Judgment A.K.Ganguly, J. 1. This writ petition has been filed by several petitioners challenging the notices inviting tender called by the. Engineer-in-Chief, (Rural), Public Health Engineering Department, Government of Bihar, published in the newspaper Times of India dated 26th April, 1999, and 24th April, 1999 for supply of items like Hand Pumps, Galvanised iron force and lift pump, India Mark-Ill, Tara Pump etc. 2. The contention of the petitioner is that the said tender notice is in clear violation of the Store Purchase Preference Rules, 1975, Government resolution No. 8981 dated 26.5.1981, and the Government of Bihars Industrial Policy. 3. The main grievances of the petitioner are that the said tender is an open one allowing participation of units outside the State. The petitioners case is that such tender should be confined to only small scale industries, registered in the State of Bihar, as the same is in consonance with the industrial policy of the State. The further case of the petitioner is that the Government of Bihar has promulgated a rule known as Store Purchase Preference Rules, 1975, and the said rules must be followed by all the departments of the State Government, Corporation, authorities, Board and Public Sector undertakings. 4. The petitioner is relying very much on Clause-5 and Clause-10 of 1981 resolution which according to the petitioner, has reiterated 1975 Preference Purchase Rules. Clause-3 of the said rule which has been officially translated in English is to the following effect: 5. "On opening of the tender, the industries located in the State shall be given opportunity to bring its rate within preference, as far as possible, through negotiation." 6. But the petitioners are relying very much on Clause-5 and Clause-10 of the 1981 resolution which are at Annexure-1. The said clauses are set out below: Clause-5: "In the background of the aforesaid suggestion of the Government of India, the State Government has decided that the items mentioned in the enclosed list which are being produced by the registered and working small, village and cottage industrial units, be purchased only from the industries established in those regions". Clause-10: "The tenders should be invited from the registered and working small scale untis/village and cottage Industrial untis of the State of Bihar only for purchase of these reserved items." 7. Clause-10: "The tenders should be invited from the registered and working small scale untis/village and cottage Industrial untis of the State of Bihar only for purchase of these reserved items." 7. Relying on the aforesaid two clauses of 1981 resolution, the learned counsel for the petitioners urged that the Industrial Units registered outside Bihar should be debarred from participating in the tendering process which is initiated by the tender notice referred to above, and in para-8 of the writ petition, it has been pleaded that the State Government has to create a monopoly in favour of the Small Scale Industries located in the State and the State Government is to deliberately practice a reverse discrimination in favour of the said small scale units and the same may be upheld by this Court. 8. Therefore, they are aggrieved by the open tender notices dated 26.4.1999 and 24.4.1999 for supply of various items. It has been stated by the petitioner that even though in the said tender notices there is a provision that the S.S.I. unit of the State will be given preference as the hand pump is included in the list of reserved items of the Stores Purchase Preference Rules, but the petitioners want a total ban on the SSI units outside of the State from participating in the tender. 9. Being aggrieved, the petitioner approached the Director Industries, Government of Bihar being the controlling authorities by making a representation dated 19.4.1999 asking it to intervene and to prevent the other State respondents from acting contrary to the State Industrial Policy. Such representation was made by them on 19.4.1999, and, surprisingly enough, on 19.4.1999 itself an order was passed by the Director of Industries, restraining the SSI units outside Bihar from participating in the tendering process. 10. This Court is surprised at the promptitude with which the Director of Industries has acted in this case. In considering the said speed and promptness of the Director of Industries while acting on the representation of the tenderers and businessman, this Court would have appreciated it much more if the Director of Industries had shown similar anxiety and promptness while acting on the representation of ordinary citizens. 11. In considering the said speed and promptness of the Director of Industries while acting on the representation of the tenderers and businessman, this Court would have appreciated it much more if the Director of Industries had shown similar anxiety and promptness while acting on the representation of ordinary citizens. 11. However, fact remains that the tender notice does not prohibit the units outside the State out from participating, but gives preference to the SSI units of the State in the matter of prices under the Stores Purchase Preference Rules. 12. On the basis of these pleadings, this writ petition was filed, and a learned Judge of this Court by an order dated 5th May, 1999 restrained the respondents from proceeding further pursuant to the tender notices which are at Annexures-5 series. 13. In the counter affidavit which has been filed by the State, the stand taken is that the tender notices have not been issued in violation of the Store Purchase Rules, in as much as, it has clearly been mentioned in the tender notices that the SSI units of the State will be given preference as hand pumps are included in the list of reserved items of the Stores Purchase Preference Rules. It has also been stated in para-6 of the counter affidavit that only after despatch of the said notice for publication on 20th April, 1999, the order from the Director Industries on 19th April, 1999 was received by the Department. It has also been stated that while issuing tender notice the respondents have taken into account the provisions of the P.W.D. Code as also the Bihar Financial Rules, which are to be followed in matters of purchase by Public Health Engineering Department. Reference to a fetter of the Director Industries, Government of Bihar dated 15.2.1999 was made and from that it has been clarified that in respect of SI. No. 156 of the reserved list which is Hand Pump preference should be given to the Small Scale Industries, and accordingly this has been indicated in the tender notice relating to purchase of the hand pumps and further stand is that in that letter it has not been mentioned that in the tendering process the units outside the State of Bihar should not be allowed to participate. It has been stated in the counter affidavit that the State untis want to form a cartel and quote exactly same rate in their tenders. This violates the sanctity of tender process and defeats the very purpose of the tender to receive competitive rates. In such a situation, participation of the outside tenderers is essential for obtaining competitive rates. It has also been stated that the interest of the State units are protected by awarding them supply order for maximum quantity depending upon their production capacity. It has also been stated that the State units seldom supply the materials within stipulated time which affects the progress of the scheme. Even then assistance is given by the Department as incentives to the State untis by awarding supply of maximum quantity. The consistent stand of the State is that they are guided by the Financial Rules and P.W.D. Code of the State Government which insist upon invitation of open tender. In the counter affidavit the State has disclosed materials to show that in the previous two tendering process the units located in the State have quoted the same rates which show that there is a cartel among the units of the State and this prevents the said respondent from obtaining competitive rates and ultimately resulting in adverse consequences to public funds. Therefore, they have decided to invite tenders by allowing participation of outside units so that the competitive rates can be ascertained. 14. Learned counsel for the petitioner has, however, stated that the affidavit filed by respondent nos. 3 and 4 is not the stand of the State, in as much as, the said affidavit has not been filed on behalf of respondent no.1. This Court, however, cannot appreciate the said argument, in asmuch as, the affidavit has been affirmed by the Executive Engineer, Department of P.H.E.D. Government of Bihar, and along with the affidavit materials have been disclosed to show that after taking decision at the appropriate State level tenders have been issued for allowing the units outside Bihar to participate in the said tender process. Therefore, there is no reason for this Court to hold that the stand taken in the counter affidavit is not the stand of the State. 15. Pursuant to the order of this Court, further affidavit has been affirmed by the State. Therefore, there is no reason for this Court to hold that the stand taken in the counter affidavit is not the stand of the State. 15. Pursuant to the order of this Court, further affidavit has been affirmed by the State. This was done after the court modified the interim order dated 5.5.1999 by the subsequent order dated 22.7.1999. By the order dated 22.7.1999, this court permitted the authority to open tenders submitted by all the parties prior to the interim order dated 5.5.99. But the court restrained the respondent from taking any final decision of accepting the tender until further orders of this court. 16. From the said supplementary affidavit filed by the State rates quoted by the units outside the State and inside the State have been disclosed and the following facts emerge: (A) Tara Pump:In respect of this item four tenderers have participated, out of which two are SSI units of the State of Bihar and two are out side the State. The rates quoted by both the units of Bihar are exactly same, which is at Rs. 8690/-, whereas, rates quoted by the outside units are below the same. (B) India Mark-Ill Pumps: For supply of this item, ten tenderers have submitted their tender. Out of those ten tenders, three are out side the State whereas, 7 are by SSI Units of the State. Out of the outside units, lowest rate of Rs. 4099/- has been quoted by M/s Bharat Enterprises, Delhi, whereas, lowest rate quoted by the SSI units of State is Rs. 4580/-. So the lowest rate of the SSI units of the State is 11.7% higher than the lowest rate quoted by the outside unit. The rates quoted by the SSI units of the State range from Rs. 4595 to 4580 which is within a marginal difference of Rs. 15/- only. (C) Force and lift Pump:In respect of this item, nine tenders have been submitted and out of which one is out side the State and remaining eight are State units. The rates quoted by the outside units are the lowest, i.e. Rs. 1960/-. The lowest rate among the SSI units ranges from Rs. 2493 to 2463 with a marginal difference of Rs. 30/- only. 17. The rates quoted by the outside units are the lowest, i.e. Rs. 1960/-. The lowest rate among the SSI units ranges from Rs. 2493 to 2463 with a marginal difference of Rs. 30/- only. 17. On the basis of these facts, the State Government took the stand if outside units are totally prevented from participating in the tendering process, the State will not be able to know the competitive rates and the State will have to pay a substantially higher amount for purchasing these item, which will be opposed to public interest. Apart from that, the other difficulty mentioned by the State is that in many cases the State units fail to deliver goods in time, resulting in substantial delay in completing the scheme for supply of drinking water. There is overwhelming public interest attached with such schemes and it is the responsibility of the State to carry on such schemes smoothly and without misutilising public funds. 18. Learned counsel for the State in course of argument submits that while following the 1981. policly, clarification or orders issued from time to time should also be taken cognizance of and they form part of 1981 resolution. Learned counsel placed reliance on two resolutions of the State Government dated 5.2,1997 and 11.6.1999. The resolutions show that the tenderers outside the State should also be allowed to participate and in the tendering process P.W.D Code should be followed. Those resolutions issued by the State Government have the approval of the Chief Minister. So those resolutions reflect the States stand. Copies of those resolutions were served on the counsel for the petitioner. 19. In the rejoinder which has been filed by the petitioners the points urged in the writ petition have been reiterated. It has been stated also that in other States namely, Maharashtra and Andhra Pradesh the units which are registered in the State are exclusively allowed to participate in such tendering process. Reliance has been placed on a judgment of the Madhya Pradhesh High Court where such policy has been upheld. 20. In this matter, counsel for the interveners were also heard and they have submitted that in the instant case, items which are going to be purchased are not reserved items. Therefore, no protection to the petitioner is available. Reliance has been placed on a judgment of the Madhya Pradhesh High Court where such policy has been upheld. 20. In this matter, counsel for the interveners were also heard and they have submitted that in the instant case, items which are going to be purchased are not reserved items. Therefore, no protection to the petitioner is available. It has also been submitted that since there has been no prayer for quashing the tender notice, the court should not interfere on the basis of a vague case made out in the writ petition. It has also been stated that if the case of the petitioner is accepted the same would impede the free flow of the inter State trade and will be violative of Article-301 of the Constitution of India. 21. In support of his contention learned counsel for the petitioner placed reliance on certain decisions which are noted below: 22. Reliance was placed on the decision of the Supreme Court in the case of the Comptroller and Auditor General of India, Gyan Prakash V/s. K.S. Jagannathan reported in A.I.R. 1987 S.C. page-537. Particularly reliance was placed on para-20 of the said judgment in order to contend that in a fit and proper case the writ court in exercise of its power under Art. 226 may issue a writ of mandamus directing the respondent to exercise its discretion in a proper manner and in a proper case in order to do justice, the Court may itself pass the necessary order or direction instead of the public authorities doing the same. 23. This court fails to appreciate the applicability of the aforesaid ratio in the facts of the present case. In the instant case, it cannot be urged that the Government has failed to exercise its discretionary power by issuing the tender notice. The contention of the petitioner is that the tender notice as such is not bad, but the participation of the untis outside the State in the said tender is bad. This according to the petitioner is in violation of the policy decision of the State Government, whereas, the stand of the State Government is that to protect the interest of the small scale industries of the State there is provision in the tender notice to give them preference in accordance with the preference rules. This according to the petitioner is in violation of the policy decision of the State Government, whereas, the stand of the State Government is that to protect the interest of the small scale industries of the State there is provision in the tender notice to give them preference in accordance with the preference rules. But the State cannot prohibit the participation of the untis outside the State in view of the various grounds explained in the affidavit. Apart from the above fact, the stand of the State is that the resolution 1981 is subject to the modifications issued from time to time, and subsequently two orders have been issued which have been referred to above, which modify the 1981 resolution, and the modified stand of the State, i.e., the tender should allow participation of the untis registered outside the State and that the said tendering process should follow the P.W.D. Code. So it is a question of policy decision by the State. It is not a case where the State Government has failed to exercise a discretion vested in it. So the decision in the case of Comptroller General (supra) is of no relevance in this case. 24. The next decision cited is of the case of Narendra Kumar Maheshwari V/s. Union of India & ors. reported in A.I.R. 1989 S.C. page 2138. Reliance has been placed on paras 99 and 100 of the said decision which lay down that even if some guidelines being not statutory and not enforceable in character, but such circulars having come into force, can create legitimate expectation in the mind of persons that the authority would abide by such guidelines. Th learned Judges of the Supreme Court have held that the doctrine of legitimate expectation applies only when a person has been given reason to believe that certain guidelines will be strictly followed. The position is further clarified in para 100 by observing as follows: "A Court, however, would be reluctant to interfere simply because one or more of the guidelines have not been adhered to even where there are substantial deviations, unless such deviations are, by nature and extent such as to prejudice the interests of the public which it is their avowed object to protect. Per contra, the Court would be inclined to perhaps overlook or ignore such deviations, if the object of the statute or public interest warrant, justify or necessitate such deviations in a particular case." 25. In the instant case, the policy of the State in the matter of granting protection to a small scale industries of the State is not an absolute policy. The said policy is to be read subject to the subsequent modifications as have been noted above. In view of the subsequent modifications which are issued in public interest, the issuance of tender notice whereby rights of small scale industries of the State have been protected to some extent cannot be considered to be a step which has been taken in violation of any rational principal nor is it opposed to public interest. 26. Therefore, the principle laid down in the case of Narendra Nath (supra) instead of supporting the petitioners case, justify the stand of the State respondents. 27. Reliance has further been placed by the learned counsel for the petitioner on the decision of the Maharashtra Asbestus Pvt. Co. Ltd. V/s. the State of Maharashtra & ors. reported in A.I.R. 1990 Bombay, page-201. From the facts of the said decision it appears that the State of Maharashtra issued tender notice making some reservations for the small scale industries. The said reservation was challenged by the petitioner alleging that the same is discriminatory. 28. A Division Bench of Bombay High Court held that some protection is required to be given to the small scale industries, in the industrial climate in the State as otherwise they will be eliminated. Therefore, the policy of the State of Maharashtra was affirmed by the Court. 29. In the instant case also some reservation has been made in the tender notice in favour of the small scale units of the State. The petitioners are obviously not challenging the same, but the petitioners are asking for a total ban on the SSI units outside Bihar from participating in the tendering process. The same is not the policy of the State of Bihar as has been clarified from time to time. Therefore, the Court cannot direct the State Government to alter its policy in view of demand of the petitioner. The same is not the policy of the State of Bihar as has been clarified from time to time. Therefore, the Court cannot direct the State Government to alter its policy in view of demand of the petitioner. So, the decision in the case of Maharashtra Asbestus (supra) does not at ail support the contention of the petitioner, on the other hand the said decision by affirming the policy of the State Government showed that the court should normally act with restrain while dealing with the question of policy decision of the State Government. 30. Learned counsel for the petitioner has also relied on a decision in the case of Union of India V/s. Hindustan Development Corporation, reported in 1998 (3) S.C.C. page-499, which is also reported in A.I.R. 1994 S.C. page- 888. The learned counsel by referring to para-14 of the said judgment tried to submit that offering of same prices, cannot be considered to be a factor for forming a cartel unless conspiracy is proved. The learned counsel submits that in the instant case, there is no agreement to hatch a conspiracy and as such justification put forward by the State for not excluding the outside units, inter alia, on the ground that the petitioners have formed a cartel is not tenable and should be rejected. 31. This Court finds that in Hindustan Development (supra) in para-14, the dictionary meaning of cartel has been considered. But in para-15 it has been clarified that a price fixation conspiracy does not necessarily involve any oral or written agreement. It is stated that if there is a concerted action or arrangement for fixation of price on the basis of some undertaking, such fixation of price is also illegal. In view of the said observation in para-15 and para-17 in the judgment, it can be said that in a given case any cartel by some of the manufactures amounts to unfair trade practice. Therefore, the observations made in paras-14, 15, 16 and 17 of the judgment should be read harmoniously. If the judgment is so read one has to come to the conclusion that cartel may be formed without any oral or documentary evidence. 32. Therefore, the observations made in paras-14, 15, 16 and 17 of the judgment should be read harmoniously. If the judgment is so read one has to come to the conclusion that cartel may be formed without any oral or documentary evidence. 32. In the instant case, from the disclosure of facts in the counter affidavit of the State it is clear that in most of the cases, prices quoted by the SSI units of the State are identical or vary within a small range, i.e. between 30 to 40 rupees. Invariably, the prices quoted by the units outside the State is lower. In the background of these facts the stand of the State that unless outside units are allowed to participate, the State will not know the competitive prices is a reasonable stand. 33. Learned counsel for the petitioner has also relied on the decision of the Supreme Court in the case of State of Bihar V/s. Subhas reported in 1999 (1) S.C.C. page-31. In the said decision of the Supreme Court, the question was the grant of sales tax exemption on the basis of the Bihar Industrial Incentive Policy, 1993. The learned Judges of the Supreme Court, considering the said policy, held that in view of the clear language of Clause 10.4. (i)(b), the States contention that the said clause was subject to Clause-1(a) which indicated that the. policy should apply to the Industries which came into production from 1.4.1992 to 3.9.1993 is rejected. The Supreme Court held the notification under section 7 of Bihar Finance Act denying tax exemption for seven years from 1.4.1993 to old industrial units is repugnant to States-industrial policy. 34. In the instant case, those questions are not at all involved. It is policy of the State to grant protection to the SSI units registered in the State which has been followed in the tencJer notice by grant of express preference to them, but the demand of the petitioner that the units outside the State should be totally excluded is not a bonafide demand in the facts of this case. Such a demand is also opposed to public policy for the reasons which are disclosed in the affidavit of the State and in the opinion of this Court, those are valid reasons. 35. Such a demand is also opposed to public policy for the reasons which are disclosed in the affidavit of the State and in the opinion of this Court, those are valid reasons. 35. Learned counsel for the petitioner has also relied upon the judgment of the Madhya Pradesh High Court about the grant of concession to the SSI units of the State. In the said judgment again the Court affirmed the policy of the State. The ratio of the said judgment cannot be applied as in the instant case the petitiones are purporting to challenge the States policy and asking this Court to interfere in the matter of policy fixed by the State about issuance of said tender notice. 36. From the above discussion, it is clear that in this mater if the petitioners prayer is granted, in that case, the court has to interfere with the latest policy decision of the State in the matter of purchase of various items in Public Health Engineering Department. 37. The latest decison of the State in this matter, as it transpires from the stand taken by the State in the counter affidavit and from the materials disclosed is that the preference shall be given to the SSI units registered in the State under the Stores Purchase Preference Rules, but the said preference cannot be to the extent of clamping a prohibition on all outside untis from participating in the tendering process. The States policy of an open tender is based on the provisions contained in the Finance Rules and the P.W.D. Code, as also the clarifications given to 1981 resolution with the approval of the Chief Minister. Besides the above factor, the State has also taken the policy in view of the overwhelming public interest which always demands that the public funds should not be wasted by purchasing some items at a higher price. Added to this, is the consideration that in most of the cases, the State units cannot ensure timely supply of materials to meet the requirement of the State, in view of limited production capacity of State units. All these are likely to cause disruption in the execution of the project for supply of drinking water. The disruption of such a project is highly detrimental to public interest. 38. This Court cannot discard the aforesaid reasons advanced by the State in support of its policy as untenable. All these are likely to cause disruption in the execution of the project for supply of drinking water. The disruption of such a project is highly detrimental to public interest. 38. This Court cannot discard the aforesaid reasons advanced by the State in support of its policy as untenable. On the other hand, the Court finds that those reasons are valid and it is extremely difficult for this Court to interfere with the States policy in the facts and circumstances of this case. 39. Reference in this connection may be made to the decision of the Honble Supreme Court in the case of Hindustan Development Corporation (supra). In para-9 of the said judgment at page-1002 of the report, the learned Judges of the Apex Court while discussing the various cases laid down the scope of Courts interference in a policy matter in the following terms: "This Court cannot strike down a policy decision taken by the State Government merely because it feels that another policy decision would have been fairer or wiser or more scientific or logical. The Court can interfere only if the policy decision is patently arbitrary, discriminatory or malafide." 40. To the same effect is the judgment of the Honble Supreme Court in the case of M.P.Oil Extraction & Anr. V/s. The State of M.P. & Anr. reported in 1997 (7) S.C.C. page-592. 41. Dealing with the scope of judicial interference in the matters of policy, the Honble Supreme Court in para-41 page- 611 in M.P.Oil (supra) has laid down the following proposition: "Unless the policy framed is absolutely capricious and, not being informed by any reason whatsoever, can be clearly held to be arbitrary and founded on mere ipse dixit of the executive functionaries thereby offending Article-14 of the Constitution or such policy offends other constitutional provisions or comes into conflict with any statutory provisions, the Court cannot and should not outstep its limit and tinker with the policy decision of the executive functionary of the State. This Court, in no uncertain terms, has sounded a note of caution by indicating that policy decision is in the domain of the executive authority of the State and the Court should not embark on the unchartered ocean of public policy and should not question the eficacy or otherwise of such policy so long the same does not offend any provision of the statute or the Constitution of India. The supremacy of each of the three organs of the State, i.e., legislature, executive and judiciary in their respective fields of operation needs to be emphasised. The power of judicial review of the executive and legislative action must be kept within the bounds of constitutional scheme so that there may not be any occasion to entertain misgivings about the role of judiciary in outstepping its limit by unwarranted judicial activism being very often talked of in these days. The democratic setup to which the polity is so deeply committed cannot function properly unless each of the three organs appreciate the need for mutual respect and supremacy in their respective fields." 42. In the case of Sales Tax Officer and Anr. V/s. Shiv Durga Mills, reported in 1998 S.C. page-591, in para-14 of the said judgment, it has been accepted that the Government may change its industrial policy, if the situation so warrants. It has been stated in the said paragraph that merely because the Government declared the industrial policy resolution for the period 1979-83, it does not mean that the Government cannot amend the said State policy under certain circumstances. In para-17 of the said judgment, it has been provided that any industrial policy can be changed if there is any over-riding public interest involved and in such change of policy the review of the financial position certainly is a very relevant factor. 43. In the instant case also the modification of 1981 resolution by the subsequent clarification as noted above, cannot be interferred with by this court, since this Court finds that such change of policy is in public interest. 44. In view of the discussions made above, it is difficult for this court to come to the conclusion that there is any illegality in the tender notice, or there is any illegality in the policy which has been adopted by the State in issuing the said tender notice by allowing the outside units to participate in the tendering process, 45. This court is of the opinion that since preference in price has to be given to the SSI units of the State, grant of such preference presupposes that the rates of everybody must be known and thereafter compared for the purpose of giving preference. This court is of the opinion that since preference in price has to be given to the SSI units of the State, grant of such preference presupposes that the rates of everybody must be known and thereafter compared for the purpose of giving preference. If the participation by the units outside the State in the tender is totally stopped in that case, the State without ascertaining the competitive rates cannot grant any preference. Therefore, the prayer of the petitioner for totally stopping the units outside the State from participating in the tendering process is unreasonable and contrary to public interest and cannot be granted. 46. Considering all those aspects of the matter, and for the reasons discussed above, this court is of the view that the prayer of the petitioner cannot be granted. This writ petition is therefore dismissed. The interim order is vacated. 47. The respondent-State can process the tender in accordance with the conditions mentioned in the tender notice and in accordance with law and as early as possible. There will be no order as to costs. Interim order is also vacated.