apart from his juniors in the same service, a question of unfair discrimination may arise, notwithstanding the fact that in terminating his service, the appointing authority was purporting to act in accordance with the terms of the employment. Where a charge of unfair discrimination is levelled with specificity or improper motives are imputed to the authority making the impugned order of termination of the service, it is the duty of the authority to dispel that charge by disclosing to the Court the reason or motive which impelled it to take the impugned action. Excepting, perhaps, in cases analogous to those covered by Art. 311(2), Proviso (c), the authority cannot withhold such information from the Court on the lame excuse, that the impugned order is purely administrative and not judicial, having been passed in exercise of its administrative discretion under the rules governing the conditions of the service. “The giving of reasons” as Lord Denning put it in Breen v. Amalgamated Engineering Union (1971) 1 All ER 1148 is one of the fundamentals of good administration and, to recall the words of this Court in Khudi Ram v. State of West Bengal (1975) 2 SCR 832 at p. 848 ( AIR 1975 SC 550 at 558) in a Government of laws ‘there is nothing like unfettered discretion immune from judicial review-ability’. The executive no less than the judiciary, is under a general duty to act fairly, Indeed fairness founded on reason is the essence of the guarantee epitomised in Arts. 14 and 16(1).” 37. The executive no less than the judiciary, is under a general duty to act fairly, Indeed fairness founded on reason is the essence of the guarantee epitomised in Arts. 14 and 16(1).” 37. It was emphatically submitted on behalf of the petitioner that the above decision of the Supreme Court is a clear authority for the proposition that even when the State is acting entirely in terms of the contract of employment and exercising its discretion in terminating the service of a temporary Government servant, which it was fully entitled to do under the terms of the contract, it must nonetheless act fairly and not arbitrarily. This authority it was submitted is in all fours with the facts of the present case Beliappa's cuse which is mentioned hereinabove and which is reported in AIR 1979 SC 429 was approvingly referred to in the subsequent case of State of Maharastra v. Veerappa R. Saboji reported in AIR 1980 SC 42 . At paragraph 13 of the report after referring to the facts of the case Untwalia, J. who delivered the judgment on behalf of the Court approvingly sets out a passage from the judgment in Belliapas's case which has already been set but hereinabove. It was submitted that Veerappa's case is also an authority for the proposition that even in the field of contract the State cannot act arbitrarily. 38. In my view, the contention of the petitioner on this aspect of the matter is sound and should be accepted. I accept the submission made on behalf of the petitioners, that neither in the case of Radha Krishna Agarwalla nor in the case of Delhi Development Authority the Supreme Court was concerned with the question of arbitrariness of State action. This is a new extension of the protection of Article 14 of the Constitution of India which has been developed by the Supreme Court starting from Royappa's case and leading to the International Airport Authority’s case. This aspect of the matter, as already indicated, was in my view, not present before the Supreme Court in the two cases mentioned above. 39. I further accept the argument on behalf of the petitioner that in the case of Radha Krishna Agarwalla the challenge of Article 14 failed because of lack of proper pleadings and materials, Although there are certain observations. 39. I further accept the argument on behalf of the petitioner that in the case of Radha Krishna Agarwalla the challenge of Article 14 failed because of lack of proper pleadings and materials, Although there are certain observations. In the decision of Radha Krishna Agarwalla's case which may legitimately inspire an argument on the difference in the Constitutional position with regard to the applicability of Article 14 when the parties are on the threshold of a contract and the position when the parties are within the contractual field, this controversy is, in my view, completely set at rest by the decisions in Belliappa's case and Veerappa's case. In Belliappa's case the State was clearly and unmistakably acting within the contractual field and was indeed acting in terms of the contract. Yet it was positively held by the Supreme Court in that case that the State cannot act arbitrarily even when it was acting in terms of the contract. Therefore, the supposed distinction with regard to the applicability of Article 14 between the two types of cases namely when the parties are on the threshold of a contract and when they are within the contractual field is completely obliterated by the decision in Belliappa's case. To put it differently, the interdict against the arbitrariness of State action is equally applicable, in my view, to both the fields. 40. Even on principle, as was lucidly submitted by Mr. Dipankar Gupta who followed Mr. Subrata Roy Chowdhury and addressed me on this aspect of the matter, it was inconceivable that the parties would have larger right when they are on the threshold of a contract than the right which they would have when they are within the contractual field. In other words, if a citizen has a right to see that the State does not act arbitrarily when the parties are on the threshold of a contract a citizen must have the same right even when the parties are in the contractual field. The only difference, it was submitted by Mr. Gupta, is that when the parties are on the threshold of a contract a citizen has a single right namely to see that the State does not act in an arbitrary fashion. The only difference, it was submitted by Mr. Gupta, is that when the parties are on the threshold of a contract a citizen has a single right namely to see that the State does not act in an arbitrary fashion. Once the parties have entered into the contractual field, a citizen has two-fold right namely a private right to see that the terms of the contract are adhered to and a public right to see that the State does not act arbitrarily. 41. This argument of Mr. Gupta is, in my view, sound and should be accepted. On principle, I find it very difficult to accept the position that a citizen has a higher right while he is on the threshold of a contract with the State than the right he has when he is in the contractual field with the State as the other party. I accept the submission of Mr. Dipankar Gupta that while on the threshold of a contract a citizen has merely a Constitutional right under Article 14 of the Constitution of India. But when the parries that is the citizen on the one hand and the State on the other are within the realm of the contract the citizen has a dual right. One right is contractual to see that the State does not act in breach of the contract and the other is the Constitutional right including the right to see that the State does not act arbitrarily while performing the contract. 42. Before I leave this aspect of the case, it wil1 be necessary to refer to two other decisions which were cited at the Bar. One is a recent decision of this Court in the case of Jay Krishna Pandey v. Union of India, reported in 84 CWN 795. In that decision Sabyasachi Mukherji J held that the action of the Government in ignoring the tender submitted by the petitioner was arbitrary and illegal, and on that finding was pleased to strike down and cancel the concluded contracts between Government on the one hand and the other parties on the other. In that decision Sabyasachi Mukherji J held that the action of the Government in ignoring the tender submitted by the petitioner was arbitrary and illegal, and on that finding was pleased to strike down and cancel the concluded contracts between Government on the one hand and the other parties on the other. It was submitted that this decision negatives the contention of the respondent that once a contract has been concluded the Court is powerless to grant relief, save and except under the Specific Relief Act either by way of awarding damages or granting relief by way of specific performance, as the case may be. 43. It was generally submitted on behalf of the petitioner that the State and its officers are clothed with special Constitutional obligations. In their dealings with citizens even when there is a concluded contract regulating such dealings. It was submitted that one of the obligations of the State in dealing with the citizen is to act fairly and not arbitrarily. Any act of the State which is unfair and arbitrary will entitle an aggrieved party to invoke the Constitutional Writ jurisdiction of the High Court under Article 226 of the Constitution. 44. Since I have come to the conclusion that an arbitrary act on behalf of the State even in the contractual field is liable to be struck down for the reasons given hereinbefore it will necessarily follow that a citizen would be entitled to invoke the writ jurisdiction in challenging such arbitrary action on the part of the State. 45. The last decision on this aspect of the matter that was strongly relied upon by the petitioners is the case of D.F.O. South Kheri v. Ram Sanehi reported in AIR 1973 SC 205 . That was a case where D.F.O. South Kheri passed an order cancelling “sleeper tally”. The challenge to this action was sought to be resisted on the ground that the Officer concerned acted in exercise of the authority conferred upon him by the terms of the contract and as such this action was not assailable under Article 226 of the Constitution of India. The challenge to this action was sought to be resisted on the ground that the Officer concerned acted in exercise of the authority conferred upon him by the terms of the contract and as such this action was not assailable under Article 226 of the Constitution of India. The Supreme Court was unable to hold that “merely because the sources of the right which the petitioner claimed was initially in a contract, for obtaining relief against any arbitrary and unlawful action on the part of the public authority, he must resort to a suit and not to a petition by way of Writ.” In that case the Supreme Court in exercising jurisdiction in Writ proceeding, quashed the order complained of on the ground that the said officer did not call for any explanation from the petitioner and gave him no hearing before passing the impugned order. According to the Supreme Court such order had to be made in a manner in consonance with the principles of natural justice. The Supreme Court approved of the principle that the parties to whose prejudice the order is intended to be passed is entitled to a hearing and that this principle is applicable equally to judicial tribunals and bodies of persons invested with authority to adjudicate upon matters involving civil consequences. To quote one of its observations “it is one of the fundamental rules of our constitutional set up that every citizen is protected against exercise of arbitrary authority by the State or its Officers.” 46. The submissions of the petitioners on this aspect of the case which I accept may be summarised as follows :- 1. If a petitioner seeks to enforce a purely contractual term, the Court normally does not entertain as application for such purpose under Art 226 of the Constitution of India. 2. But when one of the contracting parties is the State, and a challenge is thrown by the petitioner alleging that the action is arbitrary, an attack to such an action under Art. 14 of the Constitution of India is fully available. 3. The development of administrative law and the activist dimension of Art. 14 of the Constitution of India, as laid down in the international Airport Authority's case has brought out a distinction between a purely private right and a right of an individual as a member of the public vis a vis the State. 3. The development of administrative law and the activist dimension of Art. 14 of the Constitution of India, as laid down in the international Airport Authority's case has brought out a distinction between a purely private right and a right of an individual as a member of the public vis a vis the State. If there is an arbitrary revocation of contract by the State, the contractor has two rights available to him, namely, the Constitutional right as also the right under the contract. These two rights are available when there is a concluded contract. When however, the citizen and the State are on the threshold of a contract, only the constitutional right is available. 4. It is not correct to say that the relief prayed for in the Writ application amounts to the relief of specific performance. In such a case the Court is not really concerned with the mode or manner of performance. The only question that arises is whether action complained of amounts to an arbitrary action on the part of the State or not. If it is found to be arbitrary, then it should be struck down. The Court is not really concerned with the future performance of the contract. That will take its own course in accordance with law. 47. On the merits of the contention on behalf of the petitioner as to the arbitrary nature of the action of the respondent no. 1 which, it was not disputed by Mr. R.C. Deb, was "State" within the meaning of Article 12 of the Constitution of India, I am of the view that it is an arbitrary action of the worst kind. As will appear from the facts, some of which has been set out hereinabove during the entire period when the petitioner firm was carrying on the work assigned to it until its termination, there was no complaint of any kind whatsoever as to the performance of the said firm. There was not a whisper from the C.M.D.A. authorities that they had any complaint of any kind whatsoever against the said firm except for the lodging of the First Information Report (F.I.R.) and the police investigation on the basis thereof, which have been quashed by me in the Civil Revision case mentioned above. There was not a whisper from the C.M.D.A. authorities that they had any complaint of any kind whatsoever against the said firm except for the lodging of the First Information Report (F.I.R.) and the police investigation on the basis thereof, which have been quashed by me in the Civil Revision case mentioned above. The parties appear to be to have been on the best of terms except for some complaint from the said firm regarding belated payment. The impugned letter of termination dated the 5th March, 1981 was, as it were, a bolt from the blue. It follows that I am of the view that the termination challenged in the present case is grossly arbitrary. 48. The view that I have taken on this aspect of the matter which indeed was the principal contention on behalf of the petitioner is sufficient to dispose of this application. Having regard to the other points raised by both the parties I will briefly advert to the same. 49. On behalf of the respondents Mr. R.C. Deb submitted that the petitioner had an alternative remedy which was equally efficacious and adequate. Hence he submitted that this Court should not in its equitable jurisdiction under Article 226 of the Constitution of India entertain the petition and grant relief. 50. In order to appreciate this contention it will be necessary to refer to certain documents which are on record. On the 18th October, 1980 CMDA addressed a letter to the petitioner which is to be found at page 133 of the Annexures to the petition. This conversing letter to be draft agreement is in the following terms; “Dear Sirs, Kindly refer to the series of discussion held between you and the CMDA officers regarding the terms and conditions of the above project. I anclose herewith two draft copies of the Agreement incorporating all the points agreed between you and CMDA. This draft copy of the Agreement would have to be examined and vetted through the Legal Adviser, CMDA before this can be executed. In the meantime, we shall appreciate if you can kindly confirm you acceptance to the terms and conditions as indicated in the draft Agreement with you signature on each page in token of your acceptance. This letter is not a letter of intent” As is obvious from the covering letter the enclosure consisted of the draft agreement. In the meantime, we shall appreciate if you can kindly confirm you acceptance to the terms and conditions as indicated in the draft Agreement with you signature on each page in token of your acceptance. This letter is not a letter of intent” As is obvious from the covering letter the enclosure consisted of the draft agreement. Clause 14 of the draft agreement is material for our purpose and is in the following terms:- “Arbitration : If any disputes of differences of any kind whatsoever (other than those in respect of which the decision of any person is by the contract, expressed to be final and binding) shall arise between CG and CMDA in connection with or arising out of the agreement or carrying out the work-cum-study (whether during the progress of the work cum-study or after their completion and whether before or after the termination, abandonment or breach of contract) it shall in the first place be referred to and settled by the competent authority. Subject to arbitration as hereinafter provided such decision in respect of every matter so referred to shall be final and binding upon both, parties and shall forthwith be given effect to and the CG shall proceed with the work with due diligence. If the CG be dissatisfied with any such decision then they within 90 days of the foregoing decision, require that the matter or matters in dispute be referred to arbitration according to the provisions contained in the Arbitration Act, 1940 as amended upto date. The award of the arbitrator or arbitrators shall be binding on both the parties. The work under the contract shall continue during the arbitration proceedings and payment to CG shall continue as per the terms agreed upon.” 51. This communication was followed by another communication dated the 4th November, 1980 the opening paragraph of which reads as follows :- "Dear Sirs, Kindly refer to this office letter No. 208/CMDA/PL/ADP-I/28 dated 7th March, 1980 in which the CMDA had intimated to you had been selected for the above work, subject to the acceptability of the commercial proposal. The commercial proposal has since been received from you, examined by the CMDA and detailed negotiations have already been held with yourselves. The commercial proposal has since been received from you, examined by the CMDA and detailed negotiations have already been held with yourselves. Pursuant to the abuse, the CMDA is pleased to award the subject assignment to you on the following terms and conditions as agreed between you and CMDA," The above paragraph is followed by a recital of the various other terms and conditions. 52. It was common case that this document was the letter of intent in respect of the work which was being undertaken by the petitioners. 53. On the 6th November, 1980 the petitioner wrote a letter to the Additional Director of Planning CMDA which is to be found at page 167 of the Annexures to the petition and is in the following terms:- ‘Dear Sir, We thank you for the letter of intent No. 942/CMDA/PL-ADPI/LG dated 4th November, 1980 received by us on the 4th instant and hereby convey our acceptance of the same. Assuring you of our best services.” 54. On the basis of the above document Mr. R.C. Deb contended that the terms and conditions with regard to the work which were to be undertaken by the petitioner had been agreed upon between the parties, although a formal contract recording the terms was yet to be executed. It was submitted that since the agreement of the parties contained an arbitration clause the parties had chosen their own domestic from for resolving the disputes. As such the petitioner was not entitled to agitate grievances in an application under Article 226 of the Constitution of India. 55. On behalf of the petitioner reliance was placed on Clause VII of the later of intent which provides inter alia as follows:- “AGREEMENT : A mutually acceptable draft agreement has been exchanged between you and CMDA, incorporating terms and conditions of engagement in further details which would be binding on both the parties. A formal agreement will have to be entered into between CMDA and yourselves on the basis of the draft agreement, subject to vetting by the CMDA's Legal Department in respect of legal expressions, language and link implications of the clauses of the draft agreement. You will kindly agree to give your consent to such modifications, if any which may be suggested by the CMDA's Legal Adviser of the Agreement. You will kindly agree to give your consent to such modifications, if any which may be suggested by the CMDA's Legal Adviser of the Agreement. The Agreement after being vetted by the Legal Adviser, CMDA will be formally executed by you within 7 (seven) days of receipt of the intimation of such vetting. 8 (eight) copies of the Agreement in the final form shall have to be typed in appropriate stamped paper and submitted to CMDA after your necessary signatures. I (one) copy of the agreement will be returned to you for your own record after due signature of the Competent Authority of the CMDA. It may please be noted further that other terms and conditions not specified hereinabove shall be, governed by the mutually accepted Agreement as vetted by the Legal Adviser of CMDA.” 56. On the basis of the above clause it was contended on behalf of the petitioner that the Clause clearly contemplated certain further modifications of the agreement and as such the draft agreement or the letter of intent cannot be said to constitute the concluded contract between the parties. 57. In my view this contention of the petitioner is not sound. It is to be noted that the draft agreement which was forwarded to the petitioner and a copy of which the petitioner was asked to sign and return to the CMDA Authorities was followed by the letter of intent dated 4th November, 1980. It is obvious from the correspondence that the letter of intent was formally accepted in writing which signify the acceptance by the petitioner of all the terms and conditions contained therein. Although from the record it does not appear whether the draft agreement was formally accepted by the petitioner or not, from the sequence of the correspondence it appears that the petitioner never raised any objection as to the term of the draft agreement. 58. I accept the contention of the petitioner that Clause VII of the letter of intent clearly contemplates modifications of the terms which by the same clause the petitioner was called upon to accept. That however in my view does not detract from the binding nature of the existing clause. In fact Clause VII of the letter of intent clearly sets out that the draft agreement which has been exchanged between the parties would be binding on both the parties. That however in my view does not detract from the binding nature of the existing clause. In fact Clause VII of the letter of intent clearly sets out that the draft agreement which has been exchanged between the parties would be binding on both the parties. In my view the conclusion is inescapable that the existing terms and conditions as contained in the draft agreement and the letter of intent were accepted by the petitioner. It is true that the letter of intent which was expressly accepted by a formal communication does not contain an arbitration clause. But the draft agreement which as I have indicated was accepted by the petitioner by necessary implication does contain an arbitration clause. It is true that no formal agreement was executed between the parties. Notwithstanding the same I am of this view that there was consensus ad idem between the parties on the terms and conditions of the draft agreement which contained an arbitration clause. 59. The alternative submission on behalf of the petitioner was that if it is held that there is an arbitration clause binding on the parties the subject matter of the present controversy cannot be decided by arbitration. This is because the principal challenge as fully discussed above, is on the arbitrary nature of State action. This challenge is founded basically on the Constitutional guarantee of Article 14 of the Constitution of India. This question viz., whether there has been any infraction of a Constitutional guarantee in favour of the petitioner cannot be decided by the arbitrators. This is because the arbitrator or arbitrators would only be concerned with the contractual rights. This Constitutional rights cannot be said to arise out of any contract and is clearly beyond the jurisdiction of the arbitrators. 60. It was further pointed out that the other disputes also would fail outside the purview of the jurisdiction of the arbitrator. The charge of the CMDA against the petitioner is that the petitioner has committed fraud on the CMDA. A criminal proceeding of cheating which the petitioner alleges to be false and baseless has already been launched against the petitioner. It is well settled that the party against whom fraud is alleged has a right to demand that this question be decided by an open trial. A criminal proceeding of cheating which the petitioner alleges to be false and baseless has already been launched against the petitioner. It is well settled that the party against whom fraud is alleged has a right to demand that this question be decided by an open trial. It was submitted on behalf of the petitioner that in this case the petitioner desires that the charges of fraud and cheating be investigated in an open Court. As such, the domestic forum cannot be said to be alternative remedy. 61. In my view this contention of the petitioner is sound and should be accepted. The principal question of the arbitrary action on the part of the State being violative of the Constitutional guarantee of Article 14 of the Constitution of India clearly cannot be decided by arbitration. Secondly the charge of fraud and cheating against the petitioner should in my view be decided by an open trial. That being so I reject the contention of an alternative remedy raised by the respondent. 62. It was next contended on behalf of the respondents that highly disputed and complicated questions of fact were involved in the present application which could not be properly and conveniently gone into in a writ application. 63. Reference was made in this connection by Mr. R.C. Deb to a letter dated the 7th April, 1980 addressed by the petitioner which according to Mr. Deb bristled with various questions of fact. It was pointed out that allegations with regard to fraud and cheating were being gone into by the police authorities, Various allegations and counter allegations of fact were involved in this application, Reference was also made to the letter dated the 4th December, 1979 which was addressed by the petitioner no. 1 to the CMDA Authorities wherein their eligibility for undertaking the project that was advertised in the papers was laid down in some detail. It was pointed out that the abovementioned letter contains certain misrepresentation which induced the CMDA Authorities to allot work to the petitioner no. 1. It was submitted that whether these were in fact misrepresentation or not could not be properly decided on affidavits and without any further evidence. Therefore it was submitted that no relief should be granted to the petitioner in the present application. 64. 1. It was submitted that whether these were in fact misrepresentation or not could not be properly decided on affidavits and without any further evidence. Therefore it was submitted that no relief should be granted to the petitioner in the present application. 64. In answer to this contention on behalf of the respondents, it was submitted on behalf of the petitioner that there were no question of disputed facts involved in the proceedings, It was submitted that from the affidavit filed before me it should be evident that there was no misrepresentation whatsoever by or on behalf of the petitioner no. 1. Reference was made in this connection to the affidavit of Sunil Baran Roy, the then Chief Executive Officer, CMDA who was directly involved in granting the contract to the petitioner no. 1. In paragraph 4 of his affidavit affirmed on the 27th April, 1981’ Mr. Roy states inter alia as follows : “I was the Chairman of the Top Management Team in the C.M.D.A. which dealt with Pilot Sewer Study Case and which recommended the selection of Messrs, Central Group for that Study. Sri S.K. Roy, D.G. (P & D) in the C.M.D. A who is respondent no. 9 in this Rule, was also a member of the same team, Apart from this there were four other members in the team, The team relied exclusively on the evaluation and assessment of all applications made by Sri Roy and upon his guidance and advice, I, as a member of the team was led to believe that Central Group was a construction organisation and not a consultancy organisation and it was also the sister organisations of two other organisations known as Central Concrete and Allied Projects Ltd, and Central Engineering Syndicate, which had executed several major projects for the CMDA involving major underground construction activity including diversion and relaying of sewers and that three organisations constituted one group with a common pool of experience, expartise, man-power, finance and other resources, and that this common pool would be utilised for the pilot study.” It was submitted on the basis of the above statements in the affidavit of Mr. S.B. Roy that the Chief Executive of the CMDA relied on the guidance and advice of Sri S.K. Roy and not on any representation alleged to have been made by or on behalf of the petitioner no 1. S.B. Roy that the Chief Executive of the CMDA relied on the guidance and advice of Sri S.K. Roy and not on any representation alleged to have been made by or on behalf of the petitioner no 1. In the premises it was submitted that there was no disputed questions of fact which require investigation or adducing of any oral evidence. 65. In my view, this contention on behalf of the respondents ought to be rejected. I hold that in the present case the facts in dispute are not such that would preclude the petitioner from obtaining relief in this jurisdiction. I accept the submission on behalf of the petitioner that CMDA relied on the evaluation and assessment of Sri S.K. Roy and not on any representation made by the petitioner no. 1. As such the question of any misrepresentation by the petitioner no. 1 does not arise in the facts of the present case. 66. Strong reliance was placed by learned counsel appearing for the petitioners on the doctrine of promissory estoppel as enunciated and explained by the Supreme Court. It was submitted that on the representation made by the CMDA authorities that the petitioner would be awarded the contract which has been the subject matter of the letter of intent the petitioner had spent large sums of money and employed a considerable number of technical personnel and thereby altered its position to its prejudice and detriment. The factual aspect of this matter is not really in dispute. It was submitted on behalf of the petitioner that CMDA authorities are now estopped from contending that the petitioner is not entitled to carry out its assignment in terms of the letter of intent. 67. Reference was made by learned counsel on behalf of the petitioner to the earthiest decision of the Supreme Court on this aspect of the matter in the case of the Union of India v. Indo Afgan Agencies (wrongly described as Anglo Afghan Agencies in the AIR) reported in AIR 1968 SC 718 . In that decision it was had by Shah, J. (as his Lordship then was) that where a person has acted upon representations made in an Export Promotion Scheme that import licences upto the value of the goods exported will be issued, and had exported goods his claim for import licence for the maximum value permissible by the Scheme could not be arbitrarily rejected. Reduction in the amount of import certificate may be justified on the ground of misconduct of the exporter in relation to the goods exported, or on special considerations such as difficult foreign exchange position, or other matters which have a bearing on the general interests of the State. The Scheme provided for grant of import entitlement of the value and not upto the value of the goods exported. The Textile Commissioner was, therefore, in the ordinary course required to grant import certificate for the full value of the goods exported; he could not reduce that amount after enquiry contemplated by Cl. 10 of the Scheme. The authority vested in the Textile Commissioner by the rules even though executive in character was from its nature an authority to deal with the matter in a manner consonant with the basic concept of justice and fair-play; if he made an order which was not consonant with the basic concepts of justice and fair-play his proceeding was open to scrutiny and rectification by the Courts. 68. It was further held that even though the case did not fall within the terms of S. 115 of the Evidence Act, it was still open to a party who had acted on a representation made by the Government, to claim that the Government shall be bound to carry out the promise made by it, even though the promise was not recorded in the form of a formal contract as required by Article 299 of the Constitution of India. 69. On behalf of the respondents reliance was sought to be placed on paragraph 18 of the above report which is in the following terms. “it was somewhat faintly urged that if the Government is held bound by every representation made by it regarding its intention, when the exporters have acted in the manner they were invited to act, the Government would be held bound by a contractual obligation even though no formal contract in the manner required by Art. 299 of the Constitution was executed, and the exporter would be entitled to claim damages contrary to that provision for breach of the contract even though no formal written contract had been executed in the manner provided by that Article. But the respondents are not seeking to enforce any contractual right they are seeking to enforce compliance with the obligation which is laid upon the Textile Commissioner by the terms of the Scheme, and we are of the view that even if the Scheme is executive in character, the respondents who were aggrieved because of tile failure to carry out the terms of the Scheme were entitled to seek resort to the Court and claim that the obligation imposed upon the Textile Commissioner by the Scheme be ordered to be carried out.” On the strength of the above paragraph of the report, it was submitted that once the parties have entered into the field of concluded contract the question of any representation becomes immaterial and irrelevant. The parties are then governed wholly and solely by the terms of the contract. To put it differently, it was submitted that the doctrine of promissory estoppel cannot be invoked when the parties are within the field of a concluded contract. 70. Even on the merits, it was contended on behalf of the respondents that the CMDA had never written to the petitioner that its contract will not be terminated. Not only was such a promise not made but once a contract has been concluded no such promise could be binding on the CMDA. Thereafter the sole criterion would be adherence to the terms of the contract. 71. On this aspect of the matter strong reliance was placed on behalf of the petitioner on a more recent decision of the Supreme Court in the case of Motilal Padampat Sugar Mills Co Ltd. v. The State of Uttar Pradesh & ors. reported in AIR 1979 SC 621 . In that decision Bhagawati, J. of the Supreme Court after an elaborate discussion of the origin of the doctrine of promissory estoppel with reference to a large number of English cases of came to the following conclusion at the end of paragraph 8 of the report. reported in AIR 1979 SC 621 . In that decision Bhagawati, J. of the Supreme Court after an elaborate discussion of the origin of the doctrine of promissory estoppel with reference to a large number of English cases of came to the following conclusion at the end of paragraph 8 of the report. “The true principle of promissory estoppel, therefore, seems to be that where one parry has by his words or conduct made to the other a clear and unequivocal promise which is intended to create legal relations or effect a legal relationship to arise in the future knowing or intending that it would be acted upon by the other party to whom the promise is made and it is in fact so acted upon by the other party, the promise would be binding on the party making it and he would not be entitled to go back upon it, if it would be inequitable to allow him to do so having regard to dealings which have taken place between the parties, and this would be so irrespective whether there is any pre-existing relationship between the parties or not.” 72. Considerable controversy was raised whether the doctrine of promissory estoppel could merely be invoked by way of a defence or it could also be part of the cause of action, Learned counsel on behalf of the petitioners drew my attention to paragraph 9 of the report in the above case where, Bhagwati, J poses the question in the following terms:- “It may be pointed out that in England the law has been well settled for a long time, though there is some indication of a contrary trend to be found in recent juristic thinking in that country, that promissory estoppel cannot itself be the basis of an action. It cannot find a cause of action, it can only be a shield and not a sword.” Thereafter, after discussing the various English decisions on this aspect of the matter, Bhagwati, J, comes to the following conclusion at the end of paragraph 9 of the report :- “The doctrine of promissory estoppel need not, therefore, be inhibited by the same limitation as estoppel in the strict sense of the term. It is an equitable principle evolved by the Courts for doing justice and there is no reason why it should be given only a limited application by way of defence.” After rioting the decision of Lord Denning in the case of Crabb v. Arun District Council reported in (1975) 3 All ER 865 where it has been recognised that that species of estoppel called proprietary estoppel does give rise to a cause of action, Bhagwati, J. at the end of paragraph 10 of the report, comes to the following conclusion ; “But on what principle, one may ask, is the distinction to be sustained between promissory estoppel and proprietary estoppel in the matter of enforcement by action. If proprietary estoppel can furnish a cause of action, why should promissory estoppel not? There is no qualitative difference between the two. Both are the off springs of equity and if equity is flexible enough to permit proprietary estoppel to be used as a cause of action, there is no reason in logic or principle why promissory estoppel should also not be available as a cause of action, if necessary to satisfy the equity.” After noting that the plea of executive necessity cannot release the government from its obligation to honour its promise if the party acting in reliance on the promise has altered his position, Bhagwati, J. in paragraph 24 of the report states the final legal position as follows: “The law may, therefore, now be taken to be settled as a result of this decision, that where the Government makes a promise knowing or intending that it would be acted on by the promises and in fact, the promise, acting in reliance it, alters his position, the Government would be held bound by the promise and the promise would be enforceable against the Government at the instance of the promise, notwithstanding that there is no consideration for the promise and the promise is not recorded in the form of a formal contract as required by Art. 299 of the Constitution. It is elementary that in a republic governed by the rule of law no one however high or low, is above the law. Everyone is subject to the law as fully and completely as any other and the Government is no exception. It is elementary that in a republic governed by the rule of law no one however high or low, is above the law. Everyone is subject to the law as fully and completely as any other and the Government is no exception. It is indeed the pride of constitutional democracy and rule of law that the Government stands on the same footing as a private individual so far as the obligation of the law is concerned the former is equally bound as the latter.” 73. Before I deal with another and a more recent decision of the Supreme Court on the question of promissory estoppel, certain factual aspects of the matter may be briefly noted. 74. It was pointed out that in terms of Clause 3 of the letter of intent which is to be found at page 166 of the Annexures, the petitioner was required to complete the assignment by the 31st May, 1982 Unless extended by the competent authority. There was no provision for cancellation or termination of the letter of intent. The work involved was of an unusual and indeed a unique one which required tremendous initiative skill and expertise. The representation made to the petitioner was that it would be allowed to continue its work invest finance, arrange for foreign collaboration and expertise in order to complete the work-cum-study by the 31st May, 1982; By the sudden and abrupt cancellation of the letter of intent without assigning any reason whatsoever, the respondents have resiled from the representation made as aforesaid to the determent of the petitioner. This, it was submitted, afforded a cause of action in so far as the petitioner was concerned. 75. On behalf of the CMDA respondents, reference was made to a decision of the Supreme Court in the case of Jit Ram Shiv Kumar & Ors. v. The State of Haryana & Anr. reported in AIR 1980 SC 1285 . It was submitted on the strength of certain observations of Kailasam, J., in the above decision, that some parts of the doctrine of promissory estoppel as enunciated by Bhagawati, J, in the M.P. Sugar Mill's case are no longer good law. 76. In paragraph 39 of the report Kailasam, J, after referring to a large number of decisions both English and Indian comes to the following conclusion :- "39. 76. In paragraph 39 of the report Kailasam, J, after referring to a large number of decisions both English and Indian comes to the following conclusion :- "39. The scope of the plea of doctrine of promissory estoppel against the Government may be summed up as follows : (1) The plea of promissory estoppel is not available against the exercise of the legislative functions of the State. (2) The doctrine cannot be invoked for preventing the Government from discharging its functions under the law. (3) When the officer of the Government acts outside the scope of his authority the plea of promissory estoppel is not available. The doctrine of ultra vires will come into operation and the Government cannot be held bound by the unauthorised acts of its officers. (4) When the officer acts within the scope of his authority under a scheme and enters into an agreement and makes a representation and a person acting on that representation puts himself in a disadvantageous position, the Court is entitled to require the officer to act according to the scheme and the agreement or representation. The officer cannot arbitrarily act on his mere whim and ignore his promise on some undefined and undisclosed grounds of necessity or change the conditions to the prejudice of the person who had acted upon such representation and put himself in a disadvantageous position. (5) The officer would be justified in changing the terms of the agreement to the prejudice of the other party on special considerations such as difficult foreign exchange position or other matters which have a bearing on general interests of the State.” 77. In order to appreciate the differences in the views of Bhagwati, J. and Kailasam, J. it would be necessary to refer to some paragraphs of the judgment of Kailasam, J. in extenso. Paragraph 40 of the report and some of the other paragraphs read as fallows :- “40. Before we conclude, we would refer to a recent decision of this Court in Moti Lal Padampat Sugar Mills Co. (P) Ltd v. State of Uttar Pradesh (1972) 2 SCR 641 ( AIR 1979 SC 621 ). It has been held that there can be no promissory estoppel against the exercise of legislative power and the legislature cannot be precluded from exercising its legislative functions by resort to the doctrine of promissory estoppel. (P) Ltd v. State of Uttar Pradesh (1972) 2 SCR 641 ( AIR 1979 SC 621 ). It has been held that there can be no promissory estoppel against the exercise of legislative power and the legislature cannot be precluded from exercising its legislative functions by resort to the doctrine of promissory estoppel. It has also held that when the Government owes a duty to the public to act differently, promissory estoppel could not be invoked to prevent the Government from doing so. The doctrine cannot be invoked for preventing the Government from acting in discharge of its duty under the taw. The Government would no, be found by the acts of its officers and agents, who act beyond the scope of their authority. A person dealing with an agent of the Government must be held to have noticed all the limitations of his authority.” 41. With respect, we are in complete agreement with the law as stated above but we find the judgment is not in accordance with the view consistently taken by this Court in some respects. We have read the judgment of Bhagawati, J. with considerable care and attention which it deserves. Firstly, with great respect we are unable to construe the decision in Union of India v. Indo-Afghan Agencies Ltd. case ( AIR 1968 SC 718 ) in the manner in which it has been done. As pointed out by us, all that the case purports to lay down is that the Court can enforce an obligation incurred by an authority on which another has acted upon and put himself in a disadvantageous position when the authority resiles arbitrarily or on mere whim or on some undefined and undisclosed grounds of necessity. 42. With respect, we feel we are unable to agree with the interpretation put by Bhagwati, J. Bhagwati, J. states the defence of executive necessity was thus clearly negatived by this Court and it was pointed out that it did not release the Government from its obligation to honour the promise made by it, if the citizen acting to reliance on the promise, had altered his position, the doctrine of promissory estoppel was in such a case applicable against the Government and it could not be defeated by invoking the defence of executive necessity. The same view has again been reiterated at page 682 where it is stated the law may, therefore, now be taken to be settled as a result of this decision that where the Government makes a promise knowing or intending that it would be acted on by the promise and the promise would be enforceable against the Government at the instance of the promisee, notwithstanding that there is no consideration for the promise and the promise is not recorded in the form of a formal contract as required by Article 299 of the Constitution.’ These observations would be right if they, are read with the qualifications, laid down in the Indo-Afghan Agencies case ( AIR 1968 SC 718 ), and other cases. 43. The further observations of the learned Judge that ‘everyone is subject to the law as fully and completely as any other and the Government is no exception. It is indeed the pride of constitutional democracy and rule of law that the Government stands on the same footing as a private individual so far as the obligation of the law is concerned, the former is equally bound as the latter.’ Again, but if the Government makes such a promise and the promisee acts in reliance upon it and alters his position, there is no reason why the Government should not be compelled to make good such promise like any other private individual do not appear to convey the true effect of the decision.’ The decision of this Court in Century Spinning & Manufacturing Co. Ltd. v. The Ulhasnagar Municipal Council ( AIR 1971 SC 1021 ) was understood by Justice Bhagwati as refusing to make a distinction between the private individual and public body so far as the doctrine of promissory estoppel is concerned. These observations would be correct only if they are read with the exceptions recognised by Justice Bhagwati himself elsewhere in his judgments of this Court. 44. We find ourselves unable to ignore the three decisions of this Court, two by Constitution Bench M. Ramanathan Pillai v. The Slate of Kerala ( AIR 1973 SC 2641 ) and State of Kerala v. The Gwalior Rayon Silk Manufacturing (Wvg.) Co. 44. We find ourselves unable to ignore the three decisions of this Court, two by Constitution Bench M. Ramanathan Pillai v. The Slate of Kerala ( AIR 1973 SC 2641 ) and State of Kerala v. The Gwalior Rayon Silk Manufacturing (Wvg.) Co. Ltd. ( AIR 1973 SC 2734 ) and the third by a Bench of four Judges of this Court in Excise Commissioner, U.P. Allahabad v. Ram Kumar ( AIR 1976 SC 2237 ) on the ground that the observations are in the nature of obiter dicta and that it cannot be insisted as intending to have laid down any proposition of law different from that enunciated in the Indo Afghan Agencies case. It was not necessary for this Court in the Cases referred to above to refer to Union of India v. Indo-Afghan Agencies Ltd. ( AIR 1968 SC 718 ), or if properly understood it only held that the authority cannot go back on the agreement arbitrarily or on its mere whim. We feel we are bound to follow the decisions of the three Benches of this Court which in our respectful opinion have correctly stated the law. We are also unable to read the case of the House of Lords in Howell v Falmouth Board Construction Co. Ltd. (1951 AC 837) as not having overruled the view of Denning, J., and as not having expressed its disapproval of the doctrine of promissory estoppel against the Crown nor overruled the view taken by Denning, J. in Robertson v. Minister of Pensions [(1949) 1 KB 227)] that ‘the Crown cannot escape the obligation under the doctrine of promissory estoppel’. 45. We find ourselves unable to share the view of the learned Judge that the Constitution Bench of this Court in Ramanathan Pillai’s case ( AIR 1973 SC 2641 ) heavily relied upon the quotation from the American Jurisprudence para 123 p. 871 p. 873 of Vol. 28. Again we feel to remark that 'unfortunately this quotation was incomplete and had overlooked perhaps inadvertently is unjustified.” 78. On the assumption that the Supreme Court has spoken in two different voices in the case of M.P. Sugar Mills Co. Ltd. v. The State of Uttar Pradesh & Ors reported in AIR 1979 SC 621 and in the case of Jitram Shivkumar & Ors. v. The State of Haryana & Anr. On the assumption that the Supreme Court has spoken in two different voices in the case of M.P. Sugar Mills Co. Ltd. v. The State of Uttar Pradesh & Ors reported in AIR 1979 SC 621 and in the case of Jitram Shivkumar & Ors. v. The State of Haryana & Anr. reported in AIR 1980 SC 1285 , an interesting argument was advanced by Mr. Dipankar Gupta on the doctrine of precedents as evolved by different Courts in India including the Supreme Court. Before I deal with the various authorities referred to by Mr. Gupta in this connection, it will be useful to note that, the earlier of the two decisions mentioned above is a decision of two Learned Judges of the Supreme Court whereas the latter decision is of three Learned Judges of Supreme Court. 79. The earliest decision referred to in this connection is a decision of a Division Bench of this High Court in the case of Kooka Sidhwa & Co v. Robin Complex, W.B. reported in AIR 1964 Calcutta 254. At paragraph 11 of the report, Laik J, who delivered the judgment of the Court observed inter alia as follows :- “It is no doubt true that the task of the learned Judges of the High Court becomes very heavy where there are more than one decision of the Supreme Court on the same point, not following or overruling or explaining the other. The subsequent decision where the earlier decision has been explained and/or distinguished by their Lordships of the Supreme Court, presents no difficulty, but where in the later decision the attention of their Lordships of the Supreme Court to the earlier decision was not at all drawn or where in the later decision though the earlier decision is noted, but it is neither expressly overruled, explained or followed, the task of the learned Judges of the High Court becomes still heavier. In my view it would be our duty first and prime to attempt to reconcile and harmonise all the decisions of the Supreme Court given on the same point, though the most part of our time might be occupied in attempting the said reconciliation instead of giving our attention to the main problem arising in the case. In my view it would be our duty first and prime to attempt to reconcile and harmonise all the decisions of the Supreme Court given on the same point, though the most part of our time might be occupied in attempting the said reconciliation instead of giving our attention to the main problem arising in the case. It is also my view that no attempt should be made by us by ignoring or by passing or by not taking notice of all the Supreme Court decisions relevant on the point, however much time the hearing of the case might take, causing the piling up of the alleged arrears of work. To do the contrary, might amount to disposals but not decisions”. 80. The next decision referred to is another Division Bench decision of this Court in the case of Superintendent & Remembrance of Legal Affairs of the State of West Bengal v. Ram Ajodhya & Anr. reported in AIR 1965 Calcutta 348 paragraph 48 of the report is in the following terms:- “On the question of the correctness of the trial Judges directions to the Jury as to the value of the dying statement, we do not think it is necessary for us to consider the ground at any length. In Kushal Rao's case ( AIR 1958 SC 22 ), earlier decision of the Supreme Court in Ramnath's case ( AIR 1953 SC 420 ) was fully considered and after a comprehensive review of the law the Supreme Court came to the conclusion that the observation in Ramnath's case AIR 1953 SC 420 , that it was settled law that it was not safe to convict an accused person merely on the evidence of a dying statement without corroboration was not called for. Indeed, in Kushal Rao's case their lordships held that the observation of the Court was in the nature of an obiter dictum. A cognate contention has been raised on the petitioner's behalf that despite the detailed statement of the law in Kushal Roo's case ( AIR 1958 SC 22 ) the inferior Courts in the country could not disregard the decision in Ramnath's case ( AIR 1953 SC 420 ). A cognate contention has been raised on the petitioner's behalf that despite the detailed statement of the law in Kushal Roo's case ( AIR 1958 SC 22 ) the inferior Courts in the country could not disregard the decision in Ramnath's case ( AIR 1953 SC 420 ). We need only to point out that where the Supreme Court has itself had an occasion to consider in a later case, its own earlier decision, no question of the binding character of such decision can reasonably arise. We are bound to take the law as declared by the Supreme Court and we must hold that Kushal Rao's case being a direct decision on the point must be followed since it considers and explains the earlier decision on which the petitioner has relied.”. 81. The next decision referred to in this connexion is another Division Bench decision of this Court in the case of S. Mulchand v. Collector, Central Excise & Land Customs & Ors. reported in AIR 1968 Calcutta 174. At paragraph 56 of the report S.P. Mitra J. (as his Lordship then was observed as follows :- ‘The fact remains that the Supreme Court has to a certain extent revised its earlier opinion and it is the latest opinion that ought to be followed by the High Court in India”. 82. The next decision on this point is one of Mysore High Court in the case of N.K. Bhavan v. Commercial Tax Officer reported in AIR 1961 Mysore 3. At paragraphs 10 and 11 of the report S.R. Das Gupta C.J. observed as follows:- “(10). In my opinion, the view expressed by the majority of the Judges on this point in the case reported in AIR 1959 SC 648 is binding on this Court, as the law declared by the Supreme Court. It is not necessary, in my opinion, for a proposition of law declared by the Supreme Court to be binding on this Court that the actual decision of the case should proceed on that proposition. Nor is it necessary for such proposition to be the law declared by the Supreme Court that all the Judges shall express their views one way or the other on the point. Nor is it necessary for such proposition to be the law declared by the Supreme Court that all the Judges shall express their views one way or the other on the point. In my opinion, if the majority of Judges of the Supreme Court in a particular case express a view on a proposition of law then that view of the majority of the Judges would be the law declared by the Supreme Court, That being my view, the opinion expressed by the majority of the Judges in the said cage shall be held to be the law declared by the Supreme Court and binding on this Court. 11. The next question which arises for consideration is which of the two views-one expressed in 1958 SCJ 459 (: AIR 1958 SC 460) and the other in AIR 1959 SC 648 will be binding on us. On this point again there is no doubt some difficulty. But in my opinion, it is the latest pronouncement of the Supreme Court which would be binding on us. When, in my opinion, the Supreme Court expressed its view on any particular point of law such expression of view shall be considered as overriding all contrary views expressed on the point in earlier decisions of the same Court.” 83. The next decision referred to is one of Full Bench decision of the Punjab and Haryana High Court in the case of Daulat Ram Trilok Nath v. State of Punjab & Ors. reported in AIR 1976 Punjab & Haryana 304. At paragraph 16 of the report the following passage occurs. “The fatal fallacy from which the aforementioned cases seem to suffer is their failure to notice Sugganmal v. State of Madhya Pradesh, AIR 1965 SC 1740 which directly covers the issue on all fours, as I have already noticed. It is apparent from a close perusal of these judgments that this binding precedent was not brought to the notice of the learned Judges of the Division Bench at all. Secondly it has to be borne in mind that in the Orissa cases the learned Judges relied primarily on State of Madhya Pradesh v. Bhailal Bhai, AIR 1964 SC 1006 for arriving at their conclusion. Secondly it has to be borne in mind that in the Orissa cases the learned Judges relied primarily on State of Madhya Pradesh v. Bhailal Bhai, AIR 1964 SC 1006 for arriving at their conclusion. Now it is significant to remember that in Sugganmal's case (supra), their lordships had themselves considered and extensively quoted from their earlier precedent in Bhailal Bhai's case and it was thereafter that they concluded that no writ of mandamus exclusively for refund of tax was maintainable. The construction which the Supreme Court itself places on an earlier precedent is obviously binding and authoritative and it may, therefore, be aptly said that the Orissa Bench did not correctly appreciate the ratio in Bhailal Bhai’s case” 84. The next decision on this aspect of the matter is one of the Supreme Court in the case of Mattulal v. Radhe Lal reported in AIR 1974 SC 1596 , At paragraph 11 of the report the following passage occurs : “Now there can be no doubt that these observations made in Smt. Kamala Soni's case, C.A. No. 2150 of 1966 D/-26.9.1969 are plainly in contradiction of what was said by this Court earlier in Senate T.B.'s case 1966 MPLJ 26. It is obvious that the decision in Serrate T.B's case 1966 MPLJ 26 was not brought to the notice of this Court while deciding Smt. Kamala Soni's case, C.A. No. 2150 of 1966. D/26.9.1969 or else this Court would not have landed itself in such patent contradiction. But whatever be the reason, it cannot be gainsaid that it is not possible to reconcile the observations in these two decisions. That being so, we must prefer to follow the decision in Servate T B's case as against the decision in Smt. Kamala Soni's case, as the former is a decision of a larger Bench than the latter.” 85. The above decision was relied on as an authority for the proposition that the decision of the larger Bench according to the Supreme Court should prevail over the decision of a smaller Bench. 86. The next decision is one of the Supreme Court in the case of Union of India & Anr. v. K.S. Subramanian reported in AIR 1976 SC 2433 . 86. The next decision is one of the Supreme Court in the case of Union of India & Anr. v. K.S. Subramanian reported in AIR 1976 SC 2433 . Paragraph 12 of the report is as follows :- “We do not think that the difficulty before the High Court could be resolved by it by following what it considered to be the view of a Division Bench of this Court in two Cases and by merely quoting the views expressed by larger Benches of this Court and then observing that these were insufficient for deciding the point before the High Court. It is true that, in each of the cases cited before the High Court, observations of this Court occur in a context different from that of the case before us. But, we do not think that the High Court acted correctly in skirting the views expressed by larger benches of this Court in the manner in which it had do none this. The proper course for a High Court in such a case, is to try to find out and follow the opinions expressed by larger benches of this Court in preference to those expressed by smaller benches of the Court. That is the practice followed by this Court itself. The practice has now crystallized into a rule of law declared by this Court. If, however, the High Court was of opinion that the views expressed by larger benches of this Court were not applicable to the facts of the instant case it should have so giving reasons supporting its point of view”. 87. The last decision of the Supreme Court cited on this point was the case of the State of Uttar Pradesh v. Ram Chandra reported in AIR 1976 SC 2547 . Referring to a large number of its own decisions, the Supreme Court in paragraph 22 of the report observed as follows:- “Thus on a conspectus of the decisions of this Court referred to above, it is obvious that there is no real conflict in their ratio decidendi and it is no longer open to anyone to urge with any show of force that constitutional position emerging from the decisions of this Court in regard to cases of the present nature is not clear. It is also to be borne in mind that even in cases where a High Court finds any conflict between the view expressed by larger and smaller benches of this Court, it cannot disregard or skirt the views expressed by the larger benches. The proper course for a High Court in such a case, as observed by this Court in Union of India v. K.S. Subramanian (Civil Appeal no. 212 of 1975, decided on July 30, 1976) to which one of us was a party, is to try to find out and follow the opinion expressed by larger benches of this Court in preference to those expressed by smaller benches of the Court which practice hardened as it has into a rule of law is followed by this Court itself”. 88. This trilogy of Supreme Court cases was strongly relied upon in support of the proposition that when there is a conflict, the larger Bench of the Supreme Court should be followed irrespective of the question as to whether it is all earlier decision or a later decision. 89. Finally on the aspect of the matter, reference was made to a recent full Bench decision of the Punjab & Haryana High Court in the case of Indo Swiss Time Ltd v. Umrao reported in AIR 1981 P & H 213. In that case the question canvassed was whether a Company for whose benefit certain lands were being acquired under the provision of Land Acquisition Act, 1894 had the right to be added as a party or not, In paragraph 17 of the report S.S. Sandhewalia, C.J. who delivered the judgment as a minority Judge noticed that. this question had been substantially decided by the Supreme Court in the case of Himalaya Tiles & Marbles (P) Ltd., ( AIR 1980 SC 1118 ), The Supreme Court, according to the learned Chief Justice held in no uncertain terms that a Company for whose benefit the land is acquired is entitled to maintain on appeal in its own right it was submitted in the case before the Full Bench that, as a consequence of the dictum of the Supreme Court that such a Company can maintain an appeal in its own right, it would accordingly follow as a corollary that the Company would have a right to be impleaded in the original proceedings before a Court as well. 90. 90. In paragraph 20 of the report Sandhewalia, C.J. refers to an earlier decision of the Supreme Court in the case of Municipal Corporation of the City of Ahmedabad v. Chandula Shamlaldas Patel, (1970) SCWR 183. In that decision in a short order whilst upholding a preliminary objection against the maintainability of the appeal, their Lordship of the Supreme Court observed that the Municipal Corporation of the City of Ahmedabad for whose benefit the land had been acquired could not maintain an appeal in the Supreme Court against the judgment of the High Court setting aside that notification. Part of paragraph 20 of the report may be set out below :- “It is evident from the brief order that the matter was disposed of at the very threshold without any elaborate reference to either principle or by adverting to any authority. The appeal was held to be not maintainable on the short ground that their Lordships failed to see what interest the Municipal Corporation had which would sustain an appeal by it against the order of the High Court allowing the writ petition filed by the landowners.” In paragraph 22 of the report, Sandhewalia, C.J. observes as follows :- “A perusal of the judgments in the Municipal Corporation of the City of Ahmedabad (1970) 1 SCWR 183 and Himalaya Tiles ( AIR 1980 SC 1118 ) cases would plainly indicate that there is a direct conflict on the point therein. Both the judgments have been rendered by it Bench consisting of two Hon'ble Judges and cannot possibly be reconciled. This situation at once brings to the fore the somewhat intricate question which is now not of infrequent occurrence, namely.............when there is a direct conflict between two decisions of the Supreme Court rendered by co equal Benches, which of them should be followed by the High Courts and the Courts below.” Paragraphs 23 and 24 of the report are as follows :- "23. Now the contention that the latest judgment of a coordinate Bench is to be mechanically followed and must have pre-eminence irrespective of any other consideration does not commend itself to me. When judgments of the superior Court are of co-equal Benches and therefore of matching authority then their weight inevitably must be considered by the rational and the logic thereof and not by the mere fortuitous circumstances of the time and date on which they were rendered. When judgments of the superior Court are of co-equal Benches and therefore of matching authority then their weight inevitably must be considered by the rational and the logic thereof and not by the mere fortuitous circumstances of the time and date on which they were rendered. It is manifest that when two directly conflicting judgments of the superior Court and of equal authority are extant then both of them cannot be binding on the courts below. Inevitably a choice though a difficult one, has to be made in such a situation. On principle it appears to me that the High Court must follow the judgment which appears to it to lay down the law more elaborately and accurately. The mere incidence of time whether the judgments of co-equal Benches of the superior Court are earlier or later is a consideration which appears to me as hardly relevant". "24. The view I am inclined to take has the support of the High authority of Jessel M.R. in Hampton v. Horman (1877) 5 Ch D 183. Therein also the learned Master of the Rolls was faced with the difficult task of choosing between the two decisions of equal authority which were directly in conflict with each other. He observed as follows: “Now I rake it that both the cases to which I have referred are not to be reconciled with Hayes v. Hayes (1828) 38 ER 822); at all events, they differ from it so far as to leave me at liberty now to say that Hayes v. Hayes is not sound law; indeed it appears that Sri John Leach himself was dissatisfied with his decision”. Again in Miles v. Jarvis, (1883) 24 CHD 633, Kay, J., was similarly faced with two judgments of equal weight which were in conflict. He observed as follows :- “***The question is which of these two decisions I should follow and it seems to me that I ought to follow that of the Master of the Rolls as being the better in point of law.” Reference in this context may in particular be made to the celebrated case of Young v. Bristol Aeroplace Co. Ltd. (1944) KB 718. Ltd. (1944) KB 718. Therein in a similar context of the Court of Appeal being bound by its previous decisions it was held that it was not only entitled but indeed duty bound to decide which of the two conflicting decisions of its own will it follow in case of a clear divergence of the opinion in the earlier precedents”. 91. I have dealt with this aspect of the binding effect of Supreme Court decisions in the event of a conflict somewhat elaborately primarily in deference to the able and comprehensive argument of Mr. Dipankar Gupta on this question. This is because in my view there is no real conflict between the decision of Bhagwati, J. of the Supreme Court in M.P. Sugar Mills case reported in AIR 1979 SC 621 and the decision of Kailasam J. of the Supreme Court in Jit Ram Shiv Kumar's case reported in AIR 1980 SC 1285 . Although there are certain seemingly critical references in the judgment of Kailasam J. in the latter decision of the Supreme Court to certain observations of Bhagawati, J. in the earlier decision, as will appear from the latter part of paragraph 24 of the judgment of Bhagwati, J, in M.P. Sugar Mill's case reported in AIR 1979 SC 621 and the summary of the law of promissory estoppel as enunciated by Kailasam J. in paragraph 39 of the decision in Jit Ram Shiv Kumar's case reported in AIR 1980 SC 1285 the conclusion of the two learned Judges of the Supreme Court are in my view almost identical. 92. On the merits of the contention as to the applicability of the doctrine of promissory estoppel I hold that the petitioner is entitled to avail of this doctrine. It is apparent from the records that relying on the representation by the CMDA respondents that the petitioner would be entitled to carry out the work in terms of the letter of intent/work order which was to be followed by the execution of a formal contract the petitioner engaged a large technical staff spending a huge sum of money and also procured a large amount of tools and equipments and thereby altered its position considerably to its prejudice. I hold that in the facts and circumstances of this case the plea of “executive necessity” is of no avail to the respondents. I hold that in the facts and circumstances of this case the plea of “executive necessity” is of no avail to the respondents. I further hold that there are no altered circumstances which can shift the equity in favour of the respondents. This contention of the petitioners therefore succeeds. 93. This disposes of all the contentions raised on behalf of the parties. 94. In the result, this application succeeds and the Rule is made absolute. 95. There will be a writ in the nature of Mandamus directing the respondents to forthwith, recall, cancel and withdraw the impugned notice dated the 5th March, 1981 and to forbear from giving effect thereto in any manner whatsoever. There will be no order as to costs. Rule made absolute.