JUDGMENT : D.H.WAGHELA 1. These three petitions by successful bidders for license to supply, install, commission, operate and maintain three Harbour Mobile Cranes ('HMC' in short) are argued and heard together and disposed by this common judgment. 2. The petitioners M/s. ABC Trans Carriers Pvt. Ltd ('ABC' in short), M/s. Orissa Stevedores Ltd ('OSL' in short) and M/s. Viable Infrastructures & Logistic Pvt. Ltd. ('Viable' in short) have approached this Court mainly against Paradip Port Trust and its officers ('PPT' for short) and M/s. Bothra Shipping Service Pvt. Ltd ('Bothra' in short) with the main prayer to quash the decision of the Tender Committee to award license for fourth HMC in favour of M/s. Bothra. The facts and contentions being similar in all the petitions, relevant facts are taken from W.P.(C) No. 10308 of 2015. 3. The facts relevant for the present purpose are that PPT had issued e-Tender or notice for online tender from eligible bidders for grant of license for supply, installation, commissioning, operation and maintenance of three 100 ton HMCs for five years inside PPT. Bids were opened on 2.3.2015. According to Clause-9 of the tender documents, there was scope for amendment of bid documents and, according to Clause-11, bidders were to quote revenue sharing per ton in percent of Tariff Authority for Major Ports ('TAMP' in short) rate. The highest revenue sharing offered by the bidders were to be accepted and separate bids were required to be submitted for each crane. By Clause-27, PPT reserved the right to reduce the number of cranes required to be deployed from 3 to 2 at the time of finalization of tender, depending on prevailing situation. The PPT was to award the contract to such bidders as were conforming to the techno-commercially responsive and highest evaluated bids. It was further indicated that the bidders shall have to match highest quoted rate. The second highest bidder had the first right of refusal and so on. If other bidders did not agree to match the highest rate, fresh offers were to be invited through open tender. 4. By issuing addendum on 23.2.2015 to the tender notice, PPT changed the dates of opening of the Tender and stipulated that bidder or its subsidiary or its associate could participate for one HMC only. By second addendum dated 24.2.2015 only time for the opening of the tenders was changed to 16.00 hours on 7.3.2015. 5. 4. By issuing addendum on 23.2.2015 to the tender notice, PPT changed the dates of opening of the Tender and stipulated that bidder or its subsidiary or its associate could participate for one HMC only. By second addendum dated 24.2.2015 only time for the opening of the tenders was changed to 16.00 hours on 7.3.2015. 5. On 25.3.2015, the Tender Committee consisting of six officials of PPT met and found the petitioners and M/s. Bothra to be qualified bidders with OSL being highest bidder offering 9% of revenue sharing. Therefore, other bidders were called upon to match the rate offered by the highest bidder. It was also recommended by the Committee that in case all the bidders match the highest rate then four numbers of HMC might be deployed as against three, as there was further requirement. On the basis of such minutes of the meeting, M/s. Bothra was issued the letter of intent dated 28.3.2015 for grant of license for the fourth HMC. 6. The grievance of the petitioners is that fourth HMC was not part of the tender-notice and hence award of contract and license for the fourth HMC was contrary to the tender-notice and, it being a State largess, it was awarded without due process to the detriment and possible loss to the petitioners. Under such circumstances, oblique motive and extraneous considerations were alleged against the PPT. It is averred by the petitioners that there was a hidden agenda to somehow accommodate M/s. Bothra in view of cancellation of two earlier tender notice dated 12.8.2014 and 4.12.2014 wherein only two bidders participated. While HMC could be procured and installed within a period of six months M/s. Bothra was so sure of getting the award that they moved the machine within a month. It is alleged that had there been an offer to the petitioners, they could make available and install fourth HMC, but before such opportunity arose, the addendum to the tender notice was issued. It is also averred that variation in the tonnage, the petitioner would get to handle with four new HMCs, would cause loss of Rs.2 crores per annum to the petitioner. 7. It is also averred that variation in the tonnage, the petitioner would get to handle with four new HMCs, would cause loss of Rs.2 crores per annum to the petitioner. 7. As against the above case of the petitioner in the respective writ petitions, PPT has contended that it had reserved the right to reduce number of cranes required to be deployed from 3 to 2 at the time of finalization of tender process, depending on the prevailing situation. Licensees were to be permitted to install HMCs inside port prohibited area to operate any cargo berths depending on the operational requirement of the Port. It is averred that PPT would ensure that quantity of cargo to be handled by the HMCs during the financial year would be rationalized on the basis of capacity as well as availability of HMCs, even as PPT did not give any commitment to the bidders or licensees. That there was adequate cargo for the petitioners and other crane operators to function round the clock. Thus, no prejudice would be caused to the petitioners, if the fourth HMC were allowed to operate in public interest and to cope with higher target fixed for the port by Ministry of Ports. On that basis, it is submitted that in view of increasing traffic at the port and increasing period of break down among the existing HMCs, the petitioners were not likely to suffer any loss due to installation and operation of the fourth HMC. 8. By filing an affidavit of its Vice-President, M/s. Bothra, respondent No.8 has opposed the petition with the contentions that the issues raised by the petitioners are speculative, misleading and based on suppression of material facts and without the petitioner having a locus standi. It is submitted that the petitioners have never raised any objection to the grant of license for the fourth HMC to respondent no.8 and they are estopped from raising objection at a belated stage as the respondent has already invested substantial amount of money and manpower in fulfillment of installation of the crane. That the petitioners' pleas are not in public interest. That the number of cranes mentioned in the tender notice in question was never meant to be an essential term of the notice, even as the petitioners have already been favoured with the contract. That the petitioners' pleas are not in public interest. That the number of cranes mentioned in the tender notice in question was never meant to be an essential term of the notice, even as the petitioners have already been favoured with the contract. It is also submitted that the tender committee had made its recommendation on March 25, 2015 after hearing all the bidders and letters of intent dated March 28,2015 were issued to all the four bidders, after approval by the Chairman of PPT, who is the Chief Executive Authority. M/s. Bothra has thereafter fulfilled the other conditions for grant of license vide its letter dated 15.4.2015 and 27.4.2015. That M/s. Bothra had already entered into a Memorandum of Understanding on September 30,2014 long before the tender notice in question, for supply of three HMCs from its supplier and already entered into contract on 22.2.2015 for supply of one HMC at Kakinada. After that, that HMC was requested to be diverted to PPT and the HMC scheduled for delivery to Kakinada Port was delivered at Paradip Port after award of letter of intent by PPT. Thus, one HMC had already reached Paradip Port on 18.5.2015 and landed on 20.5.2015. Thereafter, commissioning and trial of the HMC was completed on 8.6.2015 and test under the contract was conducted on 11.6.2015 making the crane ready for commercial operation on 19.6.2015. Thus, M/s. Bothra has already incurred substantial expenditure in procuring, arranging and commissioning the HMC as per the tender conditions and has also furnished bank guarantee of Rs.1,20,00,000/-to PPT. It is alleged that all the three petitioners are associates of one group and have formed a cartel to prevent other operators from functioning at PPT. Denying all the allegations made in the petitions, it is submitted that the petitioners had, by suppressing material facts, obtained an ex parte order on 10.6.2015 to maintain status quo as on that date in respect of the letter of intent dated 15.4.2015. 9. The following judgments and observations made therein were cited and discussed at the bar during the course of arguments. (a) Jagdish Mandal vs. State of Orissa & Ors, [(2007) 14 SCC 517]. "22. Judicial review of administrative action is intended to prevent arbitrariness, irrationality, unreasonableness, bias and mala fides. Its purpose is to check whether choice or decision is made “lawfully” and not to check whether choice or decision is “sound”. (a) Jagdish Mandal vs. State of Orissa & Ors, [(2007) 14 SCC 517]. "22. Judicial review of administrative action is intended to prevent arbitrariness, irrationality, unreasonableness, bias and mala fides. Its purpose is to check whether choice or decision is made “lawfully” and not to check whether choice or decision is “sound”. When the power of judicial review is invoked in matters relating to tenders or award of contracts, certain special features should be borne in mind. A contract is a commercial transaction. Evaluating tenders and awarding contracts are essentially commercial functions. Principles of equity and natural justice stay at a distance. If the decision relating to award of contract is bona fide and is in public interest, courts will not, in exercise of power of judicial review, interfere even if a procedural aberration or error in assessment or prejudice to a tenderer, is made out. The power of judicial review will not be permitted to be invoked to protect private interest at the cost of public interest, or to decide contractual disputes. The tenderer or contractor with a grievance can always seek damages in a civil court. Attempts by unsuccessful tenderers with imaginary grievances, wounded pride and business rivalry, to make mountains out of molehills of some technical/procedural violation or some prejudice to self, and persuade courts to interfere by exercising power of judicial review, should be resisted. Such interferences, either interim or final, may hold up public works for years, or delay relief and succour to thousands and millions and may increase the project cost manifold. Therefore, a court before interfering in tender or contractual matters in exercise of power of judicial review, should pose to itself the following questions: (i) Whether the process adopted or decision made by the authority is mala fide or intended to favour someone; OR Whether the process adopted or decision made is so arbitrary and irrational that the court can say: “the decision is such that no responsible authority acting reasonably and in accordance with relevant law could have reached”; (ii) Whether public interest is affected. If the answers are in the negative, there should be no interference under Article 226. If the answers are in the negative, there should be no interference under Article 226. Cases involving blacklisting or imposition of penal consequences on a tenderer/contractor or distribution of State largesse (allotment of sites/shops, grant of licences, dealerships and franchises) stand on a different footing as they may require a higher degree of fairness in action." (b) R.N.Gosain v. Yashpal Dhir, [ AIR 1993 SC 352 ] "10. Law does not permit a person to both approbate and reprobate. This principle is based on the doctrine of election which postulates that no party can accept and reject the same instrument and that “a person cannot say at one time that a transaction is valid and thereby obtain some advantage, to which he could only be entitled on the footing that it is valid, and then turn round and say it is void for the purpose of securing some other advantage”. [See : Verschures Creameries Ltd. v. Hull and Netherlands Steamship Co. Ltd., (1921) 2 KB 608, 612 (CA) Scrutton, L.J.] According to Halsbury’s Laws of England, 4th Edn., Vol. 16, “after taking an advantage under an order (for example for the payment of costs) a party may be precluded from saying that it is invalid and asking to set it aside”. (c) Tata Cellular Vs. Union of India, [ (1994)6 SCC 651 ] "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. 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." xxx xxx xxx "73. Observance of judicial restraint is currently the mood in England. The judicial power of review is exercised to rein in any unbridled executive functioning. The restraint has two contemporary manifestations. One is the ambit of judicial intervention; the other covers the scope of the court’s ability to quash an administrative decision on its merits. These restraints bear the hallmarks of judicial control over administrative action." (d) B.S.N.Joshi & Sons Ltd. v. Nair Coal Services Ltd., [ (2006)11 SCC 548 ] "69. While saying so, however, we would like to observe that having regard to the fact that huge public money is involved, a public sector undertaking in view of the principles of good corporate governance may accept such tenders which are economically beneficial to it. It may be true that essential terms of the contract were required to be fulfilled. If a party failed and/or neglected to comply with the requisite conditions which were essential for consideration of its case by the employer, it cannot supply the details at a later stage or quote a lower rate upon ascertaining the rate quoted by others. Whether an employer has power of relaxation must be found out not only from the terms of the notice inviting tender but also the general practice prevailing in India. For the said purpose, the court may consider the practice prevailing in the past. Keeping in view a particular object, if in effect and substance it is found that the offer made by one of the bidders substantially satisfies the requirements of the conditions of notice inviting tender, the employer may be said to have a general power of relaxation in that behalf. Keeping in view a particular object, if in effect and substance it is found that the offer made by one of the bidders substantially satisfies the requirements of the conditions of notice inviting tender, the employer may be said to have a general power of relaxation in that behalf. Once such a power is exercised, one of the questions which would arise for consideration by the superior courts would be as to whether exercise of such power was fair, reasonable and bona fide. If the answer thereto is not in the negative, save and except for sufficient and cogent reasons, the writ courts would be well advised to refrain themselves in exercise of their discretionary jurisdiction." (e) Raunaq International Ltd. v. I.V.R.Construction Ltd. & ors, (AIR 1990 SC 393) "11. When a writ petition is filed in the High Court challenging the award of a contract by a public authority or the State, the court must be satisfied that there is some element of public interest involved in entertaining such a petition. If, for example, the dispute is purely between two tenderers, the court must be very careful to see if there is any element of public interest involved in the litigation. A mere difference in the prices offered by the two tenderers may or may not be decisive in deciding whether any public interest is involved in intervening in such a commercial transaction. It is important to bear in mind that by court intervention, the proposed project may be considerably delayed thus escalating the cost far more than any saving which the court would ultimately effect in public money by deciding the dispute in favour of one tenderer or the other tenderer. Therefore, unless the court is satisfied that there is a substantial amount of public interest, or the transaction is entered into mala fide, the court should not intervene under Article 226 in disputes between two rival tenderers. xxx xxx xxx 13. Hence before entertaining a writ petition and passing any interim orders in such petitions, the court must carefully weigh conflicting public interests. Only when it comes to a conclusion that there is an overwhelming public interest in entertaining the petition, the court should intervene. 14. xxx xxx xxx 13. Hence before entertaining a writ petition and passing any interim orders in such petitions, the court must carefully weigh conflicting public interests. Only when it comes to a conclusion that there is an overwhelming public interest in entertaining the petition, the court should intervene. 14. Where there is an allegation of mala fides or an allegation that the contract has been entered into for collateral purposes and the court is satisfied on the material before it that the allegation needs further examination, the court would be entitled to entertain the petition. But even here, the court must weigh the consequences in balance before granting interim orders. 15. Where the decision-making process has been structured and the tender conditions set out the requirements, the court is entitled to examine whether these requirements have been considered. However, if any relaxation is granted for bona fide reasons, the tender conditions permit such relaxation and the decision is arrived at for legitimate reasons after a fair consideration of all offers, the court should hesitate to intervene." (f) Natural Resources Allocation, In re, Special Reference No.1 of 2012, [ (2012)10 SCC 1 .] "98. However, after the judgment of this Court in E.P. Royappa v. State of T.N. (1974) 4 SCC 3 the “arbitrariness” doctrine was introduced which dropped a pedantic approach towards equality and held the mere existence of arbitrariness as violative of Article 14, however equal in its treatment. Bhagwati, J. (as His Lordship then was) articulated the dynamic nature of equality and borrowing from Shakespeare’s Macbeth***, said that the concept must not be “cribbed, cabined and confined” within doctrinaire limits: (SCC p. 38, para 85) “85. … Now, what is the content and reach of this great equalising principle? It is a founding faith, to use the words of Bose, J., ‘a way of life’, and it must not be subjected to a narrow pedantic or lexicographic approach. We cannot countenance any attempt to truncate its all-embracing scope and meaning, for to do so would be to violate its activist magnitude. Equality is a dynamic concept with many aspects and dimensions and it cannot be ‘cribbed, cabined and confined’ within traditional and doctrinaire limits.” His Lordship went on to explain the length and breadth of Article 14 in the following lucid words: (Royappa case, SCC p. 38, para 85) “85. Equality is a dynamic concept with many aspects and dimensions and it cannot be ‘cribbed, cabined and confined’ within traditional and doctrinaire limits.” His Lordship went on to explain the length and breadth of Article 14 in the following lucid words: (Royappa case, SCC p. 38, para 85) “85. … From a positivistic point of view, equality is antithetic to arbitrariness. In fact equality and arbitrariness are sworn enemies; one belongs to the rule of law in a republic while the other, to the whim and caprice of an absolute monarch. Where an act is arbitrary, it is implicit in it that it is unequal both according to political logic and constitutional law and is therefore violative of Article 14, and if it affects any matter relating to public employment, it is also violative of Article 16. Articles 14 and 16 strike at arbitrariness in State action and ensure fairness and equality of treatment. They require that State action must be based on valid relevant principles applicable alike to all similarly situate and it must not be guided by any extraneous or irrelevant considerations because that would be denial of equality. Where the operative reason for State action, as distinguished from motive inducing from the antechamber of the mind, is not legitimate and relevant but is extraneous and outside the area of permissible considerations, it would amount to mala fide exercise of power and that is hit by Articles 14 and 16. Mala fide exercise of power and arbitrariness are different lethal radiations emanating from the same vice: in fact the latter comprehends the former. Both are inhibited by Articles 14 and 16.” xxx xxx xxx "105. However, this Court has also alerted against the arbitrary use of the “arbitrariness” doctrine. Typically, laws are struck down for violating Part III of the Constitution of India, legislative incompetence or excessive delegation. However, since Royappa case, the doctrine has been loosely applied. This Court in State of A.P. v. McDowell & Co. (1996)3 SCC 709 stressed on the need for an objective and scientific analysis of arbitrariness, especially while striking down legislations. Jeevan Reddy, J. observed: (SCC pp. 737-38, para 43) “43. … The power of Parliament or for that matter, the State Legislatures is restricted in two ways. A law made by Parliament or the legislature can be struck down by courts on two grounds and two grounds alone viz. Jeevan Reddy, J. observed: (SCC pp. 737-38, para 43) “43. … The power of Parliament or for that matter, the State Legislatures is restricted in two ways. A law made by Parliament or the legislature can be struck down by courts on two grounds and two grounds alone viz. (1) lack of legislative competence and (2) violation of any of the fundamental rights guaranteed in Part III of the Constitution or of any other constitutional provision. There is no third ground. We do not wish to enter into a discussion of the concepts of procedural unreasonableness and substantive unreasonableness—concepts inspired by the decisions of United States Supreme Court. Even in USA, these concepts and in particular the concept of substantive due process have proved to be of unending controversy, the latest thinking tending towards a severe curtailment of this ground (substantive due process). The main criticism against the ground of substantive due process being that it seeks to set up the courts as arbiters of the wisdom of the legislature in enacting the particular piece of legislation. It is enough for us to say that by whatever name it is characterised, the ground of invalidation must fall within the four corners of the two grounds mentioned above. In other words, say, if an enactment is challenged as violative of Article 14, it can be struck down only if it is found that it is violative of the equality clause/equal protection clause enshrined therein. Similarly, if an enactment is challenged as violative of any of the fundamental rights guaranteed by clauses (a) to (g) of Article 19(1), it can be struck down only if it is found not saved by any of the clauses (2) to (6) of Article 19 and so on. No enactment can be struck down by just saying that it is arbitrary or unreasonable. Some or other constitutional infirmity has to be found before invalidating an Act. An enactment cannot be struck down on the ground that court thinks it unjustified. Parliament and the legislatures, composed as they are of the representatives of the people, are supposed to know and be aware of the needs of the people and what is good and bad for them. The court cannot sit in judgment over their wisdom. An enactment cannot be struck down on the ground that court thinks it unjustified. Parliament and the legislatures, composed as they are of the representatives of the people, are supposed to know and be aware of the needs of the people and what is good and bad for them. The court cannot sit in judgment over their wisdom. In this connection, it should be remembered that even in the case of administrative action, the scope of judicial review is limited to three grounds viz. (i) unreasonableness, which can more appropriately be called irrationality, (ii) illegality and (iii) procedural impropriety (see Council of Civil Service Unions v. Minister for the Civil Service, 1985 AC 374 which decision has been accepted by this Court as well).” xxx xxx xxx "107. From a scrutiny of the trend of decisions it is clearly perceivable that the action of the State, whether it relates to distribution of largesse, grant of contracts or allotment of land, is to be tested on the touchstone of Article 14 of the Constitution. A law may not be struck down for being arbitrary without the pointing out of a constitutional infirmity as McDowell case has said. Therefore, a State action has to be tested for constitutional infirmities qua Article 14 of the Constitution. The action has to be fair, reasonable, non-discriminatory, transparent, non-capricious, unbiased, without favouritism or nepotism, in pursuit of promotion of healthy competition and equitable treatment. It should conform to the norms which are rational, informed with reasons and guided by public interest, etc. All these principles are inherent in the fundamental conception of Article 14. This is the mandate of Article 14 of the Constitution of India. xxx xxx xxx "167. In chronological sequence, the learned counsel then cited Mahabir Auto Stores v. Indian Oil Corpn. (1990) 3 SCC 752 . Relevant observations made therein, with reference to the present controversy, are being placed below: (SCC pp. 760-61 & 763-64, paras 12, 17-20 & 23) “12. It is well settled that every action of the State or an instrumentality of the State in exercise of its executive power, must be informed by reason. In appropriate cases, actions uninformed by reason may be questioned as arbitrary in proceedings under Article 226 or Article 32 of the Constitution. 760-61 & 763-64, paras 12, 17-20 & 23) “12. It is well settled that every action of the State or an instrumentality of the State in exercise of its executive power, must be informed by reason. In appropriate cases, actions uninformed by reason may be questioned as arbitrary in proceedings under Article 226 or Article 32 of the Constitution. Reliance in this connection may be placed on the observations of this Court in Radhakrishna Agarwal v. State of Bihar, (1977)3 SCC 457 . It appears to us, at the outset, that in the facts and circumstances of the case, the respondent Company IOC is an organ of the State or an instrumentality of the State as contemplated under Article 12 of the Constitution. The State acts in its executive power under Article 298 of the Constitution in entering or not entering in contracts with individual parties. Article 14 of the Constitution would be applicable to those exercises of power. Therefore, the action of State organ under Article 14 can be checked. See Radhakrishna Agarwal v. State of Bihar at p. 462, but Article 14 of the Constitution cannot and has not been construed as a charter for judicial review of State action after the contract has been entered into, to call upon the State to account for its actions in its manifold activities by stating reasons for such actions. In a situation of this nature certain activities of the respondent Company which constituted State under Article 12 of the Constitution may be in certain circumstances subject to Article 14 of the Constitution in entering or not entering into contracts and must be reasonable and taken only upon lawful and relevant consideration; it depends upon facts and circumstances of a particular transaction whether hearing is necessary and reasons have to be stated. In case any right conferred on the citizens which is sought to be interfered, such action is subject to Article 14 of the Constitution, and must be reasonable and can be taken only upon lawful and relevant grounds of public interest. Where there is arbitrariness in State action of this type of entering or not entering into contracts, Article 14 springs up and judicial review strikes such an action down. Every action of the State executive authority must be subject to rule of law and must be informed by reason. Where there is arbitrariness in State action of this type of entering or not entering into contracts, Article 14 springs up and judicial review strikes such an action down. Every action of the State executive authority must be subject to rule of law and must be informed by reason. So, whatever be the activity of the public authority, in such monopoly or semi-monopoly dealings, it should meet the test of Article 14 of the Constitution. If a governmental action even in the matters of entering or not entering into contracts, fails to satisfy the test of reasonableness, the same would be unreasonable. In this connection reference may be made to E.P. Royappa v. State of T.N., Maneka Gandhi v. Union of India, (1978)1 SCC 248 , Ajay Hasia v. Khalid Mujib Sehravardi (1981)1 SCC 72, Ramana Dayaram Shetty v. International Airport Authority of India, (1979)3 SCC 489 and also Dwarkadas Marfatia and Sons v. Port of Bombay (1989)3 SCC 293 . It appears to us that rule of reason and rule against arbitrariness and discrimination, rules of fair play and natural justice are part of the rule of law applicable in situation or action by State instrumentality in dealing with citizens in a situation like the present one. Even though the rights of the citizens are in the nature of contractual rights, the manner, the method and motive of a decision of entering or not entering into a contract, are subject to judicial review on the touchstone of relevance and reasonableness, fair play, natural justice, equality and nondiscrimination in the type of the transactions and nature of the dealing as in the present case. "17. We are of the opinion that in all such cases whether public law or private law rights are involved, depends upon the facts and circumstances of the case. The dichotomy between rights and remedies cannot be obliterated by any straitjacket formula. It has to be examined in each particular case. Mr Salve sought to urge that there are certain cases under Article 14 of arbitrary exercise of such ‘power’ and not cases of exercise of a ‘right’ arising either under a contract or under a statute. We are of the opinion that that would depend upon the factual matrix. "18. It has to be examined in each particular case. Mr Salve sought to urge that there are certain cases under Article 14 of arbitrary exercise of such ‘power’ and not cases of exercise of a ‘right’ arising either under a contract or under a statute. We are of the opinion that that would depend upon the factual matrix. "18. Having considered the facts and circumstances of the case and the nature of the contentions and the dealing between the parties and in view of the present state of law, we are of the opinion that decision of the State/public authority under Article 298 of the Constitution, is an administrative decision and can be impeached on the ground that the decision is arbitrary or violative of Article 14 of the Constitution of India on any of the grounds available in public law field. It appears to us that in respect of corporation like IOC when without informing the parties concerned, as in the case of the appellant firm herein on alleged change of policy and on that basis action to seek to bring to an end to course of transaction over 18 years involving large amounts of money is not fair action, especially in view of the monopolistic nature of the power of the respondent in this field. Therefore, it is necessary to reiterate that even in the field of public law, the relevant persons concerned or to be affected, should be taken into confidence. Whether and in what circumstances that confidence should be taken into consideration cannot be laid down on any straitjacket basis. It depends on the nature of the right involved and nature of the power sought to be exercised in a particular situation. It is true that there is discrimination between power and right but whether the State or the instrumentality of a State has the right to function in public field or private field is a matter which, in our opinion, depends upon the facts and circumstances of the situation, but such exercise of power cannot be dealt with by the State or the instrumentality of the State without informing and taking into confidence, the party whose rights and powers are affected or sought to be affected, into confidence. In such situations most often people feel aggrieved by exclusion of knowledge if not taken into confidence. "19. In such situations most often people feel aggrieved by exclusion of knowledge if not taken into confidence. "19. Such transaction should continue as an administrative decision with the organ of the State. It may be contractual or statutory but in a situation of transaction between the parties for nearly two decades, such procedure should be followed which will be reasonable, fair and just, that is, the process which normally be accepted (sic is expected) to be followed by an organ of the State and that process must be conscious and all those affected should be taken into confidence. "20. Having regard to the nature of the transaction, we are of the opinion that it would be appropriate to state that in cases where the instrumentality of the State enters the contractual field, it should be governed by the incidence of the contract. It is true that it may not be necessary to give reasons but, in our opinion, in the field of this nature fairness must be there to the parties concerned, and having regard to the large number or the long period and the nature of the dealings between the parties, the appellant should have been taken into confidence. Equality and fairness at least demands this much from an instrumentality of the State dealing with a right of the State not to treat the contract as subsisting. We must, however, evolve such process which will work. xxx xxx xxx "23. It is not our decision which is important but a decision on the above basis should be arrived at which should be fair, just and reasonable—and consistent with good Government—which will be arrived at fairly and should be taken after taking the persons concerned whose rights/obligations are affected, into confidence. Fairness in such action should be perceptible, if not transparent.” (g) Ram and Shyam Company v. State of Haryana & ors., ( AIR 1985 SC 1147 ) "12. Let us put into focus the clearly demarcated approach that distinguishes the use and disposal of private property and socialist property. Owner of private property may deal with it in any manner he likes without causing injury to any one else. But the socialist or if that word is jarring to some, the community or further the public property has to be dealt with for public purpose and in public interest. Owner of private property may deal with it in any manner he likes without causing injury to any one else. But the socialist or if that word is jarring to some, the community or further the public property has to be dealt with for public purpose and in public interest. The marked difference lies in this that while the owner of private property may have a number of considerations which may permit him to dispose of his property for a song. On the other hand, disposal of public property partakes the character of a trust in that in its disposal there should be nothing hanky panky and that it must be done at the best price so that larger revenue coming into the coffers of the State administration would serve public purpose viz. the welfare State may be able to expand its beneficent activities by the availability of larger funds. This is subject to one important limitation that socialist property may be disposed at a price lower than the market price or even for a token price to achieve some defined constitutionally recognised public purpose, one such being to achieve the goals set out in Part IV of the Constitution. But where disposal is for augmentation of revenue and nothing else, the State is under an obligation to secure the best market price available in a market economy. An owner of private property need not auction it nor is he bound to dispose it of at a current market price. Factors such as personal attachment, or affinity, kinship, empathy, religious sentiment or limiting the choice to whom he may be willing to sell, may permit him to sell the property at a song and without demur. A welfare State as the owner of the public property has no such freedom while disposing of the public property. A welfare State exists for the largest good of the largest number more so when it proclaims to be a socialist State dedicated to eradication of poverty. All its attempt must be to obtain the best available price while disposing of its property because the greater the revenue, the welfare activities will get a fillip and shot in the arm. Financial constraint may weaken the tempo of activities. Such an approach serves the larger public purpose of expanding welfare activities primarily for which the Constitution envisages the setting up of a welfare State. Financial constraint may weaken the tempo of activities. Such an approach serves the larger public purpose of expanding welfare activities primarily for which the Constitution envisages the setting up of a welfare State. In this connection we may profitably refer to Ramana Dayaram Shetty v. International Airport Authority of India in which Bhagwati, J. speaking for the Court observed: (SCC p. 506, para 12) “It must, therefore, be taken to be the law that where the Government is dealing with the public, whether by way of giving jobs or entering into contracts or issuing quotas or licences or granting other forms of largesse, the Government cannot act arbitrarily at its sweet will and, like a private individual, deal with any person it pleases, but its action must be in conformity with standard or norms which is not arbitrary, irrational or irrelevant. The power or discretion of the Government in the matter of grant of largesse including award of jobs, contracts, quotas, licences etc. must be confined and structured by rational, relevant and non-discriminatory standard or norm and if the Government departs from such standard or norm in any particular case or cases, the action of the Government would be liable to be struck down, unless it can be shown by the Government that the departure was not arbitrary, but was based on some valid principle which in itself was not irrational, unreasonable or discriminatory.” xxx xxx xxx "At one stage, it was observed that the Government is not free like an ordinary individual, in selecting recipient for its largesse and it cannot choose to deal with any person it pleases in its absolute and unfettered discretion. The law is now well-settled that the Government need not deal with anyone, but if it does so, it must do so fairly and without discretion and without unfair procedure. Let it be made distinctly clear that Respondent 4 was not selected for any special purpose or to satisfy any Directive Principles of State Policy. He surreptitiously ingratiated himself by a backdoor entry giving a minor raise in the bid and in the process usurped the most undeserved benefit which was exposed to the hilt in the court. Only a blind can refuse to perceive it." (h) M/s.Michigan Rubber(India)Ltd. v. State of Karnataka, ( AIR 2012 SC 2915 .) "19. He surreptitiously ingratiated himself by a backdoor entry giving a minor raise in the bid and in the process usurped the most undeserved benefit which was exposed to the hilt in the court. Only a blind can refuse to perceive it." (h) M/s.Michigan Rubber(India)Ltd. v. State of Karnataka, ( AIR 2012 SC 2915 .) "19. From the above decisions, the following principles emerge: (a) The basic requirement of Article 14 is fairness in action by the State, and non-arbitrariness in essence and substance is the heartbeat of fair play. These actions are amenable to the judicial review only to the extent that the State must act validly for a discernible reason and not whimsically for any ulterior purpose. If the State acts within the bounds of reasonableness, it would be legitimate to take into consideration the national priorities; (b) Fixation of a value of the tender is entirely within the purview of the executive and the courts hardly have any role to play in this process except for striking down such action of the executive as is proved to be arbitrary or unreasonable. If the Government acts in conformity with certain healthy standards and norms such as awarding of contracts by inviting tenders, in those circumstances, the interference by courts is very limited; (c) In the matter of formulating conditions of a tender document and awarding a contract, greater latitude is required to be conceded to the State authorities unless the action of the tendering authority is found to be malicious and a misuse of its statutory powers, interference by courts is not warranted; (d) Certain preconditions or qualifications for tenders have to be laid down to ensure that the contractor has the capacity and the resources to successfully execute the work; and (e) If the State or its instrumentalities act reasonably, fairly and in public interest in awarding contract, here again, interference by court is very restrictive since no person can claim a fundamental right to carry on business with the Government. (i) Arup Das & ors., v. State of Assam & ors., (2012)5 SCC 559 . "17. It is well established that an authority cannot make any selection/appointment beyond the number of posts advertised, even if there were a larger number of posts available than those advertised. (i) Arup Das & ors., v. State of Assam & ors., (2012)5 SCC 559 . "17. It is well established that an authority cannot make any selection/appointment beyond the number of posts advertised, even if there were a larger number of posts available than those advertised. The principle behind the said decision is that if that was allowed to be done, such action would be entirely arbitrary and violative of Articles 14 and 16 of the Constitution, since other candidates who had chosen not to apply for the vacant posts which were being sought to be filled, could have also applied if they had known that the other vacancies would also be under consideration for being filled up." (j) M/s. Coal India Ltd. & ors. v. Alok Fuels(P) Ltd, [(2010) 10 SCC157.] "25. It is settled by a series of decisions of this Court starting from Shrilekha Vidyarthi v. State of U.P, (1991)1 SCC 212 that even in the domain of contractual matters, the High Court can entertain a writ petition on the ground of violation of Article 14 of the Constitution when the impugned act of the State or its instrumentality is arbitrary, unfair or unreasonable or in breach of obligations under public law. "26. In Sterling Computers Ltd. v. M&N Publications Ltd. (1993)1 SCC 445 in SCC para 28, however, this Court held: (SCC p. 464) "28. Philanthropy is no part of the management of an undertaking, while dealing with a contractor entrusted with the execution of a contract. The supply of the directories to public in time, was a public service which was being affected by the liberal attitude of the MTNL and due to the condonation of delay on the part of the UIP/UDI. There was no justification on the part of the MTNL to become benevolent by entering into the supplemental agreement with no apparent benefit to the MTNL, without inviting fresh tenders from intending persons to perform the same job for the next five years. Public authorities are essentially different from those of private persons. Even while taking decision in respect of commercial transactions a public authority must be guided by relevant considerations and not by irrelevant ones. Public authorities are essentially different from those of private persons. Even while taking decision in respect of commercial transactions a public authority must be guided by relevant considerations and not by irrelevant ones. If such decision is influenced by extraneous considerations which it ought not to have taken into account the ultimate decision is bound to be vitiated, even if it is established that such decision had been taken without bias. The contract awarded for the publication of the directories had not only a commercial object but had a public element at the same time i.e. to supply the directories to lakhs of subscribers of telephones in Delhi and Bombay, every year within the stipulated time free of cost. In such a situation MTNL could not exercise an unfettered discretion after the repeated breaches committed by UIP/UDI, by entering into a supplemental agreement with the Sterling for a fresh period of more than five years on terms which were only beneficial to UIP/UDI/Sterling with corresponding no benefit to MTNL, which they have realised only after the High Court went into the matter in detail in its judgment under appeal. 10. Considering the relevant facts in light of the contentions of the parties and the legal dicta extracted hereinabove, it would appear that besides the grievance of the petitioners against the grant of fourth HMC to M/s. Bothra, challenge is to induct M/s. Bothra into PPT beyond the terms of the tender and without the fourth HMC being subjected to tender process. There is no dispute about the facts that PPT had reserved its right to reduce the number of cranes to be put for tender process from 3 to 2 at the time of finalization of the tender and the prevailing situation was relevant only for that purpose. There was no stipulation for bringing in a fourth HMC by the same tender process initiated by e-Tender call notice issued on 13.2.2015. By the addendum to that notice the bidders and their associates could participate in one HMC only. Thus, the consideration of the tenders by the tender committee was restricted to evaluating the bids for 3 to 2 HMCs only and bidders were restricted to bid for one HMC only. By the addendum to that notice the bidders and their associates could participate in one HMC only. Thus, the consideration of the tenders by the tender committee was restricted to evaluating the bids for 3 to 2 HMCs only and bidders were restricted to bid for one HMC only. These conditions were significant in the context of requirement of the bids to make offers on revenue sharing basis per tons of cargo to be handled by each HMC, while overall rates were fixed by TAMP. In these circumstances, consideration of bid for the fourth HMC by the tender committee was unreasonable, arbitrary and without authority. Induction of fourth HMC was bound to affect the quantum of cargo to be handled by the three HMCs for which offers were invited. Therefore, it was unfair and unreasonable to refashion handling of cargo by four HMC and it would obviously prejudicially affect the prospect of profit out of three HMCs duly selected by the tender process. Consideration of offer for fourth HMC, without a proper tendering process for the purpose, also denied equality of opportunity to the other prospective bidders and therefore, it could not be said to be in public interest either. 11. An executive authority which is State within the definition of Article-12 must be rigorously held to the standards by which it professes its actions to be judged. There was a public law element in the tender process and selection in question obviously lacked in fairness, equality and fair procedure. Since the bids were on revenue sharing basis, there was inherent element of largess in awarding the contract for installation and operation of HMCs in the prohibited area of PPT. In view of these considerations, not only the number of HMCs to be deployed at PPT was essential condition of the notice calling for tender, but consideration of offer of the fourth HMC was in violation of the tender conditions, particularly Clause-27 which reads as under:- "Clause-27-AWARD CRITERIA The officer inviting the bid on behalf of Paradip Port Trust will award the contract to the bidder whose bid has been evaluated to be techno-commercial responsive and the highest evaluated Bid. A system generated e-mail will be communicated to the successful bidder and unsuccessful bidder regarding their status. A system generated e-mail will be communicated to the successful bidder and unsuccessful bidder regarding their status. In case of different revenue sharing offered for the same type of crane by different bidders then the highest offer by the bidder shall prevail. Then for the same type of cranes, other bidders shall have to match the highest quoted price. The H2 bidder will be given the first right of refusal and so on. In the event no other bidders agreed to match the highest offered price for a particular type of crane then fresh offers shall be invited through open tender. Paradip Port reserves the right to reduce the no. of the cranes required to be deployed from 3 to 2 at the time of finalization of this tender depending on the prevailing situation." In the facts of this case M/s. Bothra Shipping Service Pvt. was the third bidder who came forward to match the highest quoted price, but it was the lowest bidder for whom no occasion to match the bid arose. 12. It may be pertinent to note here that PPT has not placed any material to justify the requirement by PPT of one more HMC, over and above three additional HMCs which were put up for tender process. Mere plea and prospect of higher amount of handling of cargo at PPT, as pleaded by PPT did not justify any variation in the conditions of tender in public interest. On the other hand, PPT could not have in fact or in law assure the petitioners of enough work round the clock for the three petitioners. Under such circumstances, some under-hand dealing and prior understanding could be inferred from the demeanours of the tender committee and M/s. Bothra in so far as orders were already placed by M/s. Bothra in advance and the fourth HMC was diverted from Kakinada to PPT to install it and make it operational much ahead of the appointed time. Thus, infringement of Article 14 is writ large in the sequence of events, particularly when no general power or privilege for changing the number of HMCs is claimed or substantiated. Even if such power were asserted or assumed, exercise thereof would not be fair from bona fide in the facts of the case. Thus, infringement of Article 14 is writ large in the sequence of events, particularly when no general power or privilege for changing the number of HMCs is claimed or substantiated. Even if such power were asserted or assumed, exercise thereof would not be fair from bona fide in the facts of the case. As held in Special Reference No.1 of 2012, [ (2012)10 SCC 1 supra, action of the authority has to be tested on the touchstone of Article 14 of the Constitution. The action has to be fair, reasonable, non-discriminatory, transparent, non-capricious, unbiased, without favouritism or nepotism and in pursuit of promotion of healthy competition and equitable treatment. That mandate of Article 14 is clearly violated by PPT to the benefit of M/s. Bothra Shipping Service Pvt. and to the detriment of the petitioners. It is also not proved on record that the petitioners were taken into confidence before the bids were evaluated and the tender committee had decided to issue licence for the fourth HMC. 13. For the reasons recorded hereinabove and in view of the ratio of the judgment discussed hereinabove and to ensure sanctity of letters of intent and agreements entered into with the petitioner, letter of intent issued to the respondent no.8-M/s. Bothra Shipping Service Pvt. Ltd. has to be quashed regardless of the arrangements made and expenditures incurred by them for bringing in and making operational the fourth HMC. 14. Accordingly, petitions are allowed and the letter of intent dated 28.3.2015 for grant of license issued by the Executive Engineer, Workshop Division of the Paradip Port Trust to M/s. Bothra Shipping Service Pvt. Ltd. along with transactions consequential thereto are all set aside as illegal and arbitrary as far as the parties herein are concerned. There is no order as to cost.