JUDGMENT - M.S. JAMDAR, J.:---The first petitioner M/s. Escorts Electricals, a partnership firm of electrical engineers, work as licensed electrical contractors and claim to have specialised in industrial electrification work. The second petitioner is one of the partners of the said firm. The petitioners seek to challenge the order Dt. 26th August, 1985, passed by the Collector of Sangli District, cancelling the Administrator's Resolution dated 28th May, 1985, accepting the tender of the petitioners for providing Sodium Vapour lamps on some roads in the Sangli city and directing the Municipal Council to accept the tender of respondent No. 5 on certain terms and conditions. 2. Tenders for purchase of H.P.S.V. Lamp fittings, manufactured by Philips India Ltd. Genelec Ltd. and three other companies were invited by third respondent, the Sangli Municipal Council by the tender notice published in the Times of India, Dt. 26th March, 1985 and other newspaper. In pursuance to this notice, the petitioners submitted their tender for supply and installation of Philips make H.P.S.V. fittings and installation for aggregate amount of Rs. 14,27,266 on 8th April, 1985, which was the last date for submission of the tenders, enclosing with the said letter a Bank Solvency Certificate for rupees five lacs; details of similar jobs carried out by them and a demand draft for Rs. 30,000/- towards 2% of the tender value as earnest money. Besides the petitioners, six other tenders including the manufacturers M/s. Genelec Ltd. and Philips India Ltd. submitted their tenders which were opened on 9th April, 1985 in the office of the fourth respondent the Jubilee Electric Works, which is the electrical department of the Sangli Municipal Council. The fifth respondent Genelec Ltd., submitted their tender for Rs. 14,18,149/- and paid Rs. 15000/- as earnest deposit. 3. The Administrator Sangli Municipal Council accepted the tender of the petitioners, rejecting the tender of the fifth respondent M/s. Genelec Ltd., though the price quoted by them was lower than the price quoted by the petitioners, on the ground that Genelec Ltd. did not pay 2% earnest deposit as per the tender requirement, that they had asked for advance payment of 80% of the price of supplied material, which condition, if accepted, would cast burden of Rs. 66,500/- by way of interest at the rate of 18% p.a. on the amount of advance payment on the assumption that about six months would be required for completion of the work, and that the life of Philips make lamps offered by the petitioners was 18000 hours as against the life of 15000 hours of the lamps offered by Genelec Ltd. Accordingly, the General Manager of Jubilee Electrical Works, placed the work order on 22nd May, 1985 with the petitioners for Philips, H.P.S.V. fittings and installation. It was stated in the said work order that the tender of the petitioners for total price of Rs. 14,27,266/- was accepted on the terms and conditions of the tender form. The petitioners were called upon to pay security deposit of 2% of the total tender value amounting to Rs. 28,546/- and to enter into a agreement on stamp paper with the fourth respondent. It was also stated in the said letter that the work should be completed within five months from the receipt of the said order and in case of delay, the petitioner will have to pay fine of Rs. 300/- per day. The petitioners were also required to accept the said order. Accordingly, the petitioners by the letter Dt. 28th May, 1986 accepted the said order, enclosing therewith a Demand Draft of Rs. 28,546/- towards the 2% security deposit as required. The fourth respondent accepted the said letter, but did not accept the security deposit on the ground that the proforma of the agreement to be entered into by the petitioners and the fourth respondent was not ready. Thereafter by a telegram Dt. 6th June, 1985, the fourth respondent informed the petitioners to keep the work order pending. The telegram was received by the petitioners on the 8th. It was followed by a letter 6th June, 1985, which was received by the petitioners on the 11th. It appears that the work, order was stayed because fifth respondent Genelec Ltd. had lodged a complaint with the Divisional Commissioner, Pune, and with the Collector Sangli Dist. against the acceptance of the tender of the petitioners. On receipt of the complaint, the Collector sent a report to the Divisional Commissioner on 15th June, 1985 and on receipt of this report, the Divisional Commissioner directed the Collector to hear the concerned contractors and to take suitable decision in the matter. against the acceptance of the tender of the petitioners. On receipt of the complaint, the Collector sent a report to the Divisional Commissioner on 15th June, 1985 and on receipt of this report, the Divisional Commissioner directed the Collector to hear the concerned contractors and to take suitable decision in the matter. The Collector heard the petitioners and M/s. Genelec Ltd. on 26th July, 1985 and on 26th August, 1985, he passed the impugned order, which, as mentioned above, is the subject matter of the challenge in this petition. 4. The impugned order is challenged on the grounds:--- (i) that it is ultra vires the powers of the Collector, being outside the purview of section 318 of the Maharashtra Municipalities Act, 1965 (hereinafter called the 'said Act'); (ii) that it is mala fide, arbitrary, unreasonable and against the public interest and was passed with a view of favouring the 5th respondent; (iii) that condition No. 43 of the tender, on which the order is based, is unreasonable and violative of Article 14 of the Constitution, because, the classification made by the said condition between manufacturers and other contractors has no rational nexus to the objective of fitting street lights, and (iv) that on the basis of the work order, the petitioners incurred huge expenses and incurred liability for the purchase of requisite material to the tune of Rs. 9,66,000/- and hence respondent Nos. 1 to 4 are bound by the principles of promissory estoppel and cannot back out of the contract. 5. The impugned order was passed by the third respondent the Collector of Sangli on the complaint lodged by the fifth respondent with the Divisional Commissioner, Pune Division. On receipt of this complaint, the Divisional Commissioner directed the Collector to make enquiry into the complaint and to submit his report in respect of the said complaint. Accordingly, the collector submitted his report on 15th June, 1985 and on receipt of this report, the Divisional Commissioner directed the Collector to take suitable decision in the matter after hearing the concerned contractor, and accordingly, the Collector held an enquiry and after hearing the petitioners, as well as the 5th respondent, passed the impugned order. It is contended that the second respondent had no power to pass the impugned order under section 318 of the said Act and hence, the said order is illegal and ultra vires. 6. It is contended that the second respondent had no power to pass the impugned order under section 318 of the said Act and hence, the said order is illegal and ultra vires. 6. Section 318 of the said Act confers revisionary powers on the State Government. It lays down:- "S. 318:- The State Government may, at any time for the purpose of satisfying itself as to the legality or propriety of any order passed by, or as to the regularity of the proceedings of, any Council or of any officer subordinate to such Council or the State Government acting in exercise of any power conferred on it or him by or under this Act, call for and examine the record of any case pending before or dispose of by such Council or officer and may pass such order in reference thereto as it thinks fit; Provided that, no order shall be varied or reversed unless notice has been given to the parties interested to appear and be heard; Provided further that, no such order shall be passed in any case in which an appeal is provided and has been preferred or has been decided; Provided also that no such record shall be called by the State Government after one year from the date of the passing of the order by the Council or the Officer concerned....." 7. As the Administration in accepting ;the tender of the petitioners acted in exercise of the powers and duties of the Municipal Council and its various authorities vested in him, the order passed by the Administrator in that behalf is subject to the revisional jurisdiction of the Sate Government by virtue of section 318 of the said Act. The second respondent exercising his powers, therefore, was competent to satisfy himself as to the legality or propriety of the order passed by the Administration. Moreover, section 318 is not the only provision under which the second respondent could have acted for setting aside the order of the Administrator. Sections 306 and 308 of the said Act vest sufficient powers in the Collector in this behalf. Moreover, section 318 is not the only provision under which the second respondent could have acted for setting aside the order of the Administrator. Sections 306 and 308 of the said Act vest sufficient powers in the Collector in this behalf. Section 306 confers powers on the Director, the Collector or any officer of the Government authorised by the State Government to enter on and inspect, or cause to be entered on and inspected any immovable property occupied by or moveable property, belonging to any Council or any institution under the control or management or any work in progress under it or under its directions and call for or inspect any extract from any Council's or committee's proceedings and any book or document in the possession of or under the control of the Council or any of its committees. Section 307 confers powers on the Director and the Collector to call for returns and reports. Section 308, which concerns powers on the collector and the director to suspend the execution of any order or resolution of the Municipal Council on certain grounds reads as follows:- "Section 308:---(1) If, in the opinion of the Collector, the execution of any order or resolution of a Council or the doing of anything which is about to be done or is being done by or on behalf of a Council, is causing or is likely to cause injury or annoyance to the public or is against public interest or to lead to a breach of the peace or is unlawful, he may by order in writing under his signature suspend the execution or prohibit the doing thereof. (2) When the Collector makes any order under his signature, he shall forward the Council affected thereby a copy of the order indicating therein the reasons for making it and also submit a report to the Director, along with a copy of such order. (3) Within twenty days from the receipt of such order of the Collector, the Council shall if it so desires, forward a statement to the Director indicating therein why the order of the Collector should be rescinded, revised or modified. If no such statement is received by the Director within time, the Director shall presume that the council has no objection if the order of the Collector is confirmed. If no such statement is received by the Director within time, the Director shall presume that the council has no objection if the order of the Collector is confirmed. (4) On receipt of such report from the Collector and the Council's statement referred to in sub-section (3), if any, the director may rescind the order or may revise or modify or confirm the order or direct that the order shall continue to be in force with or without modifications: Provided that, the Director shall take into account the statement of a Council if received, before such an order is made by him." It is, therefore, futile to urge that the Collector had no jurisdiction to pass impugned order. 8. The main ground on which the second respondent passed the impugned order is that the petitioners were not eligible to submit their tender, because, only those contractors who manufacture HPSV lamps fittings were eligible to get the contract. This conclusion is fully supported by Clause 43 of the terms and conditions of the tender and also by the public notice issued by the Municipal Council inviting tenders for the work in question. Clause 43 of the Tender reads as follows:- "43(i) Sodium Vapour Street lighting work must be completed by the Contractor those who manufacture and install such sodium vapour fittings and Sodium Vapour Lamps. (ii) No exemption from the Octroi Duty will be given to the contractor for any material or article brought the Contractor for executing this, in Sangli Municipal Council Limits from outside...". The notice inviting the tender specifically reiterates this position. By this notice sealed tenders were invited for purchase of HPSV lamp fittings of Philips, Crompton, Mysore Lamps, Genelec Ltd. and Bajaj make. The last clause of the notice which restricts the eligibility to submit tenders only to the manufacturers reads as follows:- "Sodium Vapour Street lighting work must be completed by the contractors who manufacture and instal such sodium vapour fittings and Sodium Vapour Lamps...". No doubt, this clause is clumsily worded, but it does convey unequivocally the sense that only manufacturers were competent to submit the tenders. 9. This position flows also from Clause 44 of the terms and conditions of the tender. No doubt, this clause is clumsily worded, but it does convey unequivocally the sense that only manufacturers were competent to submit the tenders. 9. This position flows also from Clause 44 of the terms and conditions of the tender. The said clause reads as follows:- Clause 44:- Along with the offer, the tenderer shall have to furnish the following particulars:- (i) Technical specifications of the luminaries offered; (ii) Photometric data;-of fitting as per IS : 2149-1970. (iii) Relative iscandela diagram. (iv) Research and Development as in plant activities. (v) Certificate of Recognition of R D by department of Science Technology-Govt. of India. (vi) Testing facilities available in the R D Laboratory. (vii) Excise duty gate pass of the manufacturer. (viii) Tenderer should indicate whether the luminaries offered are manufactured in their own factory and if so, factory address should be furnished. (ix) Sample of fittings and lamp to be submitted. (x) Nominal luminaries flux and average life of lamp. (xi) Lumen depreciation of lamp at 15000 burning hours. (xii) Electrical distribution and feeder pillar diagrams. (xiii) Illumination level and uniformity figures should be mentioned." 10. Needless it is to say that the particulars required to be furnished by the tenderer as per Clause 44 can be furnished only by a manufacturer. Moreover, sub-clause (viii) of clause 44 expected the tenderers to indicate whether luminaries offered are manufactured in their own factory, and if so, to furnish the address of the factory. Sub-clause (v) required the tenderers to furnish details about the testing facilities available in R D laboratory, which Clause (iv) required the tenderers to mention the research and development as implant activities carried out by them. The tenderers were also expected to furnish vide sub-clause (v) the certificate of recognition of R D by department of Science and Technology. Government of India, Clause 43 read with Clause 44, therefore, leaves no doubt that only manufacturers were eligible to make offer for the contract. 11. Admittedly, the petitioners are not the manufacturers. As a matter of fact, besides respondent No. 5, only one other manufacturers, viz. Philips India Ltd. submitted their tender. The Administrator, therefore, was basically wrong in even taking into consideration the tender submitted by the petitioners. In doing so he had ignored the report submitted by the Electrical Engineer of the Jubilee electric works, which, as mentioned above, is the electric department of the Sangli Municipal Council. Philips India Ltd. submitted their tender. The Administrator, therefore, was basically wrong in even taking into consideration the tender submitted by the petitioners. In doing so he had ignored the report submitted by the Electrical Engineer of the Jubilee electric works, which, as mentioned above, is the electric department of the Sangli Municipal Council. This report was accepted and forwarded by the Administrator with favourable recommendation by the Chief Officer of the Sangli Municipal Council. The Electrical Engineer had recommended acceptance of the tender of the fifth respondent, M/s. Genelec Ltd. giving cogent reasons for the recommendation and explaining how the tender offered by the fifth respondent was beneficial to the Municipal Council. As a matter of fact, the electrical engineer had called for discussion only two manufacturers viz. Genelec Ltd. and M/s. Philips India Ltd. The other tenderers, including the petitioners, were not even called for discussion. That was because none of the other tenderers was a manufacturer. The electrical engineer had made clear in his report that tenders were invited only from manufacturers and had given in detail the rationale for restricting the tenders to the manufacturers. The petitioners were not and are not manufacturers and hence they were not competent to submit their tender for the work in question. The Administrator while accepting the tender of the petitioners and issuing the work order in petitioner's favour completely ignored his basic requirement. 12. It is contended that Clause 43 of the terms and conditions of the Tender violates Article 14 of the Constitution inasmuch as it discriminates against the non-manufacturing contractors. It is contended that the classification between the contractor, who is a manufacturer and the contractor who is not the manufacturer of the goods required for carrying out the work, has no rational nexus to the object sought to be achieved, viz. street lighting. According to the petitioners this decision to restrict the contract only to the manufacturers is absolutely arbitrary and discriminatory. There is no substance in this contention. There was nothing arbitrary or wrong in the Municipal Council calling for the tenders only from the manufacturers. It is certainly in the public interest to get genuine goods from the manufacturers themselves. The electrical engineer in his report, referred to above, has elaborately discussed the rationale behind the policy of restricting the tenders only the manufacturers. He had given five reasons for preferring manufacturers. It is certainly in the public interest to get genuine goods from the manufacturers themselves. The electrical engineer in his report, referred to above, has elaborately discussed the rationale behind the policy of restricting the tenders only the manufacturers. He had given five reasons for preferring manufacturers. They are as follows:- (i) Fittings should be genuine and that there should not be any scope for cheating; (ii) The manufacturer will be responsible for the guarantee in respect of the goods and that no third party will be concerned with that matter; (iii) After the order is placed the manufacturer would not ask for more price on the ground that the prices of the goods have gone up and that there would not be any possibility of work being left unfinished on account of dispute in this behalf; (iv) Optical date which is absolutely necessary for street lighting would be available only from manufacturers and that the manufacturers will be bound by that data. Moreover, the said data can be checked in the laboratory of the manufacturer any time, which would not be possible in case of non-manufacturers contractors; (v) Follow up action would be conveniently taken if the contractor is a manufacturer. All these consideration, which weighed with the concerned officers of the municipal council is restricting the tenders only to the manufacturers, are not only germane to the purpose sought to be achieve, but are completely in public interest. It cannot be disputed that it would be in public interest for municipal council to purchase genuine goods and to carry out its statutory functioning of street lighting in an efficient manner, even at higher rate, instead of getting superior goods at cheaper rate without there being any effective check on the quality and genuineness of the goods supplies. It is therefore, difficult to accept the contention that Clause 43 of the terms and conditions of the tender is violative of Article 14 of the Constitution. 13. According to the petitioners, their offer was lower than the offer of the fifth respondent M/s. Genelec Ltd. and, hence, the action of Collector is granting the contract to M/s Genelec Ltd. is unreasonable and against the public interest. It is contended that the action of the municipal council, like government action must satisfy the test of reasonableness and public interest. It is contended that the action of the municipal council, like government action must satisfy the test of reasonableness and public interest. The Municipal Council, it is urged, cannot act as it pleases in the manner of giving largess and it cannot choose to deal with any person it pleases in its absolute and unfettered discretion. In support of this proposition, reliance and sought to be placed on the decision of the Supreme Court in (M/s. Kasturi Lal Lakshmi Redeey etc. v. The State of Jammu Kashmir and another)2, A.I.R. 1980 S.C. 1992. In that case, the action of the State Government in granting tapping contract by way of negotiation was challenged as arbitrary and irrational. In dealing with two limitations imposed by law which restrict and control the discretion of the government in the matter of granting larges. Their Lordships observed as follows in para 11 of the Judgment:- "...So far as the first limitation is concerned, it flows directly from the thesis that unlike 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 contractor selling or leasing out its property, whatever be its activity, the Government is still the Government and is subject to restraints inherent in its position in a democratic society. The constitutional power conferred on the Government cannot be exercised by it arbitrarily or capriciously or in an unprincipled manner, it has to be exercised for the public good. Every activity of the Government has a public element in it and it must, therefore, be informed with reason and guided by public interest. Every action taken by the Government must be in public interest, the Government can not act arbitrarily and without reason and if it does, its action would be liable to be invalidated. If the Government awards a contract or leases out or otherwise deal with its property or grants any other largess, it would be liable to be tested for its validity on the touch stone of reasonableness and public interest and if it fails to satisfy either test, it would be unconstitutional and invalid..." In para 15 of the Judgment. If the Government awards a contract or leases out or otherwise deal with its property or grants any other largess, it would be liable to be tested for its validity on the touch stone of reasonableness and public interest and if it fails to satisfy either test, it would be unconstitutional and invalid..." In para 15 of the Judgment. Their Lordships dealt with the second limitation as follows:- "...The second limitation on the discretion of the Government in grant of larges is in regard to the persons to whom such largess may be granted. It is now well settled as a result of the decision of the Court in Ramana D. Shetty v. International Airport Authority of India A.I.R. 1979 S.C. 1628 (supra) that the Government is not free, like an-ordinary individual, in selecting the recipients for its largess and it cannot choose to deal with any person it pleases in its absolute and unfettered discretion. The law is now well established that the Government need not deal with anyone, but if it does so, it must do so fairly without discrimination and without unfair procedure. 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 the 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 Government action must be based on some principle which meets the test of reason and relevance..." 14. We have already dealt with above the second limitations. In our view, there was nothing arbitrary or capricious on the part of the Municipal Council in deciding to get the work done only from manufacturers of the goods required for the work. As observed, above, that decision was based on second reasons, which were not only relevant to the object, but were very much in the public interest. 15. There is also no substance in the contention of the petitioners that the offer of the fifth respondent was higher and cast unnecessary financial burden on the Municipal Council. As observed, above, that decision was based on second reasons, which were not only relevant to the object, but were very much in the public interest. 15. There is also no substance in the contention of the petitioners that the offer of the fifth respondent was higher and cast unnecessary financial burden on the Municipal Council. The Administrator rejected the tender of the fifth respondent on the ground that the demand of advance payment of 80% by way of interest at 18% p.a. on the tender amount calculated on the assumption that the work was to be completed within six months. Consequently, he found that the offer of the petitioners, though ex facie appeared to be higher, was in fact lower than the offer of the fifth respondent. This comparison itself was basically wrong because, as held above, the contract. Further, even assuming that the additional burden of Rs. 66,500/- by way of interest burden would be cost on the Municipal Council by the advance payment, demanded by the fifth respondent, the offer of the said company was still lower than the offer made by the only other manufacturer viz. M/s. Philips India Ltd. As mentioned by the electrical engineer in his report, the offer of M/s. Philips Ltd. was higher than that of M/s. Genelec Ltd. approximately by 2½ lacs. Advisedly, therefore, M/s. Philips India Ltd. has not made any grievance in respect of the acceptance of the tender of the fifth respondent. 16. Even assuming that the offer made by the petitioners could have been taken into consideration by the Administrator, the finding that the offer of M/s. Genelec Ltd. is higher than the offer of the petitioners in view of the advance payment demanded by M/s. Genelec Ltd. is wrong. The offer of the petitioners was Rs. 14,27,266 as against the offer of Rs. 14,18,149 of M/s. Genelec Ltd. No doubt, if as held by the Administrator the additional burden of Rs. 66,500/- is cast on the Municipal Council by the advance payment demanded by the fifth respondent, the offer of the petitioners would, in fact, turn out to be lower. But, the administrator committed a basic error in holding that additional burden would be cast on the Municipal Council by the advance payment stipulated by M/s. Genelec Ltd. in fact, it is no, advance as such. But, the administrator committed a basic error in holding that additional burden would be cast on the Municipal Council by the advance payment stipulated by M/s. Genelec Ltd. in fact, it is no, advance as such. M/s. Genelec Ltd. did not claim any advance payment either in respect of the installation work or in respect of the goods to be supplied. What they claimed was 80% of the price of the goods to be paid after supply of the goods. Moreover, the term about the advance payment was negotiable and M/s. Genelec Ltd. were prepared to discuss the terms with the administrator. The terms were as follows:- "...Our preferred terms of payment applicable for this works Contract will be so as follows. However, we are preferred to discuss the terms with you prior to finalisation of the contract:- (a) 80% of the item rates on the delivery of equipment on prorata basis; (b) balance 15% of the item rates on physical erection against fortnightly progressed bills; (c) balance 5% on completion of the order." It is significant to note in this context that the term about the advance payment was negotiable. The Collector has directed that the discussion should be held with the fifth respondent and that the tender of the fifth respondent should be accepted, if the company is willing to reduce their demand to 80% payment in advance. The Administrator could have done this before rejecting the tender of the fifth respondent. It is therefore, difficult to accept the contention that the offer of the fifth respondent was higher than that of the petitioners and cast additional financial burden on the Municipal Council and, hence acceptance of the tender of the fifth respondent was against public interest. In fact, the tender of M/s. Genelec Ltd. is lower than that of the petitioners. M/s. Genelec Ltd. is also a reputed manufacturer. The Collector was, therefore, perfectly justified and acted in public interest in cancelling the work order issued in favour of the petitioner and in directing the Municipal Council to give the contract to the fifth respondent. In fact, the tender of M/s. Genelec Ltd. is lower than that of the petitioners. M/s. Genelec Ltd. is also a reputed manufacturer. The Collector was, therefore, perfectly justified and acted in public interest in cancelling the work order issued in favour of the petitioner and in directing the Municipal Council to give the contract to the fifth respondent. In doing so, not only the collector has not acted arbitrarily or in order to favour the fifth respondent, but has prevented the administrator in rejecting the tender of M/s. Genelec Ltd. on untenable grounds and accepting the tender of the petitioners, who were not eligible to give the offer, was itself arbitrary and as a matter of fact smacked of favouritism. 17. The Administrator rejected the offer of M/s. Genelec Ltd. on two more ground, viz. that the Genelec Ltd. did not pay 2% earnest money as per tender requirement and that life of lamps offered by M/s. Genelec Ltd. was 15000 hours as against the life of 18000 hours of Philips make lamps offered by the petitioners. The plain reading of the term in respect of the earnest money will show that the tenders were not required to pay 2% money along with their tenders. As a matter of fact, the said term is silent as to how much amount the tenderers were expected to pay along with their tender towards the earnest money. The relevant clause of the terms and conditions of the tender is Clause 7 which reads as follows:- "...The security deposit amount, including tender deposit amount will be 5% of the tender amount of which 2% of the security deposit amount will be taken at the time of agreement and 2% of the security deposit amount will be taken from the first running of the work..." This clearly means that only 1% of the tender amount was required to be paid along with the tender, while 2% of the amount was paid as the time of agreement and balance amount of 2% at the first running of the work. Admittedly, M/s. Genelec Ltd. has paid 1% tender amount as earnest deposit along with the tender. It cannot, therefore, be said that M/s. Genelec Ltd. did not comply with the terms and conditions of the tender and, hence, on that ground their offer deserved to be rejected. 18. Admittedly, M/s. Genelec Ltd. has paid 1% tender amount as earnest deposit along with the tender. It cannot, therefore, be said that M/s. Genelec Ltd. did not comply with the terms and conditions of the tender and, hence, on that ground their offer deserved to be rejected. 18. This brings us to the last and important submission urged on behalf of the petitioners on the basis of the work order issued by the Administrator in their favour and the consequent steps allegedly taken by the petitioners for making preparation for carrying out the work entrusted to them under the work order. It is an admitted position that in pursuance to the Administrator's resolution accepting the tender of the petitioners, the General Manager of the Jubilee Electric Works vide his letter Dt. 22-5-1985 placed the work order with the petitioners and called upon the petitioners to complete the work within five months from the receipt of the work order. By the said letter, the petitioners were also called upon to pay 2% of the security deposit amount and enter into an agreement on stamp paper within seven days from the receipt of the order. According to the petitioners, in view of this work order, a binding contract came into existence between him and the Sangli Municipal Council and that in pursuance of the said contract for the purpose of fulfilling his part under the contract, he purchased material worth Rs. 9,66,000/-. According to him, therefore, the Sangli Municipal Corporation would be estopped from backing out of the contract and, hence on that ground also the impugned order of the Collector deserves to be quashed. 19. Clause 29, on which reliance is sought to be placed by the petitioners in support of the contention that a building contract came into existence in view of the work order, reads as follows:- "Clause 29...Successful tenderer will be required to enter into a form of contract. Until such time as a Formal Contract is entered into the Contractor's tender together with departments written acceptance thereof will constitute contract and will be binding on both parties. Until such time as a Formal Contract is entered into the Contractor's tender together with departments written acceptance thereof will constitute contract and will be binding on both parties. No portion or portions of the work are to be sub-let without the prior knowledge and approval of the Electric Engineer..." It is an admitted position that on receipt of the work order, dated 22-5-1985, the petitioners by their letter dated 28-5-1985 indicated their acceptance of the order and enclosed therewith a demand draft of Rs. 28,546/- towards 2% security deposit as required. It is also not disputed that this letter was duly received by the Administrator. It is therefore, contended that principles of promissory estoppel would estop the Municipal Corporation from backing out of its obligation. In support of this contention, reliance is placed on the decision of the Supreme Court in (The Gujarat State Financial Corporation v. M/s. Lotus Hotels Pvt. Ltd.)3, A.I.R. 1983 S.C. 848. In that case by its letter of offer and the subsequent agreement, the appellant corporation entered into a solemn agreement in performance of its statutory duty to advance loan of Rupees thirty lacs to the respondent company. Acting on the solemn undertaking, the respondent undertook and executed the project of setting up a four star hotel. The agreement to advance loan was entered into in performance of statutory duty cast upon the corporation under the Statute under which it was formed. It was contended that under the aforementioned two documents, the respondent incurred expenditures and several liabilities to set up the hotel. It was held that in the back drop of this incontrovertible fact situation, the principle of promissory estoppel would come into play. The ration of this decision, however, is not attracted in the present case, because there is no documentary evidence to show that the petitioners have actually purchased any material for the purpose of executing the contract in question. Secondly, he was not expected to go ahead with the preparation because though the letter dated 22-5-1985 written by the fourth petitioner accepting the work order was received and accepted by the fourth respondent, it is an admitted fact that the security deposit was not accepted. Moreover, respondent No. 4 had informed the petitioner by a telegram to keep the order pending. This telegram was received by the petitioners on 8-6-1985. Moreover, respondent No. 4 had informed the petitioner by a telegram to keep the order pending. This telegram was received by the petitioners on 8-6-1985. In view of this, the petitioners were not excepted to incur any expenditure even assuming that they had done so. It is, therefore, doubtful whether a binding agreement had come into existence. It is also not duly established that acting on the promise, the petitioners proceeded to suffer further liabilities and to implement and execute the project. 20. In this context, reference may also be made to the provisions in the Maharashtra Municipalities Act relating to tenders and contracts. The procedure prescribed for entering into a contract on behalf of the Municipal Council is mentioned in section 93 of the said Act. Clause (a) of sub section (2) of section 93 lays down that every contract under or for any purpose this Act shall be made on behalf of the Council by the Chief Officer. As the power of the Chief Officer were vested in the Administrator the contract was required to be made on behalf of the Council by the Administrator. Sub-section 3 further provides that every contract entered into by the Chief Officer on behalf of the Council shall be entered into in such manner and form as would bind such Chief Officer if such contract were on his own behalf, and may in the like manner and form be varied or discharged. Clause (b) of the Proviso to this sub-section further provides that every contract for the execution of any work for the supply of any materials or goods which will involve an expenditure exceeding five hundred rupees shall be in writing and shall be sealed with the common seal of the Council and shall specify the work to be done or the materials or goods to be supplied, as the case may be, the price to be paid for such work, materials or goods and in case may be, the price to be paid for such work, materials or goods and in the case of a contract for work, the time or times, within which the same or specified portions thereof shall be completed. Admittedly, except indicating the acceptance of tenders and issuing work order, no other formalities were completed. It would, therefore, be a moot question whether a binding contract came into existence between the parties. Admittedly, except indicating the acceptance of tenders and issuing work order, no other formalities were completed. It would, therefore, be a moot question whether a binding contract came into existence between the parties. The question will be decided on the basis of evidence to be led by the parties, which cannot be led in the present writ petition. Moreover, if according to the petitioners a binding contract had come into existence between them and the Municipal Council, it is open to them to file a suit for damages for breach of the contract. As in our view of action of the administrator in accepting the offer of the petitioners was itself wrong and arbitrary, the Collector was perfectly justified in setting aside that order. As held by us above, the order passed by the Collector was not only not arbitrary and capricious, but was fully justified by the circumstances and was completely in the public interest. Hence, even assuming that the Municipal Council by entrusting the work to the fifth respondent would be committing breach of any binding contract we do not think that this is a fit case which justified interference under Article 226 of the Constitution of India. In the result, therefore, the petition fails and is dismissed with costs. Rules discharged. Petition dismissed. -----