JUDGMENT - N.P. CHAPALGAONKAR J.:---The Marathwada University, a statutory University, which is represented by the Respondents Nos. 1 and 2 before us, having a seat at Aurangabad, published a short tender notice in daily "Lokmat" on 4th August, 1989, calling for the sealed B-1 tenders from the registered and un-registered contractors for the construction of Environmental Science Department building. The estimated cost of he work was Rs. 7,02,000/- and the renders were to be submitted before 2.30 p.m. upto 19th August, 1989. The earnest money of Rs. 7,100/- was to be deposited. After the tenders were opened, the University took a decision to allot the work to Respondent No. 3 M/s. Sanjeev Construction Company, Aurangabad. It is the case of the petitioner who had also submitted a tender that his render should have been accepted being the lowest and also for the reason that he had complied the necessary requirement of the tender, whereas the tender of the Respondent No. 3 was not a legal one. Therefore, the petitioner has moved this Court in its extra ordinary jurisdiction with the prayer that the order of allotment of work to the Respondent No. 3 be quashed and for a direction that petitioner's tender be accepted. 2. Challenge of the petitioner to the acceptance the tender of the respondent No. 3 by the University is mainly on two grounds. Firstly, the petitioner contends that since the tender notice published in daily "Lokmat" on 4th August, 1989, invites sealed tenders, the tenders which were not sealed cannot be considered at all Whereas the petitioner's tender was sealed one, the tender of the Respondent No. 3 was not sealed. The second ground of attack is that the petitioner's tender was the lowest and his offer was 7.49% below the D.S.R. rates and the offer of the Respondent No. 3 was the second lowest which was above 0.06% the D.S.R. rates. We are told at the Bar that the difference between the two offers in terms of the money would be to the tune of Rs. 54,000/- approximately and, therefore, the Respondent University should not have accepted the tender of the Respondent No. 3 in preference to the petitioner's tender which was the lowest one. We are told at the Bar that the difference between the two offers in terms of the money would be to the tune of Rs. 54,000/- approximately and, therefore, the Respondent University should not have accepted the tender of the Respondent No. 3 in preference to the petitioner's tender which was the lowest one. Shri. A.D. Khillare, the learned Counsel appearing on behalf of the petitioner, submitted that the University has no authority to by-pass the requirement of sealed tender and open tenders which were just pested and not sealed and also it has no discretion to prefer the tender of the respondent No. 3 which was quoting higher rates for the execution of the work than the petitioner had offered and that too for no valid reason. Shri Khillare submitted that on both these counts, the University authorities have acted arbitrarily and the University being an instrumentality of the State does not have a right of act arbitrarily in the matters of contract. 3. In support of his submission, Shri Khillere relied on the judgments of the Supreme Court in (Ramanna Shetty's case)1, A.I.R. 1979 S.C. 1628 and (Harmindersing Arora v. Union of India)2, reported in A.I.R. 1986 S.C. 1 27. Shri Khillare further submitted that sealing of the tender gives sanctity of the tender and prevents letting others know before opening of the tender the rates quoted by the tenders. This is one of the essentials in the process of selecting the contractor by calling the tender and, therefore, the term requiring that the tender should be sealed one is mandatory in nature. Shri V.B. Ghatge, the learned Counsel appearing on behalf of the respondents Nos. 1 and 2, submitted that the requirement of the tenders being sealed white they are presented to the University office was not mandatory in character and even assuming that it was mandatory, the pesting of the envelope which contains a tender form by gum or any other adhesive material would be the sufficient compliance of the term and even those envelopes will have to be taken to be sealed envelopes since the term "sealed" does not necessarily connote only sealed by wax and putting a distinctive mark on it but the pesting would also be a sealing. Shri N.B. Khandare, learned Counsel representing respondent No. 3 whose tender is accepted, adopts the argument of Shri Ghatge. 4. Shri N.B. Khandare, learned Counsel representing respondent No. 3 whose tender is accepted, adopts the argument of Shri Ghatge. 4. The short tender notice issued by the University at two places mentions that the tenders should be sealed. Notice clearly stipulated that the tenders must be sealed one. The first and the second respondents were not acting aimlessly in insisting upon this requirement and certainly this was not a meaningless or a futile exercise, it had a definite purpose. Shri Ghatge, the learned Counsel for the respondents Nos. 1 and 2, invited our attention to the meaning of the words "seal" (v.t.) as given in the Shorter Oxford English Dictionary in its 3rd Edition. The meaning given is as follows :--- "To fasten with or as with a seal. To fasten (a folded letter or other document) with melted wax or some other plastic material and impress a seal upon this so that opening is impossible unless the seal is broken." Shri Ghatge submitted that this dictionary also gives a further meaning of the verb "seal" as "to fasten up (a letter, parcel) with sealing wax, gum or like." Relying upon this dictionary meaning, It was submitted by Shri Ghatge that even pesting by gum would also come within the meaning of sealing , as it is not necessary to use wax as a sealant. In this context, it will have to be borne in mind that the purpose of sealing an envelope which contains a letter or a parcel would be to see that unless the seal which is fastened to the said envelope is broken, it would not be possible to open the envelope or to penetrate into it. This has also been indicated in the dictionary meaning we have quoted above. It means that it should be fastened and impressed upon by a seal in such a manner that it would not be possible to open the envelope without breaking the seal. It has not been prescribed in the tender notices as to how the seal should be, but the requirement clearly is that the tender must be a sealed one. We do not think that mere pesting of an envelop would ensure that nobody could open it and re-pest it. 5. It has not been prescribed in the tender notices as to how the seal should be, but the requirement clearly is that the tender must be a sealed one. We do not think that mere pesting of an envelop would ensure that nobody could open it and re-pest it. 5. The sale of a commodity or grant of lease of land by auction and allotment of the work by calling tenders are two distinct and different processes by which the public institutions call for the offers. Whereas in the case of auction, every bidder is aware of the bid given by the other competitor and the competition is just in the open. On the contrary, the process of inviting tenders has an element of secrecy in respect of the offer which is contained in the sealed envelope. As none of the bidders is aware as to what would be the bid of the other, every bidder would give his best bid (highest in the case of a lease or purchase for the commodity and the lowest in case of a construction contract or the like). Since nobody knows what would be the bid of the other competitor, then every one will try to show preparedness for the best of the terms which would be acceptable to the institution calling the tenders. Therefore, it will have to be ensured that the tenders are not tampered with, the offers are not leaked to another bidder or even to the officers of the institution for which the tenders are called. This being the object to be achieved by the term in the tender notice that the tenders should be sealed one, we will have to hold that the condition was mandatory in nature and the non compliance of it will disentitle the consideration of the offer. Though Shri Ghatge, the learned Counsel on behalf of the University, made a submission before us that there is practically no difference between a sealed tender and a pested tender, the authorities of the University seem to have accepted this distinction. Respondents Nos. 1 and 2 themselves have submitted couples of office notes in respect of these tenders at page 37 of the paperbook. These notes by Asst. Respondents Nos. 1 and 2 themselves have submitted couples of office notes in respect of these tenders at page 37 of the paperbook. These notes by Asst. Resident Engineer and Accounts Officers of the University indicates that the tenders were classified into two classes : (a) tenders received in sealed packet, and (b) tenders received in pested packets, and the question was posed whether all tenders should be opened or whether sealed tenders only should opened. It appear that the respondent No. 1 directed that all tenders should be opened. It is an admitted fact that the tender of the petitioner was a sealed one along with other three tenderes and the tender of the respondent No. 3 and two other tenders were not sealed. Shri Ghatge, learned Counsel representing the Respondent-University, invited our attention to the judgment of Division Bench of this Court consisting of Tulpule and Padhye, JJ. reported in A.I.R. 1984 Bombay 351, in the case of (M/s. B.D. Yadav M.R. Meshram v. Administrator of the City of Nagpur another)3. Objection raised to the acceptance of the tender in that case were that the tenders had not submitted eligibility certificate, has failed to sign one of the pages of tender form and had paid earnest money by mode other than prescribed. The learned Judges observed thus:--- "..... a distinction must be made where tenders are invited subject to certain conditions, between the conditions which are essential to the performance of the contract and conditions which are ancillary or subsidiary to the main object of the contract." Relying on these observations, it is the submission of Shri Ghatge that the sealing of the tender is not an essential condition but is only an ancillary one. We are afraid that we are not able to persuade ourselves to accept this contention As already pointed out the element of secrecy is vital in the process of selection of contactors by calling the tenders and, therefore, when tender notice for sealed tenders, sealing would be mandatory process without which tender shall not be valid one. Therefore, the judgment above cited is of no avail for Shri Ghadge. 6. The second contention of the petitioner that the authorities have acted arbitrarily in preferring the respondent No. 3 to the petitioner when the offer of the petitioner was the lowest one was tried to be repelled by Shri Ghatge on two counts. Therefore, the judgment above cited is of no avail for Shri Ghadge. 6. The second contention of the petitioner that the authorities have acted arbitrarily in preferring the respondent No. 3 to the petitioner when the offer of the petitioner was the lowest one was tried to be repelled by Shri Ghatge on two counts. Firstly, he submitted that the tender notice itself reserve the right with the University to accept or reject the lowest or any tender without assigning any reason. True that the tender notices has such a clause. Such a clause in the tender notice reserving the right was held to be valid and not violative of Article 14 or 19 (1)(g) of the Constitution of India by the Supreme Court in the case of (Purxotoma Ramanata Quenim v. Makan Kalyan Tandel and others)4, reported in A.I.R. 1974 S.C. 651. Such a clause, therefore, would not be invalid and unconstitutional. But as explained by the Supreme Court later in Ramanna Shetty's case, it would not give authority calling tenders a right to act arbitrarily. Bhagwati, J. speaking for the Court observed in Ramanna Shetty's case as under:--- "It is true that the Government may enter into a contract with any person but in so doing the State or its instrumentality cannot act arbitrarily. The choice must be diclated by public interest and must not be unreasoned or unprincipled." Shri Ghatge, the learned Counsel, very fairly conceded this position and accepted that even this condition will not give right to the University authorities to act arbitrarily. His submission was that the University authorities have a right to choose between the contractors keeping the interest of the University in mind and the considerations before the University were valid. 7. Therefore, we will have to consider whether the University authorities in rejecting the lowest tender of the petitioner and accepting the tender of the respondent No. 3 which was higher than the petitioner by about Rs. 54, 000/- have acted arbitrarily. Shri Ghatge submitted that the University has preferred the tender of the respondent No. 3 not on any one count but the decision of the University was cumulative effect of consideration of many factors. He listed six points which according to him were considered by the University authorities in arriving at such a decision. 54, 000/- have acted arbitrarily. Shri Ghatge submitted that the University has preferred the tender of the respondent No. 3 not on any one count but the decision of the University was cumulative effect of consideration of many factors. He listed six points which according to him were considered by the University authorities in arriving at such a decision. Firstly, he submitted that the respondent No. 3 had 30 years experience in the field, whereas no such experience certificate was produced by the petitioner. Secondly, the respondent No. 3 has his own machinery for the construction work, whereas the petitioner says that he would hire the required machinery. Thirdly, the respondent No. 3 is a b. Class registered contractor and the work limits approved for him is Rs. 30, 00, 000/-, whereas the petitioner is Class-IX contractor and the work limit approved is Rs. 50,000/- only. So far as work experience is concerned, the petitioner had the work experience of the work to the tune of Rs. 1.53 Lacs in the year 1987-88 and Rs. 5.29 Lacs in the year 1988-89 and that too piece works, whereas the respondent No. 3 had completed works of much greater value i.e. to the tune of Rs. 12.30 Lacs in the year 1986-87, Rs. 17.59 Lacs in the year 1987-88 and Rs. 11.19 Lacs in the year 1988-89. According to Shri Ghatge, the University authorities fifthly considered that the respondent No. 3 would be able to complete the work faster since he had no other work at his hand and lastly the solvency certificate produced by the petitioner is only Rs. 25,000/- and the respondent No. 3 has produced a solvency certificate to the tune of Rs. 6,00,000/-. Shri Ghatge quoted Clause 206 from the Maharashtra Public Works Manual saying that a contractor should submit a solvency certificate from the Collector of the District or Bankers Certificate of financial stability to the extent of not less than 20% of the tendered value. The estimate of the work in question was above Rs. 7,02,000/- and, therefore, the solvency submitted by the petitioner was also not sufficient according to the Manual which University normally follows. Shri. Ghatge further submitted that the decision was taken by the Building and Works Committee of the University constituted under the Ordinance No. 22 of the Marathawada University. The estimate of the work in question was above Rs. 7,02,000/- and, therefore, the solvency submitted by the petitioner was also not sufficient according to the Manual which University normally follows. Shri. Ghatge further submitted that the decision was taken by the Building and Works Committee of the University constituted under the Ordinance No. 22 of the Marathawada University. It consists of the Chief Engineer of the Government of Maharashtra, Superintending Engineer of the Public Works Department of the State Government, a Principle or Head of the Department of the Civil Engineering and an eminent Engineer from the private sector nominated by the Chancellor. His submission was that since this Committee consisting of experts has applied its mind and has accepted the tender of the respondent No. 3 in preference to the tender of the petitioner, this Court should be slow in interfering in the decision arrived at by such experts. 8. True that the authority who is to consider the tender is not prevented from refusing the tender offering the lowest amount for execution of the contract it must be for the valid reasons. In the case of (Trilochan Mishra v. State of Orissa)5, reported in A.I.R. 1971 S.C. 733, the Supreme Court has cited one of such valid reasons:--- "Government certainly has a right to enter into a contract with a person well known to it and specially one who has faithfully performed his contracts in the past in preference to an undesirable or unsuitable or untried person." The petitioner in the instant case had worked with the Respondent University itself and it is not the case of the University that they had any bad experience of the petitioner and that the Respondent No. 3 had completed some works of University satisfactorily. The tender notice does not call for the solvency to the tune of 20% of the estimated cost as is required by the Public Works Manual which is now sought to be placed in service by Shri Ghatge. Had this conditions been added to the tender notice, either the petitioner could have complied them or would have refrained from submitting his tender. We do not wish to express any opinion about other factors which may weigh in the mind of University in making the choice, at this stage, in view of the order which we propose to pass. 9. We do not wish to express any opinion about other factors which may weigh in the mind of University in making the choice, at this stage, in view of the order which we propose to pass. 9. There were four sealed tenders offered to the University and other tenders are not before us except the petitioner, we do not know, on whom the choice of University authorities would have taken in case consideration is restricted to the sealed tenders only. We accept the position that for any valid reason the University can refuse to accept the lowest tender. Relying upon the judgment of the Supreme Court in (Harminder Singh v. Union of India)6, reported in A.I.R. 1986 S.C. 1527, Shri Khillare submitted a plea that the University should be directed to accept the tender of the petitioner. In the case cited by Shri Khillare, there was reported before the Court dated August 23, 1985, submitted by the officer of the Military Department and after examination of the relative merits of the tenders, it was opined by the authority that the appellant would not only be the lowest bidder but also the purchase of milk from the appellant could be profitable while the purchase of milk from respondent No. 4 would result in serious losses to the extent of Rs. 10 lacs or so. Therefore, in the circumstances it was thought fit by the Hon'ble Judge of the Supreme Court to direct that the tender of the petitioner should be accepted. We do not have sufficient material before us to decide intense merits of all other sealed tenders and all other tenders who had supplied sealed tenders are not before us as parties to this petition. Therefore, it would not be proper on our part to restrict the choice of the University by giving such a relief to the petitioner. We can only direct that the University shall consider only the sealed tenders and select any of them and if none of them is found to be suitable, then call for the fresh tenders by a fresh notices. We do not express any opinion as to the suitability of the petitioner or any other tenderers which will have to be judged by the proper authorities. It would have been better in such a case for the respondents Nos. We do not express any opinion as to the suitability of the petitioner or any other tenderers which will have to be judged by the proper authorities. It would have been better in such a case for the respondents Nos. 1 and 2 make the report of the Building and Works Committee available to the Court which was a Committee consisting of the experts and were equipped with the better technical knowledge to choose between the contractors keeping in mind the interest of the University. In the absence of such a material, we do not think it fit to give any direction to the University in respect of the acceptance of the tender while we are quashing the acceptance of the tender of the respondent No. 3. 10. In the result, the petition is allowed. The order of the acceptance of the tender of the Respondent No. 3 by the Respondents Nos. 1 and 2 for the construction of the Environmental Science Department building in reasons to the tender notice published in daily "Lokmat" on 4th August, 1989, is hereby quashed. Rule is made absolute in terms of the above directions. In the circumstances, there be no order as to costs. Rule made absolute. ------