Judgment 1. The sole appellant, who was respondent No. 6 in the writ application, has filed the present appeal challenging the Order dated 25-8-2004, passed by a learned single Judge in C.W.J.C. No. 8573 of 2004, by which he has quashed the Order dated 27-7-2004, passed by the Chief Procurement Officer, respondent No. 3 (Annexure 8), whereby the appellant was appointed as a Transporting and Handling Agent for Patna district for the year 2004-2005 and remanded the matter to the Bihar State Food and Civil Supplies Corporation Ltd. (for short the Corporation) and its officers to reconsider the matter of appointment of the said Agent in accordance with law. 2. The admitted facts are that Corporation is a Government Undertaking and apart from other activities, it supplies foodgrains under various welfare schemes of the Central Government to the different Blocks of the State of Bihar and for that purpose it appoints Transporting and Handling Agent for transporting the foodgrains under the various schemes in different Districts and Blocks. 3. On 12-6-2004, the respondent-Corporation issued an advertisement for appointment of Transporting and Handling Agent for the district of Patna for the year 2004-2005. On 21-6-2004, tenders were submitted by three persons, namely, appellant Arun Kumar Agrawal, Vijay Kumar and Pradeep Kumar Gupta (writ petitioner-respondent No. 6). A Committee was constituted, namely, the District Transport Committee, headed by the District Magistrate, Patna, to scrutinise the application forms and other papers and, thereafter, to recommend for appointment of the Transporting and Handling Agent. The tenders were opened by the concerned authority and it was found that the writ petitioner-respondent No. 6 had offered the lowest rate and as such he was placed at serial No. 1, Vijay Kumar, who had offered rate above him, was placed at serial No. 2 and the appellant, who had offered highest rate, was placed at serial No. 3. 4. 4. The said Committee held its meeting on 2-7-2004 and found that so far as Pradeep Kumar Gupta was concerned, he was allotted the work of transporting and handling for the remaining period of 2003-2004 after cancelling the appointment of Sheo Shankar Agrawal, brother of appellant Arun Kumar Agrawal, who had taken the contract in the name of M/s. Snehlata Road Line Ltd., but his work was not satisfactory as he did not transport and handle the foodgrains timely, as a result of which the Corporation had to suffer loss of Rs. 15 lacs. This apart, he has submitted the rate of the tender, which is 20% less than the last year tender, regarding which he did not perform well and, accordingly, held that he could not be allotted the work. 5. So far as Vijay Kumar was concerned, it was found that he did not fulfil other requirements as per the tender notice and as such he was not fit to be considered. It was found that though the appellant had submitted the highest rate but the negotiation should be entered into between the Corporation and him and a copy of the said minutes of the meeting was annexed as Annexure C to the counter-affidavit filed by the appellant in the writ application. Thereafter, as a result of the negotiation, the appellant lowered down the rate and he was appointed as Transporting and Handling Agent by Order dated 27-7-2004, as contained in Annexure 8 to the writ application. Respondent-Pradeep Kumar Gupta filed a writ application, out of which the present matter arises, challenging the said question, which has been quashed by the learned single Judge by the impugned Order on two grounds, namely, firstly that no enquiry was made against the writ petitioner-respondent with regard to the allegations of illegality and infirmity in the supply of foodgrains for the period he was Transporting and Handling Agent and secondly that even if there were some allegations, the same were found not correct as the period of contract, which was up to 31-3-2004, was extended for some period and, thus, he found that the allotment of work of transporting and handling to respondent No. 6-appellant herein was vitiated in law. 6. 6. The appellant, thereafter, filed an appeal against the Order of the learned single Judge and this Court stayed the operation of the Order of the learned single Judge and in the meantime an agreement has been executed on 4-11-2004 between the Corporation and the appellant for the remaining period, which would expire on 31-3-2005. 7. It is an admitted position that the contract was allotted to the brother of the appellant, namely, Sheo Shankar Agrawal, who had taken contract in the name of M/s. Snehlata Road Line Limited. The appellant had also submitted a tender for the same but he was not allotted the work. The appellant has filed document to show that he was separate from his brother Sheo Shankar Agrawal by making a partition and the learned single Judge has not accepted the case of the writ petitioner-respondent No. 6 that appellant Arun Kumar Agrawal was making all business in the name of M/s. Snehlata Road Line Ltd. This is an important fact that in this case for the reason that the contract of M/s. Snehlata Road Line Limited for 2003-2004 was cancelled on the ground that it was found to be indulged in blackmarketing and an F.I.R. was lodged. 8. The case of the writ petitioner-respondent No. 6 is that he having offered the lowest rate, his tender ought to have been accepted and the reasons assigned for non-consideration of his tender or not inviting him for negotiation like respondent No. 6-appellant are irrelevant, arbitrary and violative of Art. 14 of the Constitution of India. It is stated that the allegation/ground that his work was not satisfactory in the previous year, as a result of which the Corporation suffered a loss of rupees 15 lacs was neither enquired into nor was sufficient opportunity afforded to him to explain the same. In the alternative, it has been stated that even if there were certain allegations, the same were not accepted as the contract of the writ petitioner-respondent No. 6 was extended/renewed even after 31-3-2004. In other words, even if there were some allegations, the same were ignored or not accepted while extending the period of contract. On these grounds, it has been asserted that non-consideration of the case of the writ petitioner-respondent No. 6 was arbitrary, unreasonable and unfair and violative of equality clause has enshrined in Art. 14 of the Constitution of India. In other words, even if there were some allegations, the same were ignored or not accepted while extending the period of contract. On these grounds, it has been asserted that non-consideration of the case of the writ petitioner-respondent No. 6 was arbitrary, unreasonable and unfair and violative of equality clause has enshrined in Art. 14 of the Constitution of India. This apart, he has also taken a ground that respondent No. 6-appellant had taken earlier a contract, in the name of his brother Sheo Shankar Agrawal, but he had committed manipulation, for which an F.I.R. was lodged, but as stated above, this ground was not held to have been proved by the writ petitioner-respondent before the learned single Judge. 9. The case of the appellant, on the other hand, is that no doubt the writ petitioner-respondent No. 6 Pradeep Kumar Gupta has submitted a lowest tender, but having regard to his past conduct, for which several times explanations/show-causes were sought for vide Annexures B to B/13 annexed with the counter-affidavit, and he did not offer any explanation, the authorities were justified in rejecting his case specially when he has offered 20 per cent less rate than that of the previous year and even on the higher rate he could not transport the foodgrains, as a result of which the Corporation suffered a loss of Rupees 15 lacs. These grounds are neither irrelevant nor irrational. It is not correct to say that no enquiry was held, on the other hand, even after giving sufficient opportunity with regard to the allegations, he did not offer any explanation and as such those allegations against him stood proved. After the period of contract of the writ petitioner-respondent No. 6 expired on 31-3-2004, the election came, as a result of which it was decided as a policy by the Corporation to extend the period of all the contracts as no fresh appointment could be made during the period of election and in this connection a letter dated 29-3-2004 of the Corporation has been brought on record of the appeal as Annexure-I to the reply on behalf of the appellant to the counter-affidavit of respondent no. 6. 6. Thus, the extension of the contract period was made in view of the aforesaid policy decision and not on the ground that the allegations regarding which notices were given and the writ petitioner did not reply, were not found correct or condoned. The District Transport Committee considered the matter fairly and having found that the writ petitioners conduct was unsatisfactory causing loss to the Corporation, for which he was already informed and he did not file any reply at all, rejected his case and recommended the case of the appellant for negotiation and, after this appellant having lowered down the rate of tender, has been appointed as Transporting and Handling Agent and as per the agreement, he is now performing the contract. 10. The case of the Corporation is similar to the case of the appellant and it has said that it has acted fairly and not arbitrarily and the contract has been allotted to the appellant in the public interest. 11. The question for consideration is as to whether the Corporation has acted fairly in making appointment of the appellant as Transporting and Handling Agent or such action of the Corporation in appointing the appellant as the said Agent is vitiated on the ground of arbitrariness, favouritism, mala fide and, thus, violative of Article ,14 of the Constitution of India. The law with regard to the contractual matter is settled. Now it will be too late to say that in the matter of contractual field, when the contract has been entered into between a citizen or a private body on the one hand and the State and its instrumentality on the other, which is treated as a State within the meaning of Art. 12 of the Constitution of India, the High Court in exercise of power will decline to interfere on the ground that the matter pertains contractual field. The State and its instrumentalities have to act fairly, in a reasonable manner and in conformity with the requirement of Art. 14 of the Constitution of India. Any deviation by the State in this regard is a ground for judicial review by this Court. However, this is subject to inherent limitations. However, in the case of exercise of contractual power by the Government Body, there are certain limitations. Any deviation by the State in this regard is a ground for judicial review by this Court. However, this is subject to inherent limitations. However, in the case of exercise of contractual power by the Government Body, there are certain limitations. The Government or State, as defined under Art. 12 of the Constitution, is the guardian of the finances of the State or the statutory body. It has a wide discretion in the matter of grant of contract. A fair play in the joints is a necessary concomitant for an administrative body functioning in an administrative sphere or quasi-administrative sphere. 12. The Apex Court in the case of Tata Cellular V/s. Union of India, reported in (1994) 6 SCC 651 : ( AIR 1996 SC 11 ) in paragraph 70, held that the judicial review with regard to the contractual matters is permissible with certain limitations. The said paragraph runs 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 finance 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 Art. 14 of the Constitution have to be kept in view while accepting or refusing a tender. There can be no question of infringement of Art. 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." 13. However, with regard to contractual matter, interference by this Court is not a general rule. Only in appropriate cases, a writ petition will lie against the State or instrumentality arising out of a contractual obligation. In cases, if the parties to the dispute in a contractual matter have agreed to settle the dispute through arbitration having an agreement to that effect, this Court will not entertain the writ application without invoking the remedy by way of arbitration. In cases, if the parties to the dispute in a contractual matter have agreed to settle the dispute through arbitration having an agreement to that effect, this Court will not entertain the writ application without invoking the remedy by way of arbitration. In this connection, reference may be made to the case of State of U.P. V/s. Bridge & Roof Co. (India) Ltd., reported in (1996) 6 SCC 22 : ( AIR 1996 SC 3515 ) and the recent judgment of the Supreme Court in the case of ABL International Ltd. V/s. Export Credit Guarantee Corporation of India Ltd., reported in (2004) 3 SCC 553 (paragraphs 14 and 27). 14. Even if there is disputed question of facts, the Court will not close its door and may in appropriate cases entertain a writ application with regard to the contractual matter involving the disputed question of facts. However, such case will be far and few. The Apex Court in the case of ABL International Ltd. (supra) has held in paragraph 27 that merely because some disputed questions of fact arise for consideration, same cannot be a ground to refuse to entertain a writ petition in all cases as a matter of rule. 15. Thus, it has to be held that in appropriate cases, a writ against: the State even with regard to contractual obligation is maintainable but to what extent this Court will interfere with regard to the contractual matter has to be considered and seen. The power of judicial review with regard to the aforesaid matter is to be exercised by this Court not as an appellate forum in disguise over the decision of the administrative authority on merit, but it has only to see whether in decision making process, the authorities have acted in unreasonable or unfair manner or the Order is arbitrary or is a result of nepotism, favouritism or actuated by mala fide or bias. Even in cases where the finding arrived at by the authorities is such that on the facts no reasonable man could come to the aforesaid conclusion or the conclusion arrived at is not supported by any material at all, that will also amount to infirmity in the decision making process. Even in cases where the finding arrived at by the authorities is such that on the facts no reasonable man could come to the aforesaid conclusion or the conclusion arrived at is not supported by any material at all, that will also amount to infirmity in the decision making process. While judging as to whether the authorities have acted rightly or not in decision making process, the Court has to consider that the right to refuse the lowest or any other tender is always available to the authorities. It cannot be inferred that Art. 14 of the Constitution of India has been violated if the Government accepts the tender of the best person or best quotation and the right to choose cannot be said as an arbitrary power. 16. In the case of Tata Cellular ( AIR 1996 SC 11 ) (supra), the scope of judicial review in relation to administrative action has been enumerated in paragraph 94, which runs as follows :- - "94. The principles deducible from the above are : (1) The modern trend points to judicial restraint in administrative action. (2) The Court does not sit as a Court of appeal but merely reviews the manner in which the decision was made. (3) The Court does not have the expertise to correct the administrative decision. If a review of the administrative decision is permitted it will be substituting its own decision, without the necessary expertise which itself may be fallible. (4) The terms of the invitation to tender cannot be open to judicial scrutiny because the invitation to tender is the realm of contract. Normally speaking, the decision to accept the tender or award the contract is reached by process of negotiations through several tiers. More often than not, such decisions are made qualitatively by experts. (5) The Government must have freedom of contract. In other words, a fair play in the joints is a necessary concomitant for an administrative body functioning in an administrative sphere or quasi-administrative sphere. However, the decision must not only be tested by the application of Wednesbury principle of reasonableness (including its other facts pointed out above) but must be free from arbitrariness not affected by bias or actuated by mala fides. (6) Quashing decisions may impose heavy administrative burden on the administration and lead to increased and unbudgeted expenditure." 17. However, the decision must not only be tested by the application of Wednesbury principle of reasonableness (including its other facts pointed out above) but must be free from arbitrariness not affected by bias or actuated by mala fides. (6) Quashing decisions may impose heavy administrative burden on the administration and lead to increased and unbudgeted expenditure." 17. Again in the case of Delhi Science Forum V/s. Union of India, reported in (1996) 2 SCC 405 : ( AIR 1996 SC 1356 ) it has been held that the question of awarding licences and contract does not depend merely on the competitive rates offered; several factors are required to be noticed by the Expert Body. The statutory body or the authority dealing with the contract has to be given latitude to select the best offers on terms and conditions to be prescribed taking into account the economic and social interest of the nation. Unless it is shown that the ultimate decision is vitiated on the ground of violation of Article 14 and other similar grounds, the Court cannot interfere in such matter. Any decision taken by an authority or body can be questioned in the Court on the ground that the decision has been taken in bad faith or it is based on irrational or irrelevant consideration or the decision has been taken without following the prescribed procedure, which is imperative in nature. Unless these grounds are found, the Court will be slow to interfere in such matter only because the expert body in the interest of the institution is selected one in place of the other. 18. Both the parties relied upon the aforesaid judgment and, thus, there is no controversy about the settled principles and as such the facts of this case have to be scrutinised to find out as to whether this Court should have interfered with the decision taken by the Corporation or not. 19. 18. Both the parties relied upon the aforesaid judgment and, thus, there is no controversy about the settled principles and as such the facts of this case have to be scrutinised to find out as to whether this Court should have interfered with the decision taken by the Corporation or not. 19. Learned counsel appearing for the appellant submitted that both the grounds given by the learned single Judge, namely, that no enquiry was held by the authorities before coming to a conclusion that the writ petitioners work was unsatisfactory during the previous period and that the extension of the period of contract means condonation of the earlier unsatisfactory work are against the record, on the other hand, the authorities having applied their mind and in the interest of the Corporation and the people of the district of Patna, awarded contract to the appellant. He also submitted that the learned single Judge, instead of deciding the question according to the settled law, has gone into the merit of the case, which is not the function of this Court in such matter. 20. Learned counsel appearing for the Corporation supported the submission advanced on behalf of the appellant. 21. Learned counsel appearing for the writ petitioner-respondent, on the other hand, submitted that both the grounds given by the learned single Judge are valid grounds supported by materials on the record and no case for interference is made out. He refuted the submission advanced on behalf of the appellant that the learned single Judge, instead of deciding the question according to the settled law, has gone into the merit of the case. According to him, while considering the question as to whether in the decision making process, the authorities have acted arbitrarily, he has found their action arbitrary and unreasonable and, accordingly, quashed the allotment of contract in favour of the appellant. 22. Admitted fact is that the writ petitioner-respondent was given contract for the remainder period of 2003-2004. During this period, he did not supply the foodgrains to different Blocks, as a result of which there was no supply of foodgrains. Annexures B to B/13 as appended to the counter-affidavit filed in the writ application on behalf of the appellant, show that several show-cause notices were sent to the writ petitioner-respondent as to the non-supply of foodgrains in terms of the contract. Annexures B to B/13 as appended to the counter-affidavit filed in the writ application on behalf of the appellant, show that several show-cause notices were sent to the writ petitioner-respondent as to the non-supply of foodgrains in terms of the contract. Some of the letters clearly show that despite the show-cause having been issued to him why appropriate action be not taken, he did not file a show-cause. It is the case of the writ petitioner-respondent that he did not receive those thirteen letters. If in spite of having received those letters, he has not filed any show-cause then it cannot be said that no enquiry was held before coming to the conclusion that his performance as a contractor was not satisfactory, on the other hand, it was detrimental to the interest of the Corporation causing loss of rupees fifteen lacs. The learned single Judge unfortunately did not notice all these documents, which are on the record. 23. Thus, it has to be held that enough opportunity was given to the writ petitioner-respondent to meet the allegations and when he did not file any show-cause, those allegations will be treated to have been correct. 24. So far as other ground given by the learned single Judge that the extension of the contract even after 31 -3-2004 for two or three months implies the condonation of the fault is concerned, it appears that the same is also not correct. In view of the general election, the Corporation took a policy decision on 29-3-2004,, which has been brought on record as stated above, which clearly shows that all the contracts, which were to expire on 31-3-2004, were extended due to ensuing election and as such the contract of the writ petitioner-respondent was extended because of the aforesaid situation and not because that the allegations were condoned. Thus, both the grounds given by the learned single Judge for interfering with the Order of appointment of the appellant as the Transporting and Handling Agent are not correct. If these grounds are not, proved then there is no other ground to come to the conclusion that the authorities have acted arbitrarily showing any favour to respondent No. 6-appellant. 25. The settled law is that the authorities have to choose between one or other tenderers keeping in view the interest of the institution. If these grounds are not, proved then there is no other ground to come to the conclusion that the authorities have acted arbitrarily showing any favour to respondent No. 6-appellant. 25. The settled law is that the authorities have to choose between one or other tenderers keeping in view the interest of the institution. The minutes annexed as Annexure C to the counter-affidavit filed on behalf of the Corporation in the writ application clearly shows that elaborate discussion was held in the meeting and it was found that the writ petitioner-respondents work was unsatisfactory in the previous year and he had caused loss to the Corporation, with regard to which he was already informed by several notices and as such his case should not be considered. This opinion of the Committee cannot be said to be unreasonable or against the record or arbitrary attracting Art. 14 of the Constitution of India. 26. If the writ petitioner-respondent was kept out of consideration on the aforesaid valid ground, then the appellant remained the only tenderer, whose case was to be considered. No doubt, he has submitted the highest tender but he asked to come for negotiation and after negotiation he lowered down the rate of his tender and, thereafter, work has been allotted to him. 27. There is nothing on the record to show that any favour was shown to the appellant or the authorities have taken into consideration anything except the interest of the Corporation. In other words, there is nothing on the record to show that in the decision making process, the authorities have come to a conclusion, which suffers from any of the infirmities as stated above. 28. In the result, this appeal is allowed and the Order of the learned single Judge is set aside and the Order of the authorities appointing the appellant as Transporting and Handling Agent is upheld.