N.P.SINGH, J.

1. This writ application has been filed for quashing an order dated 17-5-1990 issued by the Superintending Engineer, Durgawati Construction Circle, Rohtas, cancelling the work order dated 2-3-1990 and the agreement dated 9-3-1990, in respect of the construction of Spill-way of Durgawati Reservoir Project. Petitioner No. 1 is the firm and petitioner No. 2 is the partner of the said firm. Petitioner No. 1, the firm, being the main petitioner, is hereinafter referred to as the petitioner.

2. Tenders were invited for construction of the aforesaid Project. The tender notice was in two parts. Part I related to pre-qualifications of the tenderers. This part of the tender was opened on 15-6-1989. After scrutiny, according to the petitioner, it was found that the petitioner possessed the basic requirements and qualifications under part I of the said tender notice. Part II of the tender notice related to commercial offer containing rates etc. This part was opened on 19-7-1989.

3. It appears that the tenders submitted on behalf of different contractors were placed before the Departmental Tender Committee consisting of Commissioner of Water Resources, the two Engineers-in-Chief Sri R. K. Thakur and Sri H. P. Singh, Chief Engineers Sri L. S. Prasad and Sri Binay Krishna Sahay. The Tender Committee accepted the tender of the petitioner in respect of the said project. The respondent-Engineer-in-Chief by his letter dated 24-2-1990 and the Chief Engineer by his letter dated 1-3-1990 allotted the work to the petitioner. On the basis of the aforesaid orders the Superintending Engineer on 2-3-1990 issued a formal order accepting the tender of the petitioner and advising the petitioner to execute the agreement after depositing the requisite security money in the prescribed form. The petitioner deposited the requisite security money of about Rupees 10,000,00.00 (ten lacs) in the prescribed form and a formal agreement was signed between the parties on 9-3-1990.

4. It has been alleged by the petitioner that pursuant to the agreement and work order aforesaid the petitioner took steps for securing machines, equipments and materials for construction of the reservoir project in question. It has been asserted that the petitioner purchased four Hindustan 1025 Dumpers, the cost of each Dumper being Rs. 19,48,314. The petitioner also claims to have placed orders for one 300 CK Hydrolic excavator at the estimated cost of Rupees 66,87,109 for execution of the work. It is alleged that two excavators, two dodgers, 50 trippers were shifted from Ranchi to the construction site. The details of other purchases made by the petitioner in connection with the construction of the project have been given in the writ application.

5. On 17-5-1990 by the impugned communication, the aforesaid work order dated 2-3-1990 and the agreement dated 9-3-1990 were cancelled by the Superintending Engineer on the basis of the orders of the Engineer-in-Chief and the Chief Engineer dated 10-5-1990 and 12-5-1990 respectively.

6. The petitioner filed representations before the competent authorities including before the Minister, Water Resources Department, making a grievance that the work allotted to it and agreement executed in its favour have been cancelled without assigning any reason.

7. A counter affidavit has been filed on behalf of the respondents. The stand of the State is that in the tender notice, the estimated quantity of work was based on estimated P.M.F. of 8217 cumecs. On that basis the design was worked out and the quantity of work was also estimated. The estimated quantity of work shown under the head hard rock excavation was 233.81 lacs cft. and hard rock removal by manual labour with the help of chiesel and hammer was at 48.89 lacs cft. It has been pointed out that the then Engineer-in-Chief Sri K. N. Lal before the acceptance of tender had expressed his view that there was scope of substantial reduction in the estimated cost. He had also raised the i