{"id":240704,"date":"1992-11-11T00:00:00","date_gmt":"1992-11-10T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/food-corporation-of-india-vs-kamdhenu-cattle-feed-industries-on-11-november-1992"},"modified":"2016-08-12T16:40:05","modified_gmt":"2016-08-12T11:10:05","slug":"food-corporation-of-india-vs-kamdhenu-cattle-feed-industries-on-11-november-1992","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/food-corporation-of-india-vs-kamdhenu-cattle-feed-industries-on-11-november-1992","title":{"rendered":"Food Corporation Of India vs Kamdhenu Cattle Feed Industries on 11 November, 1992"},"content":{"rendered":"<div class=\"docsource_main\">Supreme Court of India<\/div>\n<div class=\"doc_title\">Food Corporation Of India vs Kamdhenu Cattle Feed Industries on 11 November, 1992<\/div>\n<div class=\"doc_bench\">Bench: J.S. Verma, Yogeshwar Dayal, N. Venkatachala, Jj.<\/div>\n<pre>           PETITIONER:\nFOOD CORPORATION OF INDIA\n\n\tVs.\n\nRESPONDENT:\nKAMDHENU CATTLE FEED INDUSTRIES\n\nDATE OF JUDGMENT03\/11\/1992\n\nBENCH:\n[J.S. VERMA, YOGESHWAR DAYAL AND N. VENKATACHALA, JJ.]\n\n\n\n\nACT:\nConstitution of India, 1950:\nArticle\t 14-Contractual\t  transactions\tof   State  or\t its\ninstrumentality-Essential      requisites-Non-arbitrariness,\nfairness in  action  and  due  consideration  of  legitimate\nexpectation-Ignoring  the   highest  bid-  Negotiations\t for\nhigher offer and acceptance thereof-Validity of.\n Administrative Law:\nDoctrine  of   legitimate  expectation-Forms   part  of\t non\narbitrariness and  Rule of  Law- To  be\t determined  in\t the\nlarger public interest Open to judicial review.\n\n\n\nHEADNOTE:\nThe appellant-Corporation  invited tenders  for sale of\nstocks of  damaged food-grains. The respondent's bid was the\nhighest. Since\tthe appellant  was not\tsatisfied about\t the\nadequacy of  the amount\t offered even in the highest tender,\nit  invited   all  the\t tenders  to   participate  in\t the\nnegotiations,  instead\tof  accepting  the  highest  tender.\nDuring the course of negotiations, the respondent refused to\nrevise the  rates in  its offer. On the basis of the highest\nbid made  during the negotiations, the appellant disposed of\nthe stocks of damaged foodgrains, rejecting the highest\ntenders. The  respondent,  whose  tender  was  the  highest,\nchallenged the\tdecision of  the appellants by filing a Writ\nPetition before\t the High  Court. It  was contended that the\naction of the appellant was arbitrary and hence violative of\nArt. 14\t of the\t Constitution. The  High Court\taccepted the\ncontention and allowed the Writ Petition. Being aggrieved by\nthe  High   Court's   decision\t the   appellant-Corporation\npreferred the present appeal.\nIt was\tcontended on behalf of the appellant that there\nbeing no  right in  the person submitting the highest tender\nto claim  acceptance thereof,  and since  all tenderers were\ngiven equal  opportunity to  participate in the negotiations\nand to\trevise the  bid before acceptance, the action of the\nappellant was not arbitrary.\nThe Respondent\tcontended that\tsince no cogent reasons\nwere  indicated\t for  rejecting\t all  the  tenders  and\t for\ndeciding to  dispose of\t the stock  by negotiating  with the\ntenderers for  procuring a higher price, such a decision was\narbitrary.\nAllowing the appeal, this Court,\nHELD: 1.1.  In contractual sphere as in all other State\nactions, the  State and\t all its  instrumentalities have  to\nconform to  Article 14\tof the\tConstitution of\t which\tnon-\narbitrariness is a significant facet. There is no unfettered\ndiscretion in  public  law.  A\tpublic\tauthority  possesses\npowers\t only to  use them for public good. This imposes the\nduty to\t act fairly  and  to  adopt  a\tprocedure  which  is\n`fairplay in action'. Due observance of this obligation as a\npart  of   good\t administration\t  raises  a   reasonable  or\nlegitimate expectation in every citizen to be treated fairly\nin his interaction with the State and its instrumentalities,\nwith this  element forming  a\tnecessary component  of\t the\ndecision making\t process in  all State\tactions. To  satisfy\nthis requirement  of non-arbitrariness in a State action, it\nis  necessary  to  consider  and  give\tdue  weight  to\t the\nreasonable-or legitimate  expectations of the persons likely\nto be  affected by  the decision  or else that unfairness in\nthe exercise  of the  power may amount to an abuse or excess\nof power apart from affecting the bona fides of the decision\nin a  given case.   The decision so made would be exposed to\nchallenge on  the ground  of arbitrariness. Rule of law does\nnot completely\teliminate  discretion  in  the\texercise  of\npower, as it is unrealistic, but provides for control of its\nexercise by judicial review. [328-A-D]\n12. The\t mere reasonable or legitimate expectation of a\ncitizen, in  such a  situation,\t may  not  by  itself  be  a\ndistinct enforceable right, but failure to consider and give\ndue weight to it may render the decision arbitrary, and this\nis how\tthe requirement of due consideration of a legitimate\nexpectation  forms   part   of\t the   principle   of\tnon-\narbitrariness, a  necessary concomitant\t of the rule of law.\nEvery legitimate expectation is a  relevant factor requiring\ndue consideration in a fair decision making process. Whether\nthe expectation\t of the claimant is reasonable or legitimate\nin the\tcontext is a question of fact in each case. Whenever\nthe question arises, it is to be determined not according to\nthe claimant's\tperception but\tin  larger  public  interest\nwherein other  more important  considerations  may  outweigh\nwhat would otherwise have been the legitimate expectation of\nthe claimant.  A bona  fide decision of the public authority\nreached in this manner would satisfy the requirement of non-\narbitrariness and withstand judicial scrutiny. [328-E-G]\n2.1. Even  though the  highest tenderer\t can  claim  no\nright to  have his   tender  accepted, there  being a  power\nwhile inviting\ttenders to  reject all the tenders, yet that\npower cannot  be exercised  arbitrarily and  must depend for\nits validity  on the  existence of  cogent reasons  for such\naction. The  object of\tinviting tenders  for disposal\tof a\ncommodity is to procure the highest price while giving equal\nopportunity to\tall  the  intending  bidders  to    compete.\nProcuring the highest price for the commodity is undoubtedly\nin public interest since the amount so collected goes to the\npublic fund. Accordingly, inadequacy of the price offered in\nthe highest  tender would be a cogent ground for negotiating\nwith the  tenderers giving  them equal opportunity to revise\ntheir bids  with a  view to  obtain  the  highest  available\nprice. Retaining the option to accept the highest tender, in\ncase the   negotiations\t do not yield a significantly higher\noffer would  be fair to the tenderers besides protecting the\npublic interest.  A  procedure\twherein\t resort\t is  had  to\nnegotiations   with    the   tenderers\t for   obtaining   a\nsignificantly higher  bid during  the period when the offers\nin the\ttenders remain\topen for acceptance and rejection of\nthe tenders  only in  the event\t of a significant higher bid\nbeing obtained\tduring negotiations would ordinarily satisfy\nthis requirement.  This procedure involves giving due weight\nto the\tlegitimate expectation of the highest bidder to have\nhis tender  accepted unless  outbid by\ta higher  offer,  in\nwhich case  acceptance of  the highest offer within the time\nthe offers  remain open\t would be  a reasonable\t exercise of\npower for public good. [329-E-H; 330-A]\nShanti Vijay  &amp; Co.  etc. v.  Princess Fatima  Fouzia &amp;\nOrs. etc., [1980] I S.C.R. 459, relied on.\nCouncil of  Civil Service Unions and Others v. Minister\nfor the\t Civil Service,\t 1985 A.C.  374 (H.L.),\t and  In  re\nPreston, 1985 A.C. 835 (H.L.), referred to.\n22. In\tthe  instant  case,  the  respondent's\thighest\ntender was  super seded\t only by  a significantly higher bid\nmade during  the negotiations with all tenderers giving them\nequal opportunity  to compete  by revising  their bids.\t The\nfact that  it was  a significantly  higher bid\tobtained  by\nadopting the  right course is sufficient to demonstrate that\nthe action  of the  appellant satisfied\t the requirement  of\nnon-arbitrariness, and it was taken for the cogent reason of\ninadequacy of the price offered in the highest tender, which\nreason was  evident to\tall tenderers invited to participate\nin the negotiations and to revise their bids. The High Court\nwas in error in taking the contrary view. [330-D-E]\n\n\n\nJUDGMENT:\n<\/pre>\n<p>     CIVIL APPELLATE JURISDICTION: Civil Appeal No. 4731 of<br \/>\n 1992.\n<\/p>\n<p>     From the Judgment and Order dated 21.7.92 of the C.W.N.<br \/>\n7419 of 1992.\n<\/p>\n<p>     Y.P. Rao for the Appellant.\n<\/p>\n<p>     Ashok Sen,\t H.L. Aggarwal,\t and K.K. Gupta (NP) for the<br \/>\nRespondent.\n<\/p>\n<p>     The Judgment of the Court was delivered by<br \/>\n     VERMA, J. Leave granted.\n<\/p>\n<p>     The appeal\t by special  leave under  Article 136 of the<br \/>\nConstitution is against the judgment and order dated 21.7.92<br \/>\nby which  the Civil Writ  Petition No. 7419 of 1992 has been<br \/>\nallowed by  the Punjab\t&amp; Haryana  High Court  directing the<br \/>\nappellant  Food\t  Corporation  of  India  to  allot  to\t the<br \/>\nrespondent the\tnecessary stocks  of damaged  rich for which<br \/>\nthe tenders  had been  invited by  the appellant,  since the<br \/>\nrespondent was the highest bidder.\n<\/p>\n<p>     The appellant  invited tenders  for sale  of stocks  of<br \/>\ndamaged\t foodgrains   in  accordance   with  the  terms\t and<br \/>\nconditions contained  in the  tender notice  (Annexure `A&#8217;).<br \/>\nThe tenders  were required to be submitted upto 2.45 p.m. on<br \/>\n18.5.92; the  tenders were  to be  opened on 18.5.92 at 3.00<br \/>\np.m.; and offers were to remain open for acceptance upto and<br \/>\ninclusive of  17.7.92. The  respondent submitted  its tender<br \/>\nfor a  stock of damaged rice  within the time specified, but<br \/>\nthe respondent&#8217;s  tender was conditional and the full amount<br \/>\nof  earnest  money  required  by  the  terms  was  also\t not<br \/>\ndeposited. It  is, however,  not necessary  to\tmention\t the<br \/>\nparticulars of these two deficiencies in respondent&#8217;s tender<br \/>\nsince they  appear to  have been waived by the appellant and<br \/>\nare not\t relied on  before us  to  support  the\t appellant&#8217;s<br \/>\naction. The  respondent&#8217;s bid  in the  tender was admittedly<br \/>\nthe highest  as found  on opening,  the tenders.  lt appears<br \/>\nthat the  appellant was\t not satisfied about the adequacy of<br \/>\nthe amount  offered in\tthe highest  tenders for purchase of<br \/>\nthe stocks  of damaged foodgrains and, therefore. instead of<br \/>\naccepting  any\tof  the\t tenders  submitted,  the  appellant<br \/>\ninvited all  the tenderers to participate in the negotiation<br \/>\non 9.6.92.  The\t respondent  refused  to  revise  the  rates<br \/>\noffered in  its tender.\t It was\t Rs.  245  per\tquintal\t for<br \/>\ncertain lots  of this  stock;, while  the highest offer made<br \/>\nduring\tthe   negotiations  was\t  Rs.  275.72  per  quintal.<br \/>\nSimilarly, as  against the respondent&#8217;s offer of Rs. 201 per<br \/>\nquintal in  respect of\tsome other  lots, the  highest offer<br \/>\nmade during  the negotiation  was Rs. 271.55 per quintal. On<br \/>\nthis basis,  the appellant  was\t to  receive  an  additional<br \/>\namount of  Rs. 8  lakhs by  accepting the highest offer made<br \/>\nduring the negotiations over the total amount offered by the<br \/>\nrespondent for\tthe stock  of  damaged\trice.  Overall,\t the<br \/>\nappellant was  offered an  excess amount of Rs. 20 lakhs for<br \/>\nthe entire  stock of damaged foodgrains in the highest offer<br \/>\nmade during  the negotiations, inasmuch as against the total<br \/>\namount\t Rs.90 lakhs which the appellant would have received<br \/>\nby acceptance  of the  highest tenders, the appellant was to<br \/>\nreceive the  amount of Rs. 1 crore 10 lakhs by accepting the<br \/>\nhighest offers made during the negotiations in which all the<br \/>\ntenderers,  including\tthe  respondent,  were\tgiven  equal<br \/>\nopportunity to participate.\n<\/p>\n<p>     The respondent  filed the\tabove Writ  Petition in\t the<br \/>\nHigh Court challenging the appellant&#8217;s refusal to accept the<br \/>\nhighest tender submitted by it for the stock of damaged rice<br \/>\nclaiming that the appellant having chosen to invite tenders,<br \/>\nit could  not thereafter  dispose of  the stocks  of damaged<br \/>\nfoodgrains by subsequent negotiations rejecting the highest<br \/>\ntenders on  the ground\tthat a\thigher bid  was obtained  by<br \/>\nnegotiations. This  action of  the appellant, was alleged to<br \/>\nbe arbitrary  and, therefore,  in  substance,  violative  of<br \/>\nArticle 14  of the  Constitution.  The\tHigh  Court  by\t its<br \/>\nimpugned order\taccepted this  contention of  the respondent<br \/>\nand allowed the Writ Petition. Hence, this appeal.\n<\/p>\n<p>     It is  not disputed  that according  to the  terms\t and<br \/>\nconditions on  which the  appellant had invited tenders, the<br \/>\nappellant had  reserved the  right to reject all the tenders<br \/>\nand, therefore,\t the highest  tender was  not  bound  to  be<br \/>\naccepted. Learned  counsel for\tthe appellant submitted that<br \/>\nthere being  no right  in the  person submitting the highest<br \/>\ntender to claim acceptance of the tender, in a case like the<br \/>\npresent. where\tall the\t tenderers including the respondent,<br \/>\nwere invited  for negotiation and given equal opportunity to<br \/>\nparticipate and\t to revise  the bid before acceptance of the<br \/>\nhighest bid  offered during  negotiation which\tresulted  in<br \/>\nobtaining an  additional amount of Rs. 8 lakhs for the stock<br \/>\nrelating to  respondent&#8217;s tender  and an overall gain of Rs.<br \/>\n20  lakhs  in  disposal\t of  the  entire  stock\t of  damaged<br \/>\nfoodgrains, the\t action of the appellant could not be termed<br \/>\narbitrary. In  reply, Shri A.K. Sen, learned counsel for the<br \/>\nrespondent contended  that even though the appellant had the<br \/>\nright to  reject any  tender, including\t the highest tender,<br \/>\nand thereafter\tnegotiate with\tall the tenderers to procure<br \/>\nthe highest  price for\tthe commodity, yet this right has to<br \/>\nbe exercised  reasonably and not arbitrarily, otherwise, the<br \/>\ncredibility of\tthe procedure  of sale\tby inviting  tenders<br \/>\nwould be  lost. Shri Sen submitted that the  decision not to<br \/>\naccept any  tender and to negotiate thereafter for obtaining<br \/>\na higher  price than  that quoted in the highest bid, cannot<br \/>\nbe taken  on the whim and caprice of the concerned authority<br \/>\nand can\t be only  for cogent  reasons indicated while taking<br \/>\nthe decision,  or else,\t the decision would be arbitrary. On<br \/>\nthis basis,  Shri Sen  further submitted that in the present<br \/>\ncase, no cogent reasons were indicated for rejecting all the<br \/>\ntenders\t and   deciding\t to  dispose  of  the  commodity  by<br \/>\nnegotiation with the tenderers for procuring a higher price.<br \/>\nHe also\t added that  the mere  fact that  a higher price was<br \/>\nobtained by negotiation would not justify the decision if it<br \/>\nwas not\t taken in  the manner permissible. This was the only<br \/>\nsubmission of  Shri Sen\t to support the decision of the High<br \/>\nCourt.\n<\/p>\n<p>     In our  view, Shri\t A.K. Sen is right in the first part<br \/>\nof  his\t submission.  However,\tin  the\t present  case,\t the<br \/>\nrespondent does\t not get  any benefit  therefrom.  The\tHigh<br \/>\nCourt&#8217;s decision  is based  on the  only  ground  that\tonce<br \/>\ntenders have  been invited  and the  highest bidder has come<br \/>\nforward to  comply with\t the conditions\t stipulated  in\t the<br \/>\ntender notice,\tit is  not permissible\tto  switch  over  to<br \/>\nnegotiation with  all the  tenderers and  thereby reject the<br \/>\nhighest\t tender.   According  to  the  High  Court,  such  a<br \/>\nprocedure is  not countenanced\tby the\trule of law. This is<br \/>\nnot the same, as the submission of Shri Sen which is limited<br \/>\nto permissibility  of such  a course  only on cogent grounds<br \/>\nindicated while\t deciding to switch over to the procedure of<br \/>\nnegotiation after  receiving  the  tenders  to\tsatisfy\t the<br \/>\nrequirement of non arbitrariness, a necessary concomitant of<br \/>\nthe rule  of law.  The proposition  enunciated by  the\tHigh<br \/>\nCourt which forms the sole basis of its decision is too wide<br \/>\nto be  acceptable and  has  to\tbe  limited  in\t the  manner<br \/>\nindicated hereafter.\n<\/p>\n<p>     In contractual  sphere as\tin all\tother State actions,<br \/>\nthe State  and all  its instrumentalities have to conform to<br \/>\nArticle 14 of the Constitution of which non-arbitrariness is<br \/>\na significant  facet. There  is no  unfettered discretion in<br \/>\npublic law:  A public authority possesses powers only to use<br \/>\nthem for public good. This impose the duty to act fairly and<br \/>\nto adopt  a procedure  which is\t `fairplay in  action&#8217;.\t Due<br \/>\nobservance  of\t this  obligation   as\ta   part   of\tgood<br \/>\nadministration raises a reasonable or legitimate expectation<br \/>\nin every  citizen to  be treated  fairly in  his interaction<br \/>\nwith the  State and its instrumentalities, with this element<br \/>\nforming a necessary component of the decision making process<br \/>\nin all\tState actions.\tTo satisfy  this requirement of non-<br \/>\narbitrariness in a State action, it is, therefore, necessary<br \/>\nto consider  and  give\tdue  weight  to\t the  reasonable  or<br \/>\nlegitimate expectations of the persons likely lo be affected<br \/>\nby the\tdecision or  else that unfairness in the exercise of<br \/>\nthe power  may amount  to an  abuse or excess of power apart<br \/>\nfrom affecting\tthe bona  fides of  the decision  in a given<br \/>\ncase. The  decision so made would be exposed to challenge on<br \/>\nthe ground of arbitrariness. Rule of law does not completely<br \/>\neliminate discretion  in the  exercise of  power, as  it  is<br \/>\nunrealistic, but  providers for\t control of  its exercise by<br \/>\njudicial review.\n<\/p>\n<p>     The mere  reasonable or  legitimate  expectation  of  a<br \/>\ncitizen, in  such a  situation,\t may  not  by  itself  be  a<br \/>\ndistinct enforceable  right, but  failure to   consider\t and<br \/>\ngive due weight to it may render the decision arbitrary, and<br \/>\nthis is\t how the  requirement  of  due\tconsideration  of  a<br \/>\nLegitimate expectation\tforms part  of the principle of non-<br \/>\narbitrariness, a  necessary concomitant\t of the rule of law.<br \/>\nEvery legitimate  expectation is a relevant factor requiring<br \/>\ndue consideration  a fair  decision making  process. Whether<br \/>\nthe expectation\t of the claimant is reasonable or legitimate<br \/>\nin the\tcontext is a question of fact in each case. Whenever<br \/>\nthe question arises, it is to be determined not according to<br \/>\nthe claimant&#8217;s\tperception but\tin  larger  public  interest<br \/>\nwherein other  more important  considerations  may  outweigh<br \/>\nwhat would otherwise have been the legitimate expectation of<br \/>\nthe claimant.  A bona  fide decision of the public authority<br \/>\nreached in  this manner\t would satisfy\tthe   requirement of<br \/>\nnon-arbitrariness  and\t withstand  judicial  scrutiny.\t The<br \/>\ndoctrine of  legitimate expectation  gets assimilated in the<br \/>\nrule of\t law and operates in our legal system in this manner<br \/>\nand to this extent.\n<\/p>\n<p>     In Council\t of  Civil  Service  Unions  and  Others  v.<br \/>\nMinister for  the Civil\t Service, 1985\tA.C. 374  (H.L.) the<br \/>\nHouse of  Lords indicated the extent to which the legitimate<br \/>\nexpectation  interfaces\t  with\texercise   of  discretionary<br \/>\npower. The impugned action was upheld as reasonable, made on<br \/>\ndue consideration  of all  relevant  factors  including\t the<br \/>\nlegitimate  expectation\t  of  the   applicant,\twherein\t the<br \/>\nconsiderations of  national security  were found to outweigh<br \/>\nthat  which   otherwise\t would\t have  been  the  reasonable<br \/>\nexpectation of\tthe applicant. Lord Scarman pointed out that<br \/>\n`the controlling  factor in determining whether the exercise<br \/>\nof prerogative\tpower is  subject  to judicial review is not<br \/>\nits source  but its  subject-matter&#8217;. Again in In re preston<br \/>\n1985 A.C. 835 (H.L.) it was stated by Lord Scarman that `the<br \/>\nprinciple of  fairness has  an important place in the law of<br \/>\njudicial review&#8217;  ant `unfairness  in the purported exercise<br \/>\nof a  power can\t be such  that it  is an  abuse of excess of<br \/>\npower&#8217;. These decisions of the House of Lords give a similar<br \/>\nindication of the significance of the doctrine of legitimate<br \/>\nexpectation. Shri  A.K. Sen  referred to  Shanti Vijay &amp; Co.<br \/>\netc. v.\t Princess Fatima Fouzia &amp; Ors. etc., [1980] 1 S.C.R.<br \/>\n459,  which   holds  that   court  should   interfere  where<br \/>\ndiscretionary power  is not exercised reasonably and in good<br \/>\nfaith.\n<\/p>\n<p>     From the  above, it  is  clear  that  even\t though\t the<br \/>\nhighest tenderer  can claim  no right  to  have\t his  tender<br \/>\naccepted, there\t being a  power while  inviting\t tenders  to<br \/>\nreject all  the tenders,  yet the  power to  reject all\t the<br \/>\ntenders cannot\tbe exercised arbitrarily and must depend for<br \/>\nits validity  on the  existence of  cogent reasons  for such<br \/>\naction. The  object of\tinviting   tenders for disposal of a<br \/>\ncommodity is to procure the highest price while giving equal<br \/>\nopportunity  to\t  all  the  intending  bidders\tto  compete.<br \/>\nProcuring the highest price for the commodity is undoubtedly<br \/>\nin public interest since the amount so collected goes to the<br \/>\npublic fund. Accordingly, inadequacy of the price offered in<br \/>\nthe highest  tender would be a cogent ground for negotiating<br \/>\nwith the  tenderers giving  them equal opportunity to revise<br \/>\ntheir bids  with a  view to  obtain  the  highest  available<br \/>\nprice. The  inadequacy may  be for  several reasons known in<br \/>\nthe commercial field. Inadequacy of the prince quoted in the<br \/>\nhighest tender\twould be  a question  of fact  in each case.<br \/>\nRetaining the  option to  accept the highest tender, in case<br \/>\nthe negotiations  do not  yield a significantly higher offer<br \/>\nwould be fair to the tenderers besides protecting the public<br \/>\ninterest. A  procedure wherein resort is had to negotiations<br \/>\nwith the  tenderers for obtaining a significantly higher bid<br \/>\nduring the period when the offers in the tenders remain open<br \/>\nfor acceptance\tand rejection  of the  tenders only  in\t the<br \/>\nevent of  a significant\t higher bid  being  obtained  during<br \/>\nnegotiations would ordinarily satisfy this requirement. This<br \/>\nprocedure involves  giving  due\t weight\t to  the  legitimate<br \/>\nexpectation  of\t the  highest  bidder  to  have\t his  tender<br \/>\naccepted unless\t outbid by  a higher  offer, in\t which\tcase<br \/>\nacceptance of  the highest  offer within the time the offers<br \/>\nremain open would be a reasonable exercise  power for public<br \/>\ngood.\n<\/p>\n<p>     In the present case, the last date upto which the offer<br \/>\nmade in\t the tender  was to  remain open  for acceptance was<br \/>\n17.7.92. After opening the tenders on 18.5.92, the appellant<br \/>\ndecided to  negotiate with  all the tenderers on 9.6.92 when<br \/>\nsignificantly  higher  amount,\tas  indicated  earlier,\t was<br \/>\noffered above  the amount  quoted in  the highest tender. In<br \/>\nsuch a\tsituation, if  the negotiations\t did not  yield\t the<br \/>\ndesirable result  of obtaining a significantly higher price,<br \/>\nthe appellant  had the\toption to  accept the highest tender<br \/>\nbefore the  last date,\tviz., 17.7.92  upto which  the offer<br \/>\nmade therein  was to  remain open  for acceptance.  In\tthis<br \/>\nmanner, the  respondent&#8217;s higher  tender was superseded only<br \/>\nby a  significantly higher  bid made during the negotiations<br \/>\nwith all  tenderers giving them equal opportunity to compete<br \/>\nby revising their bids. The fact that it was a significantly<br \/>\nhigher bid obtained by adopting this course is sufficient in<br \/>\nthe facts of the present case to demonstrate that the action<br \/>\nof  the\t  appellant  satisfied\t the  requirement   of\tnon-<br \/>\narbitrariness, and  it was  taken for  the cogent  reason of<br \/>\ninadequacy of the price offered in the highest tender, which<br \/>\nreason was  evident to all  tenderers invited to participate<br \/>\nin the negotiations and to revise their bids. The High Court<br \/>\nwas in error in taking the contrary view.\n<\/p>\n<p>Consequently, this  appeal is allowed. The impugned judgment<br \/>\nof the\tHigh Court  is set  aside, resulting in dismissal of<br \/>\nthe respondent&#8217;s writ petition, No costs,<br \/>\n G.N.\t\t\t\t\t   Appeal allowed.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Supreme Court of India Food Corporation Of India vs Kamdhenu Cattle Feed Industries on 11 November, 1992 Bench: J.S. Verma, Yogeshwar Dayal, N. Venkatachala, Jj. PETITIONER: FOOD CORPORATION OF INDIA Vs. RESPONDENT: KAMDHENU CATTLE FEED INDUSTRIES DATE OF JUDGMENT03\/11\/1992 BENCH: [J.S. VERMA, YOGESHWAR DAYAL AND N. VENKATACHALA, JJ.] ACT: Constitution of India, 1950: Article 14-Contractual [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-240704","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Food Corporation Of India vs Kamdhenu Cattle Feed Industries on 11 November, 1992 - Free Judgements of Supreme Court &amp; High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/food-corporation-of-india-vs-kamdhenu-cattle-feed-industries-on-11-november-1992\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Food Corporation Of India vs Kamdhenu Cattle Feed Industries on 11 November, 1992 - Free Judgements of Supreme Court &amp; 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