The State cannot act arbitrarily in entering into relationship with any person it likes at its sweet will. Its action must be in conformity with some principle which meets the test of reasonableness.

K. S. VARMA, J.:- In order to appreciate the controversy giving rise to these petitions certain facts will have to be stated in some detail. The State of U.P. through opposite party No.2 invited lenders for collection of Sal Seeds from 14 Forest Divisions of U.P. enumerated in tender notice, Annexure 1 to the writ petition. In pursuance of the tender notice, the petitioners submitted their tender for several Divisions within the time fixed i.e. 20th April, 1981. The date of the opening of the tender was 21st April, 1981. On that date the tenders could not be opened as this Court passed an order in Writ Petn. No.1838 of 1981, Hind Trading Company v. State of U.P. and in Writ Petn. No.1897 of 1981, Oudh Sugar Mills Ltd. v. State of U.P. (reported in 1982 All LJ 572), staying the reopening of the tenders by the State of U.P. By a subsequent order dated 27-4-1981 this Court clarified the said order and allowed the opening of the tenders. The order, however, provided that until further orders the State of U.P. shall not accept any tenders. A copy of the said order passed by this Court is Annexure 2 to the Writ petition. In compliance of the order passed by this Court the State of U.P. opened the tenders on 28-4-1981. For two Forest Divisions the petitioners tender were highest. These Forest Divisions are South Pilibhit and South Kheri, On account of the stay order, the opposite parties did not take any steps to issue the letter of acceptance for collection of the Sal Seeds for three years even for these Forest Divisions which were not in dispute in the writ petitions referred to above. The petitioners intervened in the writ petitions as opposite parties and they prayed that since the period of operation for collection of Sal Seeds is very short i.e. from 1st April to 15th June, the petitions be finally disposed of. By order dated 15-5-1981 the aforesaid writ petitions were dismissed. In the year 1977 tenders were invited for the collection of Sal Seeds for a period of four years and the petitioners in those writ petitions prayed that having regard to the assurance given by the State Government that the lease may be extended up to 15 years, the lease in favour of the petitioners be extended. This argument was repelled by the Division Bench and while disposing of the writ petitions, the Division Bench observed that for the year 1981 onwards the State Government had taken a decision that the work of collection of Sal Seeds be given to the Forest Corporation if they were ready to do so without any special increase in staff and in the remaining areas the work of collection of Sal Seeds be given on lease for three years for which tenders be invited. It was also observed by the Division Bench that the decision to invite tenders for a period of three years was in the circumstances neither arbitrary nor unreasonable but in public interest, It was also observed that the decision to invite fresh tenders for three years was neither hit by Art.14 of the Constitution nor by principles of natural justice. After the decision rendered by the Division Bench on 15-5-1981, the petitioners approached opposite party No.2 and requested him to give a letter of acceptance opposite party No.2, however, declined to give any letter of acceptance, he, however, told the petitioners that final decision will be taken by opposite party No.1. The petitioners requested that an early decision in the matter may be taken. The petitioner was called by opposite party No.2 on 20-5-1981. The petitioner contacted the purest Secretary as well as State Minister for Forests. The petitioner was informed that with regard to the collection of Sal Seeds, the petitioner may contact the Chief Conservator of Forests. When the petitioner approached opposite party No.2 the latter pressurized the petitioners to surrender the North and South Gorakhpur and east and west of Bahraich Division even though the petitioners tenders were highest. The petitioners did not agree to these s