o 15 of 1972
Appeal by Special Leave from the _judgment and order dated December 16 1971 of the Assam and Nagaland High Court in Civil Rule No 431 of 1970
C K Daphtary and D N Mukherjee for the appellant
section N Chowdhury for respondent Nos 1 to 4
M C Setalvad and K P Gupta for respondent No 5
The Judgment of the Court was delivered by Hegde J
In this appeal by special leave the appellant challenges the decision of the High Court of Assam and Nagaland in refusing to set aside the order of the Assam Government dated June 16 1970 granting a contract to Respondent No 5 for wholesale supply of country spirit to Tinsukia and North Lakhimpur warehouses for three years from July 1 1970 to June 30 1973
The appellant is a Public Limited Company
Under a contract entered into between it and the Government of Assam it had the exclusive privilege of supplying country spirit to the two warehouses in the District of Lakhimpur for the period from July 1 1967 to March 3 1970
Sometime before that contract came to an end the Commissioner of Excise Assam invited tenders in sealed covers for the privilege of supplying the country spirit to retail vendors in the Upper Assam area comprising of the District of Lakhimpur and Sibsagar including Mikir Sub Division of the United Mikir and North Cachar Hills for the period of three years commencing from April 1 1970
In the notification issued by the Commissioner it was stated that preference will be given to the manufacturers of the spirit
In pursuance of the tender notice the appellant the 5th respondent and several others submitted tenders for the grant of the contract in question followed up by necessary licences
The appellant offered to supply the spirit at 74 P per London proof litre
Respondent No 5 quoted the 203 price at 95 P per London proof litre
Another tenderer namely Rampur Distillery and Chemicals Company Ltd offered the lowest rate of 60 P per London proof litre
The tender of Rampur Distillery and Chemicals Co Ltd was found to be defective and therefore it was rejected
The Government was not satisfied with any of the tenders
Thereafter by a _letter dated February 28 1970 it called upon all the tenderers to intimate to the Government whether they were willing to reduce their rate and if so to what extent
They were required to send their replies by March 10 1970
None of the tenderers excepting the 5th respondent was willing to reduce the rate quoted by them
The Managing Director of Respondent No 5 by his letter dated March 4 1970 informed the Government that his concern was willing to reduce the rate and he left it to the Government to fix any rate which it considered reasonable
He agreed to accept the rate fixed by the Government
The Government reduced the rate fixed by Respondent No 5 to 74 P per London proof litre and accepted its tender
Aggrieved by this decision the appellant moved the High Court of Assam and Nagaland under article 226 of the Constitution to quash the Government Order granting the contract to the 5th respondent and for issuing a direction to the concerned respondents not to give effect to the impugned order
The High Court rejected that application
Hence this appeal
At the very outset it is necessary to mention that no allegation of mala fides is made against the Government
The only question that we have to consider in this appeal is whether the impugned order was made in violation of any statutory provisions
It was urged on behalf of the appellant that the impugned order violates Rule 93 of the Rules framed under the Eastern Bengal and Assam Act No 1 of 1910 Eastern Bengal and Assam Excise Act 1910 to be hereinafter referred to as the Act
Before reading Rule 93 it is necessary first to refer to the relevant provisions in the Act ie section 19
That section reads  The Provincial Government may grant to any person on such conditions and for such period as it may think fit the exclusive privilege of manufacturing or of supplying to licensed vendors or of manufacturing and supply to licensed vendors any country liquor or intoxi cating drug within any specified local area
No grantee of any exclusive privilege under this section shall exercise the same until he has received a license in that behalf from the Excise Commissioner
 The validity of this provision was not challenged before us
This provision undoubtedly confers on the Government very wide powers in the matter of granting exclusive privilege of manufacturing or of supplying to licensed vendors or of manufacturing 204 and supplying to licensed vendors any country liquor or intoxicating drug within any specified local area
In the absence of any rule the Government could have exercised that power in the manner most advantageous to the State so long as it did not infringe any of the constitutional guarantees
In understanding the nature of the power under Rule 93 we have to bear in mind the fact that rules were framed by the Government itself in the exercise of the powers conferred on it under section 36 of the Act
Having said that much we may now proceed to consider the rules relating to contract for supplying the country spirit to warehouses
The rules relevant for our present purpose are Rules 91 to 93
We may now read those rules
Tenders for a contract for the exclusive privilege of supplying country spirit from a distillery to licensed vendors within a specified area for a specified period will be called for by the Excise Commissioner 1 8 months before the date from which the contract will take effect
Provided that the Provincial Government may if circumstances so require direct that tenders be called for by the Excise Commissioner within a lesser period than 18 months specified above
Any person tendering for a license specified in rule 91 shall apply in writing to the Excise Commissioner furnishing the following particulars 1 The name or names of the person or persons applying if a firm the name of every partner of the firm and if a company the registered name thereof 2 The applicant if he is other than the existing contractor shall also state in his tender that he is willing to take over under the provisions of rule 102 of these rules the existing vats and other permanent apparatuses in the warehouses within the area to be supplied and shall furnish a list of these in his application
The Excise Commissioner shall forward the tenders with his recommendations to the Provincial Government which reserves to itself the right to accept any tender
If none of the tenders are accepted by the Provincial Government on the ground that none of them on due consideration appear to be satisfactory they reserve also the right to grant the licence to any person who has not tendered and is considered suitable in all respects Provided that when a license is cancelled or suspended during the currency of the license the Provincial Government further reserves the right to grant the license to any one without calling for tenders
 205 It was urged on behalf of the appellant that the impugned order cannot be sustained firstly because the Government has nowhere stated that the tenders made were not acceptable to it on the ground that none of them on due consideration appear to be satisfactory
Secondly under Rule 93 they could not have entered into negotiations with any of the tenderers
Neither of these contentions are sound
From the facts stated earlier it is clear that the Government considered the tenders to be unsatisfactory and hence unacceptable
That is clear from its letter to the tenderers asking them to reduce the price quoted
It is true that ultimately it granted the contract to the 5th respondent at the very rate quoted by the appellant
In the very notification calling for tenders it had been mentioned that preference will be given to the manufacturers
Prima facie there is nothing wrong in giving preference to the manufacturers
It must be borne in mind that the Government is the purchaser
On good grounds it can prefer one seller to another
It is true that being a Government it cannot show any undue favour to any party but for good reasons it may prefer one party to another
There was justification in preferring a manufacturer to others
Evidently the idea was that there should be reasonable guarantee in the matter of supply of country liquor
It was not said that this preference was given for any collateral reason
The Govern ment does not require any special power for preferring one class of sellers to others so long as the classification made by it is based on rational grounds
It is true that no rule confers on the Government power to prefer one set of suppliers to others
But what is important is that no rule prohibits it
In the absence of any such rule section 19 of the Act confers on the Government such a power
It was next said that Rule 93 prohibits the Government to negotiate with any of the tenderers
We are unable to read that rule in that way
That rule does not prohibit any negotiations with the tenderers
But on the other hand it authorises the Government to negotiate with persons who have not tendered
Here again in the absence of any rule prohibiting the Government to negotiate with the tenderers the Government can fall back on its powers under section 19
We are unable to find out any rational basis for prohibiting the Government from negotiating with the tenderers
All that the Government is interested is to get country spirit at the cheapest possible rates and to have regular supplies
For achieving those purposes it can negotiate either with the tenderers or with others
It was faintly argued that before concluding its contract with the 5th respondent the Government should have given opportunity to the other tenderers to reduce the rates quoted by them
This contention is clearly a misunderstanding of the principles of natural 206 justice
No one has a fundamental right to get a Government contract
The appellant was not deprived of any of its rights
It was given an adequate opportunity to submit its tender
Its offer was considered
The same was not rejected on irrational grounds
In matters like the one before us no question of hearing the interested parties arises
All that is required is fair play
In the result we are unable to accept any of the contentions advanced on behalf of the appellant
Hence this appeal fails and the same is dismissed
But in the circumstances of the case we make no order as to costs
VPS Appeal dismissed


Summary:
The respondent invited tenders for supplying country spirit to retail vendors
In the notification issued by the Commissioner it was stated that preference will be given to manufacturers of spirit
Several persons submitted tenders including the appellant and the 5th respondent who was a manufacturer of spirit
The appellant offered to supply the spirit at 74 P and the 5th respondent at 95 P
The Government was not satisfied with any of the tenders and the tenderers were called upon to intimate to the Government whether they were willing to reduce their rate
None of the tenderers was willing to reduce the rate except the 5th respondent who agreed to accept the rate fixed by tin Government and the Government reduced his rate to 74 P and accepted his tender
The appellant challenged the order granting the contract to the 5th respondent but the High Court dismissed the petition
In appeal to this Court it was contended that  1 the impugned order could not be sustained because the Government nowhere stated that the tenders were not acceptable on the ground that none of them on due considerations appeared to be satisfactory as provided in r 93 of the Rules framed under the Eastern Bengal and Assam Excise Act 1910 and 2 under the rule Government could not have entered into negotiations with any of the tenderers
Dismissing the appeal HELD  1 It is clear from the letter to the tenderers asking them to reduce the price quoted that the respondent Government considered the tenders to be unsatisfactory and hence unacceptable
205B C 2 Rule 93 does not prohibit any negotiations with the tenderers
On the other hand it authorises Government to negotiate even with persons who have not tendered
In the absence of any rule prohibiting Government from negotiating with the tenderers Government can fall back on its powers under section 19
In order to get country spirit at the cheapest possible rates and to have regular supplies Government can negotiate with the tenderers or others
205F 3 a No one has a fundamental right to get a Government contract
In matters like this no question of hearing parties arises
All that is required is fair play
The appellant bad an opportunity to submit its tender which was considered and rejected on grounds which ate not irrational
306A b Section 19 of the Act undoubtedly confers on the Government very wide powers in the matter of granting the exclusive privilege of manufacturing or of supplying to licensed vendors any country liquor or intoxicating drug within any specified local art a
in the absence of a rule prohibiting Government from preferring one set of sellers to others LI208 Sup
CI72 202 Government could rely on the section for such a power so long as the classification made by it is based on rational grounds
Therefore the Government could exercise that power in the manner most advantageous to it provided it did not infringe any Constitutional guarantee
205G c It is true that the Government granted the contract to the 5th respondent at the rate quoted by the appellant and thus preferred the 5th respondent
But the Government as the purchaser can prefer One seller to another for good reasons though it cannot show any undue favour to any one
d In the notification calling for tenders it was mentioned that preference will be given to manufacturers and there was justification for preferring a manufacturer to others because there would be a reasonable guarantee in the matter of supply of country liquor
205C