JUDGMENT A.N. Varma, J. - These two petitions are being disposed of by a common judgment as the issues involved therein are interconnected. 2. The first petition, namely, Writ Petition No. 8457 of 1986 is directed against the order dated 4-6-1986 passed by the Administrator, Nagar Mahapalika, Varanasi cancelling the bid of the petitioner at an auction held on 27-5-1986 for settling a contract for realisation of Tah-bazari in respect of Jatanbar market, Varanasi. It is a market where vendors sell milk and curd etc. The second petition, namely. Writ Petition No. 15386 of 1986 prays for a writ of mandamus restraining the respondents from interfering with his right to realise Tah-bazari with respect to the aforesaid market in pursuance of the contract which the petitioner claims had been duly settled with him as a result of the aforesaid auction. 3. These are the undisputed facts. On IBS 1986 an advertisement was published in a local Newspaper inviting sealed tenders for the aforesaid contract for one year. The advertisement stated that the tenders may be submitted on 27-5-86 in the office of Up-Nagar Adhikari between 12 noon and 1 P. M. The intending bidders were required to deposit cash security of Rs. 5000A. The advertisement made the deposit of cash security a condition precedent to the submission of the tender. It further stated that the highest tenderer shall have to deposit one fourth of the amount offered in the tender forthwith and thereafter the remaining three fourths of the amount shall have to be deposited immediately after acceptance of the tender by the Administrator. The advertisement was signed by the Tax Superintendent (Rajaswa Adhikshak). On 27-5-86, it appears that Deputy Administrator (UP Nagar Adhikari) was not present in his office during the hours specified in the advertisement. Consequently, it was announced by beat of drum that the lenders may be submitted in the office of the Tax Superintendent which was adjacent to the office of the Deputy Administrator. The petitioner and other bidders having already deposited the security money in terms of the advertisement, submitted their tenders before the Tax Superintendent who opened the sealed tenders the specified hour and found that the petitioners tender of Rs. 161666 - was the highest. The petitioner was directed to deposit Rs. The petitioner and other bidders having already deposited the security money in terms of the advertisement, submitted their tenders before the Tax Superintendent who opened the sealed tenders the specified hour and found that the petitioners tender of Rs. 161666 - was the highest. The petitioner was directed to deposit Rs. 42417/- forthwith being one fourth of the amount of his tender and a formal receipt was issued which was entered in ledger No. 1431 receipt No. 97, acknowledging the deposit of the aforesaid amount. 4. Upon conclusion of these proceedings a note dated 27-9-86 was put up for the consideration of the Up Nagar Adhikari (Deputy Administrator) stating that in pursuance of the directions of the Administrator for settling the contract for the year 1986-87 with respect to the Jalanbar Milk market lenders were submitted by four persons out of which the petitioner's tender of Rs. 161666/- was the highest. This was higher than previous years contract which was settled at Rs. 1,11,111/- by Rs. 50555/-. The petitioner had in terms of the conditions of the contract deposited cash security of Rs. 5000/- and a further sum of Rs. 42417/-. Under the circumstances, the bid of the petitioner may be accepted. This note was signed by the Zonal Officer, Rajaswa Adhikshak (Tax Superintendent) and the Head Clerk of the department concerned. It appears that the very next day, i.e. on 25-9-86, five persons filed written objections against these proceedings stating that they were denied the right to participate in the proceedings because of the change of the venue. Upon these complaints, oral instructions were given by the Administrator on 31-5-86 over the phone to the UP Nagar Adhikari that the auction held with respect to the Jatanbar milk market be cancelled and the market be re-auctioned. It was also directed that the amounts deposited by the bidders be returned to them. What further enquiry was made into the matter is not clear but we find that by the impugned order dated 4th July 1986 the Administrator cancelled the petitioners bid on the grounds which will be referred to in detail later in this judgment the same order, he rejected the petitioner's lender and directed that auction be held afresh settling the contract. 5. The validity of the impugned order dated 4-6-1986 was assailed by Sri V.P. Misra, learned counsel for the petitioner on a variety of grounds. 5. The validity of the impugned order dated 4-6-1986 was assailed by Sri V.P. Misra, learned counsel for the petitioner on a variety of grounds. The first ground urged in support of the petition was that the petitioner having been permitted to deposit one fourth of the amount offered in his tender, the, Administrator must be deemed to have accepted the petitioners bid which being highest a concluded contract came in to existence as a result of which that Administrator ceased to have any power to cancel the petitioners bid. 6. We are unable to find any merit in the above contention. There is no averment it the petition that the petitioners bid had beet accepted, directly or by necessary amplification, by the Administrator. It is also not established that the petitioner deposited the amount of Rs. 42417/- under the orders of either the Administrator or the Deputy) Administrator. The original record pertaining to this auction was produced before us and a perusal of the same does not disclose the existence of any order either by the Administrator or by the Deputy Administrate directing the petitioner to make the deposit. The petitioner cannot hence claim that and concluded contract had come into existence by the mere acceptance of the deposit of the aforesaid amount by the petitioner (respondent). 7. The second submission of Sri Misra, which in our opinion has considerable merit must be accepted. The contention was that in the facts and circumstances of the present case, the petitioner ought to have been afforded an opportunity by the respondents before the rejection of his bid. It was urged that the petitioners bid was not rejected on the ground the amount offered by him was grossly low or less than any reserved price or that the contract had to be settled in favour of some weaker section of society or the like. On the contrary, it was rejected ort three specific.grounds of alleged irregularities upon certain complaints mentioned in the counter affidavit. On the contrary, it was rejected ort three specific.grounds of alleged irregularities upon certain complaints mentioned in the counter affidavit. That being so, counsel argued, the (petitioner as one whose bid was the highest could have been afforded an opportunity of demonstrating that the grounds disclosed in the impugned order were not valid or that the irregularities pointed outdid not materially affect the ultimate outcome of the auction or that the complaints were false and made by persons who were not genuine bidders but were mere pretenders who woke up and came on the scene only after the conclusion of the proceedings. 8. Having given the matter a careful consideration we are clearly of the view that these contentions are well founded. 9. The Administrator has set out three specification grounds for rejecting the petitioners tender. The first is that the advertisement should have been issued by the Head of the Department which in the present case was the Deputy Administrator and not by the Tax Superintendent. 10. This objection is wholly formalistic and must be rejected even on merits. It is true that the advertisement was issued under the signature of the Tax Superintendent. But a perusal of the original record which was produced by the respondents discloses that the proposal for issuing advertisement was submitted for the approval of the Deputy Administrator on 13-5-86 and the Deputy Administrator put his signature below that note in token of his approval that very day. The advertisement was thus issued under the direction of the Deputy Administrator himself. The fact that the advertisement which was published in the Newspaper on 18-5-86 inviting the tenders was signed by the Tax Superintendent would not affect the validity of the auction in the slightest degree. The advertisement having been issued incorporating the terms and conditions truly and accurately under the direction of the Head of the Department was sufficient compliance. It did not and could not materially affect the validity of the proceedings. 11. The second ground mentioned in the impugned order for cancelling the petitioners bid is that the tenders should have been submitted or received at the very place which was notified in the advertisement whether the Up Nagar Adhikari was present in his office or not. The Tax Superintendent had no power to permit the submission of the tender in his own room. The Tax Superintendent had no power to permit the submission of the tender in his own room. Ordinarily, a change in the venue notified for an auction without informing the intending bidders might result in prejudice in that the intending bidders unaware of the fact of the change are likely to be misled and deprived of the opportunity to participate in the auction. In the present case, however, we find that indisputedly Up Nagar Adhikari was absent from his office during the hours notified in the advertisement. The categorical assertion of the petitioner that the Up Nagar Adhikari was not present in his office at the relevant time has not been controverted in the counter affidavit. All that has been asserted in the counter affidavit is that the UP Nagar Adhikari was present in the town. The next significant fact is that the lenders were received in the office of the Tax Superintendent which is adjacent to the office of the UP Nagar Adhikari. The allegation of rite petitioner is that the change of the venue had been duly notified by beat of drum. Whether the change of the venue has resulted in any material prejudice to the intending bidders would depend on the facts of each case. From a perusal of the record, it does not appear that Administrator made any serious effort before cancelling the petitioner's bid to ascertain whether the change of the venue had been duly notified so as to enable the intending bidders to participate in the proceedings. The second ground stated by the Administrator for cancelling the petitioners bid is thus clearly unsustainable not having been preceded by any enquiry whether the change of venue had resulted in any prejudice to a genuine bidder. 12. The next important aspect to be borne in the mind is that the deposit of cash security was a condition precedent to the submission of the tender. It is not clear whether the persons who had filed objections as a result of which the petitioners bid has been cancelled had deposited the requisite cash security. The advertisement states that tenders shall be submitted only after the deposit of Rs. 5000/-as cash security. It is not clear whether the persons who had filed objections as a result of which the petitioners bid has been cancelled had deposited the requisite cash security. The advertisement states that tenders shall be submitted only after the deposit of Rs. 5000/-as cash security. It is apparent that if the complainants had not deposited cash security, their plea that it was because of the change of the venue that they could not submit their tenders becomes wholly untenable and may have to be rejected as a mere pretence rather than a genuine grievance. 13. It is this aspect which makes the omission to give any notice to the petitioner significant. If the petitioner had been afforded an opportunity before the cancellation of his bid, he would have been in a position to controvert the assertions made in the complaints. The petitioner would have also had the opportunity of demonstrating that the complainants were not bona fide bidders and that his bid ought not to have been cancelled at their instance. 14. The last ground stated in the impugned order is that the Deputy Administrator ought to have been present in his office and he should have issued the tender notice under his signature. This again could not be a valid ground for cancelling the petitioners bid though it may be treated as a departmental instruction for the future guidance of the concerned officers. 15. The upshot of the aforesaid discussion is that the first and the last grounds upon which the petitioners tender has been cancelled are clearly untenable and could not afford a valid justification for cancelling the petitioner's bid. As regards the second ground, namely, the effect of the change in the venue, the Administrator should have made an enquiry on the lines mentioned above before cancelling the petitioners bid. The petitioner was the highest bidder, his bid having exceeded the previous years contract by over Rs. 50,000/-. He had valuable stakes in the proceedings and was, therefore, in the facts of the present case clearly entitled to an opportunity of being heard or making a representation before the cancellation of his bid. The Administrator has by the impugned order not only cancelled the petitioner's bid but set aside the entire proceedings and directed that tenders be invited again. 16. The Administrator has by the impugned order not only cancelled the petitioner's bid but set aside the entire proceedings and directed that tenders be invited again. 16. A public auction, in-our opinion, Conducted by the State or its instrumentalities ought lobe treated with greater sanctity than auctions held by private agencies. They ought not to be set aside except for good and sufficient reasons such as inadequacy of the; amount offered or the amount offered failing; below the reserved price or non-compliance with mandatory provisions and so forth. In the present case the Administrator has not found that the amount offered by the petitioner was low or that the alleged irregularities have produced any material effect on the final outcome. Indeed, the petitioners bid was higher than the previous years' contract by over Rs. 50,000/-. 17. In Ram and Shyam Co. v. State of Haryana reported in AIR 1985 SC 1147 : (1985) 3 SCC 267 the Supreme Court had occasion to consider a somewhat similar situation. There in an auction of minor mineral quarries the appellants bid of Rs. 3,87,000/-which was a highest was not accepted by the State Government. Instead the State Government privately settled the contract with the respondent No. 4 without giving any opportunity to the appellant to raise his bid or to point out the falsity of the allegations made by the respondent No. 4 in his letter as to the adequacy or inadequacy of the petitioners bid. Their Lordships of the Supreme Court relying on various decisions including Ramana Dayaram Shetty v. International Airport Authority of India reported in (1979) 3 SCC 489 : (AIR 1979SC 1628) observed in para 13 at page 279 of (1985) 3 SCC 267 : ( AIR 1985 SC 1147 at p. 1153) as follows : "Approaching the matter from this angle, can there be any doubt that the appellant whose highest bid was rejected by the Government should have no opportunity to improve upon his bid more so when his bid was rejected on the ground that it did not represent adequate market consideration for the concession to extract minor mineral. A unilateral offer, secretly made, not correlated to any reserved price made by the fourth respondent after making false statement in the letter was accepted without giving any opportunity to the appellant either to raise his bid or to point out the falsity of the allegations made by the fourth respondent in the letter as also the inadequacy of his bid. The appellant suffered an unfair treatment by the State in discharging its administrative functions thereby violating the fundamental principle of fair play in auction. When he gave the highest bid, he could not have been expected to raise his own bid in the absence of a competitor. Any expectation to the contrary betrays a woeful lack of knowledge of auction process. And then some one surreptitiously by a secret offer scored a march over him. No opportunity was given to him either to raise the bid or to controvert and correct the erroneous statement". (Emphasis added). In our opinion, the aforesaid dictum squarely applies to the problem at hand. As one whose bid was the highest, the petitioner was clearly entitled to an opportunity to demonstrate that none of the so-called irregularities materially affected the proceedings and that the complaints which resulted in cancellation of the petitioners bid were false and frivolous not deserving any serious consideration. This was all the more necessary as the petitioners bid was not set aside by the Administrator on the ground that it was low or that in did not truly represent the value of the contract. The impugned action was thus clearly lacking in the quality of reasonableness which is the minimum expected of the instrumentalities of the State. Settling a contract with private individuals by the State partakes the character of contrast. Public auction sought not, therefore, to be set aside lightly or on flimsy or irrelevant grounds. Public auctions should be conducted in a fair and reasonable manner. For the same reason auctions validly held ought not to be set aside except for good and sufficient reasons. In the present case this was not done. The petitioners bid has been rejected on untenable and flimsy grounds as well as without making a proper enquiry and without affording any opportunity to the petitioner. 18. Writ Petition No. 8457 of 1986 is thus entitled to succeed. In the present case this was not done. The petitioners bid has been rejected on untenable and flimsy grounds as well as without making a proper enquiry and without affording any opportunity to the petitioner. 18. Writ Petition No. 8457 of 1986 is thus entitled to succeed. The Administrator shall give an opportunity to the petitioner to show cause against the complaints referred to in the counter affidavit as well as on the issues whether the irregularities pointed out by the Administrator in his order dated 4-6-1986 have resulted in any prejudice to the intending bidders who have filed objections with respect thereto. 19. So far as, Writ Petition No. 15386 of 1986 is concerned, in view of the fact that the question of issuing the directions prayed for therein shall arise only if and when the contract is settled with the petitioner and inasmuch as we are proposing to direct the Administrator to reconsider the entire matter of settling the contract, it is apparent that no orders can be issued in this petition in favour of the petitioner as at present. This petition is hence liable to be dismissed as premature. 20. In the result, the petition No. 8457 of 1986 succeeds and is allowed. The impugned order dated 4-6-1986 passed by the respondent-Administrator is quashed. The Administrator, Nagar Mahapalika, Varanasi shall pass appropriate orders in accordance with law, having regard to the observations made here in above and after affording an opportunity to the petitioner of making a representation. The Administrator shall pass orders within 15 days from the date on which a certified copy of this judgment is filed before him. 21. Writ Petition No. 15386 of 1986, however, fails and is dismissed as having become in-fructuous. There will be no order as to costs in either of these petitions.