G. C. GUPTA, J. ( 1 ) THE Eastern Coalfields Limited issued a notice dated 28th February, 2005 inviting tenders for expansion of the coal production of Rajmahal. "expansion of the Coal production of Rajmahal OCP from 10. 5 MTY level to 17 MTY capacity level and corresponding overburden removal. " ( 2 ) THE period of intended contract was eight years. The amount of earnest money was a sum of Rs. 10 crores split up in two parts: the first part consisting of INR 2. 5 crores or its equivalent USD on prevailing exchange rates and a bid security bank guarantee for INR 7. 5 crores or its equivalent USD in the prescribed format to be issued by a nationalised or RBI scheduled Indian bank. The clause as regards earnest money appearing in the notice inviting tender reads as follows: "earnest Money: Magnetic Ink Character Recognition (MICR)Bank Draft of INR 2. 5 Crores or equivalent USD on prevailing exchange rate on the date of floating of the tender on the website in favour of 'eastern Coalfields Ltd. ' on any Nationalized/scheduled bank in India payable at Asansol preferably on State Bank of India and Bid Security Bank Guarantee for INR 7. 50 Crores or its equivalent USD in the format prescribed by ECL on Nationalised/rbi approved Scheduled Indian Bank at prevailing exchange rate on the date of floating of the tender on the website. " ( 3 ) THE Eastern Coalfields Limited reserved the right unto itself to accept or to reject any or all the tenders without assigning any reason whatsoever as would appear from Clause 17 of the notice inviting tenders. The last date for submission of tender was 20th July, 2005. By a corrigendum dated 19th April, 2005 the last date of submission of tender was extended till 19th August, 2005. By a further corrigendum dated 9th August, 2005 the last date of submission of tender was extended till 26th October, 2005. By a still further corrigendum dated 19th October, 2005 the last date of submission of tender was extended till 20th December, 2005. Each of the corrigendums issued by the eastern Coalfields Limited contained a stipulation that all other terms and conditions remained unchanged. ( 4 ) THE petitioner purchased the tender documents which are voluminous and include many sections. The 1st section provides the general information. The 2nd section provides the bid process. Each of the corrigendums issued by the eastern Coalfields Limited contained a stipulation that all other terms and conditions remained unchanged. ( 4 ) THE petitioner purchased the tender documents which are voluminous and include many sections. The 1st section provides the general information. The 2nd section provides the bid process. The other sections do not concern us. The provision as regards earnest money to be found in the 1st section is as follows: "all Bid Documents must be accompanied by the Earnest Money deposit in the form of Bank Draft of INR 2. 50 Crores or an equivalent amount in US Dollar at prevailing exchange rate on the date of floating of tender on the web site in the form of Demand Draft (MICR)drawn in favour of 'eastern Coalfields Ltd. ' on any nationalized/scheduled bank in India payable at Asansol (West Bengal) preferably on State Bank of India. The Bidder shall also furnish Bid Security bank Guarantee for INR 7. 50 Crores or its equivalent USD in the format prescribed by ECL on Nationalized/rbi approved in scheduled indian Bank at prevailing exchange rate on the date of floating of tender on the web -site. No Bidder is exempted from submitting the earnest Money and Bid Security. The Earnest Money Bank Draft and bid Security Bank Guarantee must be enclosed in a separate envelope to be submitted along with the Bid. The details of Bank Draft no. and date and Bank Guarantee No. must be endorsed on top of envelope containing the Earnest Money Bank Draft and Bid Security bank Guarantee. " whereas the provision in the 2nd section is as follows: "2. 3. 4. 1. Earnest Money and Bid Security Guarantee -2. 3. 4. 1. 1. All the Bidders shall furnish the Earnest money of an amount of INR 2. 50 Crores or its equivalent USD in the form of a magnetic Ink Character Recognition (MICR) bank draft drawn in favour of "eastern Coalfields Ltd" on a Nationalised Indian Bank, valid upto 90 days beyond the dale of validity of the bid submitted by the bidder. 2. 3. 4. 1. 2. The Bidders are additionally required to furnish a Bid security in from of Bank Guarantee in the format prescribed by ECL (clause 5. 6 of section-V) for INR 7. 2. 3. 4. 1. 2. The Bidders are additionally required to furnish a Bid security in from of Bank Guarantee in the format prescribed by ECL (clause 5. 6 of section-V) for INR 7. 50 Crores or its equivalent USD on a Nationalised Indian Bank, valid upto 90 days beyond the date of validity of the bid submitted by the bidder. 2. 3. 4. 1. 3. Bid without Earnest Money Deposit (EMD) and Bid security as per clause 2. 3. 4. 1. 1 and 2. 3. 4. 1. 2 shall be rejected. " ( 5 ) ANOTHER important noticeable aspect of the tender is the 'disclaimer' to the effect as follows which was specifically acknowledged by the writ petitioner by putting its seal and signature as would appear from the page 75 of the petition. Disclaimer 1. Though adequate care has been taken while issuing this tender Document, the Bidder should satisfy himself that document is complete in all respects. Intimation of any discrepancy shall be given to this office immediately (as mentioned below ). If no intimation is received by this office within 10 days from the date of issue of the Tender Document, then this office shall consider that the Tender Document received by the prospective Bidder is complete in all respects and that the Bidder is satisfied that the Tender document is complete in all respects. Office : C/o Director (Technical)-Op eastern Coalfields Ltd. Sanctoria, Dishergarh burdwan : 713 333 west Bengal. , India. 2. ECL reserves the right to change any or all of the provisions of this Tender Document. Such a change would be intimated to all parties procuring this Tender Document. 3. ECL reserves the right to reject any or all of the Bid Document without assigning any reasons whatsoever. " ( 6 ) THE petitioner admittedly submitted a tender together with earnest money comprised in a bank draft for a sum of Rs. 2. 5 crores and a bid security by way of bank guarantee for a sum of Rs. 7. 5 crores, both issued by the ICICI Bank Limited. ( 7 ) AFTER the bank draft for a sum of Rs. 2. 5 crores had been encashed a fresh tender notice dated 1st March, 2006 was issued by the Eastern coalfields Limited for the selfsame work. 7. 5 crores, both issued by the ICICI Bank Limited. ( 7 ) AFTER the bank draft for a sum of Rs. 2. 5 crores had been encashed a fresh tender notice dated 1st March, 2006 was issued by the Eastern coalfields Limited for the selfsame work. By a letter dated 2nd March, 2006 the petitioner was informed that the tender had been cancelled by the competent authority and the petitioner was requested to collect the bank guarantee for a sum of Rs. 7. 5 crores and was further informed that refund of a sum of Rs. 2. 5 crores had already been recommended. The writ petitioner by its letter dated 9th March, 2006 requested the ecl to indicate the reasons for rejection of the tender to which ECL by its letter dated 11th March, 2006 replied as follows: "with reference to your letter dated 9th March, 2006 we would like to inform you that your bid has been rejected as the Demand draft and the Bank Guarantee submitted by you against earnest money and security deposit respectively, were issued by a Scheduled indian Bank instead of a Nationalized Bank as required under clause 2. 3. 4. 1. 1. and 2. 3. 4. 1. 3 of the Bid document. As per advice of Attorney General Govt. of India both the bids have been rejected due to discrepancy in Bank Draft and Bank Guarantee issued by both the bidders. In view of above, company has taken a decision of cancelling the above referred Tender and to go the re-tender. " ( 8 ) CHALLENGING the cancellation of the tender the present writ petition was filed praying for cancellation of the notice inviting tender dated 1st March, 2006, the letter dated 2nd March, 2006 by which cancellation of the tender was informed to the writ petitioner and which also contained the request for taking back the amount of earnest money together with the bid security and also for cancellation of the letter dated 11th March, 2006 together with a writ in the nature of mandamus directing the respondent authorities to complete the tender process pursuant to the notice inviting tender dated 28th February, 2005 and a writ in the nature of prohibition prohibiting the respondent authorities from proceeding with the tender process pursuant to the notice inviting tender dated 1st March, 2006 and some ancillary reliefs. ( 9 ) MR. ( 9 ) MR. Mukherjee, learned senior advocate appearing for the writ petitioner submitted. a) that at the threshold or at the time of entering into the filed of contract, if there is any illegality, the Writ Court will intervene. He relied on paragraphs 9 to 11 of the Judgment in the case of M/s. Radhakrishna Agarwal and Ors. v. State of Bihar, reported in AIR 1977 sc 1496 which reads as follows: "dr. Singhvi's argument that the State Government had some special obligations attached to it would have appeared more plausible if it could be shown that the State or its officers or agents had practised some discrimination against the petitioners-appellants at the very threshold or at the time of entry into the filed of contract so as to exclude them from consideration when compared with others on any unreasonable or unsustainable ground struck by Article 14 of the Constitution. . " It is thus clear that the Erusian Equipment and Chemicals Ltd's case ( AIR 1975 SC 266 ) (supra) involved discrimination at the very threshold or at the time of entry into the field of consideration of persons with whom the Government could contract at all. At this stage, no doubt, the State Act purely in its executive capacity and is bound by the obligations which dealings of the State with the individual citizens import into every transaction entered into in exercise of its constitutional powers. But, after the State or its agents have entered into the field of ordinary contract, the relations are no longer governed by the constitutional provisions but by the legally valid contract which determines rights and obligations of the parties inter se. No question arises of violation of Article 14 or of any other constitutional provision when the State or its agents, purporting to act within this field, perform any act. In this sphere, they can only claim rights conferred upon them by contract and are bound by the terms of the contract only unless some statute steps in and confers some special statutory power of obligation on the State in the contractual field which is apart from contract. . . . . . . . . . . . . . . . . . " b) The State in matters of entering or refusing to enter into contract cannot act arbitrarily. . . . . . . . . . . . . . . . . . " b) The State in matters of entering or refusing to enter into contract cannot act arbitrarily. This is what according to him was done by the respondents. On the one hand, they purported to reject the offer because the offer was accompanied by a bank draft and a bank guarantee issued by a scheduled Indian bank, which was specifically permitted by the notice inviting tender, whereas in the notice inviting tender dated 1st March, 2006, they have once again opted for earnest money and bid security to be issued by a scheduled indian bank amongst others, as would appear from Clause 3 of the notice inviting tender dated 1st March, 2006 which reads as follows: "earnest Money: Magnetic Ink Character Recognition (MICR)Bank Draft of INR 2. 5 Crores or equivalent USD on prevailing exchange rate on the date of floating of the tender on the website in favour of 'eastern Coalfields Ltd. ' on any Nationalized/rbi approved scheduled Bank payable at Asansol preferably on State Bank of India and Bid Security Bank Guarantee for INR 7. 50 Crores or its equivalent USD in the format prescribed by ECL on Nationalised/rbi approved Scheduled Bank at prevailing exchange rate on the date of floating of the tender on the website. Bank guarantee should be valid for 268 days (28 days beyond bid valid of 240 days) from the date of opening of bid. " c) He submitted that the whole exercise was arbitrary and should be struck down. In support of his submission he relied on a judgment in the case of Ramana Dayaram Shetty v. The International airport Authority of India and Ors. , reported in AIR 1979 SC 1628 . He relied on paragraphs 20, 21 and 34 of the aforesaid Judgment which read as follows: "now, obviously where a corporation is an instrumentality or agency of Government, it would, in the exercise of its power of discretion, be subject to the same constitutional or public law limitations as Government. , reported in AIR 1979 SC 1628 . He relied on paragraphs 20, 21 and 34 of the aforesaid Judgment which read as follows: "now, obviously where a corporation is an instrumentality or agency of Government, it would, in the exercise of its power of discretion, be subject to the same constitutional or public law limitations as Government. The rule inhibiting arbitrary action by government which we have discussed above must apply equally where such corporation is dealing with the public, whether by way of giving jobs or entering into contracts or otherwise, and it cannot act arbitrarily and enter into relationship with any person it likes at its sweet will, but its action must be in conformity with some principle which nteets the test of reason and relevance. This rule also flows directly from the doctrine of equality embodied in Article 14. It is now well settled as a result of the decisions of this court in E. P. Royappa v. State of Tamil Nadu, (1974)2 SCR 348 : ( AIR 1974 SC 555 ) and Maneka Gandhi v. Union of India, (1978) 1 SCC 248 : ( AIR 1978 SC 597 ) that Article 14 strikes at arbitrariness in State action and ensures fairness and equality of treatment. It requires that State action must not be arbitrary but must be based on some rational and relevant principle which is non-discriminatory: it must not be guided by any extraneous or irrelevant consideration, because that would be denial of equulity. The principle of reasonableness and rationality which is legally as well as philosophically an essential element of equality or non-arbitrariness is projected by Article 14 and it must characterise every State action, whether it be under authority of law or in exercise of executive power without making of law. The State cannot, therefore act arbitrarily in entering into relationship, contractual or otherwise with a third party, but its action must conform to some standard or norm which is rational and non-discriminatory. This principle was recognised and applied by a bench of this Court presided over by Ray, C. J. , in Erusian Equipment and Chemicals Ltd. v. State of West Bengal ( AIR 1975 SC 266 ) (supra)where the learned Chief Justice, pointed but that the State can carry on executive function by making a law or without making a law. This principle was recognised and applied by a bench of this Court presided over by Ray, C. J. , in Erusian Equipment and Chemicals Ltd. v. State of West Bengal ( AIR 1975 SC 266 ) (supra)where the learned Chief Justice, pointed but that the State can carry on executive function by making a law or without making a law. The exercise of such powers and functions in trade by the State is subject to Part III of the Constitution. Article 14 speaks of equality before the law and equal protection of the laws. Equality of opportunity should apply to matters of public contracts. The State has the right to trade. The State has the duty to observe equality. An ordinary individual can choose not to deal with any person. The Government cannot choose to exclude persons by discrimination. The order of blacklisting has the effect of depriving a person of opportunity in the matter of public contract. A person who is on the approved list is unable to enter into advantageous relations with the Government because of the order of black-listing - A citizen has a right to claim equal treatment to enter into a contract which may be proper, necessary and essential to his lawful calling. It is true that neither the petitioner nor the respondent has any right to enter into a contract but they are entitled to equal treatment with others who offer tender or quotations for the purchase of the goods. It must, therefore follow as a necessary corollary from the principle of equality enshrined in Article 14 that though the State is entitled to refuse to enter into relationship with any one, yet if it does so, it cannot arbitrarily choose any person it likes for entering into such relationship and discriminate between persons similarly circumstanced, but it must act in conformity with some standard or principle which meets the test of reasonableness and non-discrimination and any departure from such standard or principle would be invalid unless it can be supported or justified on some rational and non-discriminatory ground. It is, therefore, obvious that both having regard to the constitutional mandate of Article 14 as also the judicially evolved rule of administrative law, the 1st respondent was not entitled to act arbitrarily in accepting the tender of the 4th respondents, but was bound to conform to the standard or norm laid down in paragraph 1 of the notice inviting tenders which required that only a person running a registered 2nd Class hotel or restaurant and having at least 5 years' experience as such should be eligible to tender. It was not the contention of the appellant that this standard or norm prescribed by the 1st respondent was discriminatory having no just or reasonable relation to the object of inviting tenders, namely, to award the contract to a sufficiently experienced person who would be able to run efficiently a 2nd class restaurant at the airport. Admittedly the standard or norm was reasonable and non-discriminatory and once such a standard or norm for running a 2nd class restaurant should be awarded was laid down, the 1st respondent was not entitled to depart from it and to award the contract to the 4th respondents who did not satisfy the condition of eligibility prescribed by the standard or norm. If there was no acceptable tender from a person who satisfied the condition of eligibility, the 1st respondent could have rejected the tenders and invited fresh tenders on the basis of a less stringent standard or norm, but it could not depart from the standard or norm prescribed by it and arbitrarily accept the tender of the 4th respondent. When the 1st respondent entertained the tender of the 4th respondents even though they did not have 5 years' experience of running a 2nd class restaurant or hotel, it denied equality of opportunity to others similarly situate in the matter of tendering for the contract. There might have been many other persons, in fact the appellant himself claimed to be one such person, who did not have 5 years' experience of running a 2nd class restaurant, but who were otherwise competent to run such a restaurant and they might also have competed with the 4th respondents for obtaining the contract, but they were precluded from doing so by the condition of eligibility requiring five years' experience. The action of the 1st respondent in accepting the tender of the 4th respondents, even though they did not satisfy the prescribed condition of eligibility, was clearly discriminatory, since it excluded other persons similarly situate from tendering for the contract and it was also arbitrary and without reason. The acceptance of the tender of the 4th respondents was, in the circumstances invalid as being violative of the equality clause of the Constitution as also of the rule of administrative law inhibiting arbitrary action. " ( 10 ) HE also relied on a Judgment in the case of FCI v. Kamdhenu cattle Feed Industries, reported in AIR 1993 SC 1601 . He relied on paragraph 10 of the aforesaid Judgment which reads as follows: "from the above, it is clear that even though the highest tenderer can claim no right to have his tender accepted, there being a power while inviting tenders to reject all the tenders, yet the power to reject all the tenders cannot be exercised arbitrarily and must depend for its validity on the existence of cogent reasons for such action. The object of inviting tenders for disposal of a commodity is to procure the highest price while giving equal opportunity to all the intending bidders to compete. Procuring the highest price for the commodity is undoubtedly in public interest since the amount so collected goes to the public fund. Accordingly, inadequacy of the price offered in the highest tender would be a cogent ground for negotiating with the tenderers giving them equal opportunity to revise their bids with a view to obtain the highest available price. The inadequacy may be for several reasons known in the commercial field. Inadequacy of the price quoted in the highest tender would be a question of fact in each case. Retaining the option to accept the highest tender, in case the negotiations do not yield a significantly higher offer would be fair to the tenderers besides protecting the public interest. A procedure wherein resort is had to negotiations with the tenderers for obtaining a significantly higher bid during the period when the offers in the tenders remain open for acceptance and rejection of the tenders only in the event of a significant higher bid being obtained during negotiations would ordinarily satisfy this requirement. A procedure wherein resort is had to negotiations with the tenderers for obtaining a significantly higher bid during the period when the offers in the tenders remain open for acceptance and rejection of the tenders only in the event of a significant higher bid being obtained during negotiations would ordinarily satisfy this requirement. This procedure involves giving due weight to the legitimate expectation of the highest bidder to have his tender accepted unless outbid by a higher offer, in which case acceptance of the highest offer within the time the offers remain open would be a reasonable exercise of power for public good. " ( 11 ) HE also relied on a Judgment in the case of Tata Cellular v. Union of India, reported in 1994 (6) SCC 651 . He relied on paragraphs 47 and 70 which read as follows: "it is submitted that the reasonableness in administrative law means to distinguish between proper use or improper use of power. The test is not the Court's own standard of reasonableness. This court has reiterated this proposition in G. B. Mahqjan v. Jalgaon municipal Council. There is a possibility of fallibility inherent in all fact findings. To insist upon a strict compliance with each and every tender document is not the law. This Court upheld the waiver of technical, literal compliance of the tender conditions in Poddar Steel corpn. v. Ganesh Engineering Works. In the present case, the shortlisting at the first stage, the allotment of cities at the second stage and the selection of franchisees qua cities at the third stage where after evaluating the financial bid by a collectivity of persons at different level Therefore, possibility of elimination of arbitrariness is conceived in the system itself. Further, the High court has analysed properly and come to the proper conclusion. That being so, this Court will not interferely exercising its powers under article 136 of the Constitution of India. The argument about hidden criteria would not affect or benefit this respondent directly or indirectly. Even otherwise, the hidden criteria cannot be impugned. There is no mention of any particular criterion on the basis of which the selection was to be made. At the second stage what was required to be kept in mind were the parameters mentioned in paragraph 2. 4. Even otherwise, the hidden criteria cannot be impugned. There is no mention of any particular criterion on the basis of which the selection was to be made. At the second stage what was required to be kept in mind were the parameters mentioned in paragraph 2. 4. The criteria for selection to each of the four cities had to be provided inter alia because the tenderers did not tender for one city alone but for more than one. The allegation of bias on the part of mr. Nair is without substance. It is submitted, whenever disqualification on the ground of personal involvement is alleged: i) the person involved (for example related) must be the decision-maker ; ii) there must be sufficient nexus between the decision-maker and the party complaining in order to justify the real likelihood of bias. 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 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. The right to choose cannot be considered to be an arbitrary power. Of course, if the said power is exercise for any collateral purpose the exercise of that power will be struck down. " d) Lastly he submitted that, in any event, unusual meticulous adherence to the terms and conditions cannot be insisted upon so as to lead to absurdity. He relied on the Judgment in the case of M/s. Poddar Steel Corporation v. M/s. Ganesh Engineering Works and Ors. , reported in AIR 1991 SC 1579 . " d) Lastly he submitted that, in any event, unusual meticulous adherence to the terms and conditions cannot be insisted upon so as to lead to absurdity. He relied on the Judgment in the case of M/s. Poddar Steel Corporation v. M/s. Ganesh Engineering Works and Ors. , reported in AIR 1991 SC 1579 . He relied on the headnote which read as follows: "an authority inviting tenders, it cannot be said, is bound to give effect to every term mentioned in the notice in meticulous detail, and is not entitled to waive even a technical irregularity of little or no significance. The requirements in a tender notice can be classified into two categories- those which lay down the essential conditions of eligibility and the others which are merely ancillary or subsidiary with the main object to be achieved by the conditions. In the first case the authority issuing the tender may be required to enforce them rigidly. In the other cases it must be open to the authority to deviate from and not to insist upon the strict literal compliance of the condition in appropriate cases. Thus, although the earnest money, under the terms of tender notice was permitted to be deposited only by cash or by demand draft drawn on the State Bank of India, the payment of earnest money by certified cheque of the union Bunk of India drawn on its own Branch could be treated as sufficient compliance of the term. It could not be said that the authority inviting the tenders could not waive the literal compliance of such a condition and accept the tender especially when it was in its interest not to reject the bid which was the highest. " ( 12 ) HE therefore invited this Court to strike down the notice inviting tender dated 1st March, 2006 as also the decision letter containing rejection of the tender of the writ petitioner. He also prayed for a direction to the respondent authorities to complete the tender process already initiated pursuant to the notice inviting tender dated 28th february, 2005 regard being had to the fact that a lot of money and energy were spent in pursuing the tender and that cannot be allowed to be wasted at the whims of the respondent authorities. ( 13 ) MR. ( 13 ) MR. P. K. Mullick, learned senior advocate appearing for the respondent authorities relying on paragraph 9 of the affidavit-in opposition, affirmed by Shri Chinmayananda Gupta on behalf of the respondent authorities submitted that the authorities had a power to reject or to accept the tender and they have exercised that power. He placed reliance on paragraph 16 of the affidavit-in-opposition which reads as follows: "that the provisions contained in the bid document and especially the clauses 2. 3. 4. 1. 1, 2. 3. 4. 1. 2, and 2. 3. 4. 1. 3 would govern the obligation of a party for furnishing the Bank Guarantee or Bank Draft and the petitioner duly accepted the said position and never raised any objection with regard thereto during the two pre-bid meetings. I state and submit that furnishing of the Bank Guarantee and Bank draft were governed by the said two clauses and the same should be furnished on Nationalized Indian Bank only which would protect the interest of the respondent No. 1 in future. " ( 14 ) HE also submitted that by acting in terms of the contract, the respondent cannot be said to have acted arbitrarily. Moreover all the terms and conditions have to be read together. It is not permissible for a party to read any term in isolation. If any term is read in isolation that would amount to making a new contract for the parties. He relied on a Judgment in the case of Directorate of Education and Ors. v. Educomp datamatics Ltd. and Ors. , reported in 2004 (4) SCC 19 . He placed reliance upon paragraphs 9, 11 and 12 of the aforesaid Judgment which read as follows: "it is well settled now that the Courts can scrutinise the award of the contracts by the Government or its agencies in exercise of their powers of judicial review to prevent arbitrariness or favouritism. However, there are inherent limitations in the exercise of the power of judicial review in such matters. The point as to the extent of judicial review permissible in contractual matters while inviting bids by issuing tenders has been examined in depth by this Court in Tata Cellular v. Union of India. After examining the entire case-law the following principles have been deduced. : (SCC pp. 687-88, para 94 ). "94. The point as to the extent of judicial review permissible in contractual matters while inviting bids by issuing tenders has been examined in depth by this Court in Tata Cellular v. Union of India. After examining the entire case-law the following principles have been deduced. : (SCC pp. 687-88, para 94 ). "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 in 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. " This principle was again restated by this Court in Monarch infrustructure (P) Ltd. v. Commr. , Ulhasnagar Municipal Corpn. It was held that the terms and conditions in the tender are prescribed by the Government bearing in mind the nature of contract and in such matters the authority calling for the tender is the best judge to prescribe the terms and conditions of the tender. It is not for the courts to say whether the conditions prescribed in the tender under consideration were better than the ones prescribed in the earlier tender invitations. It is not for the courts to say whether the conditions prescribed in the tender under consideration were better than the ones prescribed in the earlier tender invitations. It has clearly been held in these decisions that the terms of the invitation to tender are not open to judicial scrutiny, the same being in the realm of contract. That the Government must have a free hand in setting the terms of the tender. It must have reasonable play in its joints as a necessary concomitant for an administrative body in an administrative sphere. The Courts would interfere with the administrative policy decision only if it is arbitrary, discriminatory, mala fide or actuated by bias. It is entitled to pragmatic adjustments which may be called for by the particular circumstances. The Courts cannot strike down the terms of the tender prescribed by the Government because it feels that some other terms in the tender would have been fair, wiser or logical. The courts can interfere only if the policy decision is arbitrary, discriminatory or mala fide. " ( 15 ) HE also relied on a Judgment in the case of Global Energy Ltd. and ann v. Adani Exports Ltd. and Ors. , reported in 2005 (4) SCC 435 . He relied upon paragraphs 9 and 10 which read as follows: "in Tata Cellular v. Union of India a three judge Bench has explained what is a tender and what are the requisites of a valid tender. It has been held that the tender must be unconditional and must conform to the terms of the obligation and further the person by whom the tender is made must be able and willing to perform his obligations. It has been further held that the terms of the invitation to tender cannot be open to judicial scrutiny because the invitution to tender is in the realm of contract. In Air India Ltd. v. Cochin International airport Ltd. the same view was reiterated thut the State can fix its own terms of invitation of tender and that it is not open to judicial scrutiny. In Air India Ltd. v. Cochin International airport Ltd. the same view was reiterated thut the State can fix its own terms of invitation of tender and that it is not open to judicial scrutiny. Whether and in what conditions the terms of a notice inviting tenders can be a subject-matter of judicial scrutiny, has been examined in considerable detail in Directorate of Education v. Educomp Datamatics Ltd. The Directorate of Education, Government of National Capital Territory of Delhi had taken a decision to establish computer laboratories in all government schools in NCT area and tenders were invited to provide hardware for this purpose. For the final phase of 2002-2003, tenders were called for 748 schools and the cost of the project was approximately Rs. 100 crores. In view of the difficulty faced in the earlier years where the lowest tenderers were not able to implement the entire project, a decision was taken to invite tenders from firms having a turnover of Rs. 20 crores or more for the last three financial years ending with 31. 3. 2002, as it was felt that it would be easier for the department to deal with one company which is well managed and not with several companies. Some of the firms filed writ petitions in the Delhi High Court challenging the clause of NIT whereby a condition was put that only such firms which had a turnover of Rs. 20 crores or more for the last three financial years would be eligible. It was contended before the High Court that the aforesaid condition had been incorporated solely with an intent to deprive a large number of companies imparting computer education from bidding and monopolise the same for big companies. The writ petition was allowed and the clause was struck down as being arbitrary and irrational. In appeal, this Court reversed the Judgment of the High Court basically on the ground that the terms of the invitation to tender are not open to judicial scrutiny, the same being in the realm of contract and the government must have a free hand in setting the terms of the tender. The Courts would not interfere with the terms of the tender notice unless it was shown to be either arbitrary or discriminatory or actuated by malice. The Courts would not interfere with the terms of the tender notice unless it was shown to be either arbitrary or discriminatory or actuated by malice. It was further held that while exercising the power of judicial review of the terms of the tender notice, the Court cannot order change in them. ( 16 ) HE further relied on paragraphs 11 and 12 of a Judgment in the case of Purxotoma Ramanta Quenim v. Makan Kalyan Tandel and Ors. , reported in 1974 (2) SCC 651. In State of Orissa v. Harinarayan Jaiswal, (1972) 2 SCC 36 : ( AIR 1972 SC 1816 ) the respondents were the highest bidders at an auction held by the Orissa Government through the Excise commissioner, for the exclusive privilege of selling by retail the country liquor in some shops. The Government of Orissa had reserved the right either to accept or reject the highest bid and had actually rejected the bids of the respondents and later on the privilege was sold by negotiation to some others. One of the contentions taken on behalf of the writ petitioners in that case was that the power retained by the Government "to accept or to reject any bid without assigning any reason therefor" was an arbitrary power and, therefore, violative of Articles 14 and 19 (1) (g ). Hegde J. speaking for this Court rejected that contention in the following words: one of 'the contentions taken on behalf of the writ petitioners was that the power retained by the Government 'to accept or to reject any bid without assigning any reason therefor' in clause (6) of the order made by the Government on January 6, 1971, in exercise of its powers under section 29 (2) of the Act was an arbitrary power and therefore it is violative of Articles 14 and 19 (1) (g ). This contention has been upheld by the High Court. It was urged on behalf of the writ petitioners that they have a fundamental right to carry on trade or business in country liquor. That right can be regulated only by imposing reasonable restrictions in the interest of the general public. It was further urged that the power retained by the government to accept or to reject the highest hid without assigning anv reason is an unguided power and hence it is violative of Article 14. That right can be regulated only by imposing reasonable restrictions in the interest of the general public. It was further urged that the power retained by the government to accept or to reject the highest hid without assigning anv reason is an unguided power and hence it is violative of Article 14. These contentions were accepted by the High Court. To us, none of these contentions appear to be well founded. As seen earlier section 22 of the Act confers power on the Government to grant to any person on such conditions and for such period as it may think fit the exclusive privilege of selling in retail any country liquor. Section 29 empowers the Government to accept payment of a sum in consideration for the grant of any exclusive privilege under section 22 either by calling tenders or by auction or otherwise as it may by general or special order direct. The powers conferred on the state Government by section 22 and section 29 are absolute powers. As seen earlier, the validity of those provisions has not been challenged before us. Under section 29 (2) the Government had power to dispose of any of the exclusive privileges mentioned in section 22 either by auction or otherwise as it may by general or special order direct. That being the amplitude of the power of the government, we fail to see how the Government can be said to have conferred on itself arbitrary power under clause (6) of its order made on January 6, 1971, when it provided that: 'no sale shall be deemed to be final unless confirmed by the State government who shall he at liberty to accept or reject any bid without assigning any reason therefor. ' even apart from the provisions of sections 22 and 29, this Court took the view that the power retained by the Government under clause (6) reproduced above was not unconstitutional. It was observed in this context: even apart from the power conferred on the Government under sections 22 and 29, we fail to see how the power retained by the government under clause (6) of its order, dated January 6, 1971, can be considered as unconstitutional. It was observed in this context: even apart from the power conferred on the Government under sections 22 and 29, we fail to see how the power retained by the government under clause (6) of its order, dated January 6, 1971, can be considered as unconstitutional. As held by this Court in Cooverjee b. Bhurucha's case, 1954 SCR 873 : ( AIR 1954 SC 220 ) one of the important purposes of selling the exclusive right to sell liquor in wholesale or retail is to raise revenue. Excise revenue forms an important part of every State's revenue. The Government is the guardian of the finances of the State. It is expected to protect the financial interest of the State. Hence quite naturally, the Legislature has empowered the Government to see that there is no leakage in its revenue. It is for the Government to decide whether the price offered in an auction sale is adequate. While accepting or rejecting a bid, it is merely perfoming an executive function. The correctness of its conclusion is not open to judicial review. We fail to see how the plea of contravention of Article 19 (1) (g) or Article 14 can arise in these cases. The Government's power to sell the exclusive privilege set out in section 22 was not denied. It was also not disputed that those privileges could be sold by public auction. Public auctions are held to get the best possible price. Once these aspects are recognised, there appears to be no basis for contending that the owner of the privileges in question who had offered to sell them cannot decline to accept the highest bid if he thinks that the price offered is inadequate. There is no concluded contract till the bid is accepted. Before there was concluded contract, it was open to the bidders to withdraw their bids- see Union of India v. Bhimsen Walaiti Ram, (1970)2 SCR 594 : ( AIR 1971 Sc 2295 ). By merely giving bids, the bidders had not acquired any vested rights. The fact that the Government was the seller does not change the le'gal position once its exclusive right to deal with those privileges is conceded. If the Government is the exclusive owner of those privileges, reliance on Article 19 (l) (g) or Article 14 becomes irrelevant. By merely giving bids, the bidders had not acquired any vested rights. The fact that the Government was the seller does not change the le'gal position once its exclusive right to deal with those privileges is conceded. If the Government is the exclusive owner of those privileges, reliance on Article 19 (l) (g) or Article 14 becomes irrelevant. It would appear from the above that the view taken by this Court is that a condition like that contained in clause 7 reproduced above is not violative of Article 14 of the Constitution and that in matters relating to contracts with the Government, the latter is not bound to accept the tender of the person who offers the highest amount. Mr. Iyenger has tried to distinguish the above mentioned cases on the ground that they were decided in the context of certain statutory provisions. This circumstance, in our opinion, would not detract from the binding effect of the general principle enunciated in those cases. ( 17 ) LASTLY he submitted that interpretation of a contract is not in the realm of writ Court. In support of his submission he relied on a judgment in the case of Kerala State Electricity Board and Anr. v. Kurien E. Kathakali and Ors. , reported in AIR 2000 SC 2573 . He relied on paragraphs 10 and 11 which read as follows: "we find that there is a merit in the first contention of Mr. Rawal. , "learned counsel has rightly questioned the maintainability of the writ petition. The interpretation and implementation of a clause in a contract cannot be the subject-matter of a writ petition. Whether the contract envisages actual payment or not is a question of construction of contract? If a term of a contract is violated, ordinarily the remedy is not the writ petition under Article 226. We are also unable to agree with the observations of the High Court that the contractor was seeking enforcement of a statutory contract. A contract would not become statutory simply because it is for construction of a public utility and it has been awarded by a statutory body. We are also unable to agree with the observation of the High court that since the obligations imposed by the contract on the contracting parties come within the purview of the Conlract Act, that would not make the contract statutory. We are also unable to agree with the observation of the High court that since the obligations imposed by the contract on the contracting parties come within the purview of the Conlract Act, that would not make the contract statutory. Clearly, the High Court fell into an error in coming to the conclusion that the contract in question was statutory in nature. A statute may expressly or impliedly confer power on a statutory body to enter into contracts in order to enable it to discharge its functions. Dispute arising out of the terms of such contracts or alleged breaches have to be settled by the ordinary principles of law of contract. The fact that one of the parties to the agreement is a statutory or public body will not of itself affect the principles to be applied. The disputes about the meaning of a covenant in a contract or its enfurceability have to be determined according to the usual principles of the Contract Act. Every act of a statutory body need not necessarily involve an exercise of statutory power. Statutory bodies, like private parties, have power to contract or deal with property. Such activities may not raise any issue of public law. In the present case, it has not been shown how the contract is statutory. The contract between the parties is in the realm of private law. It is not a statutory contract. The disputes relating to interpretation of the terms and conditions of such a contract could not have been agitated in a petition under Article 226 of the Constitution of India. That is a matter for adjudication by a Civil Court or in arbitration if provided for in the contract. Whether any amount is due and if so, how much and refusal of the appellant to pay it is justified or not, are not the matters which could have been agitated and decided in a writ petition. The contractor should have been relegated to other remedies. " ( 18 ) I have considered the submissions made by the learned counsel for the parties. I have also perused the pleadings. The questions which may legitimately arise for a decision in this case are in my view as follows: a) whether the respondent authorities were entitled to reject all or any of the tenders? b) if so, did the respondent authorities exercise the power arbitrarily? I have also perused the pleadings. The questions which may legitimately arise for a decision in this case are in my view as follows: a) whether the respondent authorities were entitled to reject all or any of the tenders? b) if so, did the respondent authorities exercise the power arbitrarily? ( 19 ) INSOFAR as the first question is concerned I already have indicated above specific clause empowering the respondent authorities to accept or to reject any or all the tenders which has also been acknowledged by the writ petitioner by putting its seal and signature. According to that clause the authority is not only empowered to accept or to reject any or all of the tenders but also they are immune from assigning any reason. Therefore the first question is answered in the affirmative. ( 20 ) THE petitioner in paragraph 26 of the writ petition has made the following averments. "that although tender documents were purchased by 11 parties including reputed international companies but only two Bidders namely (1) Theiss Mines India Pvt. Ltd. and (2) the petitioners herein forming a consortium submitted sealed offers in the prescribed manner, although the time was repeatedly extended in urder to enable other interested parties to participate in the tender. " ( 21 ) IN paragraph 30 of the writ petition the petitioner has averred as follows. "that after opening and recording of Part-I of the petitioners' bid the Respondents opened the Part-1 of the bid submitted by Theiss mines Pvt. Ltd. Upon opening the envelop containing earnest money and Bank Guarantee, it was found that same was submitted from hsbc Bank (which is a Foreign Bank ). It was detected that Bid security Bank Guarantee which was submitted by the said Theiss mines Pvt. Ltd. was valid for 273 days as against the requisite validity periods of 330 days. Therefore there was a shoftfall of 57 days in the required guarantee period. The documents relating to pre qualification details of the said Theiss Mines Pvt. Ltd. were not opened and scrutinized by the said Tender Committee of the respondent authorities on the ground that the Respondents would seek legal opinion in the matter. " ( 22 ) FROM paragraphs 26 and 30 of the writ petition the following inferences can be made. The documents relating to pre qualification details of the said Theiss Mines Pvt. Ltd. were not opened and scrutinized by the said Tender Committee of the respondent authorities on the ground that the Respondents would seek legal opinion in the matter. " ( 22 ) FROM paragraphs 26 and 30 of the writ petition the following inferences can be made. I) there were two tenderers, namely the writ petitioner and the thiss Mines India Pvt. Ltd. (hereinafter referred to as the "theiss" ). II) Theiss had already been discarded, inter alia, because the bid guarantee was issued by a foreign bank. ( 23 ) THEREFORE the only tenderer which remained in the fray was the writ petitioner. There is, in my view, in such a case no scope for comparison of the rates, nor for any negotiation, nor for any competition amongst the bidders. A tender after all is an offer to chaffer as was held in the case of P. R. Quenim v. M. K. Tandel, reported in AIR 1974 SC 651 to chaffer is to negotiate. If there was only one tenderer where was the scope for negotiation and where was the guarantee that the competitive rates had been received. Even in the case of Tata Cellular (supra) relied upon by Mr. Mukherjee Their Lordships opined that "there can be no question of infringement of Article 14 if the Government tries to get the best person or the best quotation". In the case of P. R. Quenim (supra)it was held that "by merely giving bids, the bidders had not acquired any vested right. " ( 24 ) BY inviting a tender no one obliges himself to accept it irrespective of whether the object of tender itself is achieved. I, therefore, am of the view that the authorities did not act arbitrarily in rejecting the offers and going in for a fresh tender. The question (b) is answered accordingly in the negative. ( 25 ) I would also like to point out that under the terms and conditions contained in the notice inviting tender as also in the tender documents the respondent authority was within its power to reject all or any of the tenders without assigning any reason. This power was retained by the authority and conceded to by the writ petitioner by putting its seal and signature. This power was retained by the authority and conceded to by the writ petitioner by putting its seal and signature. When the authority exercised its aforesaid right why should the petitioner have felt it necessary to seek reasons for that? Was it not contrary to the agreed norm? If it was, why should the writ petitioner be given an opportunity to challenge the whole process just because the authority has not been meticulous in disclosing all the reasons which were before it and must have cumulatively led to the rejection of the tender. ( 26 ) MR. Mukherjee submitted that if there is any inconsistency in the terms and conditions it has to be construed against the person who has prepared them. Even assuming that the authorities were negligent in setting out the terms and conditions in a uniform manner the petitioner was no less negligent. I already have indicated that there is a disclaimer whereunder the writ petitioner was obliged within 10 days from the date of issuance of the tender documents to point out discrepancy if any. Admittedly the discrepancy between the provisions contained in the general information and the instruction to bidders as regards earnest money and the bank guarantee was not pointed out by the writ petitioner. If they had done that the question would have been taken care of at the initial stage itself. I, therefore, have no doubt in my mind that if the respondent authorities was negligent equally negligent was the petitioner. If the respondent authority is guilty of negligence the writ petitioner has contributed to it and is therefore guilty of contributory negligence. ( 27 ) THE vulnerability of the reason assigned by the authority by its letter dated 11th March 2006, which is the sheet anchor of the submission of the petitioner, cannot in my opinion be overemphasised in the facts of the case. The authority would have been well within its power, based on the conditions of tender noticed above, to say that it was not obliged to disclose any reason for rejection of all the tenders. Just because the authority chose to answer the question and just because all the reasons were not assigned the authority would not be robbed of its right to continue its quest for the best person and the best rates. Just because the authority chose to answer the question and just because all the reasons were not assigned the authority would not be robbed of its right to continue its quest for the best person and the best rates. ( 28 ) I am firmly of the view that it is in public interest to allow the state to do business as a prudent businessman without insisting upon too much adherence to the technicalities which did not really affect any fundamental right of the citizen. ( 29 ) THE prayer for ad-interim order was refused by me for the following reason. "mr. Mukherjee, no doubt, has a case in the way he has put it. But the difficulty arises from the fact that he has not disputed before me that there were only two tenderers in the fray one of them had already been rejected for a technical reason and thereafter only then there is hardly any scope for negotiation and none for competition. But the authority unfortunately has not referred to this fact for the purpose of doing what they did. I cannot also lose sight of the fact that this is an admitted position and. therefore, having regard to the judgment in the case of Sterling Computers v. M/s/m and N Publications, reported in AIR 1996 SC 51 para 12 it was held that some play in the joints has to be conceded so that the executive can function in a manner befitting the occasion. For this reason, I am unable to grant any ad-interim order. " After exchange of affidavits and hearing the learned counsel in great detail I am still of the view that no interference is called for. The writ petition is, as such, dismissed. There shall, however, be no order as to costs. Writ petition thus dismissed