Judgment S. B. Sinha J, J. 1. In this application, the petitioner has inter alia, prayed that the tender of respondent No.4 which has been accepted by respondent no.1 Corporation may be directed to be cancelled. 2. The fact of the matter is as follows ;--Admittedly a tender notice was issued by the respondent Corporation for sale of Kendu leaves for the collection year 1992. Apart from other clauses, the tenderers were required to give their offer either for one or more lots or for the entire lots of a Range. Clause 9 of the terms and conditions of sale which is contained in Annexure-3 to the writ application reads thus ;- "each tenderer shall give his offer for one or more lots, showing his order of priority for the purchase of lots in one tender form only, the tenderer shall have to offer separate rates per std. bag for each lot indicated in the tender paper The tenderers will however, offer the consolidated rate, for entire lots of a range whenever rangewise sale is specifically mentioned in the lot list. No taxes and fees will be included in the offers/bids. Separate tender form will be used for lot (s) of different divisions. " 3. The petitioner allegedly, pursuant to the said advertisement expressed its desire to purchase lot Nos.201 of 1992 and 202 of 1992 wherefor it quoted its rate at Rs.332/- and Rs.362/- respectively ; whereas respondent no.4 quoted for the entire lots as Rs.287 per stand bag. The petitioner has contended that after it come to learn that respondent No.4 also made offer for the entire lots at Rs.287 but respondent Nos.1 to 3 without inviting the petitioner for negotiation entered into a negotiation with respondent no.4 and awarded a contract to him. It has, therefore, been submitted that the petitioner has been discriminated against as he was not called for negotiation. It was further contended that respondent No.4 also did not deposit ten percent of the earnest money which was Rs.59 lacs 72 thousand. In this connection reference has been made to clause 10 of the terms and conditions of sale as contained in Annexure-3 to the writ application. 4. A counter-affidavit has been filed on behalf of respondents 1,2 and 3. The respondent No.4 although did not file any counter affidavit, but it filed an application for vacating the order of stay. 5. In this connection reference has been made to clause 10 of the terms and conditions of sale as contained in Annexure-3 to the writ application. 4. A counter-affidavit has been filed on behalf of respondents 1,2 and 3. The respondent No.4 although did not file any counter affidavit, but it filed an application for vacating the order of stay. 5. In the counter affidavit and/or the aforementioned application for vacating the stay, the respondent have inter alia submitted that the State government has appointed respondent No.1 as its sale agent for dealing with the trade of Kendu leaves by notification dated 13/14th. March, 1987. In terms of the aforementioned notification, the Corporation has been given a liberty to take loan from the Nationalised Banks for conducting the trade of kendu leaves. In the year 1992, the entire collected Kendu leaves by the corporation in Sub-division of Garhwa and part of Daltonganj could not be sold and were lying in different godowas although tenders were invited but no reasonable offer was received by it. According to the respondents, respondent No.1 has taken loan from the Nationalised Banks and it had to make payment of the loans. Besides it has been facing storage problem. So far the Kendu leaves collected in the year, 1993 is concerned, fresh tenders dated 12-5-1993 were issued for 1993 season as also for the balance unsold kendu leaves of 1992 season being tender notice dated 29-4-1993.5. In paragraph 11 of the counter affidavit it has been stated as follows : -"in sale notice and lot list of Hazaribagh Circle for tender dated 12-5-1993 altogether 29 lots of 1992 season Kendu leaves of present Garhwa division and Mohammadganj range of old daltonganj division i e.4 ranges of Garhwa division (Bhawnathpur range, nagar range, Garhwa range, and Mohammadganj range) were placed for sale besides other lots of other ranges and divisions. The details of Kendu leaves of 1992 season of garhwa division which were put to tender on 12-5-1993 are described hereunder : 5_197_BLJ1_1995.htm 6. The details of Kendu leaves of 1992 season of garhwa division which were put to tender on 12-5-1993 are described hereunder : 5_197_BLJ1_1995.htm 6. According to the respondents after receipt of the tender result sent by the General Manager M. F. P. Circle Hazaribagh the same was processed by the Corporation and as it appeared that respondent No.4 had offered over Rs.287/- per standard bag of Kendu leaves for 1992 season for the balance and unsold Kendu leaves of all the 29 lots of entire present Garhwa division it was decided to accept the said affer. The names of other tenderers with details are as follows :- 6_197_BLJ1_1995.htm 7. It has been contended that as respondent No.4 submitted its tender for the entire Garhwa sub-division, whereas the petitioner submitted its tender for only two lots, the General Manager. Hazaribagh recommended that in view of the offer of respondent No.4, its tender be accepted on the ground that the entire lots of kendu leaves of Garhwa Sub-division would be cleared off and thus the same should be accepted in preference to the bid of the petitioner. It has been contended that except respondent No.4 no other tender quoted the rate for the range/division for the entire unsold kendu leaves, for the year 1992. 8. However, the petitioner only on 20-5-1993 having come to learn about the recommendations of the General Manager Hazaribagh, send a bank draft of Rs. one lac ten thousand as EMD stating that he is ready to to take all the balance lots of present Garhwa Division at the rate of Rs.287/- per standard bag except those 4 lots for which the rates were more than Rs.287/- per standard bag. On the same day i e. on 20-5-1993 respondent No.4, however, submitted an application that it is ready to increase the rate from Rs.287 to Rs.297/-. The matter was thereafter placed before the sale Committee which recommended for negotiation and to get further increase in the rate for all the balance of 1992 season of kendu leaves of the entire Garhwa Division with the highest tender of the concerned lot of the range only. 9. The matter was thereafter placed before the sale Committee which recommended for negotiation and to get further increase in the rate for all the balance of 1992 season of kendu leaves of the entire Garhwa Division with the highest tender of the concerned lot of the range only. 9. In paragraph 22 of the counter affidavit, it has been stated as follows :- "the sale Committee took a decision for the sale of all 29 lots in question with respondent M/s Geeta Trading Company instead of selling only 8 lots with the petitioner and other individual tenders because the sale of the entire lot (s) was found to be in the best interest of the Corporation It is further relevant to mention here that the aforesaid decision was taken by the sale committee as a whole annonimously which consisted of six responsible officers and the said decision was taken in consonece with the provisions contained in clause 24 of the terms and conditions of sale which categorically provided that the corporation has got right not only to reject/accept or split the material put to sale but also provides to combine the material to sale as has baen done in the instant case. " 10. Pursuant to the said decision, the General Manager M. F. P. Hazaribagb circle invited the respondent No.4 for negotiation by letter dated 22-5-1993 and pursuant thereof a negotiation took place in terms whereof two agreements were entered into in this connection; being agreements dated 28-5-1993 and 7-6-1993 which are contained in Annexure-G series to the counter affidavit. The recommendations of the General Manger, Hazaribagh have also been approved by the sale Committee in its meeting held on 2-6-1993 (Annexure-H ). The respondents in this connection have stated that the entire transaction is complete and thereby a total revenue of Rs.63,22,389.93 paise has been ensured. 11. Mr. Pawan Kumar, learned counsel appearing on behalf of the petitioner submitted that in view of the fact that the petioner had also offered to purchase the entire lots, the respondent Corporation should have held negotiaticd with it also and the deviation and/or departure therefrom must be held to be an arbitrary act on the part of respondents 1 to 3. Learned counsel, in support of his contention relied upon a decision of the supreme Court in Ram and Shvam Company V/s. State of Haryana and Ors. Learned counsel, in support of his contention relied upon a decision of the supreme Court in Ram and Shvam Company V/s. State of Haryana and Ors. reported in A. I R 1984 S C.1147 and South India Corporation Ltd. and ano. V/s. Hindustant News Print Ltd and ano. reported in 1992 Kerala, 240. 12. Mr. J P Shukla learned counsel appearing on behalf of respondents 1 to 3, however, placed before us the entire counter affidavit and submitted that a decision has already been taken by respondents ! to 3 in the interest of the Corporation. It has been submitted that the Corporation is entitled to take a policy decision as to whether the tender of respondent No.4 was to be preferred in preference to the offer made by the petitioner which was only in respect of 6 lots whereas the offer of the respondent No.4 was for the entire lots. 13. Learned counsel for the Corporation further submitted that if the kendu leaves would not have been sold, the same would have caused monetory loss to the Corporation and thus, it was decided that negotiation should be held with respondent No.4 only. It was further submitted that only after the respondents accepted the offer of respondent No.4, the application of the petitioner was received. Learned counsel in support of his contention has relied upon Food Corporation of India V/s. Kamdhenu Cattle Feeds, reported in 1992 Vol 3 SVLK (Civil) 320, A. I. R.1990 S. C.759. 14. From a perusal of paragraph 4 of the counter affidavit, it would appear that the decision of the Sale Committee wa communicated to the general Manager on 22-5- 1993 whereas the petitioner had made the offer on 19-5-1993 and the negotiation between the General Manager, Hazaribagh mpf Circle and respondent No, 4 took place on 24-5-1993. 15. There cannot be any doubt that like any other field, in the field of contract also the action of the State must be fair and reasonable within the meaning of Article 14 of the Constitution of India. 16. However, it is also well known that the executive authorities are not expected to grant contract upon taking into consideration the highest bid only but they have also to take into consideration other relevant factors. Reference in this connection may be made to a recent decision in Manlndra nath Upadhayaya V/s. The State of U. P. and ors. 16. However, it is also well known that the executive authorities are not expected to grant contract upon taking into consideration the highest bid only but they have also to take into consideration other relevant factors. Reference in this connection may be made to a recent decision in Manlndra nath Upadhayaya V/s. The State of U. P. and ors. reported in A. I. R 1992, s. C.566. 17. In Food Corporation of India V/s. M/s. Kamdhenu Cattle Feed Industries reported in 1993 Vol.3. J. T. at page 45 held as follows :- "in contractual sphere as ir all other State actions, the State and all its instrumentalities have to conform to Article 14 of the constitution of which non-arbitrariness is a significant facet. There is no unfettered discretion in public law. A public authority possesses powers only to use them for public good. This imposes the duty to act fairly and to adopt a procedure which is fairplay in action. Due observance of this obligation as a part of good administration raises a reasonable or legitimate expectation in every citizen to be treated fairly in his Interaction with the State and its instrumentalities, with this element forming a necessary component of the decision making process in all State actions. To satisfy this requirement of non-arbitrariness in a State action, it is, therefore, necessary to consider and give due weight to the reasonable or legitimate expectations of the persons likely to be affected by the decision or else that unfairmess in the exercise of the power may amount to an abuse or excessof power apart from affecting the bona fides of the decision in a given case. The decision so made would be exposed to challenge on the ground of arbitrariness. Rule of law does not completely eliminate discretion in the exercise of power, as it is unreaslistic, but provides for control of its exercise by judicial review. The mere reasonable or legitimate expectation of a citizen, in such a situation, may not by itself be a distinct enforceable right, but failure to consider and give due weight to it may render the decision arbitrary, and this is how the requirement of due consideration of a legitimate expectation forms part of the principle of non-arbitrariness, a necessary concomitant of the rule of law. Every legitimate expectation is a relevant factor requiring due consideration in a fair decision making process, whether the expectation of the claimant is reasonable or legitimate in the context is a question of fact in each case. Whenever the question arises, it is to be determined not according to the claimants perception but in larger public interest wherein other more important considerations may outweigh what could otherwise have been the legitimate expectation of the claimant. A bona fide decision of the public authority reached in this manner would satisfy the requirement of non-arbitrariness and withstand judicial scrutiny. The doctrine of legitimate expectation gets assimilated in the rule of law and operates in our legal system in this manner and to this extent it is well known that the Court can interfere with an administrative action only on the ground of illegality, where then decision making authority has been guilty of an error of law as for example by purporting to exercises power which it does not possess ; (2) irrationality, where the decision-making authority has acted so unreasonably that no reasonable authority would have made the decision : (3) procedural impropriety, where the decision-making authority has failed in its duty to act fairly. Reference in this connection may be made to in Council of Civil service Unions and others V/s. Minister for the Civil Service, (1984) Vol.3 All e. R.935. 18 In Navjoyoti Co-op Group Housing Society V/s. Union of India and others, reported in 1992 Vol.1 Judgment Today, 621 it has been held as follows:- "in the aforesaid facts, the Group Housing, Societies were entitled to legitimate expectation of following consistent past practice in the matter of allotment, even though they may not have any legal right in private law to receive such treatment. The existence of legitimate expectation may have a number of different conse-quenses and one of such consequences is that the authority ought not to act to defeat the legitimate expectation without some overriding reason of public policy to justify its doing so. In a case of legitimate expectation if the authority proposes to defeat persons legitimate expection it should afford him an opportunity to make representation in the matter. In this connection reference may be made to the discussions on legitimate expectation at page 151 of Volume 1 (1) of Haslburys Laws of england. In a case of legitimate expectation if the authority proposes to defeat persons legitimate expection it should afford him an opportunity to make representation in the matter. In this connection reference may be made to the discussions on legitimate expectation at page 151 of Volume 1 (1) of Haslburys Laws of england. Fourth Edition (Re-issue), We may also refer to a decision of the House of Lords in Council of Civil Service Union and others V/s. Minister for Civil Service reported in 1984 (3) All england Reporter page 935. It has been held in the said decision that an aggrieved person was entitled to judicial review if he could show that a decision of the public authority affected him of some benefit or advantage which in the past he had been permitted to enjoy and which he legitimately expected to be permitted to continue to enjoy, either until he was given reasons for withdrawal and the opportunity to comment on such reasons. It may be indicated here that the doctrine of legitimate expectation imposes in essence a duty on public authority to act fairly by taking into consideration all relevant factors relating to such legitimate expectation within the conspectus of fair dealing in case of legitimate expectation, the reasonable opportunities to make representation by any change of consistent past policy, come in. We, have not been shown any compelling reasons taken into consideration by the Central Government to make a departure from the existing policy of allotment with reference to seniority in Registration by introducing a new guideline. " 19. It is, therefore, clear that judicial rsview in contractual matter is permissible if the aforementioned Executive authority has acted unreasonably, arbitrarily, illegally or irrationally. It is also well known that in relation to economic activities, the rule of the State should be viewed with a broad latitude other than tha law framed to save the rights, such as freedom of speech, religion, etc. It is not necessary to multiply decisions as this aspect of the matter has recently been dealt with in details by the Supreme Court in union of India V/s. Hindustan Development Corporation and others, reported in 1993 Vo.3 Judgment Today, S. C.15. 20. In this case, evidently, the tender notice was issued on 1-5-1993. It is not necessary to multiply decisions as this aspect of the matter has recently been dealt with in details by the Supreme Court in union of India V/s. Hindustan Development Corporation and others, reported in 1993 Vo.3 Judgment Today, S. C.15. 20. In this case, evidently, the tender notice was issued on 1-5-1993. Respondent Nos 1 to 3 have categorically stated that its earlier tenders did not fetch a reasonable offer and thus the said tender had not been accepted, for the sale of Kendu leaves for the year 1992. 21. From the advertisement dated 1-5-1993, it is evident that the advertisement was issued for the balance of unsold kendu leaves of 1992 reason It is also evident from the said sale notice and list of lots of hazaribagh Circle for tender dated 12-5-1993 that altogether 29 logs of 1992 season kendu leaves of present Garhwa division and Mohammadganj range were placed for sale besides other lots of other ranges and divisions. The tender was also issued rangewise i e. Bhawnathpur range and Nagar Range falling with the Garhwa division. 22. Admittedly, the respondent No.4 had made offer in respect of all the lots. Thus, if a policy decision has been taken by the Corporation that it would be better to accept the tender of respondent No.4 and to hold negotiation with him in the larger interest it cannot, be said that its action was unreasonable. The Sale Committee had already taken a decision in this regard and the petitioner filed an application giving offer to purchase the entire lots only on 19-5-1993. 23. It is clear that if the petitioners application was to be entertained, a fresh advertisement was required to be issued for the benefit of all the other tenderers and they were required to be given a similar opportunity. Thus, the decision of the Sale Committee to hold negotiation only with respondent no.4 in the peculiar facts and circumstances of the case, cannot be taken to be unjust, particularly in view of the fact that evidently from, the very beginning it made an offer to purchase the entire lots. Further it is surprising that the petitioner made an offer of Rs, 287/- for standard bag of kendu leaves although admittedly, earlier it had made an offer to purchase only two lots of Kendu leaves only. Further it is surprising that the petitioner made an offer of Rs, 287/- for standard bag of kendu leaves although admittedly, earlier it had made an offer to purchase only two lots of Kendu leaves only. If in this situation, the Sale Committee took a decision to hold negotiation only with respondent No.4 in order to make sale in respect of all the unsold Kendu leaves for the year, 1992, this said decision cannot be said to be arbitrary in the facts and circumstances of this case. 24. For the reasons aforementioned, this application is dismissed but in the facts and circumstances of the case, there will be no orders as to costs.