JUDGMENT M.Y. Eqbal, J. 1. These appeals under Clause 10 of the Letters Patent are directed against the judgment dated 21.11.2007 passed in W.P.C No. 1791/2007 whereby the learned Single Judge allowed the writ petition filed by the respondents- appellants and quashed the advertisement notice issued by the respondent-Market Board inviting open bid auction for settlement of Bero Haat/Bajar and further quashed the settlement made in favour of the respondents-appellants. 2. The case of the appellants-respondents, inter alia, was that their lands are being used for holding Bero Haat/Bajar by the Market Board. They claimed themselves to be the displaced persons and requested the Market Board to make settlement in their favour for collection of market fee of the said Haat/Bajar. It is stated that a group of persons were allowed to collect market fee for the financial years 2004-05 and the said period was extended up to 2005-06. The said persons became defaulters in payment of minimum guarantee amount to the Board as a result of which those 15 persons represented to the Secretary, Market Committee of the Market Board stating that they are not able to deposit the minimum guarantee of the market fee and they are not in a position to continue with the settlement for the remaining period. The said representation was considered by the Market Board and the settlement which was made with them, was cancelled. In the meantime, the claim of the writ petitioners that they were displaced persons, was inquired into and recommendation was made for settlement of Bero Haat/Bajar in their favour. The Haat was alleged to have been settled in favour of the writ petitioners. Their further case was that they were surprised to see the notice of advertisement issued by the Market Board for settlement of Bero Haat/Bajar by open bid. Petitioners case was that in terms of settlement they were entitled for extension of period according to the policy decision taken by the Board. Pursuant to the advertisement 11 persons were appointed for the purpose of collecting market fee which has also been challenged by the writ petitioners. 3. Petitioners case was that in terms of settlement they were entitled for extension of period according to the policy decision taken by the Board. Pursuant to the advertisement 11 persons were appointed for the purpose of collecting market fee which has also been challenged by the writ petitioners. 3. Respondents 2 to 4 (in the writ petition), namely, the Market Board, filed counter affidavit stating, inter alia, that a policy decision was taken for collection of market fee and ground rent for the Haat/Bazar by settlement of the same in favour of a group of local unemployed persons whose names had been recommended by the Aam Sabha of the village. In view of the said policy decision Bero Haat/Bajar was settled in the years 2005-06 with a group of 11 persons. However, representation of the writ petitioners was considered in the meantime and four persons were included in the group in whose favour settlement was made for the financial years 2007-08. The Gram Sabha selected and recommended the names of 11 persons including 4 persons who were claiming settlement as displaced persons. Settlement was accordingly made in favour of the said group of persons consisting of 15 persons. Respondents further case is that the petitioners were given the benefit by including their names in the group of persons in whose favour settlement has been made and, as such, the petitioners demand for exclusive settlement in their favour was not justified. The respondents- appellants in whose favour settlement was made, in their counter affidavit, have stated that they were selected by the Gram Sabha in accordance with the policy decision of the respondent-Market-Board. 4. The learned Single Judge formulated the following two points for consideration: (i) Whether the petitioners are entitled for ex tension of the period of settlement for further two years, as has been done in the cases of Itki, Itki Station, Mandar, Kurgi and Chutupalu Haats till the completion of three years. (ii) Whether the petitioners can derive the preferential right of settlement in view of their claim, as displaced persons, for the reason of using their raiyati lands for the purpose of holding Bero Haat/Bajar. 5. (ii) Whether the petitioners can derive the preferential right of settlement in view of their claim, as displaced persons, for the reason of using their raiyati lands for the purpose of holding Bero Haat/Bajar. 5. Answering the first point the learned Single Judge held that petitioners settlement has been arbitrarily singled out and has been advertised for fresh bid though the group which was selected for the financial years 2006-07 is entitled for extension of the period until it completes three financial years from the date of settlement as per the policy decision. The learned Single Judge, therefore, held that notice and the process for fresh bid in the case of Bero Haat/Bazar is wholly arbitrary, illegal and violative of Article 14 of the Constitution. 6. Answering the second point the learned Single Judge held that the Market Committee can authorize any person to collect market fees and is free to frame its policy decision or take any decision regarding the mode and manner of collecting market fees. It was held that the Market Committee is empowered to give preferential right to the displaced persons and/or to make policy decision for the purpose of appointing agent to collect market fees. In the result, the writ petition was allowed and the impugned notice of advertisement was quashed. 7. Mr. Anil Kumar Sinha, learned Counsel appearing on behalf of the appellants assailed the impugned judgment as being contrary to law, facts and evidence on record. Learned Counsel submitted that the learned Single Judge has not correctly interpreted the policy decision dated 8.3.2007 and thereby extended the same benefit to the writ petitioners. According to the learned Counsel, the policy decision dated 8.3.2007 is applicable only to the elected group and the writ petitioners, being not elected group, could not derive any benefit from the same. Learned Counsel further submitted that the writ petitioners were appointed in 2005 for the years 2005-06 along with the appellants and other persons and were subsequently extended for the year, 2006-07 and, therefore, their claim of extension of two years is unjustified. Learned Counsel lastly submitted that the question with regard to extension of time has been settled by the Supreme Court in the case Sterling Computer Ltd v. M.& N. Publication Ltd and Ors. . 8. Learned Counsel lastly submitted that the question with regard to extension of time has been settled by the Supreme Court in the case Sterling Computer Ltd v. M.& N. Publication Ltd and Ors. . 8. The undisputed facts are that the State Government took a policy decision to the effect that contract for collection of market fee and ground rent for the Haats/Bazars held beyond the Urban area will be settled in favour of the local unemployed masses in order to ensure that those Haats/bazars are not settled in an arbitrary manner. It was also decided that settlement of Haats/bazaars will not be done with an individual rather in favour of group of persons whose names will be recommended by the Aam Sabha of the village where the Haat is being held. On the basis of the said policy decision the settlement of Bero Haat was made in favour of 15 persons for the year, 2005-06. In the meantime the writ petitioners along with others filed representation before the Market Committee stating that they are the raiyats in respect of the land where Haat is held and, therefore, they are entitled for settlement of Haat in their favour. After due inquiry the names of these persons were included along with 15 persons and, accordingly, altogether 18 persons continued to collect market fee which continued for the year 2006-07. The aforementioned 15 persons, however, became defaulters and, therefore, the writ petitioners were given contract work for collection of market fee for the year 2006-07. In the meantime on 8.3.2007 Jharkhand State Agricultural Marketing Board came with a policy to extend the contract for collection of market fee for a period of three yeas. 9. For better appreciation the policy decision dated 8.3.2007 which is the sheet anchor of the case of the petitioner is reproduced herein below: Jharkhand State Agriculture Marketing Board, Terminal Market Yard, Pandra, Ranchi E-mail: Jsambranchi@yahoo.co.in jsambran@yahoo.co.in Letter 206/Ranchi Date 08.03. 07. From, Managing Director, Jharkhand State Agriculture Marketing Board, Pandra, Ranchi. To, Market Secretary/Incharge Market Secretary(All) Agriculture Produce Market Committee. ... Subject: Guidelines in respect of selection of duty collectors in Haat for the year 2007-2008 Sir, In relation to the above subject, the following guidelines in respect to selection of Duty Collectors in Haat for the year 2007-2008, is given as under : 1. To, Market Secretary/Incharge Market Secretary(All) Agriculture Produce Market Committee. ... Subject: Guidelines in respect of selection of duty collectors in Haat for the year 2007-2008 Sir, In relation to the above subject, the following guidelines in respect to selection of Duty Collectors in Haat for the year 2007-2008, is given as under : 1. Those selected groups who have completed 3(Three) years, there settlement will be done with new group. Settlement of the remaining will be done after completion of 3(Three) years. 2. Haat/Bazars where selected group is not formed, settlement will be done by open dak (post) 3. In selection of new group, participation of 33 percent of women be ensured. 4. In selection of new groups and renewal, the compliance of the orders passed previously ensured. 5. Selection of new group is to be done in the campus of established Haat and alongwith wide advertisement-circulation, information in one local newspaper at sub divisional level. 6. The size of the new groups will be at least 10(ten) members. Strict compliance of the above directions be ensured. Yours Sd/- Managing Director, Jharkhand State Agriculture Marketing Board Pandra, Ranchi. 10. From reading of the aforesaid policy decision it is manifestly clear that the conditions prescribed there in is applicable to those persons who were selected for a period of three years and not to the persons like petitioners who were not selected for three years. Rather they were included in the group of persons on the basis of representation submitted by them for being included on the ground that the Bazar is held in their lands. From perusal of the pleadings of the parties it is evidently clear that the petitioners/respondents are demanding settlement in their favour to the exclusion of others which is against the policy decision taken by the Marketing Board in the matter of settlement of Haat and Bazar. 11. As noticed above, Haat in question was not in fact settled with the petitioners for a period of three years. Rather when the actual persons in whose favour Bazar was settled became defaulters, petitioners name were included. 11. As noticed above, Haat in question was not in fact settled with the petitioners for a period of three years. Rather when the actual persons in whose favour Bazar was settled became defaulters, petitioners name were included. This fact has been admitted by the writ petitioners in paragraph 11 of the writ application which reads as under: That it is stated that on the basis of the aforesaid enquiry the Secretary vide letter dated 24.5.05 wrote to the Managing Director for including the petitioner in the Contractors group whose contract was already extended for the financial year 2005-06. 12. Respondents-Marketing Committee in order to implement the policy decision made advertisement for settlement of Bero Haat in accordance with the policy decision. The writ petitioners challenged the same in the writ petition on the ground inter alia that they are entitled for extension settlement for a period of three years more. In our view, such claim of the petitioners is contrary to the policy decision taken by the respondents/Marketing Committee. 13. One important aspect of the matter has not been considered by the learned Single Judge. There is no averment in the writ application that the decision for settlement of Bero Haat in terms of the policy decision is mala fide or the action of the respondents-Marketing Board in implementing such policy decision is mala fide and with the sole motive of favouring other group of persons. In absence of such averments the Court should be very reluctant in interfering with the policy decision of the Government and the decision for settlement of Bazar in question. 14. It is worth to refer some of the ratios decided by the Supreme Court in the matter of interference with the administrative decision relating to award of contract or settlement. 15. In the Case of "Food Corporation of India and Ors. v. Jagannath Dutta and Ors." (1993) Suppl. Vol.3 SCC-635, the Supreme Court observed: We are of the view that the High Court was not justified in quashing the impugned notice especially when the terms and conditions of the contract permitted the termination of the agreement by either of the parties. The High Court should not have gone into the question of contractual-obligation in its writ jurisdiction under Article 226 of the Constitution. The High Court should not have gone into the question of contractual-obligation in its writ jurisdiction under Article 226 of the Constitution. Even otherwise the High Court misread the documents on the record and grossly erred in reaching the conclusion that no policy decision was taken by the FCI to terminate the storage agencies in the State of West Bengal. We may refer to some of the documents on the record. 16. In the case of "Tata Cellular v. Union of India" (1994) 6 SCC-651, the Supreme Court had discussed elaborately the power of judicial review in the matter of Govt. Contracts. Their Lordships observed: 70. It cannot be denied that the principles of judicial review would apply to the exercise of contractual powers by Government bodies in order to prevent arbitrariness or favouritism. However, it must be clearly stated that there are inherent limitations in exercise of that power of judicial review. Government is the guardian of the finances of the State. It is expected to protect the financial interest of the State. The right to refuse the lowest or any other tender is always available to the Government. But, the principles laid down in Article 14 of the Constitution have to be kept in view while accepting or refusing a tender. There can be no question of infringement of Article 14 if the Government tries to get the best person or the best quotation. 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. 71. Judicial quest in administrative matters has been to find the right balance between the administrative discretion to decide matters whether contractual or political in nature or issues of social policy; thus they are not essentially justiciable and the need to remedy any unfairness. Such an unfairness is set right by judicial review. 17. In paragraph 94, their Lordships laid down the principles which reads as under: 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. (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. Based on these principles we will examine the facts of this case since they commend to us as the correct principles. 2. Whether the selection is vitiated by arbitrariness? 18. Again in the case of "Monarch Infrastructure (P) Ltd. v. Commissioner, Ulhasnagar Municipal Corporation and Ors." , their Lordships observed; 10. There have been several decisions rendered by this Court on the question of tender process, the award of contract and have evolved several principles in regard to the same. Ultimately what prevails with the courts in these matters is that while public interest is paramount there should be no arbitrariness in the matter of award of contract and all participants in the tender process should be treated alike. We may sum up the legal position thus: (i) The Government is free to enter into any contract with citizens but the court may interfere where it acts arbitrarily or contrary to public interest. (ii) The Government cannot arbitrarily choose any person it likes for entering into such a relationship or to discriminate between persons similarly situate. We may sum up the legal position thus: (i) The Government is free to enter into any contract with citizens but the court may interfere where it acts arbitrarily or contrary to public interest. (ii) The Government cannot arbitrarily choose any person it likes for entering into such a relationship or to discriminate between persons similarly situate. (iii) It is open to the Government to reject even the highest bid at a tender where such rejection is not arbitrary or unreasonable or such rejection is in public interest for valid and good reasons. 11. Broadly stated, the courts would not interfere with the matter of administrative action or changes made therein, unless the Governments action is arbitrary or discriminatory or the policy adopted has no nexus with the object it seeks to achieve or is mala fide. 19. In the case of "Master Marine Services (P) Ltd. v. Metcalfe and Hodgkinson (P) Ltd. and Anr." , the Supreme Court laid down the following proposition: 11. The principles which have to be applied in judicial review of administrative decisions, especially those relating to acceptance of tender and award of contract, have been considered in great detail by a three-Judge Bench in Tata Cellular v. Union of India. It was observed that the principles of judicial review would apply to the exercise of contractual powers by government bodies in order to prevent arbitrariness or favouritism. However, it must be clearly stated that there are inherent limitations in exercise of that power of judicial review. Government is the guardian of the finances of the State. It is expected to protect the financial interest of the State. The right to refuse the lowest or any other tender is always available to the Government. But, the principles laid down in Article 14 of the Constitution have to be kept in view while accepting or refusing a tender. There can be no question of infringement of Article 14 if the Government tries to get the best person or the best quotation. 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. (See para 85 of the Report, SCC para 70.) 20. In the case of "Rajasthan Housing Board and Anr. 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. (See para 85 of the Report, SCC para 70.) 20. In the case of "Rajasthan Housing Board and Anr. v. G.S. Investments and Anr." , the Supreme Court reiterated its earlier view and held as under: 10. The other question which requires consideration is that are the contours of power which the High Court would exercise in a writ petition filed under Article 226 of the Constitution where the challenge is to cancellation of an auction held by a public body where the prime consideration is fairness and generation of public revenue. This question has been examined in a catena of decisions of this Court. In a recent decision rendered in Master Marine Services (P) Ltd. v. Metcalfe and Hodgkinson (P) Ltd. where after consideration of several earlier decisions, the Bench to which one of us was a party, summarised the legal principle as under in paras 11 to 15 of the said Report: (SCC pp. 147-48) 11. The principles which have to be applied in Judicial review of administrative decisions, especially those relating to acceptance of tender and award of contract, have been considered in great detail by a three-Judge Bench in Tata Cellular v. Union of India. It was observed that the principles of judicial review would apply to the exercise of contractual powers by government bodies in order to prevent arbitrariness or favouritism. However, it must be clearly stated that there are inherent limitations in exercise of that power of judicial review. Government is the guardian of the finances of the State. It is expected to protect the financial interest of the State. The right to refuse the lowest or any other tender is always available to the Government. But, the principles laid down in Article 14 of the Constitution have to be kept in view while accepting or refusing a tender. There can be no question of infringement of Article 14 if the Government tries to get the best person or the best quotation. 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. There can be no question of infringement of Article 14 if the Government tries to get the best person or the best quotation. The right to choose cannot be considered to be an arbitrary power. Of course, if the said power is exercised for any collateral purpose the exercise of that power will be struck down. (See para 85 of the Report, SCC para 70.) 12. After an exhaustive consideration of a large number of decisions and standard books on administrative law, the Court enunciated the principle that the modern trend points to judicial restraint in administrative action. The court does not sit as a court of appeal but merely reviews the manner in which the decision was made. The court does not have the expertise to correct the administrative decision. If a review of the administrative decision is permitted it will he substituting its own decision, without the necessary expertise, which itself may he fallible. The Government must have freedom of contract. In other words, 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 principles of reasonableness but also must be free from arbitrariness not affected by bias or actuated by mala fides. It was also pointed out that quashing of decisions may impose heavy administrative burden on the administration and lead to increased and unbudgeted expenditure. (See para 113 of the Report, SCC para 94) 13. In Sterling Computers Ltd. v. M&N Publications Ltd. it was held as under: (SCC p. 458, paras 18-19) 18. While exercising the power of judicial review, in respect of contracts entered into on behalf of the State, the court is concerned primarily as to whether there has been any infirmity in the "decision-making process".... By way of judicial review the court cannot examine the details of the terms of the contract which have been entered into by the public bodies or the State. Court have inherent limitations on the scope of any such enquiry. But at the same time...the courts can certainly examine whether "decision-making process" was reasonable, rational, not arbitrary and violative of Article 14 of the Constitution. 19. Court have inherent limitations on the scope of any such enquiry. But at the same time...the courts can certainly examine whether "decision-making process" was reasonable, rational, not arbitrary and violative of Article 14 of the Constitution. 19. If the contract has been entered into without ignoring the procedure which can be said to be basic in nature and after an objective consideration of different options available taking into account the interest of the State and the public, then court cannot act as an Appellate Authority by substituting its opinion in respect of selection made for entering into such contract. 14. In Raunaq International Ltd. v. I.V.R. Construction Ltd. it was observed that the award of a contract, whether it is by a private party or by a public body or the State, is essentially a commercial transaction. In arriving at a commercial decision, considerations which are of paramount importance are commercial considerations, which would include, inter alia, the price at which the party is willing to work, whether the goods or services offered are of the requisite specifications and whether the person tendering is of the ability to deliver the goods or services as per specifications. 15. The law relating to award of contract by the State and public sector corporations was reviewed in Air India Ltd. v. Cochin International Airport Ltd. and it was held that the award of a contract, whether by a private party or by a State, is essentially a commercial transaction. It can choose its own method to arrive at a decision and it is free to grant any relaxation for bona fide reasons, if the tender conditions permit such a relaxation. It was further held that the State, its corporations, instrumentalities and agencies have the public duty to be fair to all concerned. Even when some defect is found in the decision-making process, the court must exercise its discretionary powers under Article 226 with great caution and should exercise it only in furtherance of public interest and not merely on the making out of a legal point. The court should always keep the larger public interest in mind in order to decide whether its intervention is called for or not. Only when it comes to a conclusion that overwhelming public interest requires interference, the court should interfere." 21. The court should always keep the larger public interest in mind in order to decide whether its intervention is called for or not. Only when it comes to a conclusion that overwhelming public interest requires interference, the court should interfere." 21. As noticed above, writ petitioners are not the group of persons who were selected and in whose favour settlement was made for three years. Rather they were included in the group of persons who were selected. After those selected persons had backed out from the contract, the writ petitioners were allowed to perform the contract. In that view of the matter, the writ petitioners cannot claim to challenge the advertisement notice issued by the Marketing Board inviting open bid auction for settlement of contract. Moreover, writ petitioners are not entitled to any benefit under the letter dated 8.3.2007. Learned Single Judge has not considered this aspect of the matter. For the reasons aforesaid, these appeals are allowed and the impugned orders passed by the learned Single Judge are set aside. D.G.R. Patnaik, J. 22. I agree.