Point of Law: Government must have freedom of contract. In other words, fair play in the joints is a necessary concomitant for an administrative body functioning in an administrative sphere or quasi administrative sphere. However, the decision must not only be tested by the application of Wednesbury principles of reasonableness but also must be free from arbitrariness not affected by bias or actuated by mala fides. It was also pointed out that quashing decisions may impose heavy administrative burden on the administration and lead to increased and unbudgeted expenditure

JUDGMENT :

J.B.PARDIWALA, J.

1. This appeal under clause 15 of the Letters Patent is at the instance of the original respondents of a writ application filed by the respondent herein (original writ applicant) and is directed against the order passed by a learned Single Judge of this Court dated 4th October 2019 in the Special Civil Application No.15991 of 2019, by which the learned Single Judge disposed of the writ application with some observations.

2. The facts giving rise to this appeal may be summarized as under:

3. The original writ applicant came before this Court by filing the Special Civil Application No.15991 of 2019 seeking for the following reliefs:

“(A) Your Lordships may be pleased to issue a writ of prohibition and/or a writ in the nature of prohibition and/or a writ of mandamus and/or a writ in the nature of mandamus to quash and set aside orders/communication dated 09.09.2019 issued by respondent no.2.

(B) Your Lordships may be pleased to issue a writ of prohibition and/or a writ in the nature of prohibition and/or a writ of mandamus and/or a writ in the nature of mandamus directing respondent corporation to permit the petitioner to offer suitable alternate shop/land for the purpose of showroom in connection with advertisement dated 16.06.2017 and consequent selection of the petitioner in view of communication dated 16.01.2018;

(C) Pending hearing and final disposal of the present petition, Your Lordships may be pleased to direct the respondent corporation not to proceed further for redraw and/or re-advertisement in connection with advertisement dated 16.06.2017 and consequent selection of the petitioner in view of communication dated 16.01.2018;

(D) An ex-parte ad-interim relief in terms of prayer (C) above may kindly be granted;

(E) Such other and further relief/s as may be deemed just and necessary in the facts and circumstances of the present case may kindly be granted.”

4. It appears from the materials on record that the appellants herein are a Public Sector Undertaking under the Ministry of Petroleum and Natural Gas, Government of India and a Government Company under the Companies Act, 2013. The Corporation is in the business of sale and distribution of petroleum products through its retail outlets/LPG distributorships.

5. The Corporation published an advertisement dated 16th June 2017 for the LPG distributorship at Surat. The original writ applicant applied pursuant to the said advertisement. The Corporation vide letter dated 16th January 2018 informed the original writ applicant that he had been declared as a successful candidate in the draw of lots conducted on 15th January 2018 for selection of the LPG distributor at the subject location.

6. In the aforesaid context, the Corporation asked the original writ applicant to do the following:

“1. Deposit an amount of Rs.50000 (Rupees fifty Thousand only) applicable to the subject advertised location, in line with the provisions Unified Guidelines for Selection of LPG Distributors. The above amount is to be deposited through a CTS compliant Demand Draft/Pay order (Note : Non CTS instrument will not be accepted) in favour of Indian Oil Corporation Ltd. payable at Surat and to be submitted to the following address within 7 working days from the date of this email failing which your candidature is liable to be summarily rejected:

DGM (LPG-S)

INDIAN OIL CORPORATION LTD. (M.D.)

INDANE AREA OFFICE, Ghod Dod Road, Surat – 395001

This amount may be adjusted the Security deposit payable at the time of appointment as LPG Distributor at subject location.

2. Submit the set of documents as specified within 7 working days at the above address.