ANUP DEB, J. ( 1 ) BY filing this writ petition, the petitioner inter alia made prayers for quashing or cancelling the work order awarded to one Palden Sherpa, respondent No. 2 relating to "jhora Training Works near the Bojoghari Junior High School" and for a direction to the Secretary, Irrigation Department, Government of Sikkim, respondent No. 1 to issue notice inviting tenders in the Sikkim Herald at least in two consecutive issues giving a minimum one month's time so that all the eligible contractors could participate in the tenders. ( 2 ) THE case of the petitioner is as follows :- ( 3 ) MISS Tshering Diki Bhutia, the petitioner, is an enlisted contractor with the Sikkim Public Works Department under the category-IV. The Irrigation Department surveyed the land near Bojoghari Junior High School which is adjacent to the land of the petitioner through its engineers and the Irrigation Department assured the father of the petitioner that the work would be awarded on the basis of tender. The father of the petitioner who is a registered contractor visited the office of the Irrigation Department from time to time but the notice inviting tender was not displayed in the office notice board nor in any other conspicuous place and, therefore, notice inviting tender was not published openly. Consequently, it was learnt that the work was awarded to one Palden Sherpa, respondent No. 2. The notice inviting tender was neither published in the Sikkim Herald nor in any other local paper as provided under the Sikkim Financial Rules. The respondent No. 2, Shri Palden Sherpa and his relatives were the tenderers. It is alleged that the father of the respondent No. 2 was working in the Irrigation Department and, therefore, the tender was a collusive tender between the officials of the Irrigation Department and father of the respondent No. 2. The tender was not a genuine tender as the tenderers were respondent No. 2 and his near relatives. The father of the petitioner lodged a protest when the mother of the respondent No. 2 told him that she had obtained the works. It is stated that the work adjacent to the land of the petitioner has not yet started and the work adjacent to the land of Palden Sherpa, the respondent No. 2 had started. The father of the petitioner lodged a protest when the mother of the respondent No. 2 told him that she had obtained the works. It is stated that the work adjacent to the land of the petitioner has not yet started and the work adjacent to the land of Palden Sherpa, the respondent No. 2 had started. If the petitioner or her father knew about the tender they would have participated in the same. ( 4 ) MR. Kharga, learned counsel appearing for the petitioner submitted that the Jhora Training Works at Bojoghari Junior High School in East Sikkim has not yet been completed and the work was awarded on 27-5-1997 and it had to be completed within a period of six months that is 27-11-1997. ( 5 ) A direction was issued to the respondent No. 1 to inform the Court as to whether the aforesaid work of Jhora Training Work at Bhojoghari Junior High School had been completed or not and as to whether the payment in respect of the aforesaid work was made to the contractor. ( 6 ) IN pursuance of the aforesaid order, the Divisional Engineer, North and East, Irrigation Department, Government of Sikkim submitted a reply on 28-5-1998. It was stated that the Jhora Training Work of 30 metres was completed on 9-12-1997 and the final payment was made on 27-1-1998. ( 7 ) THE Superintending Engineer, Irrigation Department has contested the case by filing a counter-affidavit and he made the following preliminary submissions :- (a) The total cost of Jhora Training at Bhojoghari Primary School, East Sikkim contract work is Rs. 2,22,000/ -. (b) The tender notice inviting offer for the aforesaid contract work was made on 5-5-1997. (c) The tender documents was on sale from 7-5-1997 to 9-5-1997 and last date for submission of the duly filled up tender form was fixed on 12-5-1997 at 12. 00 noon. The tender documents was put open at 14. 00 hrs. on 12-5-1997. After the tender process was over, a comparative statement was prepared and forwarded to the Superintending Engineer,irrigation Department on 13-5-1997 and as per the comparative statement, the respondent No. 2, Palden Sherpa has quoted/offered to do the work at par with the scheduled rate of Government and he offered the lowest rate. 00 hrs. on 12-5-1997. After the tender process was over, a comparative statement was prepared and forwarded to the Superintending Engineer,irrigation Department on 13-5-1997 and as per the comparative statement, the respondent No. 2, Palden Sherpa has quoted/offered to do the work at par with the scheduled rate of Government and he offered the lowest rate. (d) Since Shri Palden Sherpa, respondent No. 2 made the lowest offer, the said offer was accepted by the Government on 27-5-1997. (e) Shri Chewang Bhutia, the father of the petitioner had lodged an objection on 13-5-1997 with regard to award of the contract work, wherein he had mentioned that he had been requesting the Government for sanction of the said contract work and also to award the said contract work to him. (f) The Government could not award the contract work without inviting tenders and tender notice has published and tender process was duly completed. When Shri Chewang Bhutia was not able to get contract work, daughter of Shri Chewang Bhutia who is a registered Class-IV contractor has filed this writ petition. The Superintending Engineer stated that it is, therefore, clear that the instant writ petition is a motivated one and the petitioner and her father were aware of the said contract work being sanctioned and put to tender. Annexure R-4 is the objection filed by Shri Chewang Bhutia, father of the petitioner to the Divisional Engineer, Irrigation Department, Government of Sikkim, stating that the Jhora Training Work near Bojoghari Junior High School has been awarded to Smt. Sherpa wife of Mr. Nima Wangdi Sherpa and further stated that he was requesting the Government for sanctioning the said work to him to provide better quality of the work and the work site falls within his own land at Bojoghari. ( 8 ) MR. Kharga appearing for the petitioner has relied on sub-rule 7 of Rule 27 of Sikkim Financial Rules, 1979 and Rule 199 of Public Works Code. Sub-rule 7 of Rule 27 of Sikkim Financial Rules is extracted below :-"27. (7) Whenever practicable and advantageous, contracts should be placed only after tenders have been openly invited. Wherever a tender other than the lowest is to be accepted, the reasons therefor should be recorded and decision taken only after such reasons have been accepted by the authority competent to approve the contract. (7) Whenever practicable and advantageous, contracts should be placed only after tenders have been openly invited. Wherever a tender other than the lowest is to be accepted, the reasons therefor should be recorded and decision taken only after such reasons have been accepted by the authority competent to approve the contract. "rule 199 of Public Works Code, Government of Sikkim reads as follows :-"199. The following procedure should be observed while adopting open tender system. 1. The prescribed tender form and tender notice form should be used. 2. Tender should be invariably in the most open and public manner by advertisement in the Sikkim Herald and in the local newspapers or other leading newspapers, in case the value of work exceeds Rs. 5. 00 lakhs. 3. Tenders should invariably be received in the office specified in the tender notice either by post or by the authorised officials. 4. They should be lodged in a sealed closed box with a marginal opening for inserting tenders under lock and key to be kept with the tender calling authority in his personal custody. 5. The receipt of tender should be acknowledged by the Accounts Officer of the Division or person authorised by Superintending Engineer or Chief Engineer. 6. No tender should be accepted from any person directly or indirectly connected with Government servants. 7. The tender calling authority should open sealed tenders in the presence of tenderers or their authorised agents at the appointed time, place and date, notified in the tender notice. 8. The officer opening the tender should also initial all corrections in each tender, which have been made by the tenderer. 9. The officer opening the tender should keep personal note of the number of tenders received and verify it with the number noted in the comparative statement of tenders at a later date. A Register of Tenders in the form prescribed should be maintained for this purpose. 10. Authority shall always be vested in the tender calling authority to reject any or all the tenders received without assigning any reason and this should be expressly stated in the notice inviting tenders. 11. Tenders in the following cases should be rejected as defective tenders (The Bank receipt enclosed to defective tender should be returned to the tenderers promptly ). (a) If the tender is not submitted according to the conditions specified in tender notice, and (b) Conditional tender is given. 11. Tenders in the following cases should be rejected as defective tenders (The Bank receipt enclosed to defective tender should be returned to the tenderers promptly ). (a) If the tender is not submitted according to the conditions specified in tender notice, and (b) Conditional tender is given. " ( 9 ) MR. Kharga, learned counsel for the petitioner has relied upon the decision of Kumari Shrilekha Vidyarthi v. State of U. P. , reported in (1991) 1 SCC 212 : (AIR 1991 SC 537 ). The requirement of Art. 14 should extend even in the sphere of contractual matters for regulating the conduct of the State activities. Applicability of Art. 14 to all executive actions of the State being settled and for the same reason its applicability at the threshold to the making of a contract in exercise of the executive power being beyond dispute, the State cannot thereafter cast off its personality and exercise unbridled power unfettered by the requirements of Art. 14 in the sphere of contractual matters and claim to be governed therein only by private law principles applicable to private individuals whose rights flow only from the terms of the contract without anything more. The personality of the State, requiring regulation of its conduct in all spheres by requirement of Art. 14, does not undergo such a radical change after the making of a contract merely because some contractual rights accrue to the other party in addition. It is not as if the requirements of Art. 14 and contractual obligations are alien concepts, which cannot co-exist. The Constitution does not envisage or permit unfairness or unreasonableness in State actions in any sphere of its activity contrary to the professed ideals in the Preamble. Therefore, total exclusion of Art. 14 - non-arbitrariness which is basic to rule of law - from State actions in contractual field is not justified. This is more so when the modern trend is also to examine the unreasonableness of a term in such contracts where the bargaining power is unequal so that these are not negotiated contracts but standard form contracts between unequals. ( 10 ) UNLIKE the private parties the State while exercising its powers and discharging its functions, acts, indubitably, as is expected of it, for public good and in public interest. The impact of every State action is also on public interest. ( 10 ) UNLIKE the private parties the State while exercising its powers and discharging its functions, acts, indubitably, as is expected of it, for public good and in public interest. The impact of every State action is also on public interest. It is really the nature of its personality as State which is significant and must characterize all its actions, in whatever field, and not the nature of function, contractual or otherwise, which is decisive of the nature of scrutiny permitted for examining the validity of its act. The requirement of Art. 14 being the duty to act fairly, justly and reasonably, there is nothing which militates against the concept of requiring the State always to so act, even in contractual matters. This factor alone is sufficient to import at least the minimal requirements of public law obligations and impress with this character the contracts made by the State or its instrumentality. It is a different matter that the scope of judicial review in respect of disputes falling within the domain of contractual obligations may be more limited and in doubtful cases the parties may be relegated to adjudication of their rights by resort to remedies provided for adjudication of purely contractual disputes. However, to the extent, challenge is made on the ground of violation of Art. 14 by alleging that the impugned act is arbitrary, unfair or unreasonable, the fact that the dispute also falls within the domain of contractual obligations would not relieve the State of its obligation to comply with the basic requirements of Art. 14. To this extent, the obligation is of a public character invariably in every case irrespective of there being any other right or obligation in addition thereto. An additional contractual obligation cannot divest the claimant of the guarantee under Art. 14 of non-arbitrariness at the hands of the State in any of its actions. ( 11 ) EVERY holder of a public office is a trustee whose highest duty is to the people of the country and, therefore, every act of the holder of a public office, irrespective of the label classifying that act, is in discharge of public duty meant ultimately for public good. ( 11 ) EVERY holder of a public office is a trustee whose highest duty is to the people of the country and, therefore, every act of the holder of a public office, irrespective of the label classifying that act, is in discharge of public duty meant ultimately for public good. With the diversification of State activity in a Welfare State requiring the State to discharge its wide ranging functions even through its several instrumentalities, which requires entering into contract also, it would be unreal and not pragmatic, apart from being unjustified to exclude contractual matters from the sphere of State actions required to be non-arbitrary andjustified on the touchstone of Art. 14. Emphasis now is on reviewability of every State action because it stems not from the nature of function, but from the public nature of the body exercising that function; and all powers possessed by a public authority howsoever conferred, are possessed "solely in order that it may use them for the public good". The only exception limiting the same is to be found in specific cases where such exclusion may be desirable for strong reasons of public policy. This, however, does not justify exclusion of reviewability in the contractual field involving the State since it is no longer a mere private activity to be excluded from public view or scrutiny. ( 12 ) EVEN assuming that it is necessary to import the concept of presence of some public element in a State action to attract Art. 14 and permit judicial review, the ultimate impact of all actions of the State or a public body being undoubtedly on public interest, the requisite public element for this purpose is present also in contractual matters. ( 13 ) ARTICLE 14 applies also to matters of governmental policy and if the policy or any action of the Government, even in contractual matters, fails to satisfy the test of reasonableness, it would be unconstitutional. It is imperative and implicit in Art. 14 that a change in policy must be made fairly. The basic requirement of Art. 14 is fairness in action by the State. State cannot be permitted to act otherwise in any field of its activity, irrespective of the nature of its functions when it has the uppermost duty to be governed by the rule of law. Non-arbitrariness, in substance, is only fair play in action. The basic requirement of Art. 14 is fairness in action by the State. State cannot be permitted to act otherwise in any field of its activity, irrespective of the nature of its functions when it has the uppermost duty to be governed by the rule of law. Non-arbitrariness, in substance, is only fair play in action. This obvious requirement must be satisfied by every action of the State or its instrumentality in order to satisfy the test of validity. ( 14 ) BRINGING the State activity in contractual matters also within the purview of judicial review is inevitable and is a logical corrollary to the stage already reached in the decisions of the Supreme Court so far. Having fortunately reached this point, the Court should not now turn back or take turn in a different direction or merely stop there. Two recent decisions in Dwarkadas Marfatia and Sons and Mahabir Auto Stores also lead in the same direction without saying so in clear terms. This appears to be also the trend of the recent English decisions. It is in consonance with the Court's commitment to openness which implies scrutiny of every State action to provide an effective check against arbitrariness and abuse of power. The Court would much rather be wrong in saying so rather than be wrong in not saying so. Non-arbitrariness, being a necessary concomitant of the rule of law, it is imperative that all actions of every public functionary, in whatever sphere, must be guided by reason and not humour, whim, caprice or personal predilections of the persons entrusted with the task on behalf of the State and exercise of all power must be for public good instead of being an abuse of the power. ( 15 ) MR. Kharga then relied upon the decision of LIC of India v. Consumer Education and Research Centre, reported in (1995) 5 SCC 482 : (AIR 1995 SC 1811 ). ( 15 ) MR. Kharga then relied upon the decision of LIC of India v. Consumer Education and Research Centre, reported in (1995) 5 SCC 482 : (AIR 1995 SC 1811 ). In the sphere of contractual relations the State, its instrumentality, public authorities or those whose acts bear insignia of public element, action to public duty or obligation are enjoined in a manner that is fair, just and equitable, after taking objectively all the relevant options into consideration and in a manner that is reasonable, relevant and germane to effectuate the purpose for public good and in general public interest and it must not take any irrelevant or irrational factors into consideration or appear arbitrary in its decision. Duty to act fairly is part of fair procedure envisaged under Arts. 14 and 21. Every activity of the public authority or those under public duty or obligation must be informed by reason and guided by the public interest. It is the exercise of the public power or action hedged by public element that becomes open to challenge. If it is shown that the exercise of power is arbitrary, unjust and unfair, it should be no answer for the State, its instrumentality, public authority or person whose acts have the insignia of public element to say that their actions are in the field of private law and they are free to prescribe any conditions of limitations in their actions as private citizens simpliciter do in the field of private law. Its actions must be based on some rational and relevant principles. It must not be guided by irrational or irrelevant considerations. Every administrative decision must be hedged by reasons. ( 16 ) IF a contract or a clause in a contract is found unreasonable or unfair or irrational, one must look to the relative bargaining power of the contracting parties. In dotted line contracts there would be no occasion for a weaker party to bargain or to assume to have equal bargaining power. He has either to accept or leave the services or goods in terms of the dotted line contract. His option would be either to accept the unreasonable or unfair terms or forego the service for ever. In dotted line contracts there would be no occasion for a weaker party to bargain or to assume to have equal bargaining power. He has either to accept or leave the services or goods in terms of the dotted line contract. His option would be either to accept the unreasonable or unfair terms or forego the service for ever. With a view to have the services of the goods, the party enters into a contract with unreasonable or unfair terms contained therein and he would be left with no option but to sign the contract. An unfair and untenable or irrational clause in a contract is unjust and amenable to judicial review. In common law a party was relieved from such contract. In USA, the standard forms of contracts are called "contracts of Adhesion". Whether the presence of the correlative social role of the drafting party and adherent is available in equal terms is the test. ( 17 ) MR. Kharga submits that in the present case, the work was awarded to respondent No. 2, Shri Palden Sherpa secretly. ( 18 ) MR. Wangdi, learned Addl. Advocate General appearing for respondent No. 1 submitted that both petitioner and respondents are enlisted as IV grade contractor by virtue and under Notification No. 54/home/95, dated 25-9-1995 and Clause 1 (i) (a) and (b) of the Notification provides the procedure for awarding the contract work below Rs. 5 lakh (Rupees five lakhs ). Clause 1 (ii) of the said notification provides that the person to whom the work is to be awarded should be a resident of that Gram Panchayat Unit within whose jurisdiction the work is located. This geographical classification is reasonable. ( 19 ) THE Notification bearing No. 54/home/95, dated 25-9-1995 has not been challenged. It is a settled law that unless a law or notification is challenged as illegal, Court should not enter into the questions of its legality and strike it out unless it is absolutely necessary for disposal of cases before it and the case cannot be disposed of without deciding that question. In the facts and circumstances of the case, legality of the notification in question need not be decided. ( 20 ) MR. In the facts and circumstances of the case, legality of the notification in question need not be decided. ( 20 ) MR. Wangdi submits that under Clause 1 (ii) of the Notification dated 25-9-1995 the person to whom the work may be awarded should be a resident of Gram Panchayat within whose jurisdiction the work is located subject to these conditions spelt out earlier and will be given to labour co-operative societies, unemployed engineering graduates or diploma holders, social workers conversant with the area and educated unemployed persons who have completed at least the Xth standard. ( 21 ) MR. Wangdi has relied upon the case of Gopal Narain v. State of U. P. , reported in AIR 1964 SC 370 : (1964 All LJ 479 ). Equality clause does not forbid geographical classification, provided the difference between the geographical units has a reasonable relation to the object sought to be achieved and, therefore, awarding of work to the residents of a Gram Panchayat within whose jurisdiction the work is located shall not hit Art. 14 of the Constitution. The purpose of awarding the work to the residents of a Gram Panchayat is that a local resident will take much care and interest in the work and preference to the local residents was given to solve the unemployment problems and that is why the provision has been made to give preference to the following :- (a) Labour co-operative societies; (b) Unemployed engineering graduates; (c) Unemployed diploma holders; (d) Social workers conversant with the area; and (e) Educated unemployed persons who have completed at least the Xth Standard. ( 22 ) MR. Wangdi further submits that procedure adopted by the State in the public interest and in the interest of weaker section of the society is a policy matter and the Court ought not to interfere if there is no violation of fundamental rights and principle of natural justice and in this respect Mr. Wangdi has placed reliance on the case of State of U. P. v. U. P. University Colleges Pensioners' Association, reported in (1994) 2 SCC 729 : (AIR 1994 SC 2311) I am afraid that law laid down in this case cannot be made applicable in the facts and circumstances of the present writ petition. This case as relied upon by Mr. This case as relied upon by Mr. Wangdi relates tocomputing the pension on the basis of last pay drawn and in that context it was decided that as to how much of liberisation should have been conceded is a matter of policy and it is not open to any Court to interfere with such policy which cannot be said to be either unreasonable or against public interest which are the only two grounds available to a Court to interfere with a policy matter while reviewing the same judiciously. ( 23 ) LAW laid down in the decisions of the cases of Kumari Shrilekha Vidyarthi and LIC of India (supra) are good laws holding the field in the matter of awarding of Government contracts and are applicable in the facts of the case. ( 24 ) THERE must be transparency in the Government contracts. In the present case and also in some pending cases the allegations are that the contract works or notice inviting tender for the works have not been published. Section 199 of the Public Works Code provides that tender should be floated invariably in the most open and public manner and by advertising in the Sikkim Herald and in the local newspapers or other leading newspapers, in case the value of the work exceeds Rs. 5 lakhs. ( 25 ) TENDER should be invariably in the most open and public manner even for all works upto a final cost of Rs. 5 lakhs and the following guidelines shall be followed :- (a) Each Gram Panchayat shall ensure that labour co-operative societies are formed within their jurisdiction. The Rural Development Department shall make all efforts to create mass awareness particularly amongst the labours and the Labour Department, Government of Sikkim and Co-operative Department shall ensure that Labour Co-operative Societies are formed in each Gram Panchayat. Different Engineering Department shall ensure that such labour co-operative societies are included as Class-IV contractors. (b) Each Gram Panchayat shall prepare a list of unemployed engineering graduates or diploma holders, social workers and unemployed persons who have completed at least Class Xth Standard and the Rural Development Department shall ensure that names of aforesaid persons are included as Class-IV contractors by different engineering departments of the Government of Sikkim. (c) Pamphlets in local language shall be distributed by the concerned Gram Panchayat. (c) Pamphlets in local language shall be distributed by the concerned Gram Panchayat. (d) Notice inviting tender shall be displayed in the notice board of the concerned Gram Panchayat Office. The Gram Panchayat shall send copy of notices, inviting tender accompanied by forwarding letters to the Head of the Post Office, Head Master of Schools, Co-operative Shops, Fair Price Shops (Ration Shops), Primary Health Centre, Police Check Post, if any, within concerned Gram Panchayat. (e) The Gram Panchayat shall make repeated announcements within their jurisdiction through mike or microphone at least twice daily for a period of two weeks immediately before last date of submission of tender forms. Failure to comply with the guidelines mentioned in (c) to (e) by the Gram Panchayats shall be construed as if tenders have not been advertised in the most open and public manner. ( 26 ) THE Chief Secretary, Government of Sikkim is directed to issue necessary orders for compliance of concerned departments of the Government of Sikkim. ( 27 ) SINCE the work has already been completed and payments have been made, the petitioner is not entitled to any relief. Therefore, the writ petition is dismissed being infructuous but State Government shall adhere to the guidelines indicated above. ( 28 ) THERE will be no order as to costs. Petition dismissed. --- *** --- .