In this application under Article 226 of the Constitution of India the petitioners have challenged the validity of the action of Jute Corporation of India Ltd. cancelling a contract for supply of 33,300 Quintals of raw jute to the Petitioner No. 1.

2. The Petitioner No. 1 is Nellimarla Jute Mills Co. Ltd. (hereinafter referred to as "Nellimarla"). The Petitioner No. 2 is a Shareholder and Director of the Petitioner No. 1. Nellimarla is engaged in the business of manufacturing jute goods. Its jute mill is situated at Village Nellimarla in the State of Andhra Pradesh. This jute mill is said to be one of the largest of its kind in the country and provides employment for about 7,000 workers. For its manufacturing activity Nellimarla requires huge quantities of raw jute.

3. The Jute Corporation of India Ltd. is the Respondent No. 1 in this proceeding (hereinafter referred to as "JCI"). JCI is a Government Company. The nature of the functions of JCI will be apparent from the following objects specified in the Objects clause of its Memorandum of Association :-

"(a) To generally implement such special arrangement for import for internal trade or distribution of jute and Mestas, in pub