JUDGMENT Petitioner is a Private Limited Company having its registered office at Lucknow in State of Uttar Pradesh. 2. According to the petitioner, he is an experienced Civil Contractor, which is registered as such, inter-alia with Uttarakhand Public Works Department. Nagar Palika Parishad, Manglour, District Haridwar (respondent no. 3) has refused to register the petitioner on the ground that he is not a permanent resident of Uttarakhand State. Thus, feeling aggrieved, petitioner has approached this Court, seeking following reliefs: “i) Issue a writ, order or direction in the nature of certiorari calling for original records and set-aside the decision of the Respondent No. 3 of its board meeting dated 25.09.2021 under the chairmanship of Respondent No. 4 read with the impugned letter of the Respondent No. 3 dated 08.10.2021 rejecting the application of registration of the Petitioner as a contractor with the Respondent No. 3 (Annexure No. 2); ii) Issue a writ, order or direction in the nature of mandamus commanding the Respondent No. 3 to consider the application of the Petitioner for registration with the Respondent No. 3 as a ‘Class A' Contractor on the basis of eligibility criteria, as are applied to local domiciled applicants. iii) Issue a writ, order or direction in the nature of certiorari calling for original records and set-aside the 25 (twenty) tenders in respect of which bids have been invited by the Respondent No. 3 on 15.10.2021 (Annexure No. 7), as only local domiciled persons are eligible to participate in the tender process." 3. The letter issued by Executive Officer, Nagar Palika Parishad, Manglour to petitioner on 08.10.2021, is on record as Annexure-2 to the writ petition. It refers to petitioner's application for registration as Class-A Contractor, made on 31.07.2021. It also refers to the decision taken by the Board of Nagar Palika Parishad, on petitioner's application, on 25.09.2021. Based on the decision taken by the Board, petitioner was informed that his application is being rejected only for the reason that he does not belong to State of Uttarakhand. The decision taken by the Board of Nagar Palika Parishad in its meeting held on 25.09.2021, is on record as Annexure CA-2 to the counter affidavit filed by respondent no. 3. 4. The decision taken by the Board of Nagar Palika Parishad in its meeting held on 25.09.2021, is on record as Annexure CA-2 to the counter affidavit filed by respondent no. 3. 4. Perusal of the document enclosed as Annexure CA-2 to the counter affidavit reveals that a decision was taken by the Board on 25.09.2021 that submission of Permanent Resident Certificate of Uttarakhand would be an essential condition for registration as Contractor for civil construction works. In other words, residents of other States would be disqualified for registration as Contractor with Nagar Palika Parishad, Manglour. 5. Learned counsel for the petitioner submits that the decision taken by the Board of Nagar Palika Parishad violates equality clause contained in Article 14 of Constitution of India. He further submits that the distinction sought to be made between local residents vis-à-vis others for registration as Contractor, miserably fails the test of reasonable classification, as the classification is not based on any intelligible differentia and the differentia has no rational nexus with the object sought to be achieved by such classification. He further submits that the object in itself is discriminatory, therefore, impugned decision taken on 25.09.2021 cannot be sustained in the eyes of law. 6. Respondent no. 3 has raised defence of public interest in the counter affidavit and has also defended the impugned decision with reference to Rule 3(6) of the Uttarakhand Procurement Rules, 2017, as amended vide notification dated 02.04.2018. English translation of amended Rule 3(6) of Uttarakhand Procurement Rules, 2017, as supplied by petitioner's counsel, is given below:- Column-1 Column-2 3(6). Generally, the lowest rate tender should be accepted if all the conditions are equal, otherwise the reasons should be recorded completely due to which the lowest rate tender has been rejected. works up to Rs. 5 crore, being done by registered firms in the event of fulfillment 3(6) The lowest rate tender should be accepted if all the conditions/qualifications are the same, otherwise the reasons should be recorded, due to which the lowest rate tender has been rejected. But under the state sector, construction various departments within the state, can be executed through local persons/local of other conditions/qualifications. 7. Hon'ble Supreme Court in the case of Subramanian Swamy v. CBI, reported in (2014) 8 SCC 682 has held as under: “58. But under the state sector, construction various departments within the state, can be executed through local persons/local of other conditions/qualifications. 7. Hon'ble Supreme Court in the case of Subramanian Swamy v. CBI, reported in (2014) 8 SCC 682 has held as under: “58. The Constitution permits the State to determine, by the process of classification, what should be regarded as a class for purposes of legislation and in relation to law enacted on a particular subject. There is bound to be some degree of inequality when there is segregation of one class from the other. However, such segregation must be rational and not artificial or evasive. In other words, the classification must not only be based on some qualities or characteristics, which are to be found in all persons grouped together and not in others who are left out but those qualities or characteristics must have a reasonable relation to the object of the legislation. Differentia which is the basis of classification must be sound and must have reasonable relation to the object of the legislation. If the object itself is discriminatory, then explanation that classification is reasonable having rational relation to the object sought to be achieved is immaterial." 8. Article 14 forbids class legislation, but, it does not forbid reasonable classification by the State. However, in order to pass test of permissible classification, two conditions must be fulfilled, namely (i) that the classification must be founded on an intelligible differentia, which distinguishes persons or things that are grouped together from others left out of the group; and (ii) that the differentia must have a rational relation to the object sought to be achieved. 9. In case of E.P. Royappa v. State of Tamil Nadu reported in (1974) 4 SCC 3 , Hon'ble Supreme Court has held that the basic principle, which informs both Articles 14 & 16 are equality and inhibition against discrimination. In para 85 of the said judgment, it was observed that “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. In para 85 of the said judgment, it was observed that “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 & 16 strike at arbitrariness in State action and ensure fairness and equality of treatment." 10. In view of legal position as discussed above, the distinction made by Nagar Palika Parishad, for registration of contractors, based on their residential status, cannot be said to be valid. India being a Union of States, such classification based on place of residence/place of birth alone, falls foul on the Principles of Constitutional Federalism. Our Constitution provides for single citizenship and single domicile, therefore, discrimination amongst citizens for registration as Contractors by Nagar Palika Parishad, which is State under Article 12 of Constitution, based on their place of residence/place of birth would be impermissible. 11. In the case of Nagpur Improvement Trust v. Vithal Rao and others, (1973) 1 SCC 500 , a Constitution Bench of Hon'ble Supreme Court had an occasion to consider test of reasonableness under article 14 of the Constitution and the twin tests, as discussed above, were laid down. Hon'ble Court further emphasized in the said judgment that object itself should be lawful and it cannot be discriminatory and if the object is to discriminate against one section of minority, the discrimination cannot be justified on the ground that there is a reasonable classification because it has rational relation to the object sought to be achieved. 12. Thus viewed from any angle, the classification sought to be made by respondent nos. 3 & 4 cannot be said to be reasonable or valid. The object behind making such classification is also discriminatory, namely to disqualify residents of other States from participating in the tender process so that all contracts go to the local residents, at the cost of public exchequer. 13. 3 & 4 cannot be said to be reasonable or valid. The object behind making such classification is also discriminatory, namely to disqualify residents of other States from participating in the tender process so that all contracts go to the local residents, at the cost of public exchequer. 13. Nagar Palika Parishad has relied upon Rule 3(6) of the Uttarakhand Procurement Rules, 2017, as amended in 2018, in support of impugned classification. Import of Rule 3(6) and its proviso was considered by this Court in Writ Petition (M/S) No. 3816 of 2019, while examining validity of a condition added by a statutory Corporation of Uttarakhand State in its tender notice, which provided that only permanent residents of Uttarakhand State would be eligible for submitting bids for contracts upto the value of Rs. 5 crore. In the judgment dated 27.07.2021 rendered in the said writ petition, it was held that proviso to Rule 3(6) of Uttarakhand Procurement Rules, 2017, as amended in 2018, only enables the Government Departments to get civil construction projects executed through permanent residents, locally registered firms and it does not debar residents of other States from participating in the bidding process. Relevant extract of the said judgment is reproduced below:- “8. Rule 3(6) of the Uttarakhand Procurement Rules, before its Amendment, reads as under:- **3¼6½ lHkh 'krsZa leku gksus ij lkekU;r% U;wure nj okyh fufonk Lohdkj dh tk;s vU;Fkk mu dkj.kksa dks loZFkk vfHkfyf[kr fd;k tk;s ftuds dkj.k U;wure nj okyh fufonk vLohÑr dh xbZ gSA** 9. Rule 3(6) of the aforesaid Rules, after its amendment vide notification dated 02.04.2018, reads as under:- **3¼6½ lHkh 'krsZa@vgZrk,a leku gksus ij U;wure nj okyh fufonk Lohdkj dh tk;s vU;Fkk mu dkj.kksa dks vfHkfyf[kr fd;k tk;s ftuds dkj.k U;wure nj okyh fufonk vLohÑr dh xbZ gSA** ijUrq jkT; lSDVj ds vUrxZr izns'k ds Hkhrj fofHkUu foHkkxksa }kjk djk;s tk jgs :ñ 5-00 djksM+ rd ds fuekZ.k dk;Z] vU; 'krks±@vgZrkvksa ds iw.kZ gksus dh n'kk esa LFkk;h O;fDr;ksa@LFkkuh; iathÑr Qeks± ds ek/;e ls lEikfnr fd, tk ldrs gSaA** 10. A careful reading of Rule 3(6) before and after amendment indicates that besides adding proviso, the main provision was also amended vide notification dated 02.04.2018. The pre-amendment Rule 3(6) provides that other things being equal, ordinarily, the bid with lowest rates shall be accepted, failing which all the reasons will have to be recorded due to which lowest bid was rejected. The pre-amendment Rule 3(6) provides that other things being equal, ordinarily, the bid with lowest rates shall be accepted, failing which all the reasons will have to be recorded due to which lowest bid was rejected. However, by the amendment the expression ‘ lkekU;r% ' which means ‘ordinarily' and the expression ‘ loZFkk ' which means ‘all', have been deleted from Rule 3(6). By the amendment, a proviso has also been added in Rule 3(6), which permits execution of civil construction works by Government Departments under State sector up to the value of Rs. 5 Crore by permanent residents/locally registered firms provided they fulfil other conditions of eligibility. 11. From perusal of the proviso to Rule 3(6), as added by the amendment made in the year 2018, it is apparent that it applies only to (a) civil construction works& (b) upto the value of Rs. 5 Crores. Furthermore, the said proviso only enables the government departments to get civil construction project executed through permanent residents/locally registered firms and it does not debar residents of other States from participating in the bidding process." 14. Learned counsel for the parties have apprised that aforesaid judgment rendered in Writ Petition (M/S) No. 3816 of 2019 was not challenged before any higher forum. 15. This Court is in respectful agreement with the interpretation to Rule 3(6) given in para 11 of the said judgment. Rule 3(6) of the Uttarakhand Procurement Rules, 2017, as amended, provides that other things being equal, lowest rate tender has to be accepted, failing which, reasons have to be recorded for not accepting lowest rate tender. Proviso to Rule 3(6) enables the State Departments/Agencies to have the civil construction work upto the value of Rs. 5 crore, executed through local persons/locally registered firms provided they fulfill all conditions of eligibility, but it does debar residents of other States from participating in the tender process. Thus, Rule 3 (6) of the aforesaid Rules cannot be pressed into service for attaching disqualification to persons/firms from other States, for participating in bidding processes for award of contracts. 16. Even otherwise also, Nagar Palika Parishad, Manglour has framed byelaws in exercise of powers under Section 298(2) of Municipalities Act, 1916, which are known as Nagar Palika Parishad Manglour “Registration and Regulation of Contractors Byelaws, 2018". 16. Even otherwise also, Nagar Palika Parishad, Manglour has framed byelaws in exercise of powers under Section 298(2) of Municipalities Act, 1916, which are known as Nagar Palika Parishad Manglour “Registration and Regulation of Contractors Byelaws, 2018". The field is thus occupied by these Byelaws, which are statutory in nature and were notified in the official gazette on 15.09.2018. There is no provision in the said Byelaws, which de-bars persons other than residents of Uttarakhand, from registration as Contractor. Therefore, rejection of petitioner's application is dehors the conditions of eligibility laid down in the said Byelaws. Thus, Board of Nagar Palika Parishad could not have taken any decision contrary to the provisions of the Byelaws. 17. In the counter affidavit filed on behalf of respondent no. 3, there is an averment that proposal for amending the aforesaid Byelaws was sent to the State Government, and the matter is pending consideration of the State Government. This amounts to an admission that the Byelaws have not been amended so far. Eligibility of an individual/firm for registration as Contractor can be seen with reference to the existing Byelaws only. In such view of the matter also, rejection of petitioner's application for registration, cannot be sustained. 18. Accordingly, the writ petition is allowed. The decision taken by Nagar Palika Parisahd in its meeting held on 25.09.2021 and rejection of petitioner's application vide order dated 08.10.2021, are hereby quashed. Respondents are directed to re-consider petitioner's application for registration, in accordance with law, within three weeks from today.