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TMI Blog1989 (4) TMI 315X X X X Extracts X X X X X X X X Extracts X X X X ..... ce of public purpose. - Civil Appeal No. 2036 of 1987. - - - Dated:- 27-4-1989 - MUKHARJI, SABYASACHI, KANIA, M.H. ANDRANGNATHAN, S., JJ. For the Appellant; Aspi Chinai, R.F. Nariman, Miss Darshna Bhogilal, K.K. Lahiri, R. Karanjawala, Ejaz Maqbool and Mrs. Manik Karanjawala For the Respondent : K.K. Singhvi, Brij Bhushan, Anil Kumar Gupta, G. Ramaswamy, Additional Solicitor General, U.J. Mukhija, B.S. Basania, Mrs. A.K. Verma, Arun Banga and D.N. Misra JUDGMENT: SABYASACHI MUKHARJI, J. This is an appeal by special leave from the judgment and order dated 19th November, 1986 of the learned Single Judge of the Bombay High Court. In this appeal this Court has been asked to examine the frontiers of judicial review of the action of a statutory authority, i.e. the Board of Trustees of the Port of Bombay, in evicting its tenant and granting the land in question to another tenant. However, in order to appreciate the controversy it is necessary to have a conspectus of the facts involved. The respondent Board of Trustees of the Port of Bombay is a statutory authority. Vast areas of South Bombay which are completely tenanted, are owned by the respondent. Being a statu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts associate firms. In or about 1963, however, the respondent applied for and got final plot No. 5 sub-divided into final plot 5A (659 sq. mts.) and final plot 5B (650 sq. mts.). The suit plot and M/s Dhanji Mavji s plot fell entirely in final plot 5B and as a result of the sub-division, Dhanji Mavji became the tenant/occupant of a major portion of plot 5B. It is asserted that appellant s associate firm and Chunilal Gupta fell in plot No. 5A and became the tenants/occupants of a major portion of plot No. 5A. In 197 1 the Municipality renewed the mill licence covering both the structures. It is the case of the appellant that in 1970-71, the respondent arbitrarily agreed to let the entire plot 5B including the portion which had been let to and in the possession of the appellant since 1933 to M/s. Dhanji Mavji, and thereby agreed to give him 650.6 sq. mrs. against his existing 390 sq. mts. Also the appellant offered to develop final plot 5B jointly with Dhanji Mavji in 1972-76. The appellant, however, asserted that it had offered to pay the revised rent that might be fixed by the respondent. The appellant objected to the offer made to Dhanji Mavji exclusively and pointed out that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nced rent. It is asserted that at the hearing the witnesses of the respondent had admitted that the plot would be given to Dhanji Mavji if the appellant was evicted therefrom. It also agreed that the respondent was under no statutory obligation to give the entire plot to Dhanji Mavji. On or about 31st March, 1981 the Trial Court dismissed the suit, holding that the appellant was admittedly using the plot for a rice mill for over 50 years to the knowledge of the respondent; and it would be legitimate to infer that the letting was for a manufacturing purpose. Hence, the notice of termination was bad. The Trial Court did not deal with the question of mala fide. On or about 13th January, 1984 the appellate court reversed that decision and also held that the issue of mala fide or arbitrariness was not relevant on the legality of the eviction proceedings. Aggrieved thereby, the appellant filed a writ petition No. 710/84 under Article 227 of the Constitution. The High Court dismissed the said writ petition by the judgment under appeal and upheld the order of eviction. The High Court accepted the finding of the appellate court that the notice of ejectment was valid notice and there was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cy was not necessary to enable proper development of the plot as required by the Town Planning Scheme. There was no policy requiring the entire final/reconstituted plot to be allotted exclusively to the person occupying the major portion thereof or requiring the other existing occupants to be evicted. Nor, it was submitted, was the allotment of the entire plot, pursuant to any such alleged policy. On the other hand, the appellant contended that the respondent s established policy was to offer/allot a final/ reconstituted plot for development to the existing occupants thereof as joint tenants. It was contended that this rational policy which, according to the appellant, would have fulfilled the public interest of development in accordance with the regulations of the Town Planning Scheme and at the same time would not have required or necessitated the eviction of the existing occupants. Contrary to the established rational policy of accommodating tenants by offering/allotting a new plot jointly to the existing occupants/tenants, the respondent arbitrarily, it was contended, and discriminatingly did not offer the new plot 5B to M/s Dhanji Mavji and the appellant (both of whom were e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purpose. Our attention was also drawn by Mr Chinai, learned counsel for the appellant, to the observations on Administrative Law by Wade, 5th Edn. at page 355. It was stated therein as follows: "Statutory power conferred for public purposes is conferred as it were upon trust, not absolutely-that is to say, it can validly be used only in the right and proper way which Parliament when conferring it is presumed to have intended." It, therefore, follows that the public authorities which enjoy this benefit without being hidebound by the requirements of the Rent Act must act for public benefit. Hence, to that extent, this is liable to be gone into and can be the subject-matter of adjudication. Learned Addl. Solicitor General Mr Ramaswami contended that the onus was entirely on the appellant and the burden lay on the defendant to establish that the Bombay Port Trust had terminated the tenancy or taken the proceedings in eviction not in public interest but for a collateral purpose or mala fide or that it had acted in a manner contrary to the provisions of Art. 14 of the Constitution. He is right so contending. It was further urged by Mr Ramaswamy that public law duties are owed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Art. 12 of the Constitution. In appropriate cases, as was observed in the last mentioned decision, actions uninformed by reason may be questioned as arbitrary in proceedings under Art. 226 or Art. 32 of the Constitution. But it has to be remembered that Art. 14 cannot be construed as a charter for judicial review of State action, to call upon the State to account for its actions in its manifold activities by stating reasons for such actions. The contractual privileges are made immune from the protection of the Rent Act for the respondent because of the public position occupied by the respondent authority. Hence, its actions are amenable to judicial review only to the extent that the State must act validly for a discernible reason not whimsically for any ulterior purpose. Where any special right or privilege is granted to any public or statutory body on the presumption that it must act in certain manner, such bodies must make good such presumption while acting by virtue of such privileges. Judicial review to oversee if such bodies are so acting is permissible. The field of letting and eviction of tenants is normally governed by the Rent Act. The Port Trust is statutorily exempted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rly and rationally, merely because it could do so under a contract. The High Court stated that though it might be accepted that a public body like the respondent should not act unreasonably or unfairly but it did not follow that every time they decided to take action against the contractual tenants, they had to decide the said action in terms of fairness, equity and good faith. In support of this proposition, reliance was placed on the observations of this Court in L.I.C v. Escorts, (supra). In this connection, Mr Chinai appearing for the appellant reiterated before us as he did before the High Court, that the basis of the legitimate assumption or expectation of which the statutory exemption had been granted by the Legislature to the Bombay Port Trust provided a guideline or touch-stone by which the conduct of the public authority which had been granted exemption, should be judged. And, according to him, the necessity of eviction in the instant case, must have been only in public interest. Reliance was placed on several decisions referred to hereinbefore. We are inclined to accept the submission that every activity of a public authority especially in the background of the assumpt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tten statement, Vol. 2 Paper Book, page 35. In this context, it was submitted that the decision of the Port Trust was not based on public purpose/interest, and as such was ultra vires of the powers of the Port Trust. It was contended that such a plea was justiciable in all civil suits. On behalf of the Port Trust authorities, however, the submission was that there was no obligation under the Bombay Port Trust Act to provide accommodation. So, there cannot be any governmental character. This we have already dealt with. Learned Add|. Solicitor General submitted that in evidence it has been mentioned by Katara (P.W. 1 at page 43, Vol.II) that the plot had been allotted to Dhanji Mavji since it was the policy of the Bombay Port Trust to allot a re-constituted plot to a person occupying a major portion of such plot. There was no challenge to this evidence .in cross-examination. On the other hand, he contended that there was no evidence on the alleged policy of the Port Trust of giving plots on joint tenancy to all occupants. According to him, in the letters addressed by the Port Trust at pp. 82, 123, 128 of Vol. 1 and in the letters by and on behalf of the appellant and/or their alleg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore right in contending that the appellant should not be allowed to contend that the decision of the Bombay Port Trust to allot the plot to the major holder is not one of the feasible means of achieving the objectives of development. It was not open to the appellant to contend that the Bombay Port Trust could have framed a better policy in a way in which both the goals, development and non-eviction of existing tenants, could have been achieved. Furthermore, we have to bear in mind that joint-allotment for the purpose of development pre-supposes cooperation. In this connection, it is necessary to remember that Mr Singhvi, appearing for the intervener, in C.M.P. No. 19447/88 indicated that the joint development was not possible because they were not willing to take it jointly. He also pointed out that the appellant was aware that the decision to allot this plot in his client s favour had been taken as early as 1973 and that it was within the knowledge of the present appellant that they had also put up constructions thereon at substantial cost. He urged that, though it is true that the lease in favour of the petitioner was terminated and the suit filed only in 1977, the fact is that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acted improperly. In that light the decision of the High Court must be affirmed though on a different emphasis. In the view that we have taken, it is not necessary for us to go into the question whether under Art. 227 of the Constitution, it was open to the High Court to go into the question of constitutional validity for which reliance was placed on the observations of this Court in Venkatlal G. Pittie Anr. v. Bright Bros (P) Ltd. [1987] 3 SCC 558 at 569 and Khalil Ahmed Bashir Ahmed v. Tufelhussein Samasbhai Sarangpurwala, [1988] 1 SCC 155. Reliance was also placed by Mr Chinai on the observations of the House of Lords in England in Wandsworth London Borough Council v. Winder, [1985] AC 461 at 505-507. In that case the local authority was under the agreement itself, required to fix rent under the statutory provision. It committed a breach thereof. Hence, it was held there that that was a breach of a contractual obligation enforceable under the Private Law and, therefore, justiciable. As we look upon the facts of this case, there was an implied obligation in respect of dealings with the tenants/occupants of the Port Trust authority to act in public interest/purpose- That re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot arbitrary or unreasonable but could be justified on grounds of public interest. He submitted that on the facts of the present case, the state of the pleadings at the various stages and its own findings on the facts, the High Court was not called upon to go into the larger issue at all and that its observations in this regard were purely casual. He submitted, however, that, without prejudice to these contentions, he would be willing to satisfy us on the facts of the present case that the action of the Port Trust was bona fide and based on policy and reason. He addressed us on this aspect and I agree, with respect, with the conclusion of my learned brother Sabyasachi Mukharji, J. that, on the facts of the present case, the action of the Port Trust was not improper and that there are no grounds to interfere with the same. 4. In view of the above conclusion on the merits and in view of my opinion that we have not heard full arguments on both sides on the general propositions contended for by Shri Chinai as to the parameters and scope of judicial review in such matters which are issues of far-reaching importance, I would like to refrain from expressing any final and concluded opini ..... X X X X Extracts X X X X X X X X Extracts X X X X
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