1. Heard Mr. Ch. Nodiyachand Singh, learned Sr. counsel assisted by Mr.Ch. Ngongo Singh, learned counsel appearing on behalf of the petitioner-society, Mr.Th. Ibohal Singh, learned G.A. for the respondents 1,2 and 3 and Mr. H.S. Paonam, learned counsel for the private respondent no.4. 2. The fact stated, in short, of the petitioner's case is that the petitioner-society i.e. “ the Ngaikhong Khullen Pisc. Co-operative Society Ltd.” is a registered society having registration No.2 of 1976-77. 3. There is a Govt. fishery called “Yaina Pat Sub-Fishery No. 86” covered by C.S. Dag No.3003 and 3005. The systems of leasing out of the government fisheries are morefully mentioned in Part-II of the Manipur Fishery Rules 1998. The procedures for outright leasing system of the government fisheries are mentioned in Part-IV of the consisting Rules 33 and 34 of the Manipur Fisheries Rules, 1998. Relevant portion of Rule 33 of the Manipur Fisheries Rules are quoted below in entirety: (iii) Lessee to enter an agreement: - The lessee shall have to enter into an agreement with the lessor, in the agreement form appended to these Rules at Schedule A, within 1(one) month failing which the lease shall be cancelled. The lessee shall abide by the terms and conditions laid down in the agreement. (iv) Extension of lease period: - Extension of lease period in favour of the lessee shall be considered by the State Government, if the lessee fulfills the following conditions to the satisfaction of the lessor: (a) The lessee pays the lease fee for the fishery(s) in time, without any due; (b) The lessee abides by the terms and conditions of agreement, without any breach thereof; (c) The lessee shall pay in advance an amount equivalent to 1(one year's lease fee for the fishery fixed by the State Govt., which shall be existent during the last year of the previous/earlier lease period or the rate of lease fee fixed by the State Government. This amount shall be kept as security money and the lessee shall pay the said amount in the form of a Deposit -at-Call from any scheduled bank at Imphal drawn in favour of the Director of Fisheries, Manipur.The amount deposited as Deposit-at-Call shall be, later on, kept as fixed deposit for the required period, and the amount with the interest accrued to it, shall be adjusted for payment of the last period of lease or in case of failure on the part of the lessee in payment of lease fee due.” 4. In the year 1992 for a period of 10 years the Government of Manipur, Fishery Department granted lease of Yaina Pat Sub- Fishery No.86 to the petitioner-society. Again, taking into consideration of the proper maintenance of the said government fisheries while it was leased out to the petitioner-society, the Govt. of Manipur was pleased to extend the period of lease for another period of 10 years in the year 1992. Again, taking into consideration of the fishery development programme taken up by the petitioner-society in the said Yaina Pat Sub-Fishery No.86, the Govt. of Manipur by taking recourse to Sub-Rule (2) of Rule 33 of the Manipur Fisheries Rules, 1998 was pleased to issue an order being No.23/2/98-FY, Imphal the 31st December, 2002 to accord to the grant of lease term of Yaina Pat Sub-Fishery No.86 to the petitioner-society for another term of 10 years w.e.f. 1.4.2002 to 31.3.2012 at the approved rate of lease fee of Rs. 200 per hectar per annum subject to the condition that the advance payment of lease fee for 2 years plus 2% of the lease amount must be made before the delivery of possession of fisheries and agreement shall be registered in compliance with the terms and conditions of the said orders of the Govt. of Manipur dated 31.12.2002, the petitionersociety after making the necessary advance payment of lease fee an agreement of lease dated 17.2.2003 in the form prescribed in the Manipur Fisheries Rules, 1998 was signed, a copy of which is available at Annexure-A/4 to the present writ petition. The said agreement of lease was entered into between the petitioner-society and the Govt. of Manipur. The relevant terms and conditions of the said lease agreement dated 17.2.2003 are quoted hereunder: “2. The said agreement of lease was entered into between the petitioner-society and the Govt. of Manipur. The relevant terms and conditions of the said lease agreement dated 17.2.2003 are quoted hereunder: “2. The “Leasee” shall pay to the leaser for exercising the said rights the sum of Rs.95,616/- (Rupees ninetyfive thousand six hundred and sixteen) only as per terms and conditions of the order No.23/2/98-FY dated 31.12.2002 of the Govt.of Manipur and Rs.23,904/- per year the amount already paid by the leasee before the execution of this lease agreement i.e. Rs.95,616/- for the period up to 2(two years/ lease fee + 20% of the total lease amount and the subsequent installment shall be paid as herein after mentioned without any deductions before 30th June, every year the leased year being reckoned for this purpose from 1st July, to 30th June, each year. (i) 2nd instalment on or before the 30th day of June of every year (next year) (year) 2004; (ii) 3rd instalments on or before the 30th day of June of every year (preceding year) 2005 (year) and as on upto the required number of instalments allowed. The lessor shall the right to refix the lease amount such an interval as the lessor deems reasonable within the lease period. At the end of the lease period of earlier in case the conditions in the agreement are not fulfilled the fisheries rights shall stand reverted to “Lessor”. * * * “24. The “Leasee” agree that the “Lessor” has the right to terminate the lease without notice in the payment of the annual lease amount is not made by the “Lessee” by the stipulated date or when the development works in the opinion of the “Lessor” is not carried out by the “Leasee” as required. The “Lessor” has the right to grant lease to any other individual Society or organization or to reject the taka/fishery for development by itself. The deposit made by the “Lessee” when the taking lease shall stand forfeited to the Govt. in termination of the lease”. The “Lessor” has the right to grant lease to any other individual Society or organization or to reject the taka/fishery for development by itself. The deposit made by the “Lessee” when the taking lease shall stand forfeited to the Govt. in termination of the lease”. According to the terms and conditions of the leased agreement between the petitioner-society and the Government of Manipur, the required advance lease fee shall be paid before the execution of the leased agreement and the subsequent instalments shall be paid without any deduction of the advance lease fee already paid before 30th June, every year the lease period being reckoned for this purpose from 1st July to 30th June every year and second instalment on or before the 30th day of June of every year (next year) 3rd instalment on or before the 30th day of June of every year and so on up to the required number of installments. The “lesser” under the terms and conditions of the lease agreement has the right to terminate the lease without notice in the payment of annual lease amount is not made by the lesser by the stipulated date or when the development work in the opinion of the lesser is not carried out by the “Lessee” as required, and the case of the petitioner-society in the present case is that the lease agreement between the petitionersociety are binding to the petitioner-society but also to the Govt.., i.e. the respondents 1 to 3. 5. After the said registered lease agreement dated 17.2.2003 was executed for the “Yaina Pat Sub-Fishery No.86 covered by C.S. Dag No.3003 and 3005” in pursuance of the said order of the Govt. of Manipur dated 31.12.2002, the petitioner-society has been possessing the said Govt. Sub-Fishery by paying the lease fee in the manner prescribed in the registered lease agreement dated 17.2.2003. But surprisingly without any notice whatsoever to the petitioner-society and also in clear infraction of the terms and conditions of the said lease agreement dated 17.2.2003, the District Fishery Officer (D.F.O) served a letter No.DFO(8)/147/88/6 along with a copy of the order of the Govt. of Manipur being No.23/2/98- FY dated 29.3.2003 asking the petitioner-society to attend the office on 10.4.2003 to sign a fresh lease only for C.S. Dag No.3003 as the earlier order of the Govt. of Manipur being No.23/2/98- FY dated 29.3.2003 asking the petitioner-society to attend the office on 10.4.2003 to sign a fresh lease only for C.S. Dag No.3003 as the earlier order of the Govt. of Manipur dated 31.12.2002 was modified and as a result the agreement dated 17.2.2003 was cancelled. The petitioner being aggrieved by the said order of the Govt. of Manipur dated 29.3.2003 filed the present writ petition. 6. The respondents 1, 2 and 3 also filed their affidavit-inopposition stating that as per the provisions of Fisheries Rules the request of the private respondent no.4, i.e. the Ngaikhong Khullen Paddy-cum-Pisc. Co-op.Society Ltd., was cannot considered. Accordingly, the previous lease order dated 31.12.2002 is remodified vide order dated 29.3.2003 (impugned order), and accordingly the said fisheries was sub-divided into 2(two) portions as per C.S. Dag No. and thereafter allotted/leased out to the present writ petitioner- society and the private respondent no.4 in the following manner: “Sl. No. Name of Society C.S.Dag No. Period of Lease 1. Ngaikhong Khullen Pisc. -3003 1.4.2002 Co-op. Society Ltd.(Reg. Yainapat to No.2 of 1976077) 31.3.2012. 2. Ngaikhong Khullen Paddy cum Pisc.Co-op. -3005 Society Ltd. (Regd. Yainapat -do- No. 23 of 1997-98) Laipham” In the affidavit-in-opposition, it is also said that the said fisheries having 2(two) separate Dags with separate identity such as Yainapat and Yainapat Laipham and therefore allotment of the same in two Co-op. Societies does not affect their interest as a policy decision of the Government as provided under the rules does not affect their interest. 7. The private respondent no.4 also filed affidavit-in-opposition and also the additional affidavit-in-opposition. In the additional affidavit-in-opposition, the respondent no.4 had taken the plea that the order of the Govt. of Manipur dated 31.12.2002 for the extending of the term of lease period for Yainapat Sub-Fishery in favour of the petitioner-society for another 10 years w.e.f. 1.4.2002 to 31.3.2012 is illegal inasmuch as the petitioner-society was defaulter in making deposit and they have deposited the lease instalment only on 15.6.2002. of Manipur dated 31.12.2002 for the extending of the term of lease period for Yainapat Sub-Fishery in favour of the petitioner-society for another 10 years w.e.f. 1.4.2002 to 31.3.2012 is illegal inasmuch as the petitioner-society was defaulter in making deposit and they have deposited the lease instalment only on 15.6.2002. Further, the respondent no.4 in the affidavit-in-opposition mentioned that “during the pendency of the present case and in order to highlight all this facts and also to avoid the possible contention of the writ petitioner that order dated 31.12.2002 is not challenged, answering respondent has filed a cross writ petition (i.e. W.P(C ) No.660 of 2003) which is being heard along with the present writ petition following tagging of the two matters on the initiation of the present respondent so that no conflicting order is passed by this Hon'ble Court.” In reply to the additional affidavit-in-opposition, the petitioner-society also filed a rejoinder affidavit stating that as per the terms and conditions of the lease agreement about the payment of lease fee between the petitioner-society and the Govt. of Manipur and also according to the Manipur Fisheries Rules, 1998. The lease instalment could be paid on or before 30th day of June of the last year inasmuch as last year being reckoned for the purpose of the lease agreement from 1st July to 30th day June and also that the Director of Fisheries, Govt. of Manipur can exercise the power for extension of last date for payment of the last installment up to six months. Such power of the Director of Fisheries is mentioned in para-9 to the Manipur Fisheries Rules 1998. Such being the situation, the petitionersociety was the defaulter at the time of extension of the terms of the lease under the said order of the Govt. of Manipur dated 31.12.2002. Unfortunately the respondent no.4 did not press the said writ petition, i.e. W.P(C )No.660 of 2003 challenging the said order of the Govt. of Manipur dated 31.12.2002. Accordingly this court by passing an order dated 6.9.2005 dismissed the W.P (C ) No.660 of 2003. The order of this court dated 6.9.2005 reads as follows: “Heard Mr. H.S. Paonam, learned counsel for the petitioner and Mr.Ch. Nodiachand, learned Sr. counsel assisted by Mr. Laishram Binoy Singh, learned advocate appearing for the respondent no.4 as well as Md. Jalal Uddin, learned G.A. appearing for the respondent Nos.1,2 and 3. The order of this court dated 6.9.2005 reads as follows: “Heard Mr. H.S. Paonam, learned counsel for the petitioner and Mr.Ch. Nodiachand, learned Sr. counsel assisted by Mr. Laishram Binoy Singh, learned advocate appearing for the respondent no.4 as well as Md. Jalal Uddin, learned G.A. appearing for the respondent Nos.1,2 and 3. Learned counsel appearing for the petitioner submits that he is not pressing the present writ petition due to some technical mistakes and communication gap. This writ petition is dismissed as not pressed.” 8. As the writ petition, i.e. W.P(C) No.660 of 2003, filed by the private respondent no.4 challenging the said order of the Govt. of Manipur dated 31.12.2002 for according sanction to the grant of extension of lease period of Yaina Pat Sub-Fishery No.86 to the petitioner-society for another term of 10 years w.e.f. 1.4.2002 to 31.3.2012 had been dismissed as not pressed, the respondent no.4 cannot collaterally challenge the said order of the Govt. of Manipur dated 31.12.2002 in the present writ petition by filing affidavit-inopposition. The learned counsel referred: (1) Panjak Bhargava & Anr -vrs - Mohinder Nath & Anr: AIR 1991 SC 1233 ; (2) Dhurandhar Prasad Singh -vrs - Jai Prakash University & Ors: AIR 2001 SC 2552 ; The ratio laid down by the court in the above two cases are that regularity or validity of order must be directly challenged and got set aside in an independent proceeding and to permit a collateral attack on them in other proceedings there will be beset with problems and complications or a far reaching magnitude. 9. From the facts spelt out from the writ petition as well as the affidavit -in-opposition filed by the respondents 1,2 and 3, it is clear that no opportunity of being heard and no show cause notice to the petitioner-society before issuing the impugned impugned order dated 29.3.2003 and it (order dtd. 29.3.2003) was not issued for violation of the terms and conditions of the registered lease agreement dated 17.2.2003 between the petitioner-society and the Govt. of Manipur. The learned counsel appearing for the petitioner in order to substantiate his case had placed heavy reliance on the following cases: (1) Mahabir Auto Stores & Ors. -vrs- Indian Oil Corpn. & Ors., AIR 1990 SC 1031 ; (2) Harbanslal Sahnia & Anr. -vrs - Indian Oil Corpn. of Manipur. The learned counsel appearing for the petitioner in order to substantiate his case had placed heavy reliance on the following cases: (1) Mahabir Auto Stores & Ors. -vrs- Indian Oil Corpn. & Ors., AIR 1990 SC 1031 ; (2) Harbanslal Sahnia & Anr. -vrs - Indian Oil Corpn. & Ors., AIR 2003 SC 2120 ; The fact in Mahabir Auto Stores (Supra) was that the appellant Mahabir Auto Stores & Ors. was running with the business of all kinds of lubricants and the Indian Oil Corporation Ltd. supplied all kinds of lubricants to the appellants being its distributor under a contractual agreement. But the Indian Oil Corporation Ltd. abruptly stopped the supply of lubricants to the appellants and being aggrieved the appellants filed the writ petition before the High Court. The Supreme Court in that case held that even though the rights of the citizens are in the nature of contractual rights, the manner, the method and motive of a decision of entering or not entering into contract are subject to judicial review on the touchstone of relevance and reasonableness, fair play, natural justice, equality and non discrimination. Paras-12 and 13 of the judgment and order in Mahabir Auto Stores (Supra) read as follows: “12. It is well settled that every action of the state or an instrumentality of the State in exercise of its executive power, must be informed by reason. In appropriate cases, actions uninformed by reasons may be questioned as arbitrary in proceedings under Article 226 or Article 32 of the Constitution. Reliance in this connection may be placed on the observations of this court in M/s Radha Krishna Agarwal v. State of Bihar, (1977) 3 SCC 457 : ( AIR 1977 SC 1496 ). It appears to us, at the outset, that in the facts and circumstances of the case, the respondent-company IOC is an organ. Of the State or an instrumentality of the State as contemplated under Article 12 of the Constitution. The State acts in its executive power under Article 298 of the Constitution in entering or not entering in contract with individual parties. Article 14 of the Constitution would be applicable to those exercises of power. Therefore, the action of State organ under Article 14 can be checked. The State acts in its executive power under Article 298 of the Constitution in entering or not entering in contract with individual parties. Article 14 of the Constitution would be applicable to those exercises of power. Therefore, the action of State organ under Article 14 can be checked. See M/s Radha Krishna Agarwal V.State of Bihar at p.462 (at SCC)” (at p.1499-1500 of AIR) (supra), but Article 14 of the Constitution cannot and has not been construed as a charter for judicial review of State action after the contract has been entered into, to call upon the State to account for its actions in its manifold activities by stating reasons for such actions. In a situation of this nature certain activities of the respondent company which constituted State under Article 12 of the Constitution may be in certain circumstances subject to Article 14 of the Constituting in entering or not entering into contracts and must be reasonable and taken only upon lawful and relevant consideration, it depends upon facts and circumstances of a particular transaction whether hearing is necessary and reasons have to be stated. In case any right conferred on the citizens which is sought to be interfered, such action is subject to Article 14 of the Constitution, and must be reasonable and can be taken only upon lawful and relevant grounds of public interest. Where there is arbitrariness in state action of this type of entering or not entering into contracts, Article 14 springs up and judicial review strikes such an action down. Every action of the State executive authority must be subject to rule of law and must be informed by reason. So, whatever be the activity of the public; authority, in such monopoly or semi-monopoly dealings, it should meet the test of Article 14 of the Constitution. If a Government action even in the matters of entering or not entering into contracts, fails to satisfy the test of reasonableness, the same would be unreasonable. So, whatever be the activity of the public; authority, in such monopoly or semi-monopoly dealings, it should meet the test of Article 14 of the Constitution. If a Government action even in the matters of entering or not entering into contracts, fails to satisfy the test of reasonableness, the same would be unreasonable. In this connection reference may be made to E.P.Royappa V.State of Tamil Nadu, (1974) 4 SCC 3 : ( AIR 1974 SC 555 ); Maneka Gandhi v. Union of India, (1978) 1 SCC 248 ; ( AIR 1978 SC 597 ), Ajay Hasia v. Khalid Mujib Sehravardi, (1981) 1 SCC 722 : ( AIR 1981 SC 487 ): R.D.Shetty v. International Airport Authority of India, (1979) 3 SCC 489 : (AIR 1979 SC 162) and also Dwarkadas Marfatia and Sons v. Board of Trustees of the Port of Bombay, (1989 SC 1642). It appears to us that rule of reason and rule against arbitrariness and discrimination, rules of fair play and natural justice are part of the rule of law applicable in situation or action by State instrumentality in dealing with citizens in a situation like the present one. Even though the rights of the citizens are in the nature of contractual rights, the manner, the method and motive of a decision of entering or not entering into a contract, are subject to judicial review on the touchstone of relevance and reasonableness, fair play, natural justice, equality and non-discrimination in the type of the transactions and nature of the dealing as in the present case. 13. The existence of the power of judicial review however depends upon the nature (of) and the right involved in the facts and circumstances of the particular case. It is well settled that there can be “malice in law”. Existence of such “malice in law” is part of the critical apparatus of a particular action in administrative law. Indeed “malice in law” is part of the dimension of the rule of relevance and reason as well as the rule of fair play in action.” The fact of the case in Harbanslal Sahnia & Anr. -vrs - Indian Oil Corpn. (Supra) is that by an agreement dated 31.3.1994 entered into between the Indian Oil Corporation Ltd. and the appellants. Indeed “malice in law” is part of the dimension of the rule of relevance and reason as well as the rule of fair play in action.” The fact of the case in Harbanslal Sahnia & Anr. -vrs - Indian Oil Corpn. (Supra) is that by an agreement dated 31.3.1994 entered into between the Indian Oil Corporation Ltd. and the appellants. The appellants were appointed as dealers in petroleum products but the Corporation issued an order dated 6.9.2000 terminating the dealership of the appellants in violation of the principle of natural justice. The writ petition challenging the termination order dated 6.9.2000 was dismissed by the High Court on the ground that the relationship between the parties is contractual and dealership agreement condition of arbitration clause and therefore appropriate remedy available to the appellants was to have been recourse to arbitration rendered invoking the writ jurisdiction of the High Court. The Apex Court allowed the appeal thereby setting aside the judgment and order of the High Court for the reasons that: “7. So far as the view taken by the High Court that the remedy by way of recourse to arbitration clause was available to the appellants and therefore the writ petition filed by the appellants was liable to dismissed, suffice it to observe that the rule of exclusion of writ jurisdiction by availability of an alternative remedy is a rule of discretion and not one of compulsion. In an appropriate case. In spite of availability of the alternative remedy, the High Court may still exercise its writ jurisdiction in at least three contingencies: (i) where the writ petition seeks enforcement of any of the Fundamental Rights; (ii) where there is failure of principles of natural justice or, (iii) where the orders or proceedings are wholly without jurisdiction or the vires of an Act and is challenged. [See Wirlpool Corporation v. Registrar of Trade Marks, Mumbai and others (1998) 8 SCC 11]. The present case attracts applicability of first two contingencies. Moreover, as noted, the petitioners' dealership, which is their bread and butter, came to be terminated for an irrelevant and non-existent cause. In such circumstances, we feel that the appellants should have been allowed relief by the High Court itself instead of driving them to the need of initiating arbitration proceedings.” 10. Moreover, as noted, the petitioners' dealership, which is their bread and butter, came to be terminated for an irrelevant and non-existent cause. In such circumstances, we feel that the appellants should have been allowed relief by the High Court itself instead of driving them to the need of initiating arbitration proceedings.” 10. In view of the above discussions, this court is of the considered view that there was violation of the principle of natural justice and also there was no reasonableness and fair play in issuing the impugned order dated 29.3.2003 and also that the terms of the registered lease agreement dated 17.2.2003 between the petitionersociety and the Govt. of Manipur is binding not only the petitionersociety but also to the official respondents in the present writ petition. This court is also of the considered view that the impugned order dated 29.3.2003 was issued in violation of the terms and conditions of the registered lease agreement dated 17.2.2003. Accordingly, the interference to the order dated 29.3.2003 is called for. 11. For the reasons discussed above, the impugned order dated 29.3.2003 is hereby quashed and set aside and the writ petition is allowed. However, it is left to the state respondents to take necessary actions if required according to the Manipur Fisheries Rules, 1998 and law of contract for modification/ cancellation or alteration of the order of the Govt. of Manipur dated 31.12.2002 and the said lease agreement dated 17.2.2003. Parties to bear their own costs.