( 1 ) THE discretion exercised by the Municipal Corporation of Hyderabad in distributing its largesse to the 2nd respondent herein without issuing any advertisement therefor is in question in this Writ Appeal which is directed against a judgment dated 15-6-1995 passed by a learned single Judge of this Court in Writ Petition No. 22227 of 1994.

( 2 ) THE basic fact of the matter is not in dispute. The 1st respondent herein purported to be suffering from want of funds for the purpose of erection of arches and display of advertisements thereon issued a press note advertisement to the effect that there could be sponsorship by the companies and the costs for installation of the arches and sign boards as also their maintenance could be met thereby. The 2nd respondent allegedly made a survey in that regard at the request of the 1st respondent whereafter a project report was submitted. The 1st respondent thereafter allowed the 2nd respondent to put up certain arches in the twin cities. A public notice was thereafter given requesting any other person interested to provide for any further idea in the matter whereafter allegedly several advertisers attended but no one came forward to take up the project. Admittedly the writ petitioner-appellant did not attend the said meeting.

( 3 ) BEFORE the learned single Judge as also before this Court, it was inter alia submitted that a bare perusal of the terms and conditions of the grant would clearly show that valuable right has been conferred upon the 2nd respondent by the 1st respondent on a pittance. The learned counsel would urge that having regard to the settled principles of law that the State while awarding contract or distributing largesse must conform to the provisions of Article 14 of the Constitution of India, the impugned contract must be held to be arbitrary. Drawing our attention to clause (8) of the terms and conditions of the permission to erect street sign boards issued in favour of the 2nd respondent in terms of the letter dated 12/14-9-1999 whereby and whereunder the said contract was granted, it was submitted that ex facie the same is contrary to all norms of administrative action. Basing on the well known decision reported in Ramana v. I. A. Authority of India, AIR 1979 SC 1628 the learned counsel would urge that it was obligatory on the part of the 1st respondent herein being a state within the meaning of Article 12 of the Constitution of India to issue wide publicity in this regard so as to enable all persons to participate therein. The learned counsel would urge that such concession granted in favour of a private person by the State is unheard of. Our attention has been drawn to the fact that the work of 24 locations in the twin cities was allotted without reference to the advertisement and similar work orders and similar concessions have been given with respect to the second work order No. 2266, dated 14-9-1994 which clearly demonstrates undue favour shown to the 2nd respondent.

( 4 ) THE learned counsel appearing on behalf of the respondents on the other hand inter alia submitted that it is not a case where a statutory contract was granted. It maybe, contends the learned-counsel, that the work was awarded on the basis of the private negotiation but the same by itself cannot be said to be arbitrary in nature. Our attention has been drawn to S. 421 of the Hyderabad Municipal Corporation Act and it was submitted that on the basis thereof the contract in question is not governed by any statutory rules. A press notification was issued on 21-11-1994 which is in the following terms :the Municipal Corporation of Hyderabad has taken up the rationalisation of house numbering in twin cities of Hyderabad. The present system of wards-blockhouse number is very confusing and causing lot of confusion to common man, visitors, as well as to use departments in their day to day urban administration. Instead the Municipal Corporation proposes to assign house numbers in a cont