JUDGMENT : 1. We have heard learned counsel appearing for the parties. 2. This Special Appeal arises out of the judgment of learned Single Judge, dated 10.02.2014, by which he has disposed of the writ petition in the light of the settlement dated 08.08.2013, entered into between the parties and reproduced in the judgment. It was held that:-“Now the petitioner and the respondent Nos.1 to 3 would be governed by the settlement dated 08.08.2013.” 3. Brief facts, giving rise to the writ petition, are that the Jaipur Vidhyut Vitran Nigam Limited(JVVNL), floated a tender through tendering system for the work, “To operate photo spot energy bill generation system at Sub-division level in different areas of Jaipur Discom/JVVNL” for a period of three years. The Notice Inviting Tender (NIT) laid down various conditions for qualification of the bidders, to be followed for the purpose of selecting the bidder to carry out the work. The conditions were alleged to be flexible since the JVVNL reserved its rights to allow the bidders, who were not strictly covered by the conditions notified in the tender, and had marginal difference in the eligibility criteria. 4. Under Clause 8.7 of the tender, minimum three eligible bidders were required to be qualified in the technical bid for opening the financial bid. At the time of evaluation of the technical bid, there were only three bidders, namely M/s N Soft Pvt. Ltd.,- appellant, who was respondent No.4 in the writ petition; M/s BCITS Pvt. Ltd., who was the petitioner in the writ petition; and M/s Data Infosys Pvt. Ltd., who was respondent No.3 in the writ petition. All the three bidders participated in the bidding. The appellant was found marginally short in the eligibility of turover of Rs.30 crores. It had a three years turnover of Rs.29.70 crores. Since the appellant was marginally short in eligibility which was insignificant, the Corporate Level Purchase Committee had allowed him to participate in the bidding. 5. In the financial bid, the prices quoted by M/s Data Infosys were found lowest and it stood at L-1; the prices quoted by the appellant, M/s N Soft were found second lowest and it stood at L-2; and the prices quoted by M/s BCITS were highest, and thus it stood at L-3. On 09.04.2013, the bid submitted by M/s Data Infosys was accepted and the Letter of Intent(LOI) was issued in its favour. On 09.04.2013, the bid submitted by M/s Data Infosys was accepted and the Letter of Intent(LOI) was issued in its favour. A writ petition was filed by M/s BCITS Pvt. Ltd. (L-3), challenging the eligibility of both, L-1 and L-2, and also the order of the JVVNL, dated 08.03.2013, whereby the appellant was allowed to participate in the final bidding, including challenge to the Letter of Intent dated 09.04.2013. 6. On 07.08.2013, learned Single Judge directed the parties to settle the dispute amicably and for that purposes, a joint meeting was ordered to be convened on 08.08.2013 between the petitioner (L-3), the official respondents and M/s Data Infosys (L-1). The order dated 07.08.2013, passed by learned Single Judge is quoted as below:- “Heard the parties for sometime and looking to the nature of the dispute which has been brought to notice of the court, this court is of the view that there is full possibility of resolving the dispute, if the parties sit together across the table. However, it will always reserve their rights to assail in the pending petition and before examining the matter any further on merits, this court considers it appropriate that let the authorized representatives of the petitioner and the respondent-3 with the Director (Technical) & Director(Finance) of Jaipur Vidyut Vitran Nigam Ltd. may hold a joint meeting tomorrow i.e. 08.08.2013 at 5.00 PM and this court be informed about the final outcome of their deliberation. Let the matter may come up before the court on 12.08.2013, as prayed.” 7. On 08.08.2013, a joint meeting was held and the work was agreed to be distributed amongst M/s BCITS Pvt. Ltd. (L-3) and M/s Data Infosys (L-1), in the ratio of 47% : 53%. It is admitted the appellant M/s N Soft (L-2) was not called in the meeting. A resolution/settlement was drawn subject to the rights of the appellant (L-2), and further subject to the approval of the Court. On 12.08.2013, the JVVNL submitted the resolution in the Court, to which an objection was raised by the appellant (L-2) before learned Single Judge, that in the joint meeting the appellant (L-2) was not called, and without considering his rights, no settlement could be approved. Accepting the objection raised by the appellant, the settlement dated 08.08.2013 was disapproved and the official respondents were directed to hold a meeting afresh on 14.08.2013, including the appellant(L-2). 8. Accepting the objection raised by the appellant, the settlement dated 08.08.2013 was disapproved and the official respondents were directed to hold a meeting afresh on 14.08.2013, including the appellant(L-2). 8. On 14.08.2013, in compliance of the orders passed by the Court, a joint meeting was convened, in which M/s BCITS Pvt. Ltd. (L-3)-the writ-petitioner, did not agree to share the work with the appellant, and therefore, no settlement could take place. 9. In the letter dated 13.08.2013, written by the appellant(L-2), he referred to the options given to him to take 10% of the work, which he did not accept. The letter sent by the appellant (L-2), dated 13.08.2013, is quoted as below:- Date 13th August 2013 “To, The Superintending Engineer (IT), Jaipur Vidhyut Vitran Nigam, Jaipur. Sub: - Conciliation Meeting regarding distribution of work among the Bidders. Ref: 1. Tender ID No.JPD/SE(IT) TN-42 regarding job of operating Spot Energy Bill Generation System. 2. Direction of Hon'ble Rajasthan High Court dated 12th Aug. 2013 in SBCWP No.6587/2013. Sir, With reference to Conciliation meeting held as per the directive of the High Court, in presence of the Director Finance, JVVNL and the Director (Tech.), JVVNL, three options were discussed (i) mutual agreement regarding distribution of work among all the three bidders, (ii) JVVNL suggested they can distribute the work according to the Purchase Manual-1999 (amended up to date), only 10% of the work can be given to N Soft, since they are a new party in Rajasthan, and (iii) N Soft suggested that 50% of work can be given to L-1 M/s Data Infosys, and balance 50% can be distributed equally among L-2 ( N Soft) and L-3 (BCITS) i.e. 25%-25% to each. (i) All the three parties could not reach amicable understanding to the quantum of distributing of the work. (ii) The suggestion of the JVVNL is not agreeable to the N Soft, since N Soft is technically qualified to perform the job and pre-requisite qualifications of the N Soft has already been examined by the Corporate Level Committee, and further there is nothing either in the Tender Document or in the Purchase Manual that new party would not be given work more than 10%. (iii). That BCITS has not agreed with the suggestion of the N Soft to distribute the work among all the three bidders as L-1 50%, L-2 25% and L-3 25%. (iii). That BCITS has not agreed with the suggestion of the N Soft to distribute the work among all the three bidders as L-1 50%, L-2 25% and L-3 25%. Therefore, in absence of an agreement between the parties to amicably distribute the work JVVNL must strictly abide by the Purchase Manual and distribute the work in the ratio of 4:2:1 among L-1, L-2 and L-3, and also request or submit to the Hon'ble High Court to distribute the work as per Purchase Manual. Thanking you. Yours truly, Sd/- (P.N.Suresh) General Manager and Authorized Representative” 10. On 15.01.2014, learned Single Judge gave another chance to the petitioner, M/s BCITS Pvt. Ltd. (L-3), to settle the dispute by sharing the work with the appellant (L-2), but that the petitioner (L-3) did not agree, and on which learned Single Judge observed on 22.01.2014, that in case no settlement is arrived at between the three parties, the matter would be heard on merits. 11. On 10.02.2014, the matter was heard on merits. It is alleged that the counsel appearing for the appellant (L-2) was not given an opportunity of oral hearing and he was required to submit his written arguments. 12. It is submitted that by the impugned judgment, learned Single Judge, in the facts and circumstances of the case, accepted the settlement between L-1 and L-3, and accordingly disposed of the writ petition on the basis of the settlement, dated 08.08.2013, arrived at between the relevant parties, to share the work on the rates offered by them. In the body of the judgment dated 10.02.2014, it is stated at page3 that:- “Learned counsel for the respondent No.4 submits that if 10% of the work is assigned to them, they are ready to settle the matter.” It appears that in the revised offer of the appellant to accept 10% of the work, during the course of hearing, was also not accepted. 13. The judgment has been challenged on the ground that the settlement could not have been arrived at between the parties, unless the appellant (L-2) was present in the meeting, and was allowed to negotiate. The appellant (L-2) was not present in the first meeting as the Court did not direct his presence, nor any notice was issued to him. He was not informed to participate in the meeting. The appellant (L-2) was not present in the first meeting as the Court did not direct his presence, nor any notice was issued to him. He was not informed to participate in the meeting. On an application made before learned Single Judge, the matter was fixed for conciliation, and in which an offer by JVVNL, out of three offers, was made to the appellant(L-2) to accept 10% of the work, as according to the JVVNL, the Firm was from outside the State and could only be offered 10% of the work. The bidders i.e. L-1 and L-3, did not agree even to part with 10% of contract work, and thus, the negotiations so far as L-2 is concerned, were closed. 14. We do not find that learned Single Judge adopted a correct approach right from the beginning. The first order passed in the matter vitiated the entire course of proceedings in the writ petition, in which a challenge was made only to the eligibility of L-1 and L-2. In view of the order dated 07.08.2013, the matter was required to be settled between the authorized representatives of petitioner (L-3) and the respondent No.3 (L-1), with the Director(Technical) and Director(Finance) of Jaipur Vidyut Vitaran Nigam Ltd.. The directions issued by the Court to hold a joint meeting on 08.08.2013 at 5:00 PM, and to inform the Court about final outcome of the deliberation, fixing the matter on 12.08.2013, excluded the appellant (L-2). It is admitted that in this meeting dated 08.08.2013, neither the appellant (L-2) was called, nor he could participate in the meeting, and thus the deliberations of the meeting dated 08.08.2013 could not be taken into consideration to award contract. In this meeting, the appellant as L-2, was deliberately ousted as both L-1 and L-3, who were already working in Rajasthan, distributed the work, with the approval of JVVN, made a cartel to share the work to the exclusion of the appellant (L-2). 15. We find that when the appellant gave an application to hold a fresh meeting and to allow him to participate in the meeting for negotiations, his offer of 25% was not accepted, on the suggestion of the JVVNL that they can distribute the work according to the Purchase Manual-1999 (amended up to date), and only 10% of the work could be given to M/s N Soft (L-2), since they are a new party in Rajasthan. The offer/suggestion of the JVVNL to the extent of 10% was virtually denial of the negotiation to the appellant (L-2). 16. From the proceedings of the writ petition, meetings held between the parties, and the denial of the opportunities to the appellant (L-2) to participate in the negotiation, we find that taking advantage of the orders passed by learned Single Judge, the bidders, L-1 and L-3 joined together and distributed the work. In this process, they completely ousted the appellant, who was L-2, from the negotiations. The settlement arrived at between the parties, even if one of the parties is a formal party, is not valid until all the parties were allowed to participate in the negotiations freely without any pre-condition. The appellant(L-2) was ousted from the negotiation right from the beginning. In the first order of learned Single Judge, it was provided that the appellant (L-2) will not participate in the meeting, and thus, the entire process of negotiation from the beginning was vitiated, being arbitrary and violative of Article 14 of the Constitution of India. 17. The JVVNL while distributing the work in awarding contracts should have ensured fairness and transparency in their dealings. It was not expected from the JVVNL, a Public Sector Undertaking, to call only two bidders, namely L-1 and L-3 in the negotiations, reopening the tender process. 18. In our view, in a case where parties were willing to negotiate, unless all the parties were involved, the negotiation itself was illegal, and could not have resulted into valid and effective settlement. 19. In Arjan Singh Vs. Punit Ahluwalia And Others, (2008) 8 SCC 348 , the Hon'ble Supreme Court, considering the compromise arrived at between the parties in a civil dispute, held that the compromise was unlawful without the written consent of all the parties. By reason of a compromise, the claim of A was wrongly defeated. The trial Court wrongly recorded that A is only a proforma defendant in the suit filed by S. The settlement entered into by and between the parties proceeded on the wrong assumption that no decree for specific performance would be passed in the case of A. The first part of Order 23 Rule 3 was applicable because the parties to the suit entered into a compromise in terms whereof the decree became executable on the basis of the compromise. The second part of Order 23 Rule 3 CPC would have been applicable if the claim of the plaintiff would have been satisfied and further action would not have been required to be taken by the parties in term of the consent decree. The claim of A vis-a-vis that of S as per their respective suits was required to be considered together but was not done so. 20. In the present case, in the absence of the appellant (L-2), negotiation could not have proceeded between L-1 and L-3. The acceptance of the settlement by the JVVNL negated the very concept of transparency and fairness in awarding the contract. It cannot be said that since the appellant (L-2) has not challenged the Letter of Intent in favour of L-1, there was no need to allow him to participate in the negotiation. When the negotiations were opened of the bidders, L-2 was a necessary party to participate in terms of the conditions on which tender was floated. 21. From the facts and circumstances of the case, we find that in the absence of the appellant as L-2 in the meeting, the entire process of negotiation was vitiated, and that the contract should be cancelled, but that since the period of more than two years, out of three year period of the contract, is over, no direction may be given to cancel the LOI in favour of L-1 and L-3, for the period, for which they have already worked. 22. In view of the aforesaid, the Special Appeal is partly allowed, and while setting aside the judgment of learned Single Judge, dated 10.02.2014, we direct the JVVNL to re-tender the contract. 23. It will be open to the JVVNL to re-tender the contract for the remaining period, or for any further period, as the case may be, in accordance with law. 24. The parties will bear their own cost of litigation.