JUDGMENT S.H.A. Raza, J. - The fate of this writ petition hinges mainly on the answer of the question as to whether without rejecting the highest bid of the petitioner for the grant of right of ferry for providing a pantoom bridge at Gaughat in river Comti, the Nagarmahapalika, Lucknow was competent to settle the Ferry's right in favour of opposite party No. 4. 2. This writ petition is directed against the order dated 28th September, 1989 passed by Mukhyanagar Adhikari, Nagarmahapalika, Lucknow by means of which the Ferry's right were settled in favour of opposite party No. 4. Earlier in the year 1987-88 the pantoon bridge was auctioned for purposes of ferrys in favour of one Taushik Ali for a sum of Rs. 20,000/- but latter on it was given in favour of opposite party No. 4 which is a Co-operative Society of Fishermen. Several persons approached the authorities of Nagarmahapalika for auctioning of the licence and ultimately it was decided to settle the licence only after the advertisement, which was done. On 21-9-1989 the ferry rights were auctioned. Several person including opposite party No. 4 participated into the auction but the bid of the petitioner was accepted for a sum of Rs. 44,000/- and he was asked to deposit th of the total amount and accordingly the petitioner deposited the same. Therefore, it seems that on 19-9-89 opposite party No. 4 applied before the Nagarmahapalika, Lucknow to settle the ferry rights in favour of the fishermen society. Subsequently, a writ petition was filed by opposite party No. 4 for quashing the proceedings of the auction in respect of Gaughat Pantoon Bridge and on 29-9-89 this Court passed an order to the effect that the respondents shall not interfere with the right of the petitioner to ferry provided the petitioner deposits a sum of Rs. 4000/- on or before 30th September, 1989. It was indicated in the order that this arrangement was made keeping in view the public interest and a sum of rupees four thousand was fixed tentatively with the Nagarmahapalika for conferring the right to ferry for a period of one month only. It was made clear that the order would confer no right on the petitioner if he does not succeed on merit. It was made clear that the order would confer no right on the petitioner if he does not succeed on merit. Thereafter on 6th November, 1989 a rejoinder affidavit was filed along with an order dated 28th September, 1989 passed by Nagarmahapalika, Lucknow which indicated that Nagarmahapalika it self had decided to grant tehaka to the opposite party No. 4. In this view of the matter this Court had passed an order to the effect that the writ petition had become in fructuous and the same was dismissed as such and the interim order was vacated. 3. The petitioner has averred that after filing of the counter affidavit the petitioner came to know that Mukhya Nagar adhikari had passed on order for settlement of ferry right in favour of opposite party No. 4 and the writ petition was dismissed as in fructuous. On 8th November, 1989 the petitioner submitted an application mentioning therein that he was the highest bidder and deposited a sum of rupees eleven thousand on 21-9-1989 i.e. on the date of auction but when he approached the authorities be came to know that a writ petition was filed and on 6th November, 1989 and that right to ferry had been settled in favour of opposite party,No. 4 by means of an ate-dated order. It was further averred that the Samiti could have filed the rejoinder affidavit on the date fixed in the Hon'ble High Court on 30-9-1989 and that rejoinder affidavit was prepared and filed on 31-9-1989. 4. The grievance of the petitioner is that while settling the ferry rights in favour of opposite party No. 4 the petitioner was not given any opportunity of hearing in spite of the fact that his bid was highest and the same was never cancelled. Further more the ferry rights could not be settled for an amount less than the previous year and the amount which had been offered by the petitioner, was highest. 5. It appears that the Nagarmahapalika authorities while settling the right to ferry in favour of opposite party No. 4 were swayed away by a Government Order contained in Annexure-9. Further more the ferry rights could not be settled for an amount less than the previous year and the amount which had been offered by the petitioner, was highest. 5. It appears that the Nagarmahapalika authorities while settling the right to ferry in favour of opposite party No. 4 were swayed away by a Government Order contained in Annexure-9. This Government order indicates that the Chief Secretary, Government of Uttar Pradesh had directed all the Divisional Commissioners to give preference to the fishermen co-operative societies regarding the grant of ferry licences and in case there are more than one society in the area the same should be auctioned between the societies. Annexure-9 itself indicates that the said Government Order was meant for the grant of ferry rights falling within the areas of Zila Parishad. The contention of the petitioner is that the said Government Order was not applicable in the matter of grant of licenses which falls within the territorial areas of Nagarmahapalika, Lucknow. 6. The ferry right of the Pentoon Bridge at Gaughat was auctioned on 21-9-1989 in the office of Nagarmahapalika for the period commencing from 1-10-1989 to 30-9-1990 and the final bid of the petitioner was accepted. It was averred that the auction was held in accordance with the provisions of Section 8 of the Northern India Ferries Act which provides as under : "8. Letting ferry tolls by auction The tolls of any public ferry may, from time to time, be let by public auction for a term not exceeding five years with the approval of the Commissioner or by public auction or otherwise than by public auction, for any term with the previous sanction of the State Government. The lessee shall conform to the rules made under this Act for the management and control of the ferry, and may be called upon by the officer in whom the immediate superintendence of the ferry in vested, or, if the ferry is managed by a municipal or other public body under Section 7 or Section 7A then by that body, to give such security for his good conduct and for the punctual payment of the rent as the officer or body, as the case may be, thinks, fit. When the tolls are put up to public auction, the said officer or body, as the case may be, or the officer conducting the sale on his or its -behalf may, for reasons recorded in writing, refuse to accept the offer of the highest bidder, and may accept any other bid, or may withdraw the tolls from auction." 7. The said section provides that when the tolls are put up to public auction, the said officer or body, as the case may be, or the officer conducting the sale on his or its behalf may, for reasons recorded in writing, refuse to accept the offer of the highest bidder, and may accept any other bid, or may withdraw the tolls from auction. 8. It has to be seen in the instant case as to whether this can be done arbitrarily without indicating any reasons or giving opportunity to the highest bidder. 9. The opposite party No. 4 has averred in the counter affidavit that the Ghats can be only auctioned if the bidders are individuals or more than one co-operative societies and in case there is only one Co-operative Society then the Ghat will have to be settled with the Society on an average of three years income with the increase of 50% and the opposite parties have rightly settled the Ghat with the opposite party No. 4 because there existed no other Co-operative Society. It was also stated that Annexures 2 and 3 are of 1988-89 and they are irrelevant as the present period is for the year 1989-90 and those may relate only to the period 1988-89 which has been finalised by this Hon'ble Court by Writ Petition No. 438 of 1988 so these annexures are not relevant at all for the current period. Moreover, these things could very well be put up before this Court along with Writ Petition No. 8065 of 1989 so far as the question of advertisement is concerned It is dated 20th September, 1989 which is Annexure-10 of the Writ Petition No. 8065 of 1989 and Annexure-10 of the present writ petition which has not been found sufficient for the auction held on 21-9-1989, by this Court and hence Annexure-6 came into, being that is order dated 29-9-1989 passed by this Court in writ petition No. 8065 of 1989. 10. 10. It was also averred the matter of 1988-89 relating to Ghat in question has been finally disposed off by this Court in Writ Petition No. 438 of 1988 and the order passed by this Court has been annexed an Annexure-1 to this Writ Petition No. 8065 of 1989 filed by the opposite party No. 4. As the matter had already been disposed by this Court while deciding aforesaid writ petition 438 of 1988 by the order dated 25-7-1988 then how the so called order passed by the Administrator may be relevant and application for the advertisement for the Ghat in question for the year 1989-90. It was further averred that opposite party No. 4 did not participate in the auction dated 21-9-1989 but approached the then Administrator of opposite party No. 2 with application to postpone the auction after 30 days. This application is dated 21-9-1989 and had been annexed as Annexure-9 to the writ petition No. 8065 of 1985. As far as the alleged participants are concerned they were the men of the petitioner and the petitioner kept mum and did not dare to contest the case in writ petition No. 8065 of 1989 hence the entire question in respect of the auction has been finally decided. The order passed by this Court on 29-9-1989 contained in Annexure-6 to this writ petition is on the basis of Rs. 48,000/- as against Rs. 44,000/- the highest bid of the petitioner and the order was passed one day before i.e. 28-9-1989 for settling the Ghat with opposite party No. 4. 11. It seems that opposite party No. 4 has averred certain wrong facts in the writ petition and the correct facts have been twisted. Writ petition No. 438 of 1988 was filed claiming following reliefs : "Wherefore it is most respectfully prayed that : (i) A writ in the nature of certiorari may kindly be issued quashing the order dated 18-1-1988 passed by the opposite party No. 2 as contained in Annexure-5. (ii) a writ in the nature of mandamus may kindly be issued commanding the opposite parties not to re-auction the ghat in question till the period of the theka in favour of the petitioner society exists, and the opposite parties may further be restrained from interfering into the peaceful running of the theka by the petitioner society. (ii) a writ in the nature of mandamus may kindly be issued commanding the opposite parties not to re-auction the ghat in question till the period of the theka in favour of the petitioner society exists, and the opposite parties may further be restrained from interfering into the peaceful running of the theka by the petitioner society. (iii) The Government Order as contained in Annexure-6 which is said to be only applicable to the Ghats of Zila Parishad may kindly be held ultravirus, holding it to be application to all the Ghats whether they are under P.W.D. Zila Parishad Nagarmahapalika or Nagarpalika. (iv) any other writ, order or direction which is deemed fit and proper by this Hon'ble Court in the circumstances of this case, may also be issued, passed or given." The main ground of attack in that writ petition was that Prabhari Adhikari Rent (Negarmahapalika), Lucknow permitted the petitioner to deposit a sum of Rs. 13,000/- in additional to the earlier deposit of Rs. 13,000/- within a period of two months and, therefore, the opposite parties were not justified in cancelling the settlement on 13-1-1988 Annexure-5. Learned counsel for the petitioner gave a statement before the Court that he may be able to deposit the entire outstanding amount out of Rs. 33,000/- i.e. Rs. 20,000/- within a months time, therefore, Hon'ble Kamleshwar Nath, J. as he then was, directed that in case the petitioner deposits a sum of Rs. 20,000/- with the opposite party within a period of one month from that date and execute the requisite agreement, the impugned order dated 13-1-1988 cancelling the settlement in favour of the petitioner contained in Annexure-5 shall stand quashed. In the event of petitioner's failure to deposit the aforesaid amount within the time mentioned above the opposite parties would be at liberty to re auction the right and petitioner will not be entitled to carry on the contract. The writ petition was disposed of in these terms. 12. In view of what has been indicated in the judgment it cannot be said that ferry rights were finally settled with the opposite party No. 4. 13. It seems these opposite party No. 4 defaulted as result of which a public auction took place on 21-9-1989. The writ petition was disposed of in these terms. 12. In view of what has been indicated in the judgment it cannot be said that ferry rights were finally settled with the opposite party No. 4. 13. It seems these opposite party No. 4 defaulted as result of which a public auction took place on 21-9-1989. Thereafter as soon as the auction took place and the bid of the petitioner was accepted the opposite party No. 4 filed a writ petition bearing Writ Petition No. 8065 of 1989 before this Court for issuing a writ of certiorari quashing the entire auction proceedings dated 21-9-1989 in respect of Gujarat Pantoon Bridge and this Court passed the following order : List this petition for admission along with the application for interim relief on 23rd October, 1989. Meanwhile the respondents shall not interfere with the right of the petitioner to ferry provided it deposits a sum of Rupees four thousand with the Nagar magapalika. Lucknow on or before 30th September 1989. This arrangement is being made keeping in view, the public interest and a sum of rupees four thousand has been fixed tentatively as the amount payable to Nagarmahapalika for conferring the right to ferry for period of one month only, we also make it clear that this order will confer no right on the petitioner if he does succeed on merit." Subsequently, counter affidavit was filed by the petitioner and opposite party No. 4 filed rejoinder affidavit on 28-9-1989. On 6-11-1989 this court dismissed the said writ petition as in fructuous by passing the following order : "The petitioner has today filed a rejoinder affidavit annexing with an order dated 28-9-1989 of the Nagar mahapalika, Lucknow, as Annexure RI which indicated that the Nagarmahapalika itself has decided to grant theka to the petitioner society. In view of the above the writ petition has become in fructuous and is dismissed as such. The interim order, if any, is vacated." Hence the plea of the opposite party No. 4 that the ferry rights were ever settled of finalised in favour of the petitioner are incorrect. The order dated 29-6-1989 indicated that the interim order dated 29-9-1989 passed by this Court would not confer any,;right on the opposite party No. 4 if he had succeed on merit. On 28th Sept. The order dated 29-6-1989 indicated that the interim order dated 29-9-1989 passed by this Court would not confer any,;right on the opposite party No. 4 if he had succeed on merit. On 28th Sept. 1989 as the Nagarmahalika itself alleged to have settled the ferry rights in favour of opposite party No. 4 as indicated in the rejoinder affidavit filed by the petitioner in Writ Petition No. 8065 of 1989, the writ petition became in fructuous and was dismissed as such, hence it cannot be said that the ferry rights were ever finalised or settled by this Court in any of the two writ petitions which were filed by opposite party No. 4. It was at the instance of the petitioner that the writ petition was dismissed as in fructuous. 14. The petitioner of this writ petition derived the knowledge of the settlement with opposite party No. 4 only when the rejoinder affidavit was filed. There existed no question for the present petitioner to contest the writ petition as the writ petition was got dismissed by opposite party No. 4. Admittedly, on 21st Sept. 1989 the auction took place under the orders of the Administrator and now the only question remained to be decided is as to whether the settlement of ferry rights with opposite party No. 4 after the auction took place and the highest bid of the petitioner was accepted is proper or not. Section 8 of the Northern India Ferries Act provides that the tolls of any public Ferry may, from time to time, be let by public auction. It can be done otherwise than by public auction for any term with the previous sanction of the State Government. A power has been vested to an officer or body conducting the sale on his or his behalf may for reasons recorded in writing refuse to accept the offer of highest bidder and may accept any other bid or may with the tolls from auction. 15. Reading the Act, as a whole, the scheme in respect of the settlement of toll of public ferry is, that the State Government may exercise only a power of approval or Superintendence under certain cases either before or after the Government has direct Superintendence unless it is empowered under Rules framed under Section 12 of the said Act. 15. Reading the Act, as a whole, the scheme in respect of the settlement of toll of public ferry is, that the State Government may exercise only a power of approval or Superintendence under certain cases either before or after the Government has direct Superintendence unless it is empowered under Rules framed under Section 12 of the said Act. The settlement of the tolls of any public ferry should normally be by a public auction subject to the approval of the authorities concerned but in case of some emergency or for special reasons the Government might take out the case or settle the rights, otherwise than by public auction. What is required under Section 8 is that authorities should decide earlier as to method of proposed settlement if they want to take out the case of general rule and the procedure should be sanctioned by it in advance but the highest bid cannot be rejected unless the authority records the reasons in writing for so doing. The discretion cannot be exercised arbitrarily. The authorities could not after having once chosen the method change its mind and adopt a new procedure which had the effect of circumventing the order. The discretion of the officer conducting the auction is not absolute. If he refuses to accept the highest bid he must put down the reasons in writing. Section 10 of the Northern India Ferry Act, 1878 provide procedure for the cancellation of lease which reads as under : "10. Power to cancel lease : - The State Government may cancel the lease of the tolls of any public ferry on the expiration of the six months notice in writing to the lessee of its intention to cancel such lease. When any lease is cancelled under this section, the Magistrate of the district in which such ferry is situate shall pay to the lessee such compensation as such Magistrate may, with the previous sanction of the State Government award." In the instant case no notice for cancellation of lease was ever served upon the petitioner. Certainly Sections 125 to 135 of U.P. Nagarmahapalika Adhiniyam vest in Nagarmahapalika authorities the power to acquire and hold the property, power to dispose of the property, grant leaser and contracts etc. Certainly Sections 125 to 135 of U.P. Nagarmahapalika Adhiniyam vest in Nagarmahapalika authorities the power to acquire and hold the property, power to dispose of the property, grant leaser and contracts etc. It is true that neither the petitioner nor the respondent nor opposite party No. 4 has any right to enter into a contract with the Nagarmahalika, but they are entitled to equal treatment with others who offer bids, tender quotations, but if the State on any Local Bodies enter into contract with any one it must do so fairly without discrimination and without unfair procedure. In the case of Erusian Equipment and Chemicals Ltd. v. State of West Bengal, AIR 1975 SC 266 it was held that, where the State is dealing with individuals in transactions of sales and purchase of goods, the two important facts are that an individual is entitled to trade with the Government and an individual is entitled to a fair and equal treatment with others. A duty to act fairly can be interpreted as meaning a duty to observe certain aspects of rules of natural justice. A body may be under a duty to give fair consideration to the facts and to consider the representations but not to disclose to those persons details of information in its possession. Sometimes duty to act fairly can also be sustained without providing opportunity for an oral hearing. It will depend upon the nature of the interest to be affected, the circumstances in which a power is exercised and the nature of sanctions involved therein. In Ramana Dayaram Shetty v. The International Airport Authority of India, AIR 1979 SC 1628 it was indicated that the Government cannot be permitted to say that it will give jobs or enter into contracts or issue quotas or licences only in favour of those having grey hair or belonging to a particular political party or professing a particular religious faith. The Government is skill the Government when its acts in the matter of granting largess and it cannot act arbitrarily. It does not stand in the same position as a private individual. The Government is skill the Government when its acts in the matter of granting largess and it cannot act arbitrarily. It does not stand in the same position as a private individual. It must, therefore, be taken to be the law that where the Government is dealing with the public whether by way of giving jobs or entering into contracts or issuing quotas or licences or granting other forms of largess, the Government cannot act arbitrarily at its sweet will and like a private individual, deal with any person it pleases, but its action must be in conformity with standard or norm which is not arbitrarily, irrational or irrelevant. The power or discretion of the Government in the matter of grant of largess including award of jobs, contracts, quotas, licences etc. must be confined and structured by rational, relevant and non-discriminatory standard or norm and if the Government departs from such standard or norm in any particular case (sic) the action of the Government would be liable to be struck down, unless it can be shown by the Government that the departure was not arbitrary, but was based on some valid principle which in itself was not irrational, unreasonable or discriminatory. In Ram and Shyam Company v. State of Haryana, 1985 (3) SCC 267 : AIR 1985 SC 1147 it has been held as under : "Even in administrative action, the authority must act fairly which means in accordance with the principles of natural justice variously described as fair play in action. That having not been done in the present case the grant in favour of respondent 4 must be quashed. That having not been done in the present case the grant in favour of respondent 4 must be quashed. at page SC 1154; AIR 1985." "The appellant whose highest bid was rejected by the Government should have 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 The appellant suffered an unfair treatment by the State in discharging its administrative functions thereby violating the fundamental principle of fair play in action inasmuch as a unilateral offer secretly made, not correlated to any reserved price made by respondent after making false statement in the letter was accepted without giving any opportunity to the appellant either to raise the bid or to point out the falsity of the allegations made by respondent 4 in the letter as also the inadequacy of his bid. This method is open to the abuse of favouritism and nepotism. Before giving up the auction process and accepting a private bid secretly offered, the authority must be satisfied that such an offer if given in open would not be outmatched by the highest bidder. In the absence of such satisfaction, acceptance of the secret offer in such a way would also amount to arbitrary action in the matter of distribution of State largesse which is impermissible." In Harminder Singh Arora v. Union of India, 1986 (3) SCC 247 : AIR 1986 SC 1527 it has been held as follows : At pages SC 1533 and 1534; AIR 1986 "The Government may enter into a contract with any person but in so doing the State or its instrumentality cannot act arbitrarily. In absence of any specific policy of the Government it is open to the State to adopt any policy. In absence of any specific policy of the Government it is open to the State to adopt any policy. But if the authority or the State chooses to invite tenders then it must abide by the conditions laid down in the tender notice and the result of the tender and cannot arbitrarily and capriciously accept a much higher tender to the detriment of the State." In the case of Haji T.M. Hassan Rawther v. Kerala Financial Corporation, AIR 1988 SC 157 it has been held as under at page SC 161; AIR 1988 : "The public property owned by the State or by any instrumentality of the State should be generally sold by public auction or by inviting tenders. This Court has been insisting upon that rule, not only to get the highest price for the property but also to ensure fairness in the activities of the State and public authorities. They should undoubtedly act fairly. Their actions should be legitimate. Their dealings should be above board, their transactions should be without aversion or affection. Nothing should be suggestive of discrimination. Nothing should be done by them which gives an impression of bias, favouritism or nepotism. Ordinarily these factors would be absent if the matter is brought to public auction or sale by tenders. That is why the Court repeatedly stated and reiterated that the State owned properties are required to be disposed of publicly, but that is not the only rule. As O. Chinappa Reddy, J. observed "that though that is the ordinary rule, it is not an invariable rule." There may be situations necessitating departure from the rule. but then such instances must be justified by compulsions and not by compromise. It must be justified by compelling reasons and not by just convenience." 16. In the instant case the Administrator (Mukhya Nagar Adhikari) has not indicated any situation which necessitated the departure from the rule. The order of cancellation of the petitioner's bid contained in Annexure 1 only indicates that the administrator by means of his order dated 28-9-1989 had decided to settle the lease in favour of opposite party No. 4. No reason has been indicated as to why a departure was made from the Rule that ferry rights be settled by public auction. The order of cancellation of the petitioner's bid contained in Annexure 1 only indicates that the administrator by means of his order dated 28-9-1989 had decided to settle the lease in favour of opposite party No. 4. No reason has been indicated as to why a departure was made from the Rule that ferry rights be settled by public auction. The ferry rights were auctioned after due publicity and hence the Mukhyanagaradhikari could not pass an order for settlement of ferry rights in settlement in favour of opposite party No. 4. An effort has been made by the opposite party No. 4 to support the order only on the ground that the Nagarmahapalika authorities settled the ferry rights with the opposite party No. 4 for the reason that the opposite party No. 4 is registered society of fishermen and Government Policy is to prefer the societies as against the individuals, but the order does not indicate the same. The Government order relied upon apply to Zila Parishads only. 17. Assuming that the Nagarmahapalika Authorities could exercise their discretion in favour of a co-operative society as against an individual, they should have not allowed the auction to take place, but when they preferred to hold the auction as a matter of policy they cannot be allowed to deviate from it. The order, granting lease to the petitioner contained in Annexure 1 does not indicate any such reason. It does not indicate that for that reason the ferry rights were settled with opposite party No. 4. The highest bid of the petitioner was neither cancelled nor any reason has been indicated as to why the petitioner was dis entitled to collect the tolls etc. He was not given any opportunity to show cause against the order granting lease to the petitioner even when the auction took, place under the orders of the Administrator and his bid was accepted as highest. The order contained in Annexure 1 is wall arbitrary and the same is hit by principles of natural justice and deserves to be quashed. 18. In view of what we have indicated herein above the writ petition is allotted. The order dated 28th Sept. 1989 contained in Annexure I passed by opposite party No. 3 is quashed. Opposite parties are directed to allow the petitioner to run the aforesaid Gaughat Pantoon Bridge ferry for a year i.e. the year 1989-90. 18. In view of what we have indicated herein above the writ petition is allotted. The order dated 28th Sept. 1989 contained in Annexure I passed by opposite party No. 3 is quashed. Opposite parties are directed to allow the petitioner to run the aforesaid Gaughat Pantoon Bridge ferry for a year i.e. the year 1989-90. henceforth in the circumstances of the case there will be no order as to costs.