JUDGMENT

VERMA, J.:—Leave granted.

2. This appeal by special leave under Art. 136 of the Constitution is against the judgment and order dated 21-7-92 by which the Civil Writ Petition No. 7419 of 1992# has been allowed by the Punjab & Haryana High Court directing the appellant Food-Corporation of India to allot to the respondent the necessary stocks of damaged rice for which the tenders had been invited by the appellant, since the respondent was the highest bidder.

(#Reported in (1993) 1 Recent Revenue Reports 45.)

3. The appellant invited tenders for sale of stocks of damaged food-grains in accordance with the terms and conditions contained in the tender notice (Annexure A). The tenders were required to be submitted up to 2.45 p.m. on 18-5-1992; the tenders were to be opened on 18-5-1992 at 3.00 p.m.; and offers were to remain open for acceptance up to and inclusive of 17-7-92. The respondent submitted its tender for a stock of damaged rice within the time specified, but the respondents tender was conditional and the full amount of earnest money required by the terms was also not deposited. It is, however, not necessary to mention the particulars of these two deficiencies in respondents tender since they appear to have been waived by the appellant and are not relied on before us to support the appellants action. The respondents bid in the tender was admittedly the highest as found on opening the tenders. It appears that the appellant was not satisfied about the adequacy of the amount offered in the highest tenders for purchase of the stocks of damaged foodgrains and, therefore, instead of accepting any of the tenders submitted, the appellant invited all the tenderers to participate in the negotiation on 9-6-92. The respondent refused to revise the rates offered in its tender. It was Rs. 245 / - per quintal for certain lots of this stock, while the highest offer made during the negotiations was Rs. 275.72 per quintal. Similarly, as against the respondents offer of Rs. 20l /- per quintal in respect of some other lots, the highest offer made during the negotiation was Rs. 271.55 per quintal. On this basis, the appellant was to receive an additional amount of Rs. 3 lakhs by accepting the highest offer made during the negotiations over the total amount offered by the respondent for the stock of damaged rice. Overall, the appellant was offered an excess amount of Rs. 20 lakhs for the entire stock of damaged foodgrains in the highest offer made during the negotiations, inasmuch as against the total amount of Rs. 90 lakhs which the appellant would have received by acceptance of the highest tenders, the appellant was to receive the amount of Rs. 1 crore 10 lakhs by accepting the highest offers made during the negotiations in which all the tenderers, including the respondent, were given equal opportunity to participate.

4. The respondent filed the above Writ Petition in the High Court challenging the appellants refusal to accept the highest tender submitted by it for the stock of damaged rice claiming that the appellant having chosen to invite tenders, it could not thereafter dispose of the stocks of damaged foodgrains by subsequent negotiations rejecting the highest tenders on the ground that a higher bid was obtained by negotiations. This action of the appellant, was alleged to be arbitrary and, therefore, in substance, violative of Art. 14 of the Constitution. The High Court by its impugned order accepted this contention of the respondent and allowed the Writ Petition. Hence, this appeal.

5. It is not disputed that according to the terms and conditions on which the appellant had invited tenders, the appellant had reserved the right to reject all the tenders and, therefore, the highest tender was not bound to be accepted. Learned counsel for the appellant submitted that there being no right in the person submitting the highest tender to claim acceptance of the tender, in a case like the present, where all the tenderers, including the respo