Judgment Narayan Roy, J. 1. Narayan Roy, J.-Both these writ applications have been heard together, as the facts involved are common ami the prayer made on behalf of the petitioners is also almost common in both these writ applications. These applications, therefore, are being disposed of by this common judgment. 2. In C. W. J. C. No.2888 of 1995, the petitioners have prayed for the following reliefs: (i) For issuance of a writ of mandamus directing upon the respondent No.1 the general Manager (Sales and Marketing) and respondent No.2 the Chairman-cum-Managing Director of the B. C. C. L. , Dhanbad to release and supply the sponsored quantity of soft coke to the petitioner, which were duly sponsored and allotted to them as per the order and direction dated 18-3-1994, passed by this Court in C. W. J. C. No.13316 of 1993 and its analogous cases, as contained in Annexure-1. (ii) For issuance of a writ of certiorari quashing the orders of appointment of 17 dump Holders/handling Agents, as contained in letters dated 21-2-1995 and 22-2-1995, issued by the Coal Controller to the respondent Nos.2 and 4, on the basis of personal recommendations of the respondent minister, Food, Civil Supply and Commerce department, Govt. of Bihar, as contained in annexures-3, 4 and 5. (iii) For issuance of a writ of certiorari quashing the order contained in letter dated 17-1-1995, issued by the Joint Secretary, ministry of Coal, New Delhi, as contained in annexure- 6, directing the Coal India Ltd. not to deliver coal under lapsed sponsorships even if renewal orders have been issued by the Coal India Ltd. and its subsidiaries. (iv) For awarding an appropriate compensation/punishment to the respondent coal Company and its authorities concerned (Respondent Nos.1 to 4) for deliberate withholding the release and supply of the monthly quota of soft coke in the entire state of Bihar since January, 1994, in favour of the persons including the petitiopers, who have been duly sponsored/recommended under Clause 12a of the Colliery Control order, 1945 by their respective District magistrate/collector as per the order and direction dated 18-3-1994, passed by this court in C. WJ. C. No.13316/93 and its analogous cases, and (v) For issuance of any other appropriate writ and/or direction as this Court may deem fit and proper. 3. C. No.13316/93 and its analogous cases, and (v) For issuance of any other appropriate writ and/or direction as this Court may deem fit and proper. 3. In C. W. J. C. No.2848 of 1995, the petitioners have prayed for issuance of a writ of certiorari for quashing the allotment order of soft coke contained in letters dated 21-2-1995 and 22-2-1995, issued by the Coal Controller (respondent No.4), as contained in annexures 1 and 2, directing the Coal companies to allot soft coke for five years from the month of March, 1995, in favour of 17 dump holders/handling agents, as per the personal recommendation made by Sri Raghunath Jha, minister of Food, Civil Supply and commerce Department, Government of Bihar, contained in his D. O. Letter no.20895 dated 10/11-1-1995 (Annexure-3), and also for quashing the appointment of said 17 Handling agents/dump Holders, who were appointed only on the basis of. personal recommendation of aforesaid Minister of Food, Civil Supply and Commerce department, Govt. of Bihar. 4. In these cases parties have exchanged affidavits and the counsel for the respective parties have been heard. 5. The main thrust of the petitioners in these cases is that soft coal (hereinafter referred to as coal)should have been supplied to the persons, whose names were sponsored by the District Administration, including the petitioners as her the direction issued by this Court from time to time in absence of a policy decision of the state Government formulating scheme for distribution of coal catering the need of the public at large. 6. It appears that the matter had come to this Court on several occasions where the grievances were made by the individual coal dealers for supply of coal on the basis of sponsorship after coal was deleted by the Slate Government from bihar Trade Articles (Licenses Unification) Order, 1984, and after amendment of Sec.12-A of the Colliery Control Order inserting a proviso to it. This court faced with a situation that the public at large were not getting coal for their domestic consumption and coal allotted to the coal agents under the provisions of the Colliery control Order were not properly distributed even on linkage basis and this court having been satisfied that the need of the public is not being properly catered by the coal agents, passed various orders directing the State of bihar and also the Coal Controller under the Colliery Control Order. In this connection reference can be made to C. W. J. C. No.2457/92 (R) and its analogous cases, disposed of by a division Bench of this Court on 24-9-1993, of which I was one of the members. This Court having considered the respective cases of the parties disposed of the writ applications with a direction to the State authorities to formulate a scheme for distribution of Coal allocated to the state of Bihar with consultation of the Coal Controller under the Colliery Control Order and further directed the Coal Controller to resume the supply of coal to the dealers under proviso to Clause 12-A of the Colliery control Order, 1945, on the basis of sponsorship certificate granted by the district Administration. It further appears that on several occasions this Court also passed similar orders in other writ applications, including c. W. J. C. No.13316 of 1993 and its analogous cases, directing the State government and also the Coal Controller to supply coal to the dealers on the basis of. sponsorship. 7. Learned counsel appearing on behalf of the petitioners submitted that their cases were sponsored by the District administration and they were not supplied coal by the coal companies. It is-further submitted that the Coal controller under the Colliery Control order was duty bound to supply coal to the petitioners as their cases were sponsored in exercise of its power under Clause 12-A of the Colliery control Order. The petitioners have further submitted that they are entitled to get their past quotas on the basis of sponsorship and, therefore, they prayed for a direction to the authorities concerned to release their quota on the basis of sponsorship. . . 8. Learned counsel appearing on behalf of the petitioners further submitted that subsequent to their sponsorship by the District Administration, the private respondents, altogether 26 in number, have been appointed as the coal agents by the Minister, Food, Civil supply and Commerce Department, govt. of Bihar, without advertising the same in contravention of Article 14 of the Constitution of India and coal have been supplied to them by the coal companies as per the direction of the Coal controller, as contained in Annexures-3 and 4 to C. W. J. C. No.2888/95 and in annexures-1 and 2 to C. W. J. C. No.2848 of 1995. of Bihar, without advertising the same in contravention of Article 14 of the Constitution of India and coal have been supplied to them by the coal companies as per the direction of the Coal controller, as contained in Annexures-3 and 4 to C. W. J. C. No.2888/95 and in annexures-1 and 2 to C. W. J. C. No.2848 of 1995. A prayer, therefore, has been made by the writ petitioners to quash the said orders dated 21-2-1995 and 22-2-1995, as contained in annexures-3 and 4 to C. W. J. C. No.2888/95 (Annexures-1 and 2 to C. W. J. C. No.2848 of 1995) as well as the recommendation of the minister concerned dated 10/11-1-95 as contained in Annexure-5 to C. W. J. C. No.2888/95 (Annexure-3 to c. W. J. C. No.2848 of 1995)and the direction of the authority concerned of the Ministry of Coal dated 17-1-1995, as contained in Annexure-6 to C. W. J. C. No.2888 of 1995. 9. Learned counsel appearing on behalf of the respondent Coal Controller submitted that it has to act as per the recommendation of the State government, and since the cases of several dealers were recommended on the sponsorship basis by the District administration it becomes not practicable for it to allot coal to them as there was a fixed quantity of coal allocated to the state of Bihar and, therefore, it was not released to them in exercise of its power under Sec.12-A of the Colliery Control Order. It has further been contended that the matter was discussed with the Stale Government and on the basis of the recommendation of the Stale Governmenl, the coal agents whose cases were recommended by the State Government have been supplied coal vide orders as contained in Annexures-3 and 4 to c. W. J. C. No.2888 of 1995 (Annexures-1 and 2 to C. W. J. C. No.2848 of 1995 ). 10. It has also been submitted on behalf Of the Coal Controller that the petitioners are not entitled to get the quota of coal on the basis of sponsorship for the past period. Learned counsel appearing on behalf of Coal companies have also taken the same stand and they have reiterated that they are to act as per the direction of the coal Controller and they are supplying coal belonging to the quota of the State government as per the direction of the Coal Controller. 11. Learned counsel appearing on behalf of Coal companies have also taken the same stand and they have reiterated that they are to act as per the direction of the coal Controller and they are supplying coal belonging to the quota of the State government as per the direction of the Coal Controller. 11. Learned Counsel appearing on behalf of the State and the learned counsel appearing on behalf of respondent Minister, Food, Civil Supply and commerce Department, Govt. of Bihar, contended that the scheme under the sponsorship basis was not workable and since the State Government was being informed by the Coal Controller showing its inability to allot coal since large number of persons were approaching it for allotment of coal, discussion was held with the officials of the Central government and the Coal Controller and cases of certain agents were recommended to the Coal Controller for allotment of coal and accordingly, coal has been released to them as per the direction of the Coal Controller as contained in Annexure-3 and 4 to C. W. J. C. No.2888 of 1995 (Annexures-1 and 2 to C. W. J. C. No.2848 of 1995 ). 12. In course of hearing of these writ applications, the records of the case were called for and the same were produced. From the records of the case, it appears that the coal agents had filed their applications for release of coal and on the basis of their applications necessary orders were passed by the minister concerned, which is said to be an order of the Government. 13. Learned counsel appearing on behalf of the State has submitted that the action of the State Government thus was reasonable and there is no element of arbitrariness in its action. 14. Mr. Jagarnath Jha, learned counsel appearing on behalf of the respondent Minister, However, contended that he has no objection if the writ applications are allowed and the appointments of the coal agents are quashed and certain directions are issued to the State Government for formulation of a workable scheme for resuming supply of coal. 15. After hearing the respective counsel for the parties, the learned counsel appearing on behalf of the private respondents/coal agents was called upon to argue. Mr. 15. After hearing the respective counsel for the parties, the learned counsel appearing on behalf of the private respondents/coal agents was called upon to argue. Mr. Ram Balak mahto, learned senior counsel appearing on behalf of the private respondents, contended that the action of the state Governmeni in appointing the private respondents as coal agents is within its domain and the same is reasonable and it cannot be said to be arbitrary. He further submitted that the action of the State Governmeni was in public interest and reasonable and it cannot be said to be arbitrary and violative of Article 14 of the Constitution. Mr. Mahto tried 10 impress upon the court by saying that the State government after due deliberation with the Coal Controller and the officials of the Central Government recommended certain names for supply of coal on the Commissionery basis and the coal agents of the respective commissioneries were directed to supply coal on linkage basis to its district for domestic consumption of the public at large. He, therefore, contended that there cannot be said to be an element of arbitrariness in the action of the state Government. 16. In these writ applications, the question arises as to whether the orders passed by this Court as referred to above, should have been complied with by the State Govt. and also by the Coal controller, and as to whether the appointments/recommendations made by the Minister concerned recommending supply of coal to the coal agents is arbitrary, discriminatory and unreasonable. 17. It has been discussed above that this Court after decontrol of coal passed necessary directions upon the state Government and also the coal controller to supply coal in a prescribed manner. This Court directed that a formidable scheme be formulated ensuring supply of coal to the public at large for its domestic consumption and till such a scheme was formulated supply of coal should be resumed on the basis of sponsorship certificate granted by the district administration. In this case, I find that no formidable scheme till date has been formulated to cater the need of the public at large nor the supply of coal has been resumed to the coal dealers on the basis of sponsorship certificate. In this case, I find that no formidable scheme till date has been formulated to cater the need of the public at large nor the supply of coal has been resumed to the coal dealers on the basis of sponsorship certificate. However, since the Scheme on the sponsorship basis was not workable as per the affidavits of the Coal Controller and the State Government, the state Government should have come forward with a formidable scheme. It has also been noticed that no formidable scheme has been chalked out by the State Government for supply of coal to its consumers. Even if it is taken into consideration that the action on the part of the State of Bihar in appointing the private respondents as the coal agents is a formidable scheme for supply of coal catering the need of the public at large as per the direction of this Court, the scheme as such cannot be said to be reasonable and in public interest. The State Government could have appointed coal agents to make it a formidable scheme for supply of soft coke but in no case without advertising the same and inviting applications in larger interest of public. There is nothing in the affidavit of the State Government nor in the affidavit of respondent no.12, the Minister concerned, to show that there had been advertisement inviting applications by the willing persons to deal in coal, as coal agents, it appears that certain applications were received in the office of the State government without advertisement and it appears to be applications by interested persons and the method adopted by the State Government in appointing such persons as coal agents is a clear indication of the fact that it was done by a back-door policy not conforming the test of reasonableness and Article 14 of the Constitution. The private respondents have also not been able to show that they had applied for their appointment as coal agents pursuant to any advertisement. 18. The appointment of agents for lifting of coal for its general supply is a grant of largess. It has been set at rest by several decision of the Apex Court that for grant of largess the Government action must satisfy test of reasonableness and public interest. The action of the State. Government, therefore, has to be tested at the touchstone of reasonableness and Article 14 of the constitution. 19. It has been set at rest by several decision of the Apex Court that for grant of largess the Government action must satisfy test of reasonableness and public interest. The action of the State. Government, therefore, has to be tested at the touchstone of reasonableness and Article 14 of the constitution. 19. In M/s. Kasturi Lal Lakshmi reddy V/s. State of Jammu and Kashmir and another, AIR 1980 Supreme Court 1992, it has been held by the Supreme court that where the Government is dealing with the public whether by way of giving jobs or entering into contracts or granting other forms of largess, the government cannot act arbitrarily at its sweet will. It further held that there are two limitations imposed by law which structure and control the discretion of the government in this behalf. The first being with regard to the terms on which largess may be granted and the other in regard to the persons who may be recipients of such largess. Unlike a private individual, the State cannot act as it pleases in the matter of giving largess and it cannot choose to deal with any person it pleases in its absolute and unfettered discretion. Every activity of the government has a public element in it and it must, therefore, be informed with reason and guided by public interest. If the government awards a contract or leases out or otherwise deals with its property or grants any other largess, it would be liable to be tested for its validity on the touchstone of reasonableness and public interest and if it fails to satisfy either test, it would be unconstitutional and invalid. It has further been held that the governmental action must not be arbitrary or capricious, but must be based on some principle which meets the test or reason and relevance. 20. It has further been held that the governmental action must not be arbitrary or capricious, but must be based on some principle which meets the test or reason and relevance. 20. The Apex Court while dealing with the activist magnitude and Article 14 of the Constitution in the cases of e. P. Royappa V/s. State of Tamil Nadu, air 1974 Supreme Court 55, and maneka Gandhi V/s. Union of India, AIR 1978 Supreme Court 597, observed as follows: "as a necessary corollary from the principle of equality enshrined in Article 14 that though the State is entitled to refuse to enter into relationship with anyone, yet if it does so, it cannot arbitrarily choose any person it likes for entering into such relationship and discriminate between persons similarly circumstanced, but it must act in conformity with some standard Ct principle which meets that test of reasonableness and non-discrimination and any departure from such standard or principle would be invalid unless it can be supported or justified on some rational and non-discriminatory ground. " 21. In the case of Ramana dayaram Shetty V/s. International Airport authority of India, AIR 1979 Supreme court 1628, the Apex Court held that where the Corporation is an instrumentality or agency of Government, it would, in the exercise of its power or discretion, the subject to the same constitutional or public law limitations as government. The Rule inhibiting arbitrary action by Oovernment, which a government must apply equally where such corporation is dealing with the public, whether by way of giving jobs or entering into contracts or otherwise, and it cannot act arbitrarily and enter into relationship with any person it likes at its sweet will, but its action must be in conformity with some principle which meets the test or reason and relevance. 22. This is settled principle of law, as decided by the Supreme Court in the cases of E. P. Rayappa (supra) and maneka Gandhi (supra) that Article 14 strikes at arbitrariness in State action and ensures fairness and equality of treatment. It requires that the State action must not be arbitrary, but must be based on rational and relevant principle, which is non-discriminatory and it must not be guided by any extraneous or irrelevant consideration because that would be denial of equality. It requires that the State action must not be arbitrary, but must be based on rational and relevant principle, which is non-discriminatory and it must not be guided by any extraneous or irrelevant consideration because that would be denial of equality. The principle of reasonableness and rationality, which is legally as well as philosophically an essential element of equality or non-arbitrariness is projected by Article 14 and it must characterise every State action, whether it be under the authority of law or in exercise of executive power without making of law. The state cannot, therefore, act arbitrarily in entering into relationship, contractual or otherwise with a third party, but its action must conform to some standard or norm, which is rational and non-discriminatory. 23. To sum up a; to whether the action of the State Government is reasonable and in public interest, in the light of the discussions aforesaid, it is held that the same is not in conformity with the requirement of law and the action of the State Government is discriminatory, arbitrary and unreasonable, inasmuch as that the state Government had not advertised inviting applications from the public at large for their appointment as the coal agents and the action as such is violative of Article 14 of the Constitution. 24. Apart from the orders as contained in Annexures 3 and 4 to c. W. J. C. No.2888 of 1995, by which coal agents have been appointed, 12 more persons have also been appointed as coal agents by the State Government besides Biscomaun and for this also there had been no advertisement and all the coal agents were appointed by the State Government in violation of article 14 of the Constitution. The action of the state Government, therefore, does not satisfy the test of reasonableness and public interest. 25. I, therefore, quash the impugned orders as contained in Annexures 3 and 4 to C. W. J. C. No.2888 of 1995 (Annexures 1 and 2 to C. W. J. C. No.2848 of 1995) and also the appointments of 12 coal agents, who have been made parties to these writ applications, as disclosed in the counter-affidavit of the State Government. 26. I, therefore, quash the impugned orders as contained in Annexures 3 and 4 to C. W. J. C. No.2888 of 1995 (Annexures 1 and 2 to C. W. J. C. No.2848 of 1995) and also the appointments of 12 coal agents, who have been made parties to these writ applications, as disclosed in the counter-affidavit of the State Government. 26. Now coming to the grievance of the petitioners for release of the soft coke on the basis of sponsorship certificate for the past year is concerned, it has come on record by various letters of the Central Government and also of the Coal Controller that the past quotas even on the basis of sponsorship cannot be released. In my opinion also it would not be desirable to issue a writ of mandamus directing the authorities to release lost quota of coal to the petitioners, as the scheme as such was not workable by the authorities concerned and the same was not acted upon. Accordingly, the prayer made on behalf of the petitioners in this regard is rejected. 27. For the reasons and discussions aforesaid, these applications are allowed in part, but without costs. 28. Before parting with this judgment, i would like to observe that the state Government must act in future as per the directions issued by this Court from time to time as referred to above for supply of coal for its domestic use and it must ensure that supply is resumed in a regular way causing no sufferance to the general public failing which the authorities concerned shall be liable for contempt of this Courts orders as referred to above. Petitions partly allowed.