HANSARIA J. — These petitions under Article 226 of the Constitution of India challenge the grant of contract for bottling of country spirit in the Excise Ware house at Nazira to respondent No. 5, Durgeswar Gogoi, at his tendered rate of Rs. 1.20 per LPL for a period of three years with effect from the date of executing the agreement. The order of the Government granting contract is dated 31.8.87 and it was communicated to respon­dent No. 5 by the Commissioner of Excise on 7.9.87. As both the cases raise common questions of law and fact, we have heard the same together and a common judgment is being passed to dispose of the same. 2. The grievance of Jyotiparsad Borgohain, petitioner in Civil Rule No. 1068/87, is that though his tender was for Rs. 1.18 per LPL, the same was not considered at all. The case of Bongshidhar, petitioner in Civil Rule No. 1069/87 is that as he was a sitting contractor and had gained experience, the contract ought to have been granted to hilm though his tender was for Rs. 1.21 per LPL. 3. There is no denial that for bottling of country spirit a licence has to be obtained. This would appear from section 15(1) (c) of the Assam Excise Act, 1910. Rule 91 of the Assam Excise Rules, 1945, provides for calling of tenders. Rule 92 requires intending tenderers to apply for the same to the Excise Commissioner furnishing particulars mentioned in the Rule. Rule 93 is important for the cases at hand and we may quote the same:- "Right of Provincial Government to grant licence to any person,-The Excise Commissioner shall forward the tenders with his recommendations to the Provincial Government which reserves to itself the right to accept any tender. Rule 93 is important for the cases at hand and we may quote the same:- "Right of Provincial Government to grant licence to any person,-The Excise Commissioner shall forward the tenders with his recommendations to the Provincial Government which reserves to itself the right to accept any tender. If none of the tenders are accepted by the Provincial Government on the ground that none of them, on due consideration, appear to be satisfactory, they reserve also the right to grant the licence to any person who has not tendered and is considered suitable in all respects : Provided that when a licence is cancelled or suspended during the currency of the licence, the Provincial Government further reserves the right to grant the licence to any one without calling for tenders.' As per Rule 94, the period of licence shall ordinarily be for a period of three years, but in exceptional cases a longer term, not exceeding five years, or a shorter term, may be fixed. 4. At the time of hearing, the learned Senior Government Advocate produced before us two files, one of the Excise Department bearing file No. 111-40/86-87 and another Government file bearing No. Ex.84/87. The Note-sheet of the Government file was also made available for our perusal as directed by us. 5. We have perused the records and the same shows that after the receipt of the tenders from 7 (seven) persons, the Excise Commissioner sent his report to the Government on 26.4.87. In his report, the case of respondent No. 5 Durgeswar Gogoi was recommended by stating : "Sri Durgeswar Gogoi is a local man. His financial position is sound and his rate is reasonable". The records and report, however, show that at one point of time the case of Bangshidhar Borgohain, (petitioner in Civil Rule No. 1069/87 ) had found favour with the Excise Commissioner. Shri D. N. Choudhury, learned counsel for this petitioner, has drawn our attention in this connection to that part of the draft of manuscript letter of the Commissioner which is at page 105 of File No. 111-40/86-87 which shows that at first the name of Bangshidhar was sought to be recommended, which was penned through and name of Durgeswer was thereafter written on its top. In the report which the Commissioner sent to the Government on 29.4.87, we have also found an observation relating to this petitioner stating "His past and present experience in bottling contract is quite satisfactory and deserves consideration". This sentence is, however penned through in the letter. The records further reveal that after receipt of the aforesaid report of the Excise Commissioner, a query was made by the Special Commissioner of the Government on 15.5.87, as it appears from the Note-sheet of the Government file, as to why the settlement should not be made with B. Borgohain who has experience in the line, A letter was accordingly written to the Excise Commissioner on 18.5.87 asking him to come and discuss this matter with the Government. The Note-sheet shows that the Excise Commissioner did come and discuss the matter with the Special Commissioner. From the note addressed by the Special Commissioner ( as at page 3 ) it appears that the Excise Commissioner stated that "the work of bottling is done by a set of workers who can be engaged or disengaged. For this purpose no experience of tenderer is called for". We are, therefore, satisfied that the case of Bangshidhar was duly considered and as his tendered rate is higher than that of respondent No, 5 we do not think if it can be held that rejection of his tender was in any way illegal. 6. We now come to the grievance of Jyotiprasad, petitioner in Civil Rule No. 1069/87. From the report of the Excise Commissioner dated 29.4.87, we do not find any reason as to why his case was not recommended though he is also a local man and whose financial position is also sound as it would appear from the report. The Excise Commissioner has not stated that the tendered rate of this petitioner, which was Rs. 1.18, was unreasonable. The learned Senior Government Advocate, Sri P.Prasad, has drawn our attention to page 32 of the Note sheet of the Government file in which it has been stated the question of considering the tender of this petitioner did not arise inasmuch as the Government had acted on the recommendation of the Excise Commissioner who is the technical Adviser to the Government in this matter. This petitioner has specifically averred that his age was not considered and this averment has not been denied by the licensing authority. This petitioner has specifically averred that his age was not considered and this averment has not been denied by the licensing authority. In this connection, we may however point out that in the note of the Special Secretary dated 4.6.87 .to the Minister, Excise, we have found mention of the fact that the rate of Rs. 1.18 is sound in all respects so is the quoted rate of respondent No. 5 which is Rs, 1.20. The Special Commissioner then stated that the selection has to be made between the two. It was, however, subsequently pointed out that seeing the financially viable position, the case .of respondent No. 5 was better than that of this petitioner ; and that was what the Excise Commissioner had recommended, with whom we might agree. The proposal was accepted by the Minister on 27.8.87. 7. The above leaves no doubt in our mind that the case of Jyotiprasad, petitioner in Civil Rule 1068/87, was not duly considered either by the Excise Commissioner or by the licensing authority, as we do not find any cogent reason to reject his tender. There is practically no difference in the financial viability of these two tendered -as Jyotiprasad's ready finance was of Rs. 3,35,691.31 as per the aforesaid report of the Excise Commissioner, whereas Durgeswar had Rs. 3,72,916.21 with him. The Excise Commissioner had reported the financial position of both as 'sound". The question is whether on this ground the settlement in favour of respondent No. 5 can be set aside. Shri A. K. Bhattacharyya has submitted by relying on Chaitanya Kumar v. State of Karnataka, (1986) 2 SCC 494, that as the rate of respondent No. 5 was higher and as the same was likely to hit the consumer, the contract given to respon­dent No. 5 cannot be sustained because arbitrariness in the matter is writ large as due consideration was not given to the tender of this petitioner at any level. We have also been referred in this connection to the decisions in Ramana Dayaram Sheety v, The International Airport Authority of India, AIR 1979 SC 1628 and Kasturi Lal v. State of Jammu & Kashmir, AIR 1980 SC 1992 , in which it has been emphasised that in the matter relating to grant of State largessee, fairness has to prevail and there cannot be any arbitrariness in such a matter. From what was observed in Kasturilal there is nothing to doubt that in a matter like the one at hand contract has to be given to the lowest tenderer unless "there are other considerations which render it reasonable and in public interest" to do otherwise. As to the other considerations the same was explained by stating that these may be that some Directive Principle is sought «to be advanced or that the contract is given not with a view to earn 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 ( which has to be read in the context of the present case, as giving lower tender ) is not otherwise fit to be given the contract. (See para 14). There is nothing of this nature in the present case. Shri Pathak has also drawn our attention to the observations made in para 12 of Ram and Shyam Co. vs. State of Haryana, AIR 1985 SC 1147 , wherein it has been stated that if the Government chooses to deal with any one such a matter, it must do so fairly without discretion and without unfair procedure. 8. Shri J. P Bhattacharjee, the learned counsel appearing for the respondent No. 5, has contended that the grant of contract in the present case being only a matter of privilege all that was required was to act fairly and deal with the application without any bias and not in arbitrary or capricious manner as observed in para 41 of Chinglepet Bottlers v. M/s Majestic Bottling Co., AIR 1984 SC 1030 . We have also been referred to certain observations finding place in para 7 of Produce Exchange Corporation Ltd- v. Commissioner of Excise, AIR 1972 SC 2281 , in which while interpreting the purport and intent of the rules at hand, it has been stated that the Government can on good ground prefer one seller to another. It has, however pointed out that the Government cannot show any undue favour to any party. 9. We have duly considered the aforesaid submissions of the learned counsel and the facts as they have presented to us and which we have noted above. It has, however pointed out that the Government cannot show any undue favour to any party. 9. We have duly considered the aforesaid submissions of the learned counsel and the facts as they have presented to us and which we have noted above. One fact which has come out vividly and which has not been rebutted by the Government is that the tender of Jyotiprasad, petitioner in Civil Rule No. 1063/87, had not been duly considered for the purpose of deciding whether he deserved to be given contract or not. His tender being the lowest it cannot be stated that in giving the settlement to respondent No. 5 the concerned authorities had acted fairly or that good ground existed to prefer this repsondent to Jyoti Prasad. No doubt the Excise Commissioner may be taken to be a technical adviser, but from his report also we do not find as to why the case of Jyotiprasad was not recommended though he was the -lowest tenderer and against whom there is nothing on record. By now it is well settled that while granting State lergessee the State has to act fairly and it cannot do anything which will militate against the larger public interest. At this stage, we may point out that the Government having realised this position has issued a notice to the respondent No. 5 asking him to show cause as to why the contract granted in his favour should not be set aside on the ground that by virtue of higher rate given by him, the consumers shall have to pay higher price in respect of consumption of liquor which will be against public interest. This appears from Annexure-H to the affidavit-in-opposition filed by this respondent in Civil Rule No. 1069/87 10. In view of all the above, we set aside the settlement granted in favour of respondent No. 5. We accordingly allow the petitions and make the Rules absolute. It would be open to the licensing authority to decide afresh as to whom the contract should be granted. For this purpose, the licensing authority shall confine its attention to the three (3) tenderers who are before this Court. While doing so, the licensing Authority shall however bear in mind the law laid down by the Supreme Court which we have referred above and the observations made by us in this context relating to the present cases. For this purpose, the licensing authority shall confine its attention to the three (3) tenderers who are before this Court. While doing so, the licensing Authority shall however bear in mind the law laid down by the Supreme Court which we have referred above and the observations made by us in this context relating to the present cases. Till this is done, the bottling work shall be carried on departmentally. In case the department will find any difficulty in doing so, it could approach this Court to seek appropriate orders in this regard.