JUDGMENT N. N. Mithal, J. 1. Diesel Locomotive Works (DLW for short) is a unit of Indian Railways engaged in the manufacture of locomotives near Varanasi. For the manufacture of locomotives it requires steel plates and sheets and other ferrous and non-ferrous material leaving huge quantities of ferrous melting scrap including steel plates and sheets as-waste. This scrap is stored in the scrap yard by DLW and is periodically disposed of by inviting tenders for its purchase and removal. In respect of one such lot of nearly 2000MT (plus-minus 25%) sealed tenders were invited, to be opened on 29th March, 1990. 2. 21 Offers by sealed tenders were received from various parties. The tender submitted by respondent No. 6 was finally accepted. This is challanged by the petitioner, who was also one of the tenders, on the ground that it had tendered the highest rate and its tender had been wrongly rejected. It is also contended that the tender of respondent No. 6 has been wrongly accepted even though it had not complied the tender conditions. Respondent Nos. 1 to 5 have denied these allegations contending that the petitioner's tender was rightly rejected as no earnest money was deposited by it. It is further contended that as per tender conditions the respondents were under no obligation to accept the highest tender and could reject it without assigning any reason. 3. The facts as they emerge from the record are that in pursuance of the notice inviting tenders 23 parties had purchased the tender papers but only 21 tenders were submitted. Out of these 8 tenders, including petitioners, had been submitted without the requisite earnest money and were accordingly rejected summarily. Along with the remaining 13, the tenderers had deposited Rs. 50,000/- each as earnest money by demand draft or bankers cheque. Amongst these 13 tenderers the offer given by the respondent no. 6 being the highest was accepted on the basis of a comparative statement of all the offers prepared by the department after due scrutiny. The scrutiny report dated 18-4-90 submitted by the Tender Committee was accepted by the General Manager, DLW on 19-4-90. The allegation of arbitrariness or unfairness levelled against respondent was denied and it is submitted that all offers accompanied by earnest money were all duly considered and highest rate of respondent No. 6 amongst them was accepted. 4. The scrutiny report dated 18-4-90 submitted by the Tender Committee was accepted by the General Manager, DLW on 19-4-90. The allegation of arbitrariness or unfairness levelled against respondent was denied and it is submitted that all offers accompanied by earnest money were all duly considered and highest rate of respondent No. 6 amongst them was accepted. 4. In the rejoinder affidavit the petitioner claims to have submitted a crossed cheque along with tender papers which appears to have been removed mala fide with a view to award the tender to respondent No. 6. Particulars of the cheque could not be furnished 'by the petitioner as according to it, there was no column in the tender papers for this purpose and it had no opportunity to point this out as it was not conveyed the rejection of petitioner's tender. It is also alleged that a loss of atleast four lacs has been caused to the Government due to rejection of petitioner's offer which was much higher than that of respondent No. 6. Lastly, acceptance of offer made by respondent No. 6 was challanged as the mode of depositing the earnest money along with tender was not as prescribed having been submitted by loose cheque drawn on personal account and not in cash or by demand draft. Fhe rival contentions give rise to two questions asking for decision by us. First, whether the petitioner had complied with tender condition and second, if not, can he still challange the acceptance of offer made by respondent No. 6 merely because it had also violated the terms of the tender. But before proceeding to do this perhaps it would be appropriate first to examine the relevant clause 6 of the tender notice which reads as under: "Earnest money of 5% of the tender sale value subject to a maximum of Rs. 50,000/- with the stipulation that full 10% security deposit should be made by the successful tenderer before ordering sale. Earnest money are rendered to be deposited along with offer in cash or by demand draft drawn on DLW Branch of SBI in favour of Assistant Chief Cashier. DLW/ Varanasi. Cash receipt deposit/Demand Draft are to be enclosed along with tender, otherwise tender will be liable to be rejected. No demand draft on other branches, banks nor cheques, postal orders, money-orders etc. will be acceptable. DLW/ Varanasi. Cash receipt deposit/Demand Draft are to be enclosed along with tender, otherwise tender will be liable to be rejected. No demand draft on other branches, banks nor cheques, postal orders, money-orders etc. will be acceptable. For successful purchaser security deposit of balance amount to be deposited in the same manner I. T. C C. to be enclosed along with offer". 5. Accordingly Rs. 50,000/- as earnest money was to be deposited along with the tender papers. This could be either in cash or through demand draft on DLW branch of SBI. It specifically prohibits deposit of earnest money by demand draft on any other branch except DLW branch of SBI or on any other bank. Deposit of earnest money by cheques, postal order or money- order etc. was also not acceptable. 6. The first question is as to petitioner's right to maintain the petition 7 The petitioner claims to have annexed a crossed cheque for Rs. 50,000/- drawn on Bank of Baroda along with its tender. Likewise, the earnest money deposited by respondent No. 6 was by cheque and not in cash or by bank-draft. Since both the petitioner and respondent No. 6 were similarly placed the petitioner's offer could not be rejected on this ground while accepting that of respondent No. 6. The respondents I to 5, however, squarely deny in counter affidavit that petitioner had submitted any cheque for Rs. 50,000/- along with its tender. In para 6 of the supplementary counter affidavit the denial is reiterated and it is categorically pointed out that the petitioners tender was not accompanied by any bank draft, banker cheques, money-order or any other cheque or receipt or cash deposit towards earnest money Besides, in the comparative chart of all the tenders prepared soon-after the opening of tenders the fact that no earnest money had been deposited by the petitioner is noted- The tenders were opened in the presence of the petitioner's representative but he has not filed his affidavit in petitioner's support. Both the affidavit and rejoinder affidavits have been sworn by one Mangla Prasad but he does not claim to have been present at the time of submitting or opening of tender on 29-3-90. In fact from SCA-1 it appears that Jitendra Nath Singh was present on behalf of the petitioner. His affidavit has not been filed. Both the affidavit and rejoinder affidavits have been sworn by one Mangla Prasad but he does not claim to have been present at the time of submitting or opening of tender on 29-3-90. In fact from SCA-1 it appears that Jitendra Nath Singh was present on behalf of the petitioner. His affidavit has not been filed. The petitioner, however, relied on the counter foil of its cheque book, S. A.-3. The possibility of preparing such a document even subsequently cannot be ruled out. More particularly because copies of the previous and next cheque have also not been filed. On the other hand in the report of the Tender Committee it is clearly mentioned that the petitioner had not submitted earnest money along with its offer and its tender was accordingly rejected summarily. This report is based on the comparative statement prepared on 10th April, 1990, much before the acceptance of the offer of respondent No. 6. Admittedly, in the tender papers also no mentioned of this cheque has been made. Thus the question whether the petitioner had or had not annexed the cheques with its tender raises a factual controversy. Since respondents 1 to 5 have categorically denied we consider it unnecessary to enter into this factual controversy. In view of the facts already narrated earlier we are inclined to hold that the tender was rightly rejected as no earnest money had been deposited by the petitioner. 7. Sri R. N. Singh, however, submitted that even assuming that the petitioner's tender had been lawfully rejected yet he can still challenge the acceptance of the offer made by respondent No. 6 being unfair and arbitrary. Should that offer be quashed the petitioner's will still have a vital interest in this contract to make its offer once again when tenders are invited afresh. In support of his submission he relies heavily on the case of Ramanna v. Airport Authority of India, AIR 1979 SC 1628 . In that case it was held that "a tender of a person who did not fulfil requisite qualifications could not be accepted". In support of his submission he relies heavily on the case of Ramanna v. Airport Authority of India, AIR 1979 SC 1628 . In that case it was held that "a tender of a person who did not fulfil requisite qualifications could not be accepted". He, in particular, laid much emphasis on the following observations made by the Court in the course of that judgment : "The rule inhibiting arbitrary action by Government must apply equally where such corporation is dealing with the public, whether by way of giving jobs or entering into contracts or otherwise, and it cannot act arbitrarily and enter into relationship with any person it likes at its sweet will, but its action must be in conformity with some principle which meets the test of reason and relevance". 8. Another observation in this judgment on which reliance has been placed is as under: "It is true that neither the petitioner nor the respondent has any right to enter into a contract but they are entitled to equal treatment with others who offer tender or quotation for the purchase of the goods. It must, therefore, follow as a necessary corollary from the principle of equality enshrined in Article 14 that though the State is entitled to refuse to enter into relationship with any one, yet if it does so, it cannot arbitrarily choose any person it likes for entering into such relationship and discriminate between persons similarly circumstances, but it must act inconformity 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 soma rational and non discriminatory grounds." Concluding the matter the Supreme Court had this to say "It is, therefore, obvious that both having regard to the constitutional mandate of Art. 14 as also the judicially evolved rule of administrative law, the 1st respondent was not entitled to act arbitrarily in accepting the tender of the 4th respondents, but was bound to conform to the standard or norm laid down in paragraph 1 of the notice inviting tenders which required that only a person running a registered Ilnd class hotel or restaurant and having at least 5 years' experience as such should be eligible to tender". Reliance is also placed on the case of Life Insurance Corporation of India v. Escorts Ltd, 1986 (1) SCC 264 . In that case the submission was that an instrumentality of State was debarred by Art. 14 from acting arbitrarily and is obliged to state before the Court the reasons justifying its action. The Court was of the view that although every action of the State or an instrumentality of State must be informed by reason and, in appropriate cases, actions uniformed by reason may be questioned as arbitrary in proceedings under Art. 226 but the Court refused to construe Art 14 as a charter for judicial review of State action and to call upon it to account for its action in its manifold activities by stating reasons for such actions. In para 102 of the report the Court observed as under : "If the action of the State is related to contractual obligations or obligations arising out of the tort, the court may not ordinarily examine it unless the action has some public law character attached to it. Broadly speaking, the court will examine action of State if they pertain to the public law domain and refrain from examining them if they purtain to the private law field. The difficulty will lie in demarcating the frontier between the public law domain and the private law field. It is impossible to draw the line with precision and we do not want to attempt it. The question must be decided in each case with reference to the particular action, the activity in which the State or the instrumentality of the State is engaged when performing the action, the public law or private law character of action and a hoast of other relevant circumstances. When the State or an instrumentality of the State ventures into the corporate word and purchase the shares of a Company, it assumes to itself the ordinary role of a share holder, and dons the robes of a share holder, with all the rights available to such a share-holder. There is no reason why the State as a share-holder should be accepted to State its reasons when it seeks to change the management, by a resolution of the Company, like any other shareholder". 9. There is no reason why the State as a share-holder should be accepted to State its reasons when it seeks to change the management, by a resolution of the Company, like any other shareholder". 9. Thus the necessity to require the State or its instrumentality to give reason for its action can arise only where it is acting within the domain of public law. The next case to which reference has been made by the petitioner is Central Inland Water Transport Corporation Ltd., v. Brojo Nath Ganguly. AIR 1986 SC 1571 . That case, however, is not quite relevant inasmuch as the contract of service in that case was found to be against public policy under section 23 of the Contract Act. In the case of Yadav Medical Stores v. State of U. P., AIR 1981 Alld. 139 a Division Bench of this Court was dealing with award of tender to a person who had not fulfilled the requisite condition set out in the notice inviting tenders. Relying upon AIR 1979 SC 1628 (supra) the court allowed the petition on the ground that the person whose tender has been accepted did not possess requisite qualification i.e. possession of a shop and a licence to sell drugs which he had acquired subsequent to the date of opening the tender, finally a reference was made to M/s. Atar Enterprises v. City of Industrial Development Corporation 1990 (2) JT 401 where the submission of the petitioner, that when highest offer of the types in question are rejected reasons sufficient to indicate the stand of the appropriate authority should be made available and ordinarily the same should be communicated to the concerned authorities unless there be any specific justification not to do so, was accepted. 10. As opposed to the above, Sri AShok Khare relied upon the two decisions, one rendered by Bombay High Court and the other by Supreme Court. In B. D. Yadav v. Administrator, AIR 1984 Bombay 351 the facts were quite similar to those involved in the present case. The Administrator in the city of Nagpur had Invited tender for completing an unfinished work of stadium. Apart from some conditions for eligibility for submitting tenders one of the conditions in the notice inviting tender was that a sum of Rs. The Administrator in the city of Nagpur had Invited tender for completing an unfinished work of stadium. Apart from some conditions for eligibility for submitting tenders one of the conditions in the notice inviting tender was that a sum of Rs. 25,000/- should be deposited as earnest money in the form of deposit at call or demand draft or National Saving Certificates pledged in favour of Development Engineer. The petitioner challenged the right of respondent No 2 to submit the tenders inter alia, on the ground that the earnest money had not been deposited in the manner set out in the NIT. Following the Supreme Court dicta in Ramana Davaram Shetty v. International Airport Authority, AIR 1979 SC 1628 the Court went on to hold that "where the deficiency on the part of the tender related to essential term of NIT the authority could not validly accept the tender." The position, however, would be different where only a non essential condition was not strictly fulfilled In the other case relied upon by the learned counsel for the respondent M/s G. J. Fernades v. State of Karnataka, AIR 1990 SC 958 , also the point involved related to acceptance of tender. The NIT contained certain conditions and the question was whether all of them were pre-qualifying conditions or some of them only required the tenderer to furnish certain information; The court on examination of the terms of the NIT held : "The conditions and stipulations in a tender notice have two types of consequences the first is that the party issuing the tender has the right to punctilously and rigidly enforce them. Thus if a party does not strictly comply with the requirement of NIT it is open for it to decline to consider the party for awarding contract. The second consequence is not that the party inviting tenders cannot deviate from these guidelines at all in any situation but that any deviation, if made should not result in arbitratiness or discrimination. Where the non conformity with or relaxation from the prescribed standard results in some substantial prejudice of injustice to any of the parties involved or to the public interest in general then only such a deviation can come into question." 11. Where the non conformity with or relaxation from the prescribed standard results in some substantial prejudice of injustice to any of the parties involved or to the public interest in general then only such a deviation can come into question." 11. According to the above decision, the rule of Ramana's case would apply to a case where a person complains that a departure from the qualifications has kept him out of race, but injustice is less apparent where the attempt of the applicant is only to gain immunity from competition. 12. The law expounded in the above cases, therefore, lays down that the authority inviting tenders must strictly follow the conditions set out by it in the notice inviting tenders but this rule is not absolute or inviolable in respect of those conditions which are not essential to the main object of the tender. If the minor relaxation or deviation are made in some of the nonessential conditions then the authority will not be guilty of unfairness, arbitrariness or discrimination if the benefit of the deviation or relaxation is also made available to all the parties in contest. In the light or the law as found above we must now examine whether it was essential for parties to deposit earnest money strictly in accordance with the conditions of NlT. The submission of Sri Ashok Khare was that although the deposit of earnest money was an essential condition but not the mode of depositing it. He also submitted that since the petitionr had totally failed to deposit the earnest money it automatically went out of the eligibility field and was not rightly considered by the authorities. In reply to this the submission of Sri R. N. Singh was that the mode prescribed for depositing the earnest money was not an empty formality or a matter of procedure but was the very crux of the matter. The condition being an essential condition any breach thereof would disentitle the respondent no. 6 from being considered. A reading of clause 6' of the NIT would show that it permits deposit of earnest money only in cash or by bank draft drawn on the DLW branch of S. B. I. only. The other mode such as demand draft on other branch on banks, cheques, postal order, money order etc. were totally barred. 6 from being considered. A reading of clause 6' of the NIT would show that it permits deposit of earnest money only in cash or by bank draft drawn on the DLW branch of S. B. I. only. The other mode such as demand draft on other branch on banks, cheques, postal order, money order etc. were totally barred. When the condition in the NIT requires any particular thing to be done in a particular manner and not otherwise than it follows that the authority inviting tenders is insisting on deposit being made only in the manner prescribed. The emphasis that earnest money should only be deposited in two specified modes coupled with a negative condition prohibiting its deposit through other modes only goes to show the intention of the authority inviting tenders that it desired deposit being made in a particular manner only. This, therefore, makes it an a particular manner only. This, therefore, makes it an essential condition and, in our opinion, any deviation from it by the authority would be unjustified, arbitrary and improper. 13. The own conduct of the respondent also proves this. Out of 21 parties who had submitted their tenders there were 8 who had not deposited earnest money at all and their tenders were summarily rejected and kept out of consideration- The remaining 13 tenders had, however, deposited the earnest money by one mode or the other but not necessarily in the manner provided in the NIT except perhaps a few. The cases of all these tenders were considered on merit whereafter tenders of respondent no 6 was accepted, being the highest. It is urged that all these 13 tenderers were treated similarly and the respondents 1 to 5 cannot be accused of being unfair or arbitrary. The qustion, however, is some what different and it is whether the tenders of thoe who had not deposited the earnest money strictly in accordance with clause 6 of NIT could at all be taken into consideration. 14. Admittedly the earnest money deposited by respondent no. 6 was in the form of a loose cheque drawn on its C/D account in the Union Bank of India, Sonarpura Varanasi. This cheque was also certified as good for payment by the Bank. The argument of Sri Ashok Khare for respondent no. 6 had complied with condition no. 14. Admittedly the earnest money deposited by respondent no. 6 was in the form of a loose cheque drawn on its C/D account in the Union Bank of India, Sonarpura Varanasi. This cheque was also certified as good for payment by the Bank. The argument of Sri Ashok Khare for respondent no. 6 had complied with condition no. 6 of NIT even if it is considered to be an essential condition. In this connection reference has been made to M. S. Partha- sarthy's book "Cheques in Law and practice" 3rd Edition at pages 36-37 to the following effect : "This takes us to the practice of marking or certifying cheques. The practice seems to have been popular in the United States and was fairly common in England about seventy years ago. To give their cheques an enhanced standing, customers used to ask their bankers to mark or certify the cheques as 'good' for payment. This was done by the banker by initialling the cheque and also writing 'good' across the instrument. Such cheques were considered as good as cash and were used in real estate transactions and for payment of taxes." This practice, however, does not appear to be prevalent in India. Atleast there is nothing which has been brought to our notice which may indicate this. The paragraph quoted above clearly shows that the practice is prevalent in United States but in England it has long ceased to be the practice. Thus we find it difficult to agree with Sri Khare that a loose cheque issue by a party, even though certified to be good for payment, by the bank, can be taken as equivalent to payment by cash. 15. Sri Khare then turned to another case T. V. Subhadra Amma v. Kerala Board of Revenue, AIR 1982 Kerala 81 where as a condition for a right to run the toddy shop one of the conditions of auction was that the tenders should be in Form-vi accompanied by a demand draft for an amount not less than 10% of the tender amount. The tender of respondent no. 2 which was accepted by the authority was not accompanied by a demand draft but by a pay order instead. The contention of the petitioner was that this payment was not valid. The court, however, held that pay orders are as efficacious as draft for a purpose like this. The tender of respondent no. 2 which was accepted by the authority was not accompanied by a demand draft but by a pay order instead. The contention of the petitioner was that this payment was not valid. The court, however, held that pay orders are as efficacious as draft for a purpose like this. From the report of that case, however, it appears that the mode of payment was not one of the essential terms of the tender notice as it is in the case before us. 16. There is marks difference in the character of a document in the form of a cheque and a demand draft. The bank draft is issued only after the party had made payment into the bank and the transaction is commonly known as purchase of draft. The amount of the draft is payable at the branch indicated in the document. The cheque, on the other hand, even after being issued allows the money to remain at the disposal of the party issuing the cheques till such time as the cheque has been honoured and untill such time the drawer retains the right to stop its payment. An endorsement by the Bank to the effect that it was good for payment only ensures the payee that the drawee is bound to honour is whether or not the drawee Bank can recover the amount paid to the payee from the drawer of the cheque. Because of these essential differences between a cheque and the demand draft the two cannot be equated, particularly when, as in this case, there is specific bar against deposit of earnest money by cheque. The mere fact that all the tenderers who had deposited the earnest money, whether in terms of clause 6 or not had been treated alike cannot make any difference. It is quite possible to visualise that the parties who had failed to deposit the earnest money may also have been in the fray had they known that earnest money through cheque was also acceptable. Thus they have obviously been deprived from competeting with others and this makrs the action of respondents 1 to 5 unfair when condition no. 6 of the NIT so specifically points out that deposit of earnest money in any other mode except in cash or by demand draft would not be acceptable. Thus they have obviously been deprived from competeting with others and this makrs the action of respondents 1 to 5 unfair when condition no. 6 of the NIT so specifically points out that deposit of earnest money in any other mode except in cash or by demand draft would not be acceptable. It leads us to think that this was an essential precondition for submitting tenders and the respondents were not entitled to deviate from this. All tenders which were not accompanied by deposit of earnest money strictly in the manner indicated in the NIT deserved to be rejected. We reject the contention of the respondents that the earnest money could be accepted even when It was deposited by some mode other than those in NIT. We also hold that clause 6 of NIT is not merely ancillary or subordinate condition but in view of the language in which is couched the same was a crucial and essential terms of the tender which could not be deviated from. The acceptance of tender of respondent no. 6 was illegal. The respondents 1 to 5 were bound to consider only those tenders which had strictly complied with conditions set out in NIT and, if for seme reasons those tenders were considered to be unsuitable or unacceptable they had the right to re-invite the tenders afresh. 17. In the end it was faintly urged that while exercising extra ordinary Jurisdiction under Art. 226 of the Constitution the court should not interfere in this matter as huge quantitity of scrap has accomulated in the scrap yard of DLW and any delay in its removal was likely to cause serious problem in the working of the DLW. The submission of Sarvsri Lalji Sinha and Vinod Swarup for respondents 1 to 5 cannot be accepted because none of these essential facts have been brought on record. The counter affidavit is silent on the point of total storage capacity of the scrap yard and the quantity of scrap already dumped therein. There is no indication as to how long it will take for DLW to invite fresh tenders for the lot in question. In the absence of the relevant material we find no basis for the submission made on behalf of respondents 1 to 5. 18. Apart from above, this matter has been pending since May, 1990 and more than five months have passed. In the absence of the relevant material we find no basis for the submission made on behalf of respondents 1 to 5. 18. Apart from above, this matter has been pending since May, 1990 and more than five months have passed. Nothing extra ordinary seems to have happened during this period. In the supplementary affidavit filed on 17th October, 1990, also we find not a word about it. We are, therefore, not impressed by this argument. The position could have been different had relevant facts bearing on the point been brought to our notice. We accordingly find merit in this petition which his accordingly allowed. The letter accepting tender of respondent no. 6 dated 3-6-1990 is hereby quashed. Let a writ of mandamus be issued to respondent nos. 1 to 5 not to enter into any contract with respondent no. 6 in persuance of the notice inviting tenders S/C/Sales/MS/270 for 1990-91 opened on 29th March, 1990 for disposal and removal of scrap. Respondent nos. 1 to 5 may, however, consider those tenders which comply with the conditions of NIT and where earnest money has been deposited strictly in accordance with clause 6 of NIT. Should the respondents I to 5 find such tenders as unacceptable for any reason, it will be open to them to invite tenders for the lot in question afresh. In the circumstances of the case, we direct the parties to bear their own costs. Petition allowed.