Y. V. NARAYANA, J. ( 1 ) THE scope of Judicial Review under article 226 of the Constitution of India in the matter of distribution of largesse by the state and its authorities falls for consideration in the present Writ Petition. ( 2 ) THE present Writ Petition has been filed by the petitioners-M/s. Emco Limited for issue of a Writ of Mandamus questioning the action of the 1st respondent in issuing Letter of Intent in favour of the 2nd respondent pursuant to the tender notice dated 19-1-2000 in respect of Package no. W3/a. P. TRANSCO/dist/rs-15 for single Phase Electronic Energy Meters in a pilfer Proof Box as illegal and void and consequently to direct the 1st respondent to award the said Project for Single Phase electronic Energy Meters in Pilfer Proof Box to the first petitioner. ( 3 ) THE factual matrix leading to the filing of the present Writ Petition is set out as hereunder: the 1st Writ Petitioner is a company incorporated under the Companies Act and is a manufacturer of transformers and meters in India and the 2nd petitioner is its joint Director. The 1st respondent is a statutory Corporation and is a Government undertaking. It has floated a global tender for supply of Three Phase Electronic Energy meters in a Pilfer Proof Box by an invitation dated 19-1-2000. The process of selection provides for a preference for local manufacturers to the extent of 15% of the tender amount. This has been done with a view to encourage Indian Manufacturers thereby encouraging generation of employment and increase of revenue to the state. The petitioners in anticipation of being awarded the contract and to facilitate successful performance thereof entered into collaboration agreement with another chinese company, called holley Group Co. Ltd since the said company had completed successful operation for two years, the qualification criteria stipulated by the 1st respondent in Clause 1 (C) of GCC and SCC. The tenders were opened on 29-3-2000 and the petitioners tender was found to be the lowest evaluated tender in accordance with clause 27. 4 of the Instructions to Bidders. Subsequently on two occasions the petitioners were asked by the 1st respondent to give extension for the validity of the offer which was done upto 25-10-2000 and 25-11-2000. The tenders were opened on 29-3-2000 and the petitioners tender was found to be the lowest evaluated tender in accordance with clause 27. 4 of the Instructions to Bidders. Subsequently on two occasions the petitioners were asked by the 1st respondent to give extension for the validity of the offer which was done upto 25-10-2000 and 25-11-2000. The petitioners also came to know that the 1st respondent recommended to the World Bank the award of the project to the petitioners on two occasions. Through the press report the petitioners came to know that despite the recommendation of the 1st respondent to the World Bank to award the project to the petitioners, it was rejected by the World bank. The petitioners came to know that ultimately the project was awarded to the 2nd respondent. Questioning the action of the 1st respondent in issuing the letter of intent and awarding the project to the 2nd respondent, the present writ petition is filed. ( 4 ) THE 1st respondent-Corporation resisted the Writ Petition and filed a detailed counter. It is averred in the counter as hereunder: The State of Andhra pradesh is involved in the process of expanding the infrastructure of the manufacture and distribution of electricity and in view of the limited resources the government approached the World Bank for loan and the loan was sanctioned with its policy to reserve its rights to finalise the contract entered into by the Government. The Apex Court has upheld this policy holding that the acceptance of tenders by the Government in case of high cost of projects based on loans from International financial Institutions, award of contracts in accordance with specifications or opinion of such institution would not be arbitrary or illegal. The 1st respondent has to purchase a large number of meters for recording the consumption of various types of consumers. With a view to combat the problem of pilferage power, the 1st respondent has to take advantage of advanced technology in manufacture of the meters in pilfer proof boxes available in the international market. The 1st respondent felt it is essential to purchase such type of meters. The bid documents were finalized in consultation with the World Bank. Global tenders were invited and the process of selection provides for a preference of local manufacture to the extent of 15% of the tender amount. This has been done to encourage Indian manufacturers. The 1st respondent felt it is essential to purchase such type of meters. The bid documents were finalized in consultation with the World Bank. Global tenders were invited and the process of selection provides for a preference of local manufacture to the extent of 15% of the tender amount. This has been done to encourage Indian manufacturers. The tenders received were opened on 29-3-2000. Subsequently on 3-7-2000 the 1st respondent examined the bids and provisionally came to the conclusion that bid of the writ petitioners has to be considered and accordingly forwarded it to the World Bank for concurrence. The World bank sought some clarification and ultimately the World Bank interpreted the terms and conditions of the bid and opined that the Writ Petitioners do not come within the zone of consideration. ( 5 ) SRI Anil Diwan, the learned Senior counsel appearing for the petitioners assailed the action of the 1st respondent in issuing Letter of Intent and awarding the project to the 2nd respondent and contended that the petitioners fulfilled the criteria and theirs was the lowest evaluated bid and hence they ought to have been awarded the project. He contended that the 1st respondent after having been satisfied that the bid of the petitioners was the lowest favourably considered for awarding the project and recommended it to the world Bank twice for according the contract. He further contended that the 1st respondent was satisfied about the capabilities of the petitioners to perform the project and accordingly recommended to the World Bank on two occasions to award the project which clearly establishes that the petitioners were fully qualified in all respects to be awarded the project. The thrust of the argument is that the 1st respondent has not disclosed the reason for awarding the contract to the 2nd respondent though the petitioners-firm was selected and recommended to the World bank. The learned Counsel contended that the meters supplied by the 2nd respondent to Haryana Electricity Board were of poor quality and hence the 2nd respondent is not entitled to the project. He also attributed mala fides to the 1st respondent in awarding the project to the 2nd respondent. The learned Counsel contended that the meters supplied by the 2nd respondent to Haryana Electricity Board were of poor quality and hence the 2nd respondent is not entitled to the project. He also attributed mala fides to the 1st respondent in awarding the project to the 2nd respondent. ( 6 ) THE learned Advocate General Sri t. Anantha Babu appearing for the 1st respondent submitted that the contract was awarded to the 2nd respondent after due consideration of all relevant facts and in accordance with the procedure laid down in the bid documents. The decision was arrived in a fair and bona fide manner and cannot legitimately be challenged in a proceeding under Article 226 of the constitution of India. Referring to the collaboration agreement entered into by the petitioner, the learned Advocate-General submitted that it does not satisfy the requirement stipulated in the qualification under Section VII-A, Clause I (a) regarding two years successful operation and 40% production. Finally he submitted the scope of judicial review is limited only to the decision making process and not on the merits of the decision. In other words he contended that the Court does not sit as an appellate authority while exercising the power of judicial review in matters of distribution of largesse by the State and its authorities. He contended that it is well settled that the Court while exercising its power under Article 226 of the Constitution of India with regard to contracts entered into by the State or its other authorities, the courts will not interfere except in case of arbitrariness or mala fide. ( 7 ) TAKING into consideration the submissions made by the petitioner and the 1st respondent, the only question that falls for consideration is whether the award of project by the 1st respondent in favour of the 2nd respondent is fair and free from arbitrariness. ( 8 ) IT is the contention of the petitioners that the 1st respondent has considered and recommended it to the World Bank and subsequently it was given to the 2nd respondent. The World Bank has granted the loan and in accordance with its policy it has reserved for itself a limited role in connection with the contracts entered into by the 1st respondent. The World Bank has granted the loan and in accordance with its policy it has reserved for itself a limited role in connection with the contracts entered into by the 1st respondent. The learned advocate General has placed reliance on the guidelines which lay down that loan agreement governs the legal relationship between the borrower and the Bank and the guidelines are made applicable to procurement of goods and works for the project as provided in the agreement. In other words, the World Bank on its part ensures that the proceeds of any loan are used only for the purpose for which the loan was granted with the aforementioned policy and guidelines and the petitioners not qualifying under Section VII-A Clause I (a) the burden is on the petitioners to establish that the 1st respondent has acted in an arbitrary manner. Even according to the 2nd petitioner s affidavit, the petitioners have been considered by the 1st respondent but ultimately it was not approved by the world Bank. On the face of these averments it is not possible to hold that the 1st respondent has acted either in an arbitrary manner or with mala fides. Considering the scope of the judicial review the Supreme court in Tata Cellular vs. Union of India has clearly laid down that the principle of judicial review would apply to the exercise of contractual powers by Government bodies to the extent of preventing arbitrariness or favouritism. Judicial review is concerned with reviewing not the merits of the decision but the decision making process itself. The Apex Court has held as follows:"it cannot be denied that the principles of judicial review would apply to the exercise of contractual powers by government bodies in order to prevent arbitrariness or favouritism. However, it must be clearly stated that there are inherent limitations in exercise of that power of judicial review. Government is the guardian of the finances of the State. It is expected to protect the financial interest of the state. The right to refuse the lowest or any other tender is always available to the Government. But, the principles laid down in Article 14 of the constitution have to be kept in view while accepting or refusing a tender. There can be no question of infringement of Article 14 if the government tries to get the best person or the best quotation. But, the principles laid down in Article 14 of the constitution have to be kept in view while accepting or refusing a tender. There can be no question of infringement of Article 14 if the government tries to get the best person or the best quotation. The right to choose cannot be considered to be an arbitrary power. Of course, if the said power is exercised for any collateral purpose the exercise of that power will be struck down. Judicial quest in administrative matters has been to find the right balance between the administrative discretion to decide matters whether contractual or political in nature or issues of social policy; thus they are not essentially justiciable and the need to remedy any unfairness. Such an unfairness is set right by judicial review. "from the aforementioned findings of the apex Court, it follows that it is not for the court to determine whether a particular pglicy or particular decision taken in the fulfillment of that policy is fair. It is only concerned with the manner in which the decisions have been taken. Judicial review is concerned not with the decision but with the decision making process. Speaking of judicial review Lord Fraser in amin vs. Entry Cledarance Officer has observed thus:"judicial review is concerned not with the merits of a decision but with the manner in which the decision was made. . . Judicial review is entirely different from an ordinary appeal. It is made effective by the Court quashing the administrative decision without substituting its own decision, and is to be contrasted with an appeal where the appellate Tribunal substitutes its own decision on the merits for that of the Administrative Officer. "hence it is not for this Court to decide whether a particular policy or decision is fair. It is only concerned with the manner in which those decisions are taken and the authorities have acted in a fair manner and free from arbitrariness and bias. Dealing with the scope of judicial review, the Apex court in M. P. Oil Extraction vs. State of M. P. has observed as follows:"the executive authority of the State must be held to be within its competence to frame a policy for the administration of the State. Dealing with the scope of judicial review, the Apex court in M. P. Oil Extraction vs. State of M. P. has observed as follows:"the executive authority of the State must be held to be within its competence to frame a policy for the administration of the State. 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 provision, the Court cannot and should not out step its limit and tinker with the policy decision of the executive functionary of the State. Policy decision is in the domain of the executive authority of the State and the Court should not embark on the uncharted ocean of public policy and should not question the efficacy 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 emphasized. 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 out stepping its limit by unwarranted judicial activism. The democratic set up to which the policy 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. "in the matter of grant of largesse, the State certainly has spectrum of discretion but it should be open, fair and honest and completely above board. Considering the question of doctrine of fairness and reasonableness in the contract to which the state is a party, the Apex Court has held in asst. Excise Commissioner vs. Issae Peter "doctrine of fairness or the duty to act fairly and reasonably is a doctrine developed in the administrative law field to ensure the rule of law and to prevent failure of justice where the action is administrative in nature. Excise Commissioner vs. Issae Peter "doctrine of fairness or the duty to act fairly and reasonably is a doctrine developed in the administrative law field to ensure the rule of law and to prevent failure of justice where the action is administrative in nature. Just as principles of natural justice ensure fair decision where the function is quasi-judicial, the doctrine of fairness is evolved to ensure fair action where the function is administrative. But it can certainly not be invoked to amend, alter or vary the express terms of the contract between the parties. This is so even if the contract is governed by statutory provisions, i. e. , where it is a statutory contract or rather more so. In case of contracts freely entered into with the State, like the present ones, there is no room for invoking the doctrine of fairness and reasonableness against the party to the contract (State), for the purpose of altering or adding to the terms and conditions of the contract, merely because it happens to be the State. In such cases, the mutual rights and liabilities of the parties are governed by the terms of the contract (which may be statutory in some cases) and the laws relating to contracts. When, as in the present case, the contracts are entered into pursuant to public auction, floating of tenders or by negotiation, there is no compulsion on anyone to enter into the contracts. It is voluntary on both sides. There can be no question of the State power being involved in such contracts. The State does not guarantee profit to the licensees in such contracts. There is no warranty against incurring losses. It is a business for the licensees. Whether they make profit or incur loss is no concern of the State. In law, it is entitled to its money under the contract. It is not as if the licensees are going pay more to the State in case they make substantial profits. However, no opinion need be expressed on the question as to what would be the position in the case of contracts entered into otherwise than by public auction, floating of tenders or negotiation. Hence it has 1o be held that the State has power of discretion in the matter of distribution of largesse and the power of judicial review is limited. Hence it has 1o be held that the State has power of discretion in the matter of distribution of largesse and the power of judicial review is limited. The State while awarding the contracts is free to choose its own method to arrive at a decision. In a recent decision reported in AIR India vs. Cochin International Airport Ltd. the Apex court has held as follows:"the award of a contract, whether it is by a private party or by a public body or the State, is essentially a commercial transaction. In arriving at a commercial decision considerations which are of paramount are commercial considerations. The State can choose its own method to arrive at a decision. It can fix its own terms of invitation to tender and that is not open to judicial scrutiny. It can enter into negotiations before finally deciding to accept one of the offers made to it. Price need not always be the sole criterion for awarding a contract. It is free to grant any relaxation, for bona fide reasons, if the tender conditions permit such a relaxation. It may not accept the offer even though it happens to be the highest or the lowest. But this State, its corporations, instrumentalities and agencies are bound to adhere to the norms, standards and procedures laid down by them and cannot depart from them arbitrarily. Though that decision is not amenable to judicial review, the court can examine the decision making process and interfere if it is found vitiated by mala fides, unreasonableness and arbitrariness. The State, its Corporations, instrumentalities and agencies have the public duty to be fair to all concerned. Even when some defect is found in the decision making process the Court must exercise its discretionary power under Article 226 with great caution and should exercise it only in furtherance of public interest and not merely on the making out of a legal point. The Court should always keep the larger public interest in mind in order to decide whether its intervention is called for or not. Only when it comes to a conclusion that overwhelming public interest requires interference, the Court should intervene. "hence it has to be held that a citizen has no fundamental right to insist on state or its authorities to do business with him. Only when it comes to a conclusion that overwhelming public interest requires interference, the Court should intervene. "hence it has to be held that a citizen has no fundamental right to insist on state or its authorities to do business with him. The state is entitled to enter into business with any person or class of persons to the exclusion of others as long as State does not prohibit others to carry on business. The supreme Court in Krishnan Kakkanth vs. Govt. of Kerala has held as follows:"unless the Government policy is demonstrably arbitrary, capricious, irrational, discriminatory or violative of constitutional or statutory provisions, it cannot be struck down by the Court. "it is clear that State can depart from the set norm in favour of a particular group of persons provided the same is not irrational, unreasonable, discriminatory or arbitrary. In another important judgment reported in sterling Computers Ltd. vs. M and N publications Ltd. the Supreme Court had an occasion to consider the scope of judicial review in the matter of State largesse and held that the Court is not expected to function as Court of Appeal while examining the administrative decision. The supreme Court has held as follows:"by way of judicial review the Court is not expected to act as a Court of appeal while examining an administrative decision and to record a finding whether such decision could have been taken otherwise in the facts and circumstances of the case. While exercising the power of judicial review, in respect of contracts entered into on behalf of the State, the Court is concerned primarily as to whether there has been any infirmity in the "decision making process". By way of judicial review the Court cannot examine the details of the terms of the contract which have been entered into by the public bodies or the State. Courts have inherent limitations on the scope of any such enquiry. If the contract has been entered into without ignoring the procedure which can be said to be basic in nature and after an objective consideration of different options available taking into account the interest of the State and the public, then Court cannot act as an appellate authority by substituting its opinion in respect of selection made for entering into such contract. But at the same time the Courts can certainly examine whether "decision making process" was reasonable, rational, not arbitrary and violative of Article 14. Once the procedure adopted by an authority for purpose of entering into a contract is held to be against the mandate of article 14, the Courts cannot ignore such action saying that the authorities concerned must have some latitude or liberty in contractual matters and any interference by Court amounts to encroachment on the exclusive right of the executive to take such decision. "the Courts would be reluctant to interfere with the administrative decision in awarding the contract unless the party aggrieved satisfies the Court that the ultimate decision is vitiated. In Delhi Science forum vs. Union of India? the Apex Court has held as follows:"the question of awarding licences and contracts does not depend merely on the competitive rates offered, several factors have to be taken into consideration by an expert body which is more familiar with the intricacies of that particular trade. While granting licences a statutory authority or the body so constituted should have latitude to select the best officers on terms and conditions to be prescribed taking into account the economic and social interest of the nation. Unless any party aggrieved satisfies the Court that the ultimate decision in respect of the selection has been vitiated, normally courts should be reluctant to interfere with the same. " ( 9 ) THE afore-mentioned principle has been affirmed by the Supreme Court in a decision reported in TVL Sundaram Granites vs. Imperial Granites Ltd. The Court has categorically laid down that the grant of largesse is at the discretion of the State and the action should be open, fair and honest and completely above board. ( 10 ) THE 1st respondent, as directed by this Court, has placed the entire record in a sealed cover before this Court. I have gone through the entire record including the correspondence between the concerned parties. I found that the entire transaction is open, fair and transparent. In circumspection of the entire case law laid down by the Apex Court and the facts of this case, I find that there is nothing irrational, capricious or arbitrariness in awarding the project to the 2nd respondent by the 1st respondent. I found that the entire transaction is open, fair and transparent. In circumspection of the entire case law laid down by the Apex Court and the facts of this case, I find that there is nothing irrational, capricious or arbitrariness in awarding the project to the 2nd respondent by the 1st respondent. I do not find any ground for invoking Article 226 of the constitution of India for exercising the power of judicial review in this case. The writ Petition is devoid of merits and is accordingly dismissed. There will be no order as to costs.