The State must act reasonably and not arbitrarily in exercising statutory power or discharging contractual obligations, and any action taken by the State must comply with principles of natural justice.

( 1 ) IN this application the petitioner challenges the withholding of the release order in respect of certain lots, being Nos. 31 (OP) to 39 (OP) which according to the petitioner was collectively sold to him.

( 2 ) PURSUANT to an advertisement in the Statesman, Calcutta Edition and Amrita Bazar Patrika on diverse dates in January, 1981 the petitioner attended the auction sale in respect of the certain unserviceable goods belong to the respondent No. 1.

( 3 ) IT is not in dispute that the petitioner was declared the highest bidder in respect of the abovementioned lots in that auction sale.

( 4 ) PURSUANT to the terms and conditions of the sale the petitioner paid a sum of Rs. 1,20,000/- in cash on the 28th January, 1981 which sum represented a little more than 25% of the total value of the goods in respect of which the petitioner became the highest bidder. It is further not in dispute that the petitioner paid the balance sum of Rs. 3,50,000/- plus sales tax amounting to Rs. 18,800/- on the 4th February, 1981.

( 5 ) IT is the contention of the petitioner by virtue of the provisions of section 64 (2) of the State of Goods Act, 1930 the sale became complete in so far as the parties are concerned. It must be stated that this legal proposition was not disputed by Mr. Dutt who appeared on the behalf of the Calcutta Port Trust Authorities.

( 6 ) THEREAFTER on the 5th March, 1981 a letter was addressed to M/s. Egbert Andrews Auction Mart, respondent No. 4 herein by the Controller of Stores of the respondent No. 1 stating that Lot Nos. 31 (OP) to 39 (OP) in respect of which the petitioner became the highest bidder as mentioned above has been finally decided to be withdrawn from the auction sale as per the order of the Chairman of the respondent No. 1.

( 7 ) IT is this decision to withdraw these lots from the auction sale which is challenged before me in this application. Miss Chaturvedi appearing on behalf of the petitioner submits before me that this action on the part of the Port Authorities is arbitrary, unreasonable and capricious. This action is also challenged being contrary to all principles of natural justice in as much as a valuable right of property of the petitioner has been taken away without giving him any opportunity of showing cause. This, it is contended, is violative of the well-known principle audi alteram partem.

( 8 ) MR. Dutt, appearing for the Port Trust Authorities does not really dispute any of the factual aspects of this case. According to Mr. Dutt the petitioner is not entitled to invoke the writ jurisdiction because whatever rights the petitioner has clearly flow from a contract. Mr. Dutt draws my attention to the decision of the Supreme Court in the case of (1) Kulchhinder Singh and Ors. v. Hardayal Singh Brar and Ors. , reported in AIR 1976 SC 2216, where V. R. Krishna Iyer, J. observed, inter alia, as follows : At its best, the writ petition seeks enforcement of a binding contract but the neat and necessary repellent is that the remedy of Article 226 is unavailable to enforce a contract qua-contract. We fail to see how a supplier of chalk to a Government School or cheese to a Government Hospital can ask for a constitutional remedy under Article 226 in the event of a breach of a contract, by passing the normal channels of civil litigation? (paragraph 11 of the report ).

( 9 ) IN my view this contention of Mr. Dutt is no longer valid in view of the Supreme Court decision in the well-known case of (2) Ramana v. The International Air Port Authority of India, reported in AIR 1979 SC 1628. This decision of the Supreme Court is clear authority of the proposition that whether in the field of exercise of statutory power or in discharge of its contractual obligation the State must act reasonably and not arbitrarily. In other words, this indict against arbitrariness and unreasonableness would apply to the State whether it has exercised statutory power or discharged contractual obligation. A sm