Judgment :- 1. The petitioner has invoked the extraordinary equitable jurisdiction of this Court under Article 226 of the Constitution of India, praying for a writ in the nature of Certiorari, to quash the condition-10 of the public auction, stipulating that persons, who has filed case against the municipality, will not be eligible to compete for auction, as also the order dated 29.7.2011 issued vide Na.Ka.No.12227/08/Aa2, in cancelling the lease deed in favour of petitioner. 2. The respondent no.2 issued advertisement in the newspaper inviting tenders for leasing out shops of vegetable and Fruit market in Kattukoodalur Road, Virudhachalam. One of the conditions stipulated in the auction notice was that persons, who have filed legal proceedings against municipalities, will not be entitled to lease of land. 3. In response to the advertisement, the petitioner participated in the auction held on 13.7.2011 at 11.00 a.m., after submitting tender along with the earnest money and Demand Draft in lieu of Solvency Certificate. The petitioner also deposited the electricity charges. The petitioner was declared the highest bidder and the bid in favour of petitioner was also confirmed. Inspite of the fact, that the contract stood concluded between the parties, the petitioner was not issued letter of allotment. 4. After two weeks of confirming the bid, the respondent no.1 passed the impugned order, cancelling the bid of petitioner and forfeiting the earnest money and electricity charges deposited by petitioner, on the ground that the petitioner was not eligible to participate under condition-10 of the auction notice, as he had filed case against the municipality. 5. The impugned condition-10 debarring the person to be not eligible for lease, is challenged by petitioner, on the ground, that the condition is totally arbitrary, being in violation of settled law, that any contract prohibiting the right to bar legal proceedings is void. It is the submission of petitioner, that it was not open to the respondents to cancel the concluded contract, merely on the ground that the petitioner had initiated legal proceedings to redress his grievance. 6. The impugned order is also challenged on the ground of arbitrary exercise of power by respondent no.1, on the ground, that the respondents not only acted arbitrarily, but also forfeited the earnest money and electricity charges by unilaterally cancelling the concluded contract. 7. 6. The impugned order is also challenged on the ground of arbitrary exercise of power by respondent no.1, on the ground, that the respondents not only acted arbitrarily, but also forfeited the earnest money and electricity charges by unilaterally cancelling the concluded contract. 7. The writ petition is opposed by the learned counsel for the respondents by contending that, the petitioner has no locus standi to challenge cancellation of the lease in his petitioner, as the respondents had reserved the right to cancel any bid without assigning any reasons under Clause-13 of the terms of the auction notice. This contention is misconceived, as this is not a case of cancellation of bid, but a concluded contract. 8. It is also contended, that the petitioner, having participated in the auction after accepting the conditions, is now estopped to challenge the terms of condition of auction. It was contended, that it is not even disputed, that the petitioner was guilty of violating clause-10 of the terms of the bid, therefore, action of the respondents cannot be faulted with. 9. On consideration, I find that this writ petition deserves to succeed. Though under the normal circumstances, this Court does not interfere with the rights under the contract, as the remedy is to go to Civil Court, but when action by the State or its authorities is totally arbitrary and violative of Article 14 of the Constitution of India, then this Court can interfere even in contractual matters. The respondent no.1 does not have any right to cancel the concluded contract unilaterally, by invoking condition-10 of the auction, which on the face of it is void, as no stipulation can be made to debar a person to avail his legal proceedings in accordance with law. This condition also was not statutory, therefore, on acceptance of bid, it stood waived. 10. It is now well settled law, that even in the matter of contract it is not open to the State or its agencies to act in an arbitrary manner, as held in E.P.Royappa vs. State of Tamil Nadu, 1974 (4) SCC 3 , Mrs.Maneka Gandhi vs. Union of India, 1978 (1) SCC 248 , Ramana Dayaram Shetty vs. The International Airport Authority of India, AIR 1979 SC 1628 , M/s.Kasturi Lal Lakshmi Reddy vs. State of J&k, AIR 1980 SC 1992 and Haji T.M.Hassan Rawther vs. Keral Financial Corporation, 1980 (1) SCC 166. 11. 11. The action of respondent no.1 in cancelling the contract, being arbitrary cannot be sustained in law. Otherwise also it was not open to the respondents to forfeit the earnest money and other deposits, if the contract was to be cancelled, on the ground of eligibility of petitioner to participate in the auction. 12. Condition-10 of the auction notice also deserves to be declared as void, as the stipulation to debar a person to avail his legal remedy cannot be sustained in law. 13. Learned counsel for the respondents however pointed out, that subsequently, the petitioner has been elected as Councilor of the Municipality, therefore, he is not entitled to take the lease of municipality property. If that be so, it shall be open to the respondents to cancel the lease by invoking bar under statute in accordance in law, but this cannot be ground to uphold the impugned order or clause-10 of auction, which is patently arbitrary and not sustainable in law. 14. Consequently, this writ petition is allowed. The clause-10 of the auction notice, declaring persons, who are prosecuting legal proceedings against the municipality to be debarred from auction, is declared as void, and the impugned order, cancelling the bid of petitioner is quashed. This order shall not bar the respondents to take appropriate action under the Act in view of election of petitioner as Municipal Councilor. 15. No costs. Consequently, connected Miscellaneous petitions are closed.