R. A. SHARMA. J. For the year 1995-96 the Excise Commissioner U. P. invited tenders, vide notice dated 29-12-1994 for allotment of districts to the distilleries for supply of country liquor to the bonded warehouses. The peti tioner submitted its tender for a number of districts including the district of Raebareli. The respondent No. 3 also submitted his tenders but he did not submit any tender for district Raibareli. Respondents Nos. 1 and 2 have, however, rejected the tender of the petitioner for district Raebareli and !n its plaee allotted the said district to the respondent No. 3, although it has not submitted tender for it. Being aggrieved petitioners have filed this writ petition. 2. All the respondents have filed counter-affidavits and petitioners have filed rejoinder-affidavit in reply thereto. On behalf of respondents Nos. 1 and 2 supplementary affidavit has also been filed and in reply thereto petitioners have filed supplementary rejoinder-affidavit. We have heard learned counsel for the parties. 3. Learned counsel for the petitioners has attacked the impugned order on five grounds, viz. (1) respondents Nos. 1 and 2 could not have allotted district Raebareli to the respondent No, 3 as it has not submitted any tender for that district; (2) the order has been passed in violation of principle of natural justice ; (3) the respondents have acted in unfair and arbitrary manner and had passed the order without applying mind to the facts of the case ; (4) the district Raebareli could not have been allotted to the respondent No. 3 without comparative evaluation of merit of both the petitioners and the respondent No. 3 ; and (5) under the conditions of tender defect, if any, could have been the factor forgiving preference, but tender could not have been rejected on those grounds. 4. Learned Advocate-General, appearing for the respondents Nos. 1 and 2, apart from disputing the above contentions of the petitioners, has raised the following objections:- (a) A citizen does not have fundamental right to trade or business in liquor and the contract/licence granted for such a business is nothing but privilege granted by the State regarding which the State has absolute power to grant or not to grant. 1 and 2, apart from disputing the above contentions of the petitioners, has raised the following objections:- (a) A citizen does not have fundamental right to trade or business in liquor and the contract/licence granted for such a business is nothing but privilege granted by the State regarding which the State has absolute power to grant or not to grant. (b) Grant of such a privilege is a matter of policy of the Government which cannot be subject-matter of judicial scrutiny, specially when what is challenged is the refusal to grant such a privilege/licence and not their non-renewal. (c) Petitioners have given undertaking in form of declaration to the Excise Department to the effect that they will accept any rates granted and any area or areas allotted to them by the Excise Commissioner for wholesale supply of country liquor even in respect of the areas for which they have not given any tenders and, therefore, it is not open to them to challenge the impugned order. (d) Petitioners have no locus standi to file the writ petition under Article 226 of the Constitution to challenge the impugned order. 5. Sri S. C. Budhwar, learned counsel for the respondent No. 3 has, apart from supporting the submissions raised by learned Advocate-General, made two further submissions, viz. (i) grant of licence is based on subjective satisfaction of the Government and it cannot be challenged except on limited grounds which have not been made in the instant case ; and (ii) on the basis of material on record rejection of the claim of the petitioners for district Raebareli and its allotment to respondent No. 3 is fully justified. 6. Before dealing with the pleas raised on behalf of the petitioners it is appropriate to decide the objections raised on behalf of the State and the respondent No. 3. 7. Constitution Bench of Supreme Court in Khoday Distilleries Ltd. v. State of Karnataka, (1995) 1 SCC 574 , has laid down that "potable liquor as a beverage is an intoxicating and depressant drink which is dangerous and injurious to health and is, therefore, an article which is res extra commercium being inherently harmful, A citizen has, therefore, no fundamental right to do trade or business in liquor. Hence the trade or business in liquor can be completely prohibited". Hence the trade or business in liquor can be completely prohibited". It was accordingly held that the State has the to create monopoly either in itself or in its agency for manufacture, possession, sale and distribution of liquor as beverage. It was further held that it is open to the State to permit trade or business in potable liquor with or without limitation by the citizen who will have then right to carry on such trade or business subject to limitation, if any, but the State can neither make discrimi nation between citizens nor can it adopt a method which is discriminatory. It is, therefore, settled that business in liquor is privilege granted by the State to the citizen and is not his fundamental right. The State actions, however, have to be fair and reasonable and it is not open to it to discriminate between the citizens. Grant of such privilege is always subject to the principle con tained in Article 14 of the Constitution and the State action if challenged has to be justified on the touch-stone of the said Article. In this connection reference may be made to Doongaji v. State of Madhya Pradesh, AIR 1991 SC 1947 (a case of liquor business) and Ramana Dayaram Shetty v. International Airport Authority, AIR 1979 SC 1628 . Here reference may also be made to Nelw Horizons Ltd. v. Union of India, (1995) 1 SCC 478 , wherein in the matter relating to grant of contract on the basis of tender, Supreme Court has laid down as under: "at the outset, we may indicate that in the matter of entering into a contract, the State does not stand on the same footing as a private person who is free to enter into a contract with any person he likes. The State, in exercise of its various functions, is governed by the mandate of Article 14 of. the Constitution which excludes arbitrariness in State action and requires the State to Act fairly and reasonably. The action of the State in the matter of award of a contract has to satisfy this criterion. Moreover a contract would either involve expenditure from the State exchequer or augmentation of public revenue and consequently the discretion in the matter of selection of the person for award of the contract has to be exercised keeping in view the public interest involved in such selection. Moreover a contract would either involve expenditure from the State exchequer or augmentation of public revenue and consequently the discretion in the matter of selection of the person for award of the contract has to be exercised keeping in view the public interest involved in such selection. The decisions of this Court, therefore, insist that while dealing with the public, whether by way of giving jobs or entering into contracts or issuing quotas or licences or granting other forms of largesse, 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 the standards or norms which are not arbitrary, irrational or irrelevant. It is, however, recognised that certain measure of "free play in the joints" is necessary for an administrative body functioning in an administra tive sphere. " It was further laid down that "the Government must have freedom of contract. In other words, a fair play in the joints is a necessary concomitant for an administrative body functioning in an administrative sphere or quasi-adminis trative sphere. However, the decision must not only be tested by the appli cation of Wednesbury principle of reasonableness (including its other facets out above) but must be free from arbitrariness not affected by bias or actuated by malafides. " 8. It is thus true that a citizen does not have fundamental right to do trade or business in liquor and it is for the Government to decide whether to permit the citizen to do trade or business in liquor. But once having permitted the citizen to do such trade or business the State has to act consistently with the principle of Article 14 of the Constitution. The State unlike a. citizen cannot claim absolute right to grant or not to grant contract/licence to a citizen. If the State action, in this connection, is challenged before a Court, the Court has to adjudge its validity on the touch-stone of fairness, reasonableness and principle contained in Article 14 of the Constitution. The first and second submissions of learned Advocate- General canaot be accepted in toto. Refusal or grant of privilege/licence is not completely immuned from challenge. The plea of grant of contract/licence being based on pure subjective satisfac tion of the Government raised by Sri S. C. Budhwar, cannot be accepted. The first and second submissions of learned Advocate- General canaot be accepted in toto. Refusal or grant of privilege/licence is not completely immuned from challenge. The plea of grant of contract/licence being based on pure subjective satisfac tion of the Government raised by Sri S. C. Budhwar, cannot be accepted. It is true that in such matters subjective element is generally involved, but deci sion to grant or not to grant a contract has to be on the objective basis. It is not open to the Government to act in arbitrary or discriminatory manner. 9. As regards the submission regarding locus standi of the petitioners to file writ petition the learned Advocate-General has placed reliance on five cases, viz. (1) N. K. & F. Mills v. N. T. G. & Bros. , AIR 1971 SC 246 ; (2) J. M. Desai V. Roshan Kumar, AIR 1976 SC 578 ; (3) Mithilesh Garg v. Union of India, AIR 1992 SC 443 ; (4) Simbhaoli Sugar Mills v. Union of India, AIR 1993 Delhi 219 ; and (5) Shri Prakash Rai v. S. D. M. , 1994 ALJ 901. In all the above cases existing businessman have challenged the induction of a new rival in the trade. Such a right a businessman does not have unless conferred by the statute. The reason in that Article 19 (1) (g) of the Constitu tion or any other provision of law does not guarantee to a businessman protec tion from competition and the loss of income on account of competition does not result in injury to his legal right. But the case of the applicant whose claim has been rejected is different. Rejection of his claim is itself a prejudice to him. He has, therefore, locus standi to challenge the order rejecting his claim and granting a contract/licence to another person. But the case of the applicant whose claim has been rejected is different. Rejection of his claim is itself a prejudice to him. He has, therefore, locus standi to challenge the order rejecting his claim and granting a contract/licence to another person. A similar plea raised on behalf of the State in M/s. Shadi Lal Distillery and Chemical Works v. State of U. P. , AIR 1977 All 349 was rejected by a Division Bench of this Court by holding as under: "the disposal of the privilege of supplying country liquor, is governed by the provisions of the Act, Rules and the conditions therunder and if the action of the Excise Commissioner is not in conformity with those provisions, any tenderer has sufficient interest to invoke the writ jurisdiction of this court to challenge such action of the Excise Commissioner. " "if there is infraction of such statutory provisions, the aggrieved party can approach this court under Article 226 of the Constitution. " This contention of the learned Advocate-General as such is devoid of merit. 10. The last objection relates to the undertaking in the form of declara tion given by the petitioner, which is reproduced below: "with reference to the tender/tenders submitted by me/us for the wholesale supply of country liquor for the year 1995-96, I/we hereby undertake to accept any rates granted and area/areas allotted to me/us by the Excise Commissioner, U. P. for the whole-sale supply of country liquor for the year commencing from April 1, 1995 and ending on the March 31,1996 in respect of area/areas for which tenders have been given or of the areas for which no tender has been given. " The contention of the State is that in view of the above declaration it is not open to the petitioner to challenge the rejection of its claim and allotment of district Raebareli to respondent No. 3. This plea has to be rejected for two reasons, viz. firstly, the petitioner has merely given an undertaking to accept any rate or area, even if no tender has been submitted by it for such an area. This plea has to be rejected for two reasons, viz. firstly, the petitioner has merely given an undertaking to accept any rate or area, even if no tender has been submitted by it for such an area. The declaration does not contain the undertaking that the petitioner will not challenge the allotment of the district for which it has submitted tender, to another person, who has not even submitted his tender for it; and secondly, the Government have been obtaining such type of undertaking from the distillers annually for the last several years and it appears that similar arguments are raised from time to time. Such a plea was rejected by a Division Bench of this Court in M/s. Shadi Lal Distillery v. State of U. P. , AIR 1977 All 349 (supra) wherein, in this connection, it was laid down as under : "no doubt, the petitioner had given an undertaking that it was prepared to take up supply of liquor in any district other than those for which it had tendered. But such undertaking is not contemplated by the provisions of Act or the rules and hence did not enable the Excise Commissioner to act otherwise than in accordance with the provisions of the Act, rules and conditions prescribed by them. " Plea relating to the undertaking was again rejected by a Division Bench in Doon Valley Distillers v. State of U. P. , Writ Petition No. 551 of 1991, decided on 18-7-1991. 10-A. Grant of liquor licence is regulated by Section 24 of the U. P. Excise Act (herein after referred to as the Act) and Rules 28 and 417. Section 24 of the Act is as under: "24. Grant of exclusive privilege of manufacture, etc.- Subject to the provisions of Section 31, the Excise Commissioner may grant to any person a licence for the exclusive privilege - (1) of manufacturing or of supplying by wholesale, or of both, or (2) of selling by wholesale or by retail, or (3) of manufacturing or of supplying by wholesale, or of both, and of selling by retail, any country liquor or intoxicating drug within any local area. " Rules 28 and 417 are also reproduced below : "28. " Rules 28 and 417 are also reproduced below : "28. The contract supply system.- The contract supply system has been applied to: (a) the supply of country spirit throughout Uttar Pradesh save for a few inaccessible outlying tracts ; (b) the supply of hemp drugs, ganja and bhang, throughout Uttar Pradesh. Under this system the exclusive privilege of supplying country spirit or hemp drugs (as the case may be) at fixed rates to a particular tract of the State is granted for a certain period to a contractor. The supply contractor is selected by calling for tenders quoting the rates at which country spirit, hemp drugs (as the case may be) will be supplied at all stated bonded warehouses in the tract , specified. Usually the contract is awarded to the contractor or firm tendering at the lowest rates ; but full power is reserved to Government to accept or reject any tender without assigning reasons. No payment is required for the exclusive right of supply. The system aims at securing for the retail vendors an adequate supply of intoxicants of good quality at reasonable and constant rates. In such tract Government maintains a certain number of bonded ware houses for the safe custody of country spirit or hemp drugs. Every retail vendor of country spirit or hemp drugs must |as a rule, draw his supplies from a bonded warehouses situate in the tract within his shop lies. The supply contractor is responsible for keeping bonded warehouses in his tract replenished with country spirit or with hemp drugs (as the case may be) of the prescribed description and quality. On the days fixed for issue of supplies to retail vendors from a bonded warehouse the supply contractor must supply the intoxicant or intoxicants which he has stored at the warehouse at the price determined by Government as the issue price of such intoxicants for that tract, to any licensed retail vendor whose shop is situated within that tract. Agreements between Government and supply contractors usually con tain stipulations relating to such matters as the quality, safe custody etc. of the intoxicant supplied to the bonded warehouse, and the opening of wholesale depots where such depots are necessary. Issues by the supply contractor or his agent from the bonded warehouse to retail vendors must invariably be made under the control and supervision of an Excise Inspector. of the intoxicant supplied to the bonded warehouse, and the opening of wholesale depots where such depots are necessary. Issues by the supply contractor or his agent from the bonded warehouse to retail vendors must invariably be made under the control and supervision of an Excise Inspector. Each bonded warehouse is secured under double locks, one belonging to the Excise Depart ment and the other to the supply contractor. " "417. Contractors how selected.-The firm is selected in the following manner : Tenders in Form C. L. 23 are invited by the Excise Commissioner vide notice in Form C. L. 22 for the rates at which the different catego ries of spirit will be supplied at all specified bonded warehouses and wholesale depots in the area indicated. These tenders are submitted for the orders of Government. The contract will ordi narily be awarded to the firm tendering at the lowest rates, but full power is reserved to accept such tender as may be deemed best in public interest, and to reject any of those received without reasons being assigned. No payment is required for the exclusive right of supply, the object being to secure to the retail vendors a supply of good spirit at a cheap and fixed rate. Spirit may be supplied from any distillery, whether situated within the State or outside. The detailed conditions of the contract are given in the notice in Form C. L. 22 calling for tenders and in the form of licence C. L. 1. " 11. In pursuance of Rule 417 the Excise Commissioner invited tenders vide notice published on 29-12- 1994 in the instant case. Some of the relevant conditions of the said notice are as under : "2. For each district tender will be submitted alongwith the security amount of Rs. 10,000 (Rs. Ten thousand ). Any tender without security amount shall not be considered. Security amount shall be accepted in the form of bank draft of any scheduled bank/fixed deposit/deposit at call or national saving certificate/p. O. saving bank account pledged in favour of U. P. Excise Commissioner. 3. (a) For every district of the State (except for the district where consumption of |alcohol is prohibited), separate tenders will be accepted but any tenderer can submit tenders for more than one districts in one sealed envelope. 4. 3. (a) For every district of the State (except for the district where consumption of |alcohol is prohibited), separate tenders will be accepted but any tenderer can submit tenders for more than one districts in one sealed envelope. 4. (1) Supply of plain/spiced country liquor in poly pouches as specified in para 3 (b) or in sealed bottles as prescribed in clause 7 below shall be supplied to the shops in the area of the contract as per the order of the Excise Commissioner. (2) If no tender is received for any district, the Excise Commissioner can invite the tenders again for that district or can award the contract to any distillery even without calling tenders. In the above circumstances the rates for the supply shall be fixed by the Excise Commissioner. 17. The tender should be submitted in a sealed envelope superscribed with "tender for wholesale supply of plain and spiced country liquor for the year 1995-96" and the same shall be submitted in the office of the Excise Commissioner, U. P. by 1 p. m. on 9-1-95. The Excise Commissioner, U. P. has the right to accept most beneficial tender in the public interest and to reject any tender out of the remaining tenders received, without mentioning any reason. 18. No district is reserved for any tenderer but while allotment of supply area, preference shall be given as under if there is no material difference in the tendered rates. (a) The existing wholesale supplier whose supply was satisfactory and who has provided the following facilities at the warehouse during the year 1994-95 : (1) Storage capacity equivalent to the quantity of 10 days requirement. (2) Motor driven semi-automatic bottle washing machine for cleaning of the bottles. (3) Vacuum filter machine, (4) Semi-automatic filling machine. (5) Poly pouch filling machine. (6) Motor driven semi-automatic capsuling machine. (7) Installation of tube-wells or underground storage tanks in case of inadequate availability of drinking water. (8) Arrangement of power generator in case of inadequate supply of electricity. (9) Supply of liquor in U. P. Excise embossed bottles. (b) Those tenderers who submit tenders for any warehouse in Jhansi charge alongwith any other district of U. P. shall be given the preference. (8) Arrangement of power generator in case of inadequate supply of electricity. (9) Supply of liquor in U. P. Excise embossed bottles. (b) Those tenderers who submit tenders for any warehouse in Jhansi charge alongwith any other district of U. P. shall be given the preference. (c) If all the terms in the tender submitted are equal then for supply of liquor to any district preference shall be given to that tenderer whose distillery is situated in the same district. If there are two or more distilleries in the same district and there is not any material difference in the rates quoted by all such distilleries, preference shall be given to that distillery who is already having the contract for that district. " According to the conditions of the notice tender has to be submitted for each district with requisite security amount. It is only for a district regarding which, no tender has been submitted that the Excise Commissioner can invite tenders again or can award the contract to any distillery even without calling tenders. As the respondent No. 3 has not submitted any tender for district Raebareli it was not open to the Government to allot that district to it. It is not a casa where no tender was submitted for this district and, therefore, condition No. 4 (2) is not attracted. This Court in Shadi Lal v. State of U. P. (supra), relevant extract from which is reproduced below, has held that a person who has not submitted any tender for a district is not entitled to be considered for grant of privilege of supplying country liquor in that district: "opposite party No. 3 who had not even tendered for Muzaffarnagar district could not have considered for being given the exclusive privilege of supplying country liquor in that district. " The first submission of the learned counsel for the petitioners, as such, has to be accepted. 12. As regards the second and the third submissions of the learned counsel for the petitioners, it may be observed that it is settled that the Government while granting contract and licence for doing trade or business in country liquor has to act in fair and reasonable manner which in certain circumstances, may include the compliance of principle of natural justice. As regards the second and the third submissions of the learned counsel for the petitioners, it may be observed that it is settled that the Government while granting contract and licence for doing trade or business in country liquor has to act in fair and reasonable manner which in certain circumstances, may include the compliance of principle of natural justice. A Division Bench of this Court in M/s. Doon Valley Distillers v. State of U. P. Writ Petition No. 551 of 1991, decided on July 18, 1991, has laid down that it was obligatory on the State Government to act fairly and disclose the material used against the tenderer before depriving him of its claim. Learned Advocate General, in this connection, has contended that it is not obligatory on the part of the State to disclose the material to the tenderer which was used against it. In this connection reliance has been placed on M/s. Chingleput Bottlers v. Majestic Bottling Co. , AIR 1984 SC 1030 , and Vishnu Ram Borah v. Parag Saikia, AIR 1984 SC 898 . In M/s. Chingleput Bottlers (supra) Supreme Court has laid down that the Commissioner was under no obligation either to disclose the source of information or gist of the information and all that was required from him was that he should act fairly and deal with application without bias and not in arbitrary and capricious manner. In that case the Commissioner, in fact, heard both the parties after making the enquiry and recorded their statements in respect of all relevant aspects. It is on this basis that it was held that there was neither violation of principle of natural justice nor was it obligatory on the part of the Commissioner to disclose the information on the source or information. In the other case of Vishnu Ram Borah (supra) Supreme Court held that disclosure of the secret report or material to the tenderer is not necessary. The Court held that such a refusal will not amount to denial of natural justice, because "the rules of natural justice must necessarily vary with the nature of the right and attended circumstances. " In both these cases it was not held that principle of fair play and rules of natural justice are not attracted in the matter of grant of licence/contract for trade or business in liquor. " In both these cases it was not held that principle of fair play and rules of natural justice are not attracted in the matter of grant of licence/contract for trade or business in liquor. If a claim of the tenderer is rejected on the ground that he is not eligible or on the ground that he is not competent to discharge obligation imposed by the contract or licence, it is necessary that he should be given some opportunity in some form or the other so as to enable him to establish his eligibility and competency, otherwise it may result in arbitrary actions. Rule of "fair play" demands that a claim of a tenderer could not be rejected on the ground of his ineligibility or incompetency to discharge contractual and statutory obligations without giving him an opportunity to prove that he was both eligible and competent. In such enquiry there is no adjudication of rights of the parties, and, therefore, it may be held in summary manner with out disclosing the confidential reports or materials collected by the Department against him. But what is essential is that he must have a say before his claim is rejected. In the instant case the petitioner was never given such an oppor tunity and the impugned order has been passed in violation of the principle of fair play and the rules of natural justice. 13. In this connection it may be mentioned that in paragraphs 3 (c) to 3 (f) of the counter-affidavit of Sri P. P. Gupta, Assistant Excise Commissioner (Licensing) Headquarter Allahabad, it has been stated that the Excise Com missioner U. P. issued circular dated 29-12-1994 asking the District Excise Officers of the respective districts to submit their reports about performance of the distilleries in the past years in respect of supply or the country liquor and the reports received in respect thereto from District Excise Officers, were considered for making selection of the distilleries. It is further stated that the Excise Commissioner considered the report of the District Excise Officer Raebareli, dated 9-1-1995, by which several irregularities and short-comings were pointed out against the petitioners and the Excise Commissioner, after considering the said report, recommended to the State Government, which has passed the impugned orders. Paragraphs 3 (c) to 3 (f) of the aforesaid counter-affidavit are reproduced below; "3 (c ). Paragraphs 3 (c) to 3 (f) of the aforesaid counter-affidavit are reproduced below; "3 (c ). That the report of the district Excise Officer about the perform ance of the distilleries during the past years was also considered for making selection of Distilleries. The Excise Commissioner, U. P. in this respect issued a circular dated 29-12-1994 asking the District Excise Officers of the respective Districts to submit their reports about the performance of Distilleries in past years in respect of supply of country liquor in Bonded Warehouses. A copy of circular SC issued by the Excise Commissioner dated 29-12-1994 is being filed herewith as Annexure CA-2 to this counter-affidavit. 3 (d ). That the Excise Commissioner considered the report of District Excise Officer, Raebareli dated 9-1- 1995 which is filed herewith as Annexure CA-3 to this affidavit which would clearly go to show that several irregularities and shortcomings were pointed out by him in respect of performance of petitioners Distillery and hence it was recommended that preferably Rampur Distillery be allotted for the wholesale supply of country liquor during the year 1995-96. 3 (e ). That thereafter the Excise Commissioner considered the matter thoroughly and exercised his discretion in the interest of Revenue and general public. 3 (f ). That thereafter, the entire matter was referred to the State Government and appropriate orders were passed by the State Government which is being filed herewith as Annexure CA-4 to this counter- affidavit. " The aforesaid report of the District Excise Officer, Raebareli is dated January 9, 1995 and it was received in the office of the Excise Commissioner, U. P. , on 10-1-1995. The Excise Commissioner passed his order on 9-1-1995 on which date the said report was not received. How could that report be considered by the Excise Commissioner while passing the order against the petitioners and recommending for allotment of district Raebareli to respondent No. 3. There is no explanation from the State. That apart, learned counsel for the peti tioners pointed out some defects contained in the said report which, according to the records of the Government, have already been made good last year. It is not necessary for this Court to go into this controversy any further. But what appears to the Court is that the matter was decided in a mechanical manner without applying the mind to the relevant material. It is not necessary for this Court to go into this controversy any further. But what appears to the Court is that the matter was decided in a mechanical manner without applying the mind to the relevant material. The last submis sion of Sri S. C. Budhwar, learned counsel for the respondent No. 3, has, therefore, to be rejected. 14. Although normally the tender of a person who has given lowest rates, is liable to be accepted, but the Government has the power not to accept such a tender. Apart from the rates the Government has also to see that the person whose tender is accepted is eligible and competent enough to discharge contractual obligations. When there is more than one tenderer in a district the Government has to select the best amongst them. Therefore, some kind of comparative evaluation of merit of the tenderers has to be made by the Government. Ultimately it is for the Government to select the best out of a lot. The fourth submission raised on behalf of the petitioners is also liable to be accepted. 15. It is not possible to accept the fifth submission of learned counsel for the petitioners, it is open to the Government to reject the claim of a tenderer if he docs not satisfy the conditions referred to in clause (18) of the tender notice. These are the considerations on the basis of which it is open to the Government not only to give preference but also to reject the claim of a tenderer altogether. 16. Before parting with the case it may be observed that an attempt was made on behalf of the State to demonstrate that the decision of Division Bench of this Court in M/s. Shadi Lal Distillery v. State of U. P. (supra) has not laid down correct law, because it has placed reliance on Rule 417 which does not have the statutory force. Presuming it is so, it does not make any differ ence. If the authorities have acted under Rule 417 and issued tender notice thereunder their actions have to be judged on that basis. Presuming it is so, it does not make any differ ence. If the authorities have acted under Rule 417 and issued tender notice thereunder their actions have to be judged on that basis. In this connection reference may be made to Ramana v. I. A. Authority, AIR 1979 SC 1628 (supra) wherein, it was laid down as under: "it is well-settled rule of administrative law that an executive autho rity must be rigorously held to the standards by which it professes its actions to be judged and it must scrupulously observe those standards on pain of invalidation of an act in violation of them. This rule was enunciated by Mr. Justice Frankfurther in Vitarelli v. Seaton, (1959) 359 US 535 : 3 L Ed 2d 1012 where the learned Judge said: "an executive agency must be rigorously held to the standards by which it professes its action to be judged. . . . . . Accordingly, if dismissal from employment is based on a denned procedure, even though generous beyond the requirements that bind such agency, that procedure must be scrupulously observed. . . . . . This judicially evolved rule of administrative law is now firmly established and, if I may add, rightly so. He that takes the procedural sword shall perish with the sword. " This Court accepted the rule as valid and applicable in India in A. B. Ahluwalia v. State of Punjab, (1975) 3 SCR 82 : AIR 1975 SC 984 and in subsequent decision given in Sukhdev v. Bhagatram, (1975) 3 SCR 619 z AIR 1975 SC 1331 , Mathew, J. , quoted the above-referred observations of Mr. Justice Frankfurter with approval. It may be noted that this rule, though supportable also as emanating from Article 14, does not rest merely on that article. It has an independent existence apart from Article 14. It is a rule of administrative law which has been judicially evolved as a check against exercise of arbitrary power by the executive authority. " 17. This writ petition is accordingly allowed with costs. The order dated 16-2-1995 of the Excise Commissioner, U. P. , SC far as it has cancelled the claim of the petitioners for district Raebareli and has allotted that district to respondent No. 3 and the order of the Government passed in this connec tion, are quashed. Respondents Nos. " 17. This writ petition is accordingly allowed with costs. The order dated 16-2-1995 of the Excise Commissioner, U. P. , SC far as it has cancelled the claim of the petitioners for district Raebareli and has allotted that district to respondent No. 3 and the order of the Government passed in this connec tion, are quashed. Respondents Nos. 1 and 2 are directed to consider and decide the claim of the petitioners for district Raebareli in accordance with law, within three weeks from the date of presentation of certified copy of this order before them. Petition allowed. .