JUDGMENT : Sanjay K. Agrawal, J. 1. The National Highways Authority of India (for short 'the NHAI') is an Authority constituted under Section 2(1) of the National Highways Authority of India Act, 1988 (for short 'the NHAI Act') for development, maintenance and management of national highways and other highways vested in it or entrusted to it by the Government. 2. The Central Government through the Ministry of Road Transport and Highways (MORTH) by its notification dated 24-7-2014 in exercise of the powers conferred by Section 5 of the National Highways Act, 1956, entrusted to the State Government (Department of Public Works) various national highways including old national highways situated within the State for discharging the functions in relation to the execution of works pertaining to each of the national highways described in the said notification. The MORTH also issued guidelines on 31-3-2016 regarding procedures to be adopted for invitation of tenders and qualification of Contractors for execution of Road and Bridge works on National Highways and Centrally Financed Schemes modifying the earlier procedure dated 13-11-2014. 3. The Executive Engineer, Department of Public Works, National Highway Division, Jagdalpur floated MORTH e-Procurement Tender Notice dated 5-2-2016 inviting on-line financial bids on Item Rate Basis and technical bid in Standard Bidding Documents (SBD) from the contractors registered in A Class in Unified Registration System of PWD, Chhattisgarh and equivalent contractors of Central/State Government and their undertaking and unregistered contractors capable to execute the work i.e. NIT No.829 – Widening with 2-lane + Paged Shoulders Reconstruction of Minor Bridges and Culverts and 4-laning in Selected reach in km.299.00 to 316.880 of NH-63 (Old NH-43) in the State of Chhattisgarh. The estimated amount of contract was Rs.6312.16 lacs providing for the time schedule. In response to the e-procurement tender notice, the petitioner submitted its bid for the said work and the petitioner's bid was evaluated by the Evaluation Committee and ultimately, same was accepted and letter of acceptance was issued on 30-4-2016 which was communicated to the petitioner. The Superintending Engineer (employer) also directed the petitioner to furnish additional performance security in the form detailed in para 34.1 of the Instructions to Bidders (ITB) for an amount equivalent to Rs.3,42,78,178/- within 21 days of the receipt of the letter of acceptance and sign the contract in accordance with para 34.3 of the ITB. 4. The Superintending Engineer (employer) also directed the petitioner to furnish additional performance security in the form detailed in para 34.1 of the Instructions to Bidders (ITB) for an amount equivalent to Rs.3,42,78,178/- within 21 days of the receipt of the letter of acceptance and sign the contract in accordance with para 34.3 of the ITB. 4. The Evaluation Committee constituted by the Central Government found the bid of the petitioner seriously unbalanced in relation to the Engineer's estimate of the cost of work to be performed under the contract, therefore, the petitioner was asked to submit additional performance security as stated above by order dated 30-4-2016. The petitioner submitted its detailed price analysis to demonstrate the internal inconsistency of those prices with the consideration methods and the schedule proposed. 5. The Tender Evaluation Committee in its recommendation dated 13-5-2016 found that the market rate of Bitumin has been reduced. Therefore, the Tender Evaluation Committee recommended for reducing the amount of additional performance guarantee to 7.32% of the estimated cost in place of 15.32% earlier accepted and it was placed before the Principal Secretary of the Government which was not accepted by the Government and the order dated 27-5-2016 was passed granting only ten days time to submit the additional performance security holding that there shall be no change to the amount of additional performance security. 6. Legality and validity of the order dated 27-5-2016 was challenged by the petitioner by filing W.P.(C)No.1398/2016 before this Court in which this Court by order dated 1-6-2016 issued notices to the respondents directing them to file their reply. In the meanwhile, the Superintending Engineer issued a memo dated 7-6-2016 to the petitioner in response to the petitioner's representation that the petitioner's request to reduce the additional performance security cannot be considered as it will be contrary to the provisions contained in para 29.5 of the ITB. Thereafter, on 9-6-2016, the employer Superintending Engineer, PWD, National Highway Circle, Raipur cancelled the letter of acceptance. Thereafter, the petitioner filed W.P. (C)No.1664/2016 calling in question the order of the competent authority dated 9-6-2016 cancelling his letter of acceptance. 7. Since the subject-matter of both the writ petitions is one and same, they were clubbed together and heard analogously for sake of convenience and are being disposed of by this common order. 8. Thereafter, the petitioner filed W.P. (C)No.1664/2016 calling in question the order of the competent authority dated 9-6-2016 cancelling his letter of acceptance. 7. Since the subject-matter of both the writ petitions is one and same, they were clubbed together and heard analogously for sake of convenience and are being disposed of by this common order. 8. In both the writ petitions filed before this court, the main ground to question the order of the competent authority is that the bidding terms of subject tender provide for the performance security to be 5% of the contract value therefore, the additional performance security in any case cannot be more than 5% of the amount of the seriously unbalanced bid. It is the further case of the petitioner that for imposition of additional performance security, it has to be reasonably examined first as to whether the bid of the petitioner is seriously unbalanced, whereas, none of the respondents in their communications earlier to 7-6-2016 have ever claimed the petitioner's bid to be seriously unbalanced. The petitioner's bid has not been decided under clause 29.5 of the ITB to be seriously unbalanced and as soon the petitioner has been communicated seeking additional performance security, the petitioner has submitted its detailed price analysis which has been accepted by the evaluation committee, but the State Government in defiance of the circular of the Central Government providing for guidelines regarding procedure to be adopted for invitation of tenders and qualification of contractors for execution of road and bridge works which clearly provides that evaluation will be done by the evaluation committee, has illegally cancelled the letter of acceptance and ordered for forfeiture of bid security. It is also the case of the petitioner that in case the recommendations of the committee are not found acceptable, the matter shall be referred to the Ministry duly citing the reasons for non-acceptance and with full justification, but within the prescribed period of ten days. If the State Government finds that the report of the tender evaluation committee reducing the percentage of additional performance security is unacceptable, it ought to have referred the matter to the Ministry of the Government of India for consideration, it could not have rejected the recommendations of the evaluation committee duly constituted by the Government of India. If the State Government finds that the report of the tender evaluation committee reducing the percentage of additional performance security is unacceptable, it ought to have referred the matter to the Ministry of the Government of India for consideration, it could not have rejected the recommendations of the evaluation committee duly constituted by the Government of India. Therefore, the order impugned passed by the competent authority dated 9-6-2016 {Annexure P-13 in W.P. (C)No.1664/2016} deserves to be quashed and the matter be sent to the Central Government for taking decision on the recommendations of the evaluation committee. 9. Return has been filed by the Central Government in W.P.(C) No. 1398/2016 opposing the writ petition stating inter alia that the petitioner's bid was found to be seriously unbalanced, therefore, additional performance security has been directed to be furnished in accordance with the order of the State Government dated 31-3-2015. The petitioner was L-1 as such, its bid has been accepted on 30-4-2016. The additional performance security has been sought strictly in accordance with clause 29.5 of the ITB finding the petitioner's bid to be seriously unbalanced and as such, the order of the State Government is inconformity with the ITB and inconformity with the law laid down by the Supreme court from time to time. 10. The State Government has filed return in W.P.(C)No.1664/2016 relying upon clause 52 of the Standard Bidding Document which relates to Securities and the order passed by the State Government on 19-7-2016 finalizing the contract was stayed by the Superintending Engineer by which the work order was issued in favour of M/s. Vinod Kumar Jain and therefore, the writ petition deserves to be dismissing. 11. Mr. Rajkamal Singh, learned counsel present on behalf of the petitioner, would submit that the order of the competent authority directing furnishing of additional performance security is per se arbitrary and contrary to the ITB. After seeking additional performance security, the petitioner has submitted its detailed price analysis demonstrating the inconsistency of those prices with the consideration method and the schedule proposed. After seeking additional performance security, the petitioner has submitted its detailed price analysis demonstrating the inconsistency of those prices with the consideration method and the schedule proposed. The detailed price analysis has been considered by the evaluation committee constituted by the Central Government and which recommended rejection of percentage of additional performance security from 15.32% to 7.32% which ought to have accepted by the State Government and in case it is found to be acceptable as provided by the guidelines issued by the Central Government, the matter ought to have been referred to the Ministry of MORTH, Central Government for taking a decision. Instead of that, the State Government itself has taken a decision by not accepting the recommendations of the evaluation committee and directing for insistence of furnishing additional performance security which is unsustainable and bad in law and therefore, it deserves to be set aside. 12. Mr. N.K. Vyas, learned Assistant Solicitor General appearing for Union of India, would submit that the decision of the State Government to insist for additional performance security is in accordance with the circular of the State Government dated 31-3-2016 and in accordance with clause 29.5 of the ITB, and no interference is warranted in exercise of jurisdiction under Article 226 of the Constitution of India. 13. Mr. J.K. Gilda, learned Advocate General appearing on behalf of the State Government, would support the order of the State Government and would submit that the petitioner's bid was found to be seriously unbalanced in relation to the Engineer's estimate of the cost of work to be performed under the contract. Therefore, it is the discretion of the evaluation committee to ask for additional performance security from the petitioner which was accepted by the State Government and thereafter, additional performance security has been directed to be furnished and therefore, no fault can be found in the decision of the State Government directing for additional performance security and the order of the State Government deserves to be upheld, as there is no arbitrariness or irrationality in the decision-making process of the State Government. Thus, the writ petitions deserve to be dismissed. 14. We have heard learned counsel for the parties, considered their rival submissions made herein-above and also gone through the record extensively and thoroughly. 15. Thus, the writ petitions deserve to be dismissed. 14. We have heard learned counsel for the parties, considered their rival submissions made herein-above and also gone through the record extensively and thoroughly. 15. In order to consider the plea raised at the Bar, the proceedings which took place between the parties leading to passing of the impugned order cancelling the letter of acceptance are necessarily to be noticed which are as under:- 1. The MORTH e-procurement tender notice was issued on 5-2-2016. 2. 15. In order to consider the plea raised at the Bar, the proceedings which took place between the parties leading to passing of the impugned order cancelling the letter of acceptance are necessarily to be noticed which are as under:- 1. The MORTH e-procurement tender notice was issued on 5-2-2016. 2. The tender evaluation committee considered the cases of all the bidders and by recommendation dated 28-4-2016 recommended the bid of the petitioner to be accepted and also found the petitioner's bid to be unbalanced and therefore, recommended for furnishing additional performance security which states as under:- jk"Vªh; jktekxZ dzå&63 ¼iqjkuk jk"Vªh; jktekxZ dzå&43½ ds fdåehå 299-00 ls 316-800 esa nks&ysu lM+d pkSM+hdj.k isOgM 'kksYMj lfgr iqy&iqfyk ds iquZfuekZ.k ,oa p;fur Hkkx esa Qksj&ysu lM+d pkSM+hdj.k dk;Z dh fufonk esa fufonkdkjksa ls izkIr nj ds ewY;kadu gsrq fufonk lfefr dh cSBd fnukad 28&04&2016 ¼dk;Z dh vuqekfur ykxr :i, 6855-64 yk[k½ fo"k;kafdr dk;Z dh fufonk eq[; vfHk;ark] yksd fuekZ.k foHkkx] jk"Vªh; jktekxZ ifj{ks=] jk;iqj }kjk fufonk vkea=.k lwpuk dzekad&829@eqåvå@jkåjkå@fuåizå@44&36@2015 fnukad 05&02&2016 fufonk vkbZåMhå 26500 }kjk izFke ckj fufonk vkeaf=r dh xbZA ftldh fufonk esa Hkkx fy;s 06&fufonkdkjksa ds rduhdh chM ewY;kadu i'pkr~ fufonk lfefr }kjk fufonk esa Hkkx fy;s 06& fufonkdkjksa vgZ ?kksf"kr djrs gq, foRrh; izLrko [kksys tkus dh vuq'kalk dh xbZ] rn~kuqlkj vkt fnukad 28&04&2016 fufonkdkjksa ds foRrh; izLrko [kksys x;s ftldk fooj.k fuEukuqlkj gSA dzekad fufonkdkj dk uke izLrqr vkbZVe nj 1- ds,y,&vkse ¼tsåOghå½] jk;iqj ¼Nåxå½ 511969666-48 2- esllZ fouksn dqekj tSu&chå,eå,lå¼tsåOghå½] jk;iqj ¼N0x0½ 512334513-35 3- Mh oh izkstsDV fyfeVsM] dksjck ¼Nåxå½ 560933117-00 4- ihå,lå,å dULVªD'ku] jk;iqj ¼Nåxå½ 581703658-78 5- esllZ jk;iqj dULVªD'ku izkå fyfeå] jk;iqj ¼Nåxå½ 593344607-49 6- esllZ dh&LVksu bUÝk izkå fyfeå] gSnjkckn 642356833-54 mijksDrkuqlkj ds,y,&vkse ¼tsåOghå½] jk;iqj ¼Nåxå½ ls izkIr vk;Ve fufonk nj :å 511969666-48 U;wure gS] tks dk;Z dh vuqekfur ykxr :-685563564-58 ls @¼&½25-32% de gSA vr% fufonk lfefr }kjk izkIr vlarqfyr nj gsrq izkIr nj @25- 32% - @10.00% = 15.32% vuqekfur ykxr dh jkf'k dh cSad xkjaVh vfrfjDr lqj{kk fuf/k ds :i esa izkIr fd, tkus ds 'krZ lfgr fufonk Lohd`r fd, tkus dh vuq'kalk dh tkrh gSA lnL; lfpo lnL; lfpo lnL; dk;Zikyu vfHk;ark v/kh{k.k vfHk;ark {ks=h; vf/kdkjh yksåfuåfoå] jk"Vªh; jktekxZ laHkkx] yksåfuåfoå] jk"Vªh; jktekxZ e.My] ,eåvksåvkjåVhå ,.M ,på txnyiqj ¼Nåxå½ jk;iqj ¼Nåxå½ ,uå,på dsEil] jk;iqj ¼Nåxå½ lnL; v/;{k la;qDr lapkyd ¼foRr½ eq[; vfHk;ark dk;kZy; izeq[k vfHk;ark] yksåfuåfoå] jk"Vªh; jktekxZ ifj{ks=] yksåfuåfoå] jk;iqj ¼Nåxå½ jk;iqj ¼Nåxå½ 3. The recommendation made by the tender evaluation committee was produced before the State Government by the Chief Engineer on 28-4-2016 which was ultimately accepted by the State Government on 30-4-2016 and the letter of acceptance was issued on 30-4-2016 which has been filed as Annexure P-3 in W.P.(C)No.1398/2016. 4. The petitioner submitted its detailed price analysis on 6-5- 2016 claiming to be in view of clause 29.5 of the ITB and on 23-5-2016, the tender evaluation committee evaluated the said price analysis vide Annexure P-16 in W.P.(C) No.1664/2016 which states as under:- iwoZ i`"B ls& mijksDr dk;Z dh fufonk esa U;wure fufonkdkj ds,y,&vkse ¼tsåOghå½] jk;iqj ¼Nåxå½ }kjk U;wure nj :- 511969666-48 izLrqr dh xbZ tks dk;Z dh vuqekfur ykxr ls @¼&½25-32% de gSA v/kh{k.k vfHk;ark] jk"Vªh; jktekxZ e.My] jk;iqj }kjk i= dzå&903@lkå@15&01@2016 fnukad 30&04&2016 }kjk fufonk Lohd`r dh x;h] ftlds vkuqlkj fufonkdkj dks dk;Z dh vuqekfur ykxr jkf'k dk 5 izfr’kr vFkkZr :i;s 3]42]78]178-00 vekur jkf'k ds :i esa ,oa @25- 32%-@10-00% =15.32% vlarqfyr nj gsrq :- 10]50]28]338-00 dh cSad xkjaVh vfrfjDr lqj{kk fuf/k ds :i esa tek djus gsrq fy[kk x;kA bl laca/k esa fufonkdkj }kjk vH;kosnu izLrqr dj nj fo'ys"k.k izLrqr fd;k x;k gS] ftlds vuqlkj orZeku esa dk;Z esa iz;qDr gksus okyh lkefxz;ksa tSls Mkej] bxY'ku] lhesaV] yksgs ds ewY; esa deh gqbZ gSA ,låchåMhå ds I.T.B. Section 1, Clause-29.5 ds vuqlkj vlarqfyr nj gsrq fu;ksDrk (Employer) }kjk Bsdsnkj ls nj fo'ys"k.k izkIr dj vfrfjDr lqj{kk fuf/k dk fu/kkZj.k fd, tkus dk izko/kku gSA mijksDr dk;Z esa 2715-00 M.T. Bitumen dk mi;ksx gksxkA fnukad 01&01&2015 ls foHkkx esa izpfyr ,låvksåvkjå esa Mkejhdj.k dk;ksZ dh nj dk fu/kkZj.k Mkej ewY; :- 51]616-00 Per M.T. ds vk/kkj ij fd;k x;k gS] orZeku esa fcVqfeu dh cktkj nj :- 31]900-00 Per M.T. gSA vr% orZeku esa fcVqfeu dh nj esa yxHkx :- 20]000-00 Per M.T. dh deh gqbZ gSA fcVqfeu dh njksa esa vk;h deh ds dkj.k dk;Z dh ykx esa yxHkx :- 5]43]00]000-00 ¼ikap djksM+ frjkfyl yk[k½ vFkkZr @8-00% dh ykxr de vk;sxhA vr% ewY;kadu lfefr }kjk fufonkdkj ds vH;kosnu ij fopkj djrs gq, izkIr vlarqfyr nj gsrq dk;Z dh vuqekfur ykxr dk @25-32%-@10-00% = 15.32% ds LFkku ij @25-32%-@18-00% = 7.32% jkf'k dh cSad xkjaVh vfrfjDr lqj{kk fuf/k ds :i esa izkIr fd;s tkus dh vuq'kalk dh xbZ gSA vr% ewY;kadu lfefr dh vuq'kalk ds ifjikyu esa izLrko dk vuqeksnu ysuk pkgsaxsA eq[; vfHk;ark jkåjkå ifjå jk;iqj 5. The said report of the tender evaluation committee was placed before the State Government by the Chief Engineer of the NHAI. The Principal Secretary of the Government on 13-5-2016 declined to accept the evaluation of the tender committee and directed to proceed as per the decision earlier taken and order dated 7-6-2016 was passed directing for furnishing additional performance security equivalent to 15.32% of the Probable Amount of Contractor and ultimately, on 9-6-2016, the Superintending Engineer, PWD, National Highway Circle, Raipur, passed an order cancelling the letter of acceptance and forfeiture of bid security, and a new NIT was floated on 13-6-2016 which was challenged in W.P.(C)No.1664/2016. 6. In W.P.(C)No.1664/2016, this Court passed an interim order on 5-7-2016 that the State may continue with the process of evaluation of the bid, but no final order shall be passed without permission of the Court. Thereafter, on 19- 7-2016, contrary to the order of this Court dated 5-7-2016, letter of acceptance was issued to M/s. Vinod Kumar Jain, but later-on that order was suspended by the Superintending Engineer, PWD, National Highway Circle, Raipur, which has been duly recorded in the order sheet dated 26-7-2016 passed in W.P.(C)No.1398/2016. 16. Now, the question for consideration is whether in the facts and circumstances of the case, the State Government is justified in cancelling the letter of acceptance issued in favour of the petitioner and further justified in forfeiture of the bid security upon non-furnishing of the additional performance security by the petitioner. 17. At this stage, it would be appropriate to notice the guidelines issued by the Government of India, Ministry of Road Transport & Highways, dated 31-3-2016, filed as Annexure R-1/2, providing guidelines regarding procedures to be adopted for invitation of tenders and qualification of Contractors for execution of Road and Bridge works on National Highways. Para 3 of these guidelines provides for constitution of Evaluation Committee of works with sanctioned cost more than Rs.5 crores and up to Rs.100 crores which will be a multi-membered committee consisting of five members and the Chief Engineer of the State Government is the Chairman. The authority competent to accept bids shall be of the rank of Principal Secretary or Secretary, PWD. Para 7 of the said guidelines provides as under:- "7. The authority competent to accept bids shall be of the rank of Principal Secretary or Secretary, PWD. Para 7 of the said guidelines provides as under:- "7. The authority competent to accept bids in the State PWD/BRO shall not accept any bid in supersession of the recommendation of the Evaluation Committee or the Screening Committee, as the case may be. In case such an occasion arises, where recommendations of the Committee are not found acceptable, the matter shall be referred to the Ministry duly citing the reasons for non-acceptance and with full justification; but within the prescribed time of 10 days." 18. A careful perusal of the aforesaid guidelines would show that ordinarily, if the recommendations of the committee so constituted by the Central Government are not acceptable to the authority competent to accept the bids, the matter shall be referred to the Ministry of Road Transport & Highways, Government of India, citing the reasons for non-acceptance and with full justification but within the prescribed time of ten days and the Ministry of Road Transport & Highways, Government of India will take decision in the matter. 19. Now, facts of the case are required to be examined in light of para 7 of the guidelines dated 31-3-2016 as to whether these guidelines have been followed by the Principal Secretary, PWD - the authority competent to accept the bid. 20. It is pertinent to mention that the recommendations of the tender evaluation committee were accepted by the State Government on 30-4-2016, letter of acceptance was issued in favour of the petitioner and an additional performance security was also sought to the extent of 15.32% by that order. Thereafter, the petitioner in terms of clause 29.5 of the Instructions to Bidders (ITB) submitted its detailed price analysis to demonstrate the internal consistency of those prices with the construction methods and schedule proposed. "29.5 If the Bid of the successful Bidder is seriously unbalanced in relation to the Engineer's estimate of the cost of work to be performed under the contract, the Employer may require the Bidder to produce detailed price analyses for any or all items of the Bill of Quantities, to demonstrate the internal consistency of those prices with the construction methods and schedule proposed. After evaluation of the price analyses, the Employer may require that the amount of the performance security set forth in Clause 34 be increased at the expense of the successful Bidder to a level sufficient to protect the Employer against financial loss in the event of default of the successful Bidder under the Contract." 21. The said price analysis was considered by the tender evaluation committee duly constituted and it was found that the rate of Bitumin has been reduced in the market and the recommendations of the tender evaluation committee were considered by the Chief Engineer and it was placed before the Principal Secretary, PWD with a note as reproduced herein above. 22. Since the tender evaluation committee has recommended reduction of additional performance security from 15.32% to 7.32%, which ought to have been accepted by the Principal Secretary, PWD, but in view of para 7 of the guidelines so issued by the Central Government, if the recommendations of the tender evaluation committee were not acceptable to the Principal Secretary, PWD, authority competent to accept the bids, it ought to have referred the matter to the concerned Ministry, Government of India, as provided in para 7 of the said guidelines assigning reasons for its disagreement, but the Secretary, PWD has not followed the guidelines issued by the Central Government and straightway took a decision holding that he is not agreeable to the proposal of the tender evaluation committee and directed to proceed as per the decision taken earlier seeking additional performance security to the extent of 15.32%. Such a course is clearly impermissible in law. 23. Such a course is clearly impermissible in law. 23. It is the work of the Central Government which is being executed through the National Highways Authority of India and since the questioned National Highway falls within the State of Chhattisgarh, the Central Government in its wisdom has authorized the Principal Secretary, PWD, Government of Chhattisgarh, by its guidelines to accept the bids subject to the condition that the recommendations of the high-powered tender evaluation committee are binding upon the Principal Secretary, PWD and in case, the recommendations are not found acceptable, the Principal Secretary, PWD is bound to refer the matter to the concerned Ministry, Government of India and period of limitation has also been prescribed as within ten days from the date of acceptance, but this has not been done by the Principal Secretary, PWD, as such, the decision of the State Government is arbitrary and in deviation from the standard guidelines issued by the Government of India in that behalf for acceptance of tenders in such cases. 24. In the matter of Tata Cellular v. Union of India, (1994) 6 SCC 651 the Supreme Court held that judicial review in contractual matters would apply even to the exercise of contractual powers by the government and government institution in order to arrest arbitrariness and laid down the limitation for exercise of power in contractual matter. It was held as under:- “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. 74. 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. 74. Judicial review is concerned with reviewing not the merits of the decision in support of which the application for judicial review is made, but the decision-making process itself. 77. The duty of the court is to confine itself to the question of legality. Its concern should be: 1. Whether a decision-making authority exceeded its powers? 2. Committed an error of law, 3. committed a breach of the rules of natural justice, 4. reached a decision which no reasonable tribunal would have reached or, 5. abused its powers. Therefore, it is not for the court to determine whether a particular policy or particular decision taken in the fulfillment of that policy is fair. It is only concerned with the manner in which those decisions have been taken. The extent of the duty to act fairly will vary from case to case. Shortly put, the grounds upon which an administrative action is subject to control by judicial review can be classified as under:- (i) Illegality : This means the decision-maker must understand correctly the law that regulates his decision-making power and must give effect to it. (ii) Irrationality, namely, Wednesbury unreasonableness. (iii) Procedural impropriety. The above are only the broad grounds but it does not rule out addition of further grounds in course of time. As a matter of fact, in R. v. Secretary of State for the Home Department, ex Brind (Supra), Lord Diplock refers specifically to one development, namely, the possible recognition of the principle of proportionality. In all these cases the test to be adopted is that the court should, “consider whether something has gone wrong of a nature and degree which requires its intervention”. 94. The principles deducible from the above are: (1) The modern trend points to judicial restraint in administrative action. (2) The court does not sit as a court of appeal but merely reviews the manner in which the decision was made. (3) The court does not have the expertise to correct the administrative decision. 94. The principles deducible from the above are: (1) The modern trend points to judicial restraint in administrative action. (2) The court does not sit as a court of appeal but merely reviews the manner in which the decision was made. (3) The court does not have the expertise to correct the administrative decision. If a review of the administrative decision is permitted it will be substituting its own decision, without the necessary expertise which itself may be fallible. (4) The terms of the invitation to tender cannot be open to judicial scrutiny because the invitation to tender is in the realm of contract. Normally speaking, the decision to accept the tender or award the contract is reached by process of negotiations through several tiers. More often than not, such decisions are made qualitatively by experts. (5) The Government must have freedom of contract. In other words, a fair play in the joints is a necessary concomitant for an administrative body functioning in an administrative sphere or quasi-administrative sphere. However, the decision must not only be tested by the application of Wednesbury principle of reasonableness (including its other facts pointed out above) but must be free from arbitrariness not affected by bias or actuated by mala fides. (6) Quashing decisions may impose heavy administrative burden on the administration and lead to increased and unbudgeted expenditure. Based on these principles we will examine the facts of this case since they commend to us as the correct principles.” 25. The principle of law laid down in Tata Cellular (supra) has been followed by the Supreme Court with approval in the matters of Jagdish Mandal v. State of Orissa, (2007) 14 SCC 517 and Elektron Lighting System Pvt. Ltd. and others v. Shah Investments Financial Developments and Consultants Pvt. Ltd. and others, 2015 AIR SCW 6408. 26. In the matter of ABL International Ltd. and another v. Export Credit Guarantee Corporation of India Ltd. and others, (2004) 3 SCC 553 the Supreme Court has held that the State or an instrumentality of the State is a party of the contract, it has an obligation in law to act fairly, justly and reasonably. Paragraph 23 of the report states as under:- "23. Paragraph 23 of the report states as under:- "23. It is clear from the above observations of this Court, once the State or an instrumentality of the State is a party of the contract, it has an obligation in law to act fairly, justly and reasonably which is the requirement of Article 14 of the Constitution of India. Therefore, if by the impugned repudiation of the claim of the appellants the first respondent as an instrumentality of the State has acted in contravention of the abovesaid requirement of Article 14, then we have no hesitation in holding that a writ court can issue suitable directions to set right the arbitrary actions of the first respondent. ..." Their Lordships further concluded in paragraph 53 as under:- "53. From the above, it is clear that when an instrumentality of the State acts contrary to public good and public interest, unfairly, unjustly and unreasonably, in its contractual, constitutional or statutory obligations, it really acts contrary to the constitutional guarantee found in Article 14 of the Constitution. ..." 27. Following the law laid down in the aforesaid cases, we find that the decision of the Principal Secretary, PWD of the State Government not to accept the recommendations of the tender evaluation committee reducing the additional performance security from 15.32% to 7.32% contrary to the guidelines dated 31-3-2016 issued by the Central Government, is clearly arbitrary, unfair, unjust and unreasonable. The Principal Secretary, PWD of the State Government has acted contrary to the binding guidelines issued by the Central Government. Therefore, the impugned order of the State Government dated 9-6-2016 cancelling/revoking the order dated 30-4-2016 is hereby quashed and the consequential orders are also quashed. The Principal Secretary, PWD of the State Government has acted contrary to the binding guidelines issued by the Central Government. Therefore, the impugned order of the State Government dated 9-6-2016 cancelling/revoking the order dated 30-4-2016 is hereby quashed and the consequential orders are also quashed. The Principal Secretary, PWD, Government of Chhattisgarh is directed to refer the matter to the Ministry of Road Transport and Highways, Government of India, within ten days from today, along with the recommendations of the tender evaluation committee for its consideration and reasons for non-acceptance of the recommendations of the tender evaluation committee for taking a decision by the MORTH, Government of India in this regard and in turn, the Ministry of Road Transport and Highways, Government of India, would take decision within three weeks from the date of receipt of the reference from the Principal Secretary, PWD, Government of Chhattisgarh in terms of para 7 of the guidelines dated 31-3-2016, and communicate the same to the petitioner and the State Government. 28. The writ petitions are allowed to the extent indicated hereinabove. No order as to costs.