D. P. WADHWA, J. ( 1 ) THE facts are quite simple. Paramjit Singh Sethi, the petitioner, seeks to strike down the action of respondent No. 1, Delhi Development Authority (for Short dda ), in awarding contract (dated 27-7-1981) for excavation of Yamuna sand from the lands situated in villages Madanpur Khadar and Jasola in the Union territory of Delhi to respondent No, 3, M/s. National Sand Supply Co. The further directions sought are that the DDA should award the contract after holding public auction to the highest bidder, and to direct respondent No. 2, the Collector (Mines and Minerals), to grant permit to the highest bidder. The writ petition (CW No. 141/82) was filed on 16-1-1982. The Court issued show cause notice to the respondents and at the same time directed that if permit had not yet been issued it might not be issued till further orders of the Court. On 25-2-1982, the court noted that the DDA had taken the stand that the contract was valid but the petitioner was, however, challenging it and saying that he was willing to offer and run the contract at a higher prices. The writ petition was admitted to hearing by a Division Bench. As regards interim orders, the court noted the objection of the DDA and others that the contract was settled in August 1981 and because of stay obtained by some other parties other than the petitioner there had been no action on the contract. The court declined the stay. ( 2 ) M/s. National Sand Supply Co. also filed a writ petition (CW No. 208/83) on 1-2-1983 against the DDA, the Lt. Governor, Delhi, the Union of India through Secretary, Ministry of Works and Housing, New Delhi, and the Collector (Mines and Minerals), Delhi, as. respondents. M/s. National Sand Supply Co. prayed, in effect, that a mandamus be issued directing the DDA to perform the contract D/-27-7-1981. It also prayed for a mandamus directing the DDA to forward to respondent No. 4, the Collector (Mines and Minerals), the royalty and Security amount tendered by M/s. National Sand Supply Co. to the DDA and to collect the permit from the office of the Collector and to permit M/s. National Sand Supply Co. to quarry sand from the lands in the aforesaid two villages Madanpur Khadar and Jasola. to the DDA and to collect the permit from the office of the Collector and to permit M/s. National Sand Supply Co. to quarry sand from the lands in the aforesaid two villages Madanpur Khadar and Jasola. This writ petition was directed to be heard along with Civil Writ Petition No. 141 of 1982. Paramjit Singh Sethi, (Petitioner in CW 141/82), filed an application to intervene. The Court, however, directed that he would be heard, if necessary. Certain interim orders were passed from time to time to keep the rights of M/s. National Sand Supply Co. alive in case of their possible success, but these need not be referred to. ( 3 ) DDA is an authority constituted under the Delhi Development Act, 1957, and is a body corporate. Its objects and functions are described in the said Act. The Collector performs his duties under the Delhi Minor Minerals Rules, 1969 (for short the Rules ) framed- under the Mines and Minerals (Regulation and Development ). Act 1957 (for short the Regulation Act ). ( 4 ) AT the time of these petitions, there are stated to be two sand points in the Union Territory of Delhi from where sand is excavated. Those points are : (1) Okhla, and (2) villages Madanpur Khadar and Jasola, on the banks of river Yamuna which passes through Delhi. It was stated that at present only one sand point at Okhla was being used. The dispute here concerns the sand point at Madanpur Khadar and Jasola villages. It is not necessary to trace the history as to how this sand point was operated earlier except to note that the lands in these villages from where sand is extracted earlier belonged to the Gaon Sabha and vested in the Central Government under S. 150 (3) of the Delhi Land Reforms Act 1954 on the urbanisation of these villages by virtue of a notification issued under S. 507 of the Delhi Municipal Corporation Act, 1957. The Central Government thereafter placed this land at the disposal of the DDA for the purpose of development by a notification D/- 20-8-1974 issued under S. 20 (1) of the Delhi Development Act 1957. The Central Government thereafter placed this land at the disposal of the DDA for the purpose of development by a notification D/- 20-8-1974 issued under S. 20 (1) of the Delhi Development Act 1957. Under S. 2 (d) of the Delhi Development Act, "development" means "the carrying out of building, engineering, mining or other operations in, on, over or under land or the making of any material change in any building or land and includes redevelopment". Since then the quarrying of Yamuna sand from the land situated in these villages has been entrusted to the Delhi State Industrial Development Corporation (for short the DSIDC ), a Government company, which was to carry out the operations departmentally. This was in pursuance of some decision taken by the authorities and the land was handed over to the DSIDC for excavation of sand on annual licence basis, the licence fee being fixed at Rs. 72,000. 00 per annum. This licence fee was raised to Rs. 87,120. 00 in the year 1979-80. It is the admitted case that the DSIDC in turn was inviting tenders/applications from various parties to excavate and extract sand and at times this was done by auction as well, and the contract was awarded to the highest bidder. The DDA complains, in the return filed to the petition, that this was illegal and the DSIDC was to operate the sand points departmentally. The DSIDC complained after sometime that these lands/sand points could not be operated because of restrictions imposed by the traffic police for the plying of trucks through the two villages. The DDA, therefore, resumed the land from the DSIDC on 19-12-1980. ( 5 ) IT is the case of the DDA that it received two applications for allotment of these sand points for excavation of sand from (1) Shri Madan Lal Mittal, and (2) M/s. National Sand Supply Co. The offer of M/s. National Sand Supply Co. , was accepted and it was conveyed by letter dated 27-7-1981. M/s. National Sand Supply Co. was to pay Rs. 3. 25 lacs per annum for three years (from 14-8-1981 to 13-8-1984) subject to enhancement of 10% after expiry of two years. The offer of M/s. National Sand Supply Co. , was accepted and it was conveyed by letter dated 27-7-1981. M/s. National Sand Supply Co. was to pay Rs. 3. 25 lacs per annum for three years (from 14-8-1981 to 13-8-1984) subject to enhancement of 10% after expiry of two years. The offer of this party was accepted, in preference to the other party for two reasons : (1) the amount offered was higher, and (2) it did not insist on the permission to use village routes which had been banned by the traffic police. Shri Madan Lal Mittal had offered Rs. 3 lacs per annum and had specifically asked for approach road. M/s. National Sand Supply Co. had also agreed to supply about 8,000 cubic metres of sand required for the works of the DDA on mutually agreed rates which were, however, not spelled out in the letter D/- 27-7-1981. By a letter D/-22-8-1981 by the DDA to M/s. National Sand Supply Co. it was mentioned that mining permit will be obtained in the name of the DDA while in the earlier letter it was said that M/s. National Sand Supply Co. was to obtain the mining permit in its own name. Possession of the land was handed over to M/s. National Sand Supply Co. on 17-8-1981. ( 6 ) AT this stage, it may also be noticed that after the conclusion of the arguments a file containing the order permitting relaxation of R. 18 of the Rules by the Deputy Commissioner was produced and the copy of this order which is D/- 2-8-1982 was placed on record. This order showed that the DDA had applied for quarrying of 25000 cubic metres of sand from the revenue estates of these two villages and that the contract awarded was for evacuation/removal of sand from these sites toM/s. National Sand Supply Co. By this order, the Deputy Commissioner in exercise of his powers under R. 28 relaxed the conditions of R. 18, said to be in the interest of mineral development in the union territory of Delhi by allowing the request of the DDA for permission to M/s. National Sand Supply Co. for evacuation of sand. Paramjit Singh Sethi has even questioned the validity of such an order. for evacuation of sand. Paramjit Singh Sethi has even questioned the validity of such an order. ( 7 ) PARAMJIT Singh Sethi has complained that the DDA could not award the contract in such a fashion to M/s. National Sand Supply Co. and by doing so, it has violated the law and infringed his fundamental rights under the Constitution. He refers to various decisions of the Supreme Court in support of his argument and particularly to M/s. Kasturi Lal Lakshmi Reddy v. State of Jammu and Kashmir, AIR 1980 SC 1992 . His case is simple. He says, he was also in the same line. He was not aware of any such offer by M/s. National Sand Supply Co. to the DDA or of its acceptance till the contract was awarded to the National Sand Supply Co. He has even alleged motives. ( 8 ) THIS argument is met by the DDA and M/s. National Sand Supply Co. on the plea that quarring operations are governed by the Rules and that it was not necessary to call for any tenders or to hold public auction and that the decision to award the contract was taken in public interest. It is nobody s case that the petitioner was aware that the DDA was entertaining any application for grant of the subject matter contract. In short, the case of the DDA is that it had granted licence for sand excavation "after due consideration and has not acted illegally or arbitrarily" and that no statutory right of the petitioner has been infringed. M/s. National Sand Supply Co. has, of course, also referred to the fact that there was enormous and unprecedented time-bound construction activity in the Union Territory of Delhi during the relevant time on account of Asiad 1982 and that urgent steps were needed to open this sand point at those two villages. At that time only one sand point at Okhla was being worked by another party which was thus having monopoly of supplying sand to consumers in Delhi. ( 9 ) THE affidavit of the DDA is brief while the following further points emerge from the affidavit of M/s. National Sand Supply Co. At that time only one sand point at Okhla was being worked by another party which was thus having monopoly of supplying sand to consumers in Delhi. ( 9 ) THE affidavit of the DDA is brief while the following further points emerge from the affidavit of M/s. National Sand Supply Co. (1) The petition is motivated and has been filed at the instance of some interested parties who do not want this sand point to open and who want their monopoly of supplying sand in Delhi from Okhia to continue. The petition is thus mala fide (2) M/s. Santoshi Associates who are operating from Okhia sand point are selling sand at the rate of Rs. 42. 00 per truck (2260 cubic feet) while M/s. National Sand Supply Co. had agreed to sell sand at 22. 00 per truck (3) while Shri Madan Lal Mittal had asked for the use of the road and removal of traffic restrictions. M/s. National Sand Supply Co. had agreed to get necessary clearance from the authorities or to make an alternative route (4) the Petition is barred by res judicata or principles analogous thereto inasmuch as similar writ petition, though by different parties raising the same points had been dismissed, though in limits by the Supreme Court as well as this Court. It is said that there is a concert between the present together (sic) and petitioner on other similar writ petitions (5) the DDA acted within its jurisdiction after formulation of its subjective satisfaction in public interest and as such the award of contract could not be challenged. It is further averred that normal procedure under the regulation Act and the Rules for grant of mining rights is by way of receipt of applications from parties desirous of obtaining such rights and there is no provision for issue of an advertisement or auction though some States have so included in their rules which is in addition to the normal mode of grant of such rights on receipt of application made suo motu by the parties themselves; that the process of auction is resorted to in rare and special cases and that there is no invariable rule of auction; that all the authorities have power to grant such right keeping in view various factors relevant for promotion of public interest, distribution and utilisation of natural resources and mineral wealth. The action of the DDA is, therefore, asserted to be in public interest as it would check inflation and subserve common good. (6) A public authority like DDA is not concerned only with obtaining maximun price for grant of licencee-hold rights. It has to assess, weigh and balance all the factors relevant to its own interests as well as keep in view the paramount consideration of public interest. The DDA is not a private profit making body. It has been established to promote maximum good of the public of Delhi by carrying out development of Delhi. It is a public authority which has been assigned a duty and a task by the Legislature to fulfil certain objects which promote public interest. The DDA, therefore, in the execution of its objects (should) keep in view the relevant factors impining (sic) on a particular situation. It was further stated that a very high amount of licence fee is not conducive to and does not subserve the public interest because an unreasonably high licence fee perforce increases the price at which the sand is sold to the consumers. (7) The petitioner had not been arbitrarily excluded from the award of the contract and that there were only two items under consideration for grant of the work of quarrying the sand and the petitioner was nowhere in the picture, he having not applied it is said that the paramount consideration that weigh with the authorities, was to supply sand to the citizen of Delhi at low prices and that the said result could not have been achieved by granting the licence to quarry the sand at a very high licence money. M/s. National Sand Supply Co. further claims that nobody could have offered the conditions as has been done by it, particularly making arrangement for bringing the sand from the sand point by getting permission for use of another route and that as the position existed as on that date nobody could have brought the sand to the main road because of the restrictions imposed by the police on plying of trucks on the only available route. M/s. National Sand Supply Co. further claimed that there has been no illegal or arbitrary exclusion of the petitioner from making his offer in respect of the contract awarded to respondent No. 3, M/s. National Sand Supply Co. M/s. National Sand Supply Co. further claimed that there has been no illegal or arbitrary exclusion of the petitioner from making his offer in respect of the contract awarded to respondent No. 3, M/s. National Sand Supply Co. Respondent No. 3 had employed after the grant of the licence, 250 persons of which 100 own and use donkeys in the task of removal of sand and that they have acted under the contract and spent huge amounts and that the petitiosner had no special or general interest in the contract in question. ( 10 ) ON these submissions, the National Sand Supply Co. relies upon the following passage of the judgment of the Supreme Court in M/s. Kasturi Lal Lakshmi Reddy s case ( AIR 1980 SC 1992 ) (supra) :- ". . . . . . . . . there may be an infinite variety of considerations which may have to be taken into account by the Government in formulating its policies and it is on a total evaluation of various considerations which have weighed with the Government in taking a particular action, that the court would have to decide whether the action of the Govt. is reasonable and in public interest. . . . . . . there is always a presumption that the governmental action is reasonable and in public interest and it is for the party challenging its validity to show that it is wanting in reasonableness or is not informed with public interest. " ( 11 ) REFERENCE may now be made to the relevant provisions of law. The Regulation Act provides for regulation of mines and development of minerals, under S. 3 of the Regulation Act "mining lease" means a lease granted for the purpose of undertaking mining operations, and includes a sub-lease granted for such purpose; "mining operations" means any operations undertaken for the purpose of winning any mineral; "minor minerals" means building stones, gravel, ordinary clay, ordinary sand other than sand used for prescribed purposes, and any other mineral which the Central Government may, by notification in the official Gazette, declare to be a minor mineral; "prospecting operations" means any operations undertaken for purpose -of exploring, locating or proving mineral deposits; and "prospecting licence" is defined to mean a licence granted for the purpose of undertaking prospecting operations. Ss. Ss. 4 to 13 of the Regulation Act do not apply to prospecting licences and mining leases in respect of minor minerals. These provisions deal with the general restrictions on undertaking prospecting and mining operations, and prescribe procedure for obtaining prospecting licences or mining leases and also deal with the power of the Central Government to make rules for that purpose. ( 12 ) THE State Governments have been given powers to make rules in respect of minor minerals. This is under S. 15 (1) of the Regulation Act which is as under : "the State Government may, by notification in the Official Gazette, make rules for regulating the grant of prospecting licences and mining leases in respect of minor minerals and for purposes connected therewith. " ( 13 ) THE Delhi Minor Minerals Rules 1969 were framed under S. 15 (l)oftheragulation Act. In fact. these Rules deal with quarrying of minor minerals. "quarry" under R. 2 (f) means "to dig or bore into or under any land or to win, extract or collect therefrom any mineral in any manner". Under R. 3 of the Rules, there is a prohibition to quarry minor minerals without a permit to be granted in accordance with the Rules. The Rules would apply to the DDA as it is the DDA who would be the permit holder. Various limitations have been imposed by the Rules for the grant and operation of the permit for quarrying the minor minerals. Under R. 18, a permit issued is not transferable. This rule is as under : "suspension/removal of Permits. A permit issued under these Rules is not transferable. The Collector may suspend or cancel the permit for contravention of these rules or for any breach of any of the conditions of the permit and his order shall be final. However, before an order for cancellation of permit is made, the permit holder shall be given an opportunity to show cause why his permit may not be cancelled. "r. 28 gives power to the Deputy Commissioner to relax the Rules in special cases, and is as under : "relaxation of rules in special cases. However, before an order for cancellation of permit is made, the permit holder shall be given an opportunity to show cause why his permit may not be cancelled. "r. 28 gives power to the Deputy Commissioner to relax the Rules in special cases, and is as under : "relaxation of rules in special cases. The Deputy Commissioner may, if he is of opinion that in the interest of mineral development it is necessary so to do by order, and for reason to be recorded in writing, authorise in any case for the grant of any quarry permit or the working of any quarry for the purpose of winning of any mineral of terms and conditions different from those laid down in these rules. " ( 14 ) ON the basis of the provisions of the Regulation,act and the Rules, it was argued by Shri P. N. Lekhi appearing for M/s National Sand Supply Co. that auction was not the method under the law, and the court could not substitute its judgment and evolve a new method. It was argued that grant of lease for quarrying of sand is akin to. or is, prospecting . It was further argued that the Rules, in effect, bring into operation the provisions of Ss. 4 to 13 of the Regulation Act and, therefore, according to Shri Lekhi, it was not necessary to put any public advertisement, or to award the contract by public auction. I think, there is apparent fallacy in this line of reasoning. S. 14 of the Regulation Act specifically bars the application of the provisions of Ss. 4 to 13 to minor minerals, and these very provisions, therefore, cannot be introduced to apply to minor minerals on the basis of the Rules framed under S. 15 ( 1) of the Regulation Act. Moreover, the Rules would continue to apply to the DDA only who had applied for grant of permit under the Rules and do not govern the case of the National Sand SupplyCo. or the persons similarly situated. Further, the Rules deal with quarrying of minor minerals. The sand points in question are well known and are being used for the last many years. or the persons similarly situated. Further, the Rules deal with quarrying of minor minerals. The sand points in question are well known and are being used for the last many years. Paramjit Singh Sethi is not questioning the grant of permit for quarrying of sand from these points to the DDA but is challenging the action of the DDA in subsequently transferring the rights under the permit to M/s National Sand Supply Co. and the terms under which it was so done. ( 15 ) REFERENCE was also made by Shri Lekhi to a decision of the Court of Appeal reported as Asher v. Secy. of State (1974) 2 All ER 156. In this case, the plaintiffs, who were the elected councillors of a district council, refused to apply the provisions of the Housing Finance Act, 1972. The Secretary of State, who had the constitutional- duty of seeing that the Act was put into operation, had four courses open to him. He adopted one course. Reliance was placed on the following observations of Lord Lawton, LJ:- "if in law it was open to him, he was justified in doing what he did. Balancing the advantages and disadvantages of one possible course of action against another and making a decision is what Secretaries of State have to do it is the very stuff of government and the courts should not interfere save for good reason and disagreeing with the decision is not in itself a good reason". I do not know how this case helps Shri Lekhi. ( 16 ) IN support of his contentions, Shri G. L. Sanghi, appearing for Paramjit Singh Sethi, strongly relied upon the decision of the Supreme Court in M/s Kasturi Lal Lakshmi Reddy ( AIR 1980 SC 1992 ) (supra) where law on the subject was summed up. In this case, the Supreme Court referred to its earlier decision in Ramana Dayaram Shetty v. International Airport Authority of India, AIR 1979 SC 1628 wherein it was observed that the discretion of the Government was not unlimited in that the Government could not grant largess in its arbitrary discretion or at its sweet will and on such terms as it chooses in its absolute discretion. It was said that there are two limitations imposed by law which structure and control the discretion of the Government in this behalf. It was said that there are two limitations imposed by law which structure and control the discretion of the Government in this behalf. The first is in regard to the terms on which largess may be granted, and the other, in regard to the persons who may be recipients of such largess. On the first limitation, the court observed that unlike a private individual, the State cannot act as it pleases in the matter of giving largess. Though ordinarily a private individual would be guided by economic considerations of self- gain in any action taken by him, it is always open to him under the law to act contrary to his self-interest or to oblige another in entering into a contract or dealing with his property. But the Government is not free to act as it likes in granting largess such as awarding a contract or selling or leasing out its property . Further, If the Government awards a contract or leases out or otherwise deals with its property or grants any other largess, it would be liable to be tested for its validity on the touchstone of reasonableness and public interest and if it fails to satisfy either test, it would be unconstitutional and invalid . The Court also pointed out that this ground of invalidity, namely, that the governmental action is unreasonable or lacking in the quality of public interest, is different from that of mala fides though it may, in a given case, furnish evidence of mala fides. On the second limitation, the court held that where the Government is dealing with the public, whether by way of giving jobs or entering into contracts or granting other forms of largess, the Government cannot act arbitrarily at its sweet will and, like a private individual, deal with any person it pleases, but its action must be in conformity with some standard or norm which is not arbitrary, irrational or irrelevant. The governmental action must not be arbitrary or capricious, but must be based on some principle which meets the test of reason and relevance . The governmental action must not be arbitrary or capricious, but must be based on some principle which meets the test of reason and relevance . The Supreme Court in its earlier two decisions in E. P. Royappa v. State of Tamil Nadu, AIR 1974 SC 555 and Maneka Gandhi v. Union of India, AIR 1978 SC 597 had observed with reference to Art. 14 that it - must follow as a necessary corollary from the principle of equality enshrined in Art. 14 that though the State is entitled to refuse to enter into relationship with anyone, yet if it does so, it cannot arbitrarily choose any person it likes for entering into such relationship and discriminate between persons similarly circumstanced, but it must act in conformity with some standard or principle which meets the test of reasonableness and non-discrimination and any departure from such standard or principle would be invalid unless it can be supported or justified on some rational and non-discriminatory ground . The court also observed that, the Government, therefore, cannot, for example, give a contract or sell or lease out its property for a consideration less than the highest that can be obtained for it, unless of course there are other considerations which render it reasonable and in public interest to do so. Such considerations may be that some Directive Principle is sought to be advanced or implemented or that the contract or the property is given not with a view to earning revenue but for the purpose of carrying out a welfare Scheme for the benefit of a particular group or section of people deserving it or that the person who has offered a higher consideration is not otherwise fit to be given the contract or the property . The Court referred to these considerations only illustratively and observed that there may be an infinite variety of considerations which may have to be taken into account by the Government in formulating its policies. The court further observed that there was always a presumption that the governmental action is reasonable and in public interest and it is for the party challenging its validity to show that it is wanting in reasonableness or is not informed with public interest and that thisburden is a heavy one. The court further observed that there was always a presumption that the governmental action is reasonable and in public interest and it is for the party challenging its validity to show that it is wanting in reasonableness or is not informed with public interest and that thisburden is a heavy one. But, where it is so satisfied, it would be the plainest duty of the court under the Constitution to invalidate the governmental action. ( 17 ) REFERENCE was also made to two more decisions of the Supreme Court. In State of U. P. v. Vijay Bahadur Singh, AIR 1982 SC 1234 , the Supreme Court, while dealing with the question of ratification by the State Government of the acceptance of the bid auctioning certain forests, observed : "therefore, the Government had the right, for good and sufficient reason, we may say, not to accept the highest bid but even to prefer a tenderer other than the highest bidder, the High Court was clearly in error in holding that the Government could not refuse to accept the highest bid except on the ground of inadequacy of the bid. Condition No. 10 does not so restrict the power of the Government not to accept the bid. There is no reason why the power vested in the Government to refuse to accept the highest bid should be confined to inadequacy of bid only. There may be a variety of good and sufficient reasons, apart from inadequacy of bids, which may impel the Government not to accept the highest bid. In fact, to give an antithetic illustration, the very enormity of a bid may make it suspect. It may lead the Government to realise that no bona fide bidder could possibly offer such a bid if he meant to do honest business. Again the Government may change or refuse its policy from time to time and we see no reason why change of policy by the Government, subsequent to the auction but before its confirmation, may not be a sufficient justification for the refusal to accept the highest bid. It cannot be disputed that the Government has the right to change its policy from time to time according to the demands of the time and situation and in the public interest. It cannot be disputed that the Government has the right to change its policy from time to time according to the demands of the time and situation and in the public interest. " ( 18 ) IN the State of U. P. v. Shiv Charan Sharma, AIR 1981 SC 1722 the appeal arose out of grant of a lease for excavating sand and minor minerals from the leased area by the State of U. P. The dispute was whether the grant was to be made on an application of a party or by auction between contending offerers. The Court referred to the following observations of the constitution Bench in Fertilizer Corporation Kamgar Union (Regd.) Sindri v. Union of India, (1981) 1 SCC 568 : ( AIR 1981 SC 344 ):- "we want to make it clear that we do not doubt that bona fides of the authorities, but as far as possible, sales of public property, when the intention is to get the best price, ought to take place publicly. The vendors are not necessarily bound to accept the highest or any other offer, but the public at least gets the satisfaction that the Government has put all its cards on the table. "the Court observed that apart from the fact whether there should be a grant on application or by auction, public interest demands that those who seek the privilege of extracting mineral under lease from the State, be asked to bid against each other. In the case before the Supreme Court, there were two contenders who were asked to bid against each other while at the same time reserving the minimum bid "public auction with open participation and a reserved price guarantees public interest being fully subserved", the Court observed. ( 19 ) THE passage relied upon by M/s. National Sand Supply Co. from M/s. Kasturi Lal Lakshmi Reddy ( AIR 1980 SC 1992 ) (supra) does not advance its case. So many questions are left unanswered. At least in the recent past, the contract had been awarded on the basis of tenders or by public auction. M/s. National Sand Supply Co. is lying stress that the agreement in question was entered into in public interest. The points taken by M/s. National Sand Supply Co. have not been so taken by the DDA in its affidavit. At least in the recent past, the contract had been awarded on the basis of tenders or by public auction. M/s. National Sand Supply Co. is lying stress that the agreement in question was entered into in public interest. The points taken by M/s. National Sand Supply Co. have not been so taken by the DDA in its affidavit. To me, however, it appears that the defence of the respondents, and particularly of M/s. National Sand Supply Co. , proves the case of the petitioner in view of the facts of the case and the law as laid down by the Supreme Court. The affidavit of the DDA does not spell out any formulations regarding change in its policy. The grievance of the petitioner is correct that he was unaware that the DDA was inviting applications. He is in the same trade. In the writ petition, he is not asking that the contract should be awarded to him. He says, he is prepared to offer a higher price and at least he should be given a chance to compete. He may or may not get the contract, if awarded after holding public auction. It would be for the DDA to impose such terms and conditions including the maximum price for which the sand could be sold. ( 20 ) THERE do not appear to be any special considerations for awarding the contract by the DDA to M/s. National Sand Supply Co. As per the DDA, the only considerations which weighed with it were : (1) the price offered, and (2) provision for alternative route by M/s. National Sand Supply Co, It appears that the DDA did not examine if any alternative route could at all be made available, the DSIDC, which is a Government Company, could not have the traffic restrictions removed, and it, therefore, could not be left to a private party like the National Sand Supply Co. to make an alternative road when there existed only one road as at present or to have the traffic restrictions removed. There is no whisper in the pleadings and nothing was said during the course of arguments as to how any alternative route could be made by M/s. National Sand Supply Co. , or the traffic restrictions imposed could be got removed. It is admitted in the affidavit of M/s. National Sand Supply Co. There is no whisper in the pleadings and nothing was said during the course of arguments as to how any alternative route could be made by M/s. National Sand Supply Co. , or the traffic restrictions imposed could be got removed. It is admitted in the affidavit of M/s. National Sand Supply Co. that prohibitory restrictions had been imposed by the police on plying of trucks over the one and only entry and exit publicroad available to and from the sand point, and, therefore, it was not possible for the DSIDC to arrange excavation of sand from this point It appears that the DDA just fell for this offer of M/s. National Sand Supply Co. without examining in depth the validity of the offer. Further, without asking for (sic) public tenders of inviting applications, it could not be said that the amount offered by M/s. National Sand Supply Co. was the highest. May be it was higher than what was being offered earlier but that hardly justified the action of the DDA in ignoring other similarly situated persons. Though much has been said by M/s. National Sand Supply Co. about sale of sand to the public at the rate of Rs. 22. 00 per truck, the letter of the DDA is absolutely silent about it, and there is no agency to enforce this undertaking/offer of M/s. National Sand Supply Co. However it is apparent that this offer of Rs. 22. 00 per truck is exclusive of transport charges for which again an ordinary consumer would have to depend upon the rates fixed by a private party. It therefore, appears that public interest has been the first casualty in this agreement. As far as the claim of M/s. National Sand Supply Co. that huge construction activity was going on because of Asaid 1982 and this prompted the DDA to give the contract in question is concerned, it is not borne out from the record. The DDA has not supported this contention. Subsequent events also show that this could not be so. In spite of the fact that the stay granted earlier was vacated by the Court, this sand point was not operated and yet construction activity connected with the Asiad 1982 completed and the games held. ( 21 ) AT this stage, the order of the Deputy Commissioner dated 2-8-1982 may again be referred to. In spite of the fact that the stay granted earlier was vacated by the Court, this sand point was not operated and yet construction activity connected with the Asiad 1982 completed and the games held. ( 21 ) AT this stage, the order of the Deputy Commissioner dated 2-8-1982 may again be referred to. By this order, on the basis of the power under R. 28 of the Rules, the conditions of R. 18 have been relaxed in the interest of mineral development in the Union territory of Delhi and the DDA has been allowed to sub-lease the permit for evacuation/removal of sand in favour of M/s. National Sand Supply Co. The reason for relaxation of R. 18 is that the DDA would not be operating the mines departmentally and thus would be violating the condition of R. 18 which prohibits the sub-leasing of permit. This order has been challenged as being outside the purivew of R. 28 inasmuch as the conditions of R. 18 could be relaxed only in the interest of mineral Development which is not so in the present case, but because of the view I have taken I need not go into this point. ( 22 ) PARAMJIT Singh Sethi has denied that he filed any writ petition earlier. He also denied that there was any concert between him and any other person. The Writ Petition filed by various parties challenging the award of the contract in question have no doubt been dismissed, but not on merits. In fact, it was not seriously argued that the present petition is barred by res judicata or principles analogous thereto. Shri G. L. Sanghi referred to a decision of the Supreme Court in the Workmen of Cochin Port Trust v. Board of Trustees of Cochin Port Trust, AIR 1978 SC 1283 , where the Court had held that dismissal of a special leave petition under Art. 136 need not necessarily bar the entertainment of a writ petition under Art. 226 on the same grounds, The Court observed : "in the instant case the award of the Tribunal no doubt, was challenged in the special leave petition filed in the Court, on almost all grounds which were in the subsequent writ proceeding agitated in the High Court. There is no question, therefore, of applying the principles of constructive res judicata in this case. There is no question, therefore, of applying the principles of constructive res judicata in this case. What is, however, to be seen is whether from the order dismissing the special leave petition in limine it can be inferred that all the matters agitated in the said petition were either explicitly or impliedly decided against the respondent. Indisputably nothing was expressly decided. The effect of a non-speaking order of dismissal without anything more indicating the grounds or reasons of its dismissal must, by necessary implication, be taken to have decided that it was not a fit case where special leave should be granted" (para 9 ). Following this judgment, I would, therefore, hold that the present petition is not barred by res judicata or principles analogous thereto. ( 23 ) IT cannot be disputed that grant of contract in the instant case by the DDA to M/s. National Sand Supply Co. is a largess, and the DDA could not do it in its arbitrary discretion or at its sweet will and on such terms as it chooses in its absolute discretion. Applying the two principles laid down in M/s. Kasturi Lal Lakshmi Reddy ( AIR 1980 SC 1992 ) (supra), it would be seen that both of them are not satisfied, i. e. , firstly, as regards the terms on which largess may be granted, and secondly in regard to the persons who may be recipient of such largess. The action of the DDA in awarding the contract to M/s. National Sand Supply Co. is, therefore, invalid. Consequently, the letter dt. 27-7-1981 of the DDA awarding contract to M/s. National Sand Supply Co. is, therefore, quashed. ( 24 ) IN this view of the matter the writ petition filed by M/s. National Sand Supply Co. fails. Even otherwise, I do not think such a writ petition is maintainable. It may, however, be noticed that Shri Lekhi referred to a recent decision of the Supreme Court in the Gujarat State Financial Corporation v. Lotus Hotels Pvt. Ltd. , AIR 1983 SC 848 . In this case, the company had filed a petition praying for a writ of mandamus directing the Corporation to disburse the promised loan to the company for construction of a 4-Star Hotel. In this case, the company had filed a petition praying for a writ of mandamus directing the Corporation to disburse the promised loan to the company for construction of a 4-Star Hotel. One of the contentions raised by the Corporation was that the dispute raised between theparties was in the realm of contract and at best the Corporation could be charged with breach of contract for which the remedy was by way of damages or any other remedy for breach of contract. The Court observed that the Corporation had entered into a solemn agreement in the performance of its statutory duty to advance the loan to the company and acting on that solemn undertaking the company had proceeded to undertake and execute the project of setting up a hotel. This is how the Court observed : "agreement to advance the loan was entered into in performance of the statutory duty cast on the Corporation by the Statute under whcih it was created and set up. On its solemn promise evidence by the afore-mentioned two documents, the respondent incurred expenses, suffered liabilities to set up a hotel. Presumably, if the loan was not forthcoming, the respondent may not have undertaken such a huge project. Acting on the promise of the appellant evidenced by documents, the respondent proceeded to suffer further liabilities to implement and execute the project. In the backdrop of this incontrovertible fact situation, the principle of promissory estoppel would come into play. "the Court also held that the Corporation was acting in a very unreasonable manner and it being an instrumentality of the Government, the rule inhibiting arbitrary action by the Government would equally apply where such Corporation dealing with the public whether by way of giving jobs or entering into contracts or otherwise and it cannot act arbitrarily and its action must be in conformity with some principle which meets the test of reason and relevance. The Court, therefore, held that a petition under Art. 226 would certaily lie to direct performance of a statutory duty by other authority as envisaged by Art. 12 of the Constitution. The principles laid down in this authority do not he1p M/s. National Sand Supply Co. The Contract in the instant case could not be said to have been awarded by the DDA in the performance of any of its statutory duties. The principles laid down in this authority do not he1p M/s. National Sand Supply Co. The Contract in the instant case could not be said to have been awarded by the DDA in the performance of any of its statutory duties. Rather, it was against R. 18 of the Rules which was relaxed only after about a year by the Deputy Commissioner on the ground that the DDA was not excavating/removing sand depart-mentally. ( 25 ) FURTHER, no particulars have been given as to how there has been a change in the position of M/s National Sand Supply Co. after the award of the contract to it, particularly when there is nothing on the record to show that any alternative route has been obtained by it and when even R. 18 was relaxed on 2-8-1982 by the Deputy Commissioner. There is only a vague averment that a huge labour force has been employed. This allegation is as vague as it could be. Moreover, I do not think, that writ jurisdiction is a proper remedy for enforcement of the contract in the instant case. I may, however, note that there has been no defence on the part of the DDA for allowing the writ petition of M/s National Sand Supply Co. The attitude of the DDA is ununderstandable. As already noticed above, the stay granted earlier was vacated, yet the contract has not been put into operation. It was stated by counsel for the DDA that the DDA was awaiting the result of the writ petition filed by Paramjit Singh Sethi. ( 26 ) I have tried to see if I could uphold the contract, but I have been unable to do so. The principles of law laid down by the Supreme Court are squarely applicable and I cannot find any exception in the present case, particularly in view of the stand taken by the DDA. ( 27 ) IN the result, the writ petition filed by Paramjit Singh Sethi is allowed with costs, and Rule is made absolute. The Writ Petition filed by M/s National Sand Supply Co. is, however, dismissed without any order as to costs.-D. K. KAPUR, C. J. :- 28. 1 have had the advantage of considering the opinion of my learned brother Wadhwa J. , in connection with the two writ petitions before the Court. The Writ Petition filed by M/s National Sand Supply Co. is, however, dismissed without any order as to costs.-D. K. KAPUR, C. J. :- 28. 1 have had the advantage of considering the opinion of my learned brother Wadhwa J. , in connection with the two writ petitions before the Court. As I agree substantially with the conclusions to be arrived at regarding the two petitions, 1 could very well have recorded this fact, but some of the points arising in the two cases are such, that they require a separate opinion. As far as the petition of Shri Paramjit Singh Sethi is concerned, I have grave doubts that it is at all maintainable. It seems to me that the petitioner has no real connection with the grant of the contract in favour of M/s. National Sand Supply Company, but 1 will base my base my decision concerning that petition on" some quite different considerations. I would like first to take up the petition of M/s. National Sand Supply Company which is Civil Writ Petition No. 208/83. This petition prayed for a mandamus to direct the Delhi Development Authority to perform a contract dt. 27th July 1981, whereby permission was given to the petitioner to quarry sand from land situated in two villages Madanpur Khadar and Jasola. It may here be mentioned that this is really permission to lift from the Jamuna. The sand is used for building purposes, and constructions which arise from such use are not purely commercial. As noticed in my learned brother s judgment, the licence fee used to be fixed at the rate of Rs. 72,000. 00 per annum till the year 1979-80, when it became Rs. 87,120. 00. At that time tenders used to be invited by the Delhi State Industrial Development Corporation for doing the quarrying operations. There were a number of difficulties in raising the sand. Restrictions were placed by the police, the road was difficult and there were many disputes relating to the quarrying of the sand which led to the Delhi State Industrial Development Corporation not being able to properly operate the sand points. Historically, even before the land vested in the Central Government under the Delhi Development Act, 1957, thiswas a traditional source of sand for building purposes in Delhi. Historically, even before the land vested in the Central Government under the Delhi Development Act, 1957, thiswas a traditional source of sand for building purposes in Delhi. At that time, the quarrying of the sand was a source of income to the villagers because the sand formed part of the Shamlat Deh of the villages. In any event, it is not necessary to trace out the historical back-ground for the purposes of this case except to say that there have been a large number of cases involving the quarrying of the sand before the courts at various times. After the year 1979-80 when this land came under the direct control of the Delhi Development Authority, it received two offers for the excavation of sand one from Shri Madan Lal Mittal and the second from M/s. National Sand Supply Company was at the rate of Rs. 3. 25 lakhs per annum for three years from 14th Aug. 1981 to 13th Aug. 1984, which was subject to some enhancement after some time. Out of these two offers, that of M/s. National Sand Supply Company was accepted. The fee of Rs. 3. 25 lakhs was more than three times the previous rate at which the Delhi State Industrial Development Corporation had got tenders, so no one can say that the rate was very low. The reason for the rise in the amount of tenders was that sand was urgently required for building purposes in connection with the Asian Games. ( 29 ) FOR some reason, the excavators of sand from another place, namely, Okhla, were interested that this contract should not be carried out, so some obstructions were raised regarding the actual enforcement of the contract. There is a firm, M/s. Santoshi Associates, which operates the Okhla sand point and sells sand at the rate of Rs. 42. 00 per truck. Under the agreement with the Delhi Development Authority, M/s. National Sand Supply Company had to sell sand at the rate of Rs. 22. 00 per truck. If M/s National Sand Supply Company had carried out their contract, M/s. Santoshi Associates would be out of business. So, there have been numerous challenges to the contract made in favour of M/s National Sand Supply Company. In this connection, writ petitions were filed by others which failed. Details of these need not be gone into. 22. 00 per truck. If M/s National Sand Supply Company had carried out their contract, M/s. Santoshi Associates would be out of business. So, there have been numerous challenges to the contract made in favour of M/s National Sand Supply Company. In this connection, writ petitions were filed by others which failed. Details of these need not be gone into. In any event, the Writ Petition of Shri Paramjit Singh Sethi was filed later and was ordered to be listed along with that of M/s National Sand Supply Company. This was for purposes of convenience. ( 30 ) AS the writ petition of M/s. National Sand Supply Company was concerned with a mandamus to give effect to the contract dated 27th July, 1981, one may well ask whether such a mandamus can at all be issued in respect of a contract. The Delhi Development Authority would have received a sum of Rs. 3. 25 lakhs annually if it had given effect to the contract. There was no stay from any one. Probably, the Delhi Development Authority was persuaded that the sum of Rs. 3. 25 lakhs was too low a figure and, therefore, they should not give effect to the contract. In fact the Delhi Development Authority has lost substantial revenue by not putting the contract into effect nor cancelling the same. I am of the view that whatsoever remedy is open to M/s. National Sand Supply Company, it is not that of a writ of mandamus. The contract cannot be enforced in this way. There is an alternative remedy open which has not been availed of. On this short point, the writ petition of M/s. National Sand Supply Company has to fail. ( 31 ) I agree with my learned brother that this writ petition has to be dismissed but without costs. ( 32 ) THIS brings me to the writ petition of Shri Paramjit Singh Sethi. In my view, the contract for quarrying the sand was only up to 13th Aug. , 1984, and that period had practically elapsed or was about to elapse without the contract being given effect to, so there was no purpose in Shri Paramjit Singh Sethi filing the writ petition. The counter- affidavit filed on behalf of M/s. National Sand Supply Company is based on the claim that the writ petition has been filed mala fide. , 1984, and that period had practically elapsed or was about to elapse without the contract being given effect to, so there was no purpose in Shri Paramjit Singh Sethi filing the writ petition. The counter- affidavit filed on behalf of M/s. National Sand Supply Company is based on the claim that the writ petition has been filed mala fide. It is stated that M/s. Santoshi Associates acquired complete monopoly in the trade of sand in the Union Territory of Delhi on account of blockade of the source of Jamuna sand at Madanpur Khadar etc. , A writ petition was filed by M/s. Shallu Enterprises being Civil Writ Petition No. 6825 of 1981, which was rejected by the Supreme Court. That writ petition was practically the same as that filed by Shri Paramjit Singh Sethi. Another writ petition M/s. Democrat Builders v. Delhi Development Authority being C. W. 1884/81, was filed in this Court, in which a show cause notice was issued and in that case the claim was that the petitioners were connected with Abdul Majid and Paramjit Singh Sethi, the same Paramjit Singh Sethi as has filed the writ petition now. This writ petition was dismissed as withdrawn. The case of the respondents was that under some name or other, the partners of Santoshi Enterprises had been trying to prevent the enforcement of the contract in favour of M/s. National Sand Supply Company and having failed eventually in the Supreme Court and the High Court, another person connected with that firm, namely, Paramjit Singh Sethi had filed the present petition. ( 33 ) IT is clear from these facts that Shri Paramjit Singh Sethi is not a mere volunteer. He is a person who is interested in the contract of M/s. National Sand Supply Company not being given effect to so that the price of sand should not come down in Delhi. ( 34 ) ACCORDING to my learned brother s judgment, Shri Paramjit Singh Sethi has a right to file a petition in his own name and he has locus standi to proceed with the same on the footing that he is also connected with the work of supplying sand. ( 34 ) ACCORDING to my learned brother s judgment, Shri Paramjit Singh Sethi has a right to file a petition in his own name and he has locus standi to proceed with the same on the footing that he is also connected with the work of supplying sand. So, I will proceed on the basis that the petition is not mala fide, but is motivated by a genuine desire to maintain the high price of sand so that the Delhi Development Authority can get better revenue by selling the sand at a higher price. ( 35 ) THE essence of my learned brother s judgment is that no private offers should be accepted for the job of quarrying the sand but the same should be done by inviting tenders from the public and giving it to the highest bidder. This may be correct, but the Delhi Development Authority should also keep in view its policy of ensuring the supply of sand at a reasonable rate to the public. ( 36 ) IT appears obvious to me that the Delhi Development Authority is a public organisation with statutory functions and I think it has to take into account the prevailing market price of the sand and has to ensure that the sand is supplied at a lower rate. There is no justification for the Delhi Development Authority taking over the management of the sand in its own hands unless it is for the public good. At the time the Delhi State Industrial Development Corporation, was issuing tenders for a sum of Rs. 78,000. 00 or Rs. 87,000. 00 and so on, no one could take objection to the rate. But got a tender for Rs. 3. 25 lakhs which is a much greater amount, the rival groups who are handling the Okhla sand, are interested that a lower price should not be charged from the customers. ( 37 ) THERE are thus two aspects of the "case. One is the fixation of a lower selling price by the person quarrying the sand and the second is the manner in which the tenders have to be called for. ( 37 ) THERE are thus two aspects of the "case. One is the fixation of a lower selling price by the person quarrying the sand and the second is the manner in which the tenders have to be called for. ( 38 ) ON the basis of certain judgments of the Supreme Court regarding Governmental policy and the application of Art. 14 of the Constitution, my learned brother has come to the conclusion that the tenders should be invited from the public at large and not accepted if they are made individually. I am not sure that this is the correct legal position, in regard to such things, as quarrying sand or licences relating to mines and minerals. The position of a contract in which the Authority or State is concerned, i. e. , in case the work is to be performed for the State by some one else is quite different. In such cases, the State has to find a contracting party. It has to get the best available offer for expending its own funds. It cannot distribute its funds to the public to the detriment of the Public Exchequer. For example, if the State is to build a building, it cannot award it to a contractor at an abnormal high price. But, it must get tenders from various persons so that the best available offer is accepted. This does not mean necessarily the lowest offer, but an offer which maintains quality and also saves money to the Public Exchequer. In the case of lease, licences, and so on, the position is quite the reverse. In such cases, it is the licencee who is interested in the permission, or the lessee who is interested in getting the land. The Delhi Development Authority enters into both types of contracts for leases. It may lease out land at a fixed rate to certain persons, or it may auction out the land to the public, if it auctions out the land to the public, it gets the highest offer. But, this results in an escalation in the price of land. If it fixes a lower rate, then it has to decide how the leases have to be made. It may be by way of draw of lots or by some similar process. There have been public auctions by the Delhi Development authority of buildings for very large sums of money. If it fixes a lower rate, then it has to decide how the leases have to be made. It may be by way of draw of lots or by some similar process. There have been public auctions by the Delhi Development authority of buildings for very large sums of money. There have also been many buildings constructed by the Delhi Development Authority at a no profit no loss basis and there have also been allotment of lands to various persons at quite a reasonable late. This is all a matter of policy but, the policy has to be general. It cannot be particularised to benefit a few persons. ( 39 ) I am of the view that in the matter of quarrying of sand, the Delhi Development Authority has a dual responsibility. It is not so much interested in getting a few extra thousands of rupees per year for the quarrying operations as in ensuring that the price of sand is not too high. The functions of a Welfare State are not intended to make small profits for the State, but to ensure the fair distribution of the products to the public at a reasonable rate. Thus, in many cases the State may buy things dear (at a high price) and sell them at a lower rate. This is a State subsidy for equalising the benefit of products amongst the largest numbers. There can be rationing, there can be Fair Price Shops, there can be control on prices, or there can be subsidy of prices. All these matters are of policy which do not depend on the manner in which a businessman does business. The businessman is concerned with the maximum profit. If the Delhi Development Authority was a businessman, it would try to make the maximum profit from the sand. There would be no interest to fix the selling rate qua the public. There is a big difference between the operation of a Welfare State and the operation of a monopolistic business-house. The return from the quarrying of the sand at Rs. 3. 25 lakhs per year is a mere pittance as far as the Delhi Development Authority is concerned. But the fact that the sand would be supplied to the public at Rs. 22. 00 per truck is a point of vital importance. The return from the quarrying of the sand at Rs. 3. 25 lakhs per year is a mere pittance as far as the Delhi Development Authority is concerned. But the fact that the sand would be supplied to the public at Rs. 22. 00 per truck is a point of vital importance. ( 40 ) I agree with my learned brother that the writ petition of Shri Paramjit Singh Sethi should be allowed but the selling price of sand throughout Delhi should be fixed at a much lower rate (say Rs. 22. 00 per truck ). This should also apply to M/s. Santoshi Associates of Okhla as well as to any prospective tenderer for the sand at Madanpur Khaddar and Jasola. ( 41 ) THEREFORE, the direction to be given to the respondents is that they must ensure that the sand supplied in Delhi is at a reasonable rate, there must be a restriction controlling the selling rate of the tenderer, I agree that the writ petition of Shri Paramjit Singh Sethi should be allowed but with this direction. In the same way the Authority should aim to limit the price of sand from the other point under its control. ( 42 ) THE price at which the sand from Okhla is supplied must also be the same. The writ petition of M/s. National Sand Supply Company will stand dismissed without costs and that of Shri Paramjit Singh Sethi will be allowed with costs. The costs to be paid by the Delhi Development Authority.