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TMI Blog2004 (1) TMI 96X X X X Extracts X X X X X X X X Extracts X X X X ..... and commerce. Space is scarce in Mumbai as it is an island, and demands on its land are heavy in view of the ever-growing industrial, commercial and economic activities. Due to the availability or continuously growing modern infrastructure at Mumbai large sections of the population from throughout the country continue to migrate to Mumbai, which, with its characteristically liberal metropolitan culture, open-heartedly accommodates anyone who seeks shelter in its arms. 3.The Bombay Port Trust Estate, admeasuring around 720 hectares (1800 acres approx.) of land is a huge stretch from Colaba to Raoli junction, including Pir Pau, Butcher Island, land at Titwala and other islands. The population is highly urbanized and dense. Out of the total area of 720 hectares the area under the jurisdiction of Estate Department of the BPT is around 336 hectares. Out of these, 306 hectares of area is occupied by the lessees of BPT holding leases of various tenures. Around 720 hectares of land was under intensive use for the Board's own activities around the year 1980. There were about 600 lessees. The lessees could broadly be divided into three categories: monthly or annual lessees, 15 years' term l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... delineated on the Port Trust estates and having regard to the various factors relevant to the valuation for the Port Trust estates ranging from Raoli Junction to Colaba, Pir Pau and Butcher Island. In all, the lands admeasure about 1800 acres and are inclusive of land at Titwala and Butcher and other islands. (ii) The estimate of market value should indicate values of lands both in vacant and occupied conditions and for different users. (iii) The market values should be given separately for each zone or block on two relevant dates, viz. as on 1st January, 1975 and 1st January, 1978 (these dates have since been modified at the time of signing the agreement as 1st January, 1975 and 1st January, 1980). (iv) To lay down a general formula for the guiding principles to enable the Port Trust to arrive at land values rationally at a future date and realize a fair share of the future increase in land values periodically." 4.At the point of time when Kirloskar Consultants embarked upon their task, there were 764 law suits filed by BPT in several courts and another 265 were in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... learned single Judge formed an opinion that the revision of rent by the BPT was arbitrary and capricious and therefore violative of the constitutional restraint on the Port Trust as an instrumentality of the State. In the opinion of the learned single Judge, the BPT was entitled to protect itself against erosion in the rentals as a result of inflationary trends, but excepting this no other factor could be taken into consideration and in any case the BPT could not afford to behave like a private landlord indulging into rack-renting by co-relating the rates of rent with market rates. The notices terminating the tenancies with the option for continuance subject to revision of rent based on Kirloskar Consultants report were struck down. Thus the decision of the learned Single Judge had the effect of nullifying the entire exercise undertaken by the BPT through Kirloskar Consultants. 6.The BPT preferred an intra-Court appeal which was dealt with by a Division Bench. On 28-6-1991, the matter came up for consideration before a Division Bench (consisting of Chief Justice P.D. Desai, and Justice Sukumaran). The Division Bench formed an opinion and expressed it to the parties that the matter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on' may be at 20 per cent of the above rates. Letting rates for future years from 1-10-1992 to 30-9-2012 for 'Non-Home Occupation' and 'Home Occupation' shall be as given in the Annexures". Notwithstanding the fixation of letting rates for 20 years for good and sufficient reasons, Board may review and revise the letting rates. (iv) Minimum rent may be for built up area up to 0.5 FSI irrespective of whether the area is built up or not. Minimum rent from 1-10-1982 to 30-9-1982 for non-hazardous trade/use will be Rs. 6.33 per sq. metre per month and for POL and hazardous trade/use will be Rs. 8 per sq. metre per month or for 0.5, FSI of built up area, whichever is more. The rent will increase proportionately to the built up area but maximum rent may not exceed the rent that would have been payable on the basis of Fair Market Rents recommended by Kirloskar Consultants Ltd. (v) In case of letting of BPT structures, the revised rate of rent per sq. metre of floor space may be at 2.5 times the letting rates. The repairs and maintenance of the structure shall be done by the tenant/lessee. For this purpose the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d at 12 months' rent at the applicable letting rate. (xii) In the case of monthly tenancies the applicable rates used to be more than the above rates to cover general property taxes. However, in view of the restrictive tenure, the tax liability is to be borne by BPT. (xiii) In the case of subsisting leases, assignments and consequent grant of lease on new terms would be at the prevailing letting rate at the relevant time and in relation to use. However, in case of amalgamation revised rent would be at the letting rate prevailing at the time of amalgamation subject to a ceiling that the revised rent will not be more than 12 times the earlier rent. Where lessee is already paying rent at the prevailing letting rate, assignment would be permitted on levy of revised rent at 25 per cent over the applicable letting rate or on levy of premium at 12 months rent at the applicable letting rate as may be desired by the lessee/tenant. (xiv) Sub-letting, change of user, transfer, occupation through an irrevocable power of attorney and any other breaches may be regularised, by levy of revised rent at the applic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n that if the action of the Board satisfied the test of being fair and reasonable, it was to be accepted. Leaving aside the grievances made by the lessees in respect of individual properties as in the opinion of the Division Bench it was not permissible to expand the ambit of enquiry in the proceedings pending before it and to determine whether a particular lessee was entitled to some other advantage or not, the Division Bench concentrated on the issue as to the right of the Port Trust to increase the rent and the modalities adopted by it in determining the rates at which the rent would be increased. On behalf of the Board a chart was tendered before the Division Bench indicating the rents which were paid by the lessees (who had filed petitions before the Court) prior to October 1, 1991, and the revised rent as suggested by Kirloskar Consultants and the modified rent fixed by the Port Trust in pursuance of the directions of the Division Bench with a view to demonstrate the fairness and reasonableness writ in the proposals. The chart was taken on record and annexed as exhibit 'B' to the judgment dated 11-3-1993 of the Court. The Port Trust made it clear to the Division Bench that it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the light of the reasons given by the learned single Judge and submissions that are made by the lessees in support of the said judgment to show that the said 'Compromise Proposals' of re-enhancement of rent suffer from the vice of arbitrariness. Since this question has not been gone into by the Division Bench of the High Court, we consider it appropriate to set aside the impugned judgment of the Division Bench of the High Court for reconsideration of the appeals in the light of the submissions that are made by the appellant lessees as well as intervenors with regard to the 'Compromise proposals' that are submitted by the Port Trust and consider the same on merits. It will be open to the respondents in the Letters Patent Appeals before the High Court as well as the intervenors to agitate the points which were agitated before the learned Single Judge and which have been decided against them by the learned Single Judge. If any of the appellants in these appeals had not intervened before the High Court in Letters Patent Appeals still will be open to him to move the High Court for intervention." (emphasis supplied) 11.The matter reached back and has been disposed of afresh vide impu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t-Trust can certainly increase the rent periodically and the occupants of the plots, on whatever terms and conditions at present, will also have to abide by the same. The appellant-Trust cannot claim any exemption from the provisions of the 1999 Act." As to the individual submissions or as to the cases of individual hardships, the court made certain observations and formed an opinion that by and large the same were already taken care of. 12.At the end the Division Bench allowed the Port Trust liberty to go ahead with the fixation of rent consistently with the observations made by the Court. 13.Feeling aggrieved by the decision of the Division Bench, Jamshed Hormusji Wadia has once again come up in the present appeal by special leave. There are other appeals by a few other lessees and a host of intervention, applications by other lessees. 14.The BPT has also filed a memo of cross-objections seeking relief beyond the one allowed by the Division Bench of the High Court. In substance, the BPT seeks its initial action based on Kirloskar Consultants' report being restored and sustained. On behalf of the appellants, not only the maintainability of cross-objections in an appeal under A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iness or capriciousness. It must act within the four corners of the statute which has created and governs it. All its actions must be for the public good, achieving the objects for which it exists, and accompanied by reason and not whim or caprice. 18.It was submitted by the learned Additional Solicitor General that not only does the Bombay Port Trust happen to be an instrumentality of State, it is also an owner-cum-landlord. When the private landlords are making money in the commercial capital city of Bombay, there is no reason why the Bombay Port Trust should be kept pegged down to abysmally low rates of rent which were settled decades before and at a point of time when in Bombay the land was available for occupation more or less like just a bounty of nature and people were being persuaded and encouraged by holding out incentives to come to Bombay and settle there. He submitted that the Bombay Port Trust has to manage and administer a huge port, most vital to the industrial and economic life of the nation, and it needs money for funding its activities. Every additional penny earned by Bombay Port Trust has to be and is spent for public good and the increase in rent would augment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is the purpose? Does the Legislatures intend to leave such entities absolutely unbridled and uncontrolled as landlords from the operation of the rent control legislation or do they do so with some hope and trust in such institutions? In M/s. Dwarkadas Marfatia and Sons (supra) a few decisions and authorities were cited before this Court. The observations of Chief Justice Chagla (as His Lordship then was) in Rampratap Jaidayal v. Dominion of India - 1952 L.R. 54 Bom. 927 were quoted with approval stating that while enacting rent control legislations, the Government seeks to achieve the object of protecting the tenants and preventing the rent from being increased and people from being ejected unreasonably; then it cannot be assumed that that the very Government would itself be indulging into those very activities which it was proposing to prevent by enacting such laws. The underlying assumption behind granting exemption from the operation of the rent control legislations was that the Government would not increase rents and would not eject tenants unless it was necessary to do so in public interest and a particular building was required for the public purpose. It was also pointed ou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... scheme. In P.J. Irani v. State of Madras and Anr. - AIR 1961 SC 1731 the Constitution Bench observed that a tenant in a building owned by the State or its instrumentality is not liable to eviction solely because the tenancy has terminated. The existence of rent control legislation, though not applicable to such building, is suggestive of the State's policy of protecting tenants because of the great difficulty of their obtaining alternative accommodation. 21.In our opinion, in the field of contracts the State and its instrumentalities ought to so design their activities as would ensure fair competition and non-discrimination. They can augment their resources but the object should be to serve the public cause and to do public good by resorting to fair and reasonable methods. The State and its instrumentalities, as the landlords, have the liberty of revising the rates of rent so as to compensate themselves against loss caused by inflationary tendencies. They can - and rather must - also save themselves from negative balances caused by the cost of maintenance, and payment of taxes and costs of administration. The State, as landlord, need not necessarily be a benevolent and good charit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Government approved valuers. The report submitted by Kirloskar Consultants reveals a very scientific and methodical research carried out by them, followed by recommendations for such action as logically flew from the facts found by them. Relevant historical and geographical facts were collected, analysed and given due weight and consideration for drawing deductions therefrom. There was nothing wrong in the procedure adopted by the Bombay Port Trust and in the decision taken on Kirloskars' Report but for the fact that the consequence which followed from the action taken on recommendations made by Kirloskar Consultants was a sudden and exorbitant increase in rates of rent which turned out to be manifold compared to the current rates at which the rent was being paid by the lessees. Two factors weighed heavily with the 1993 Division Bench decision of the High Court. The learned Judges felt that the proposals, if accepted, would result in the distinction between an ordinary private landlord and the Bombay Port Trust - a landlord yet an instrumentality of State, being lost. Secondly, accepting the current market rates of real estates and working out a return on such rates by reference to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th the High Court and this Court was one of reasonability and the need for striking a balance before taking a long leap in the direction of an upwards revision of rates. The stand throughout taken by the Board has to be appreciated. It has been agreeable to every reasonable suggestion made by the Court and has never treated the issue as to revision of rent as a matter of its prestige or with the ego of a landlord. This Court made a remand to the Division Bench of the High Court persuaded by the consideration that there were a few aspects of paramount significance which needed the attention of the Division Bench of the High Court. The fact remains that in the quest for an amicable, and if not so, then at least a reasonable resolution of the dispute, the Division Bench of the High Court as well as this Court have proceeded on an assumption that for the future, the settlement whether mutual or by dictum of the Court, shall centre around the Compromise Proposals. This Court wanted the Court to be assured for itself and the lessees to be satisfied for themselves that the Compromise Proposals were not just an arrow shot in the dark but were capable of being illuminated by assigning reaso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... This period is divisible into three parts i.e. (i) 1-10-1982 to 31-3-1994; (ii) l-4-1994 to 31-3-2000; and (iii) the period post 31-3-2000. In the 'Compromise Proposals' the Bombay Port Trust has agreed that for the period 1-10-1982 to 31-3-1994 the original terms would continue to apply and the lessees give up their contest, if any, for this period. (2) The period between 1-4-1994 and 31-3-2000 is the bone of contention. The Compromise Proposals proposed 15% return for non-residential use and 12% return for residential use as the fair market rent on the estate value. The Division Bench of the High Court has directed these rates to be reduced to 6% and 4% respectively. Instead of our undertaking an exercise afresh as to what would be a fair and reasonable return to the Bombay Port Trust, it is sufficient to record that all the learned Counsel for the parties excepting the Bombay Port Trust, have agreed that the lessees are prepared to accept the rates revised as 10% and 8% respectively. In our opinion, (1) the rates of 10% and 8% above said are very fair and reasonable and the Bombay Port Trust ought to accept the same; (2) the above said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fully settled as on 31-7-2000. 408 (vi) Number of eligible cases where parties have not approached for compromise. 916 28.It was pointed out at the Bar by the learned Addl. Solicitor General that by the time the Division Bench of the High Court pronounced its judgment, 408 lessees had accepted the Compromise Proposals mooted by the Board and also entered into new leases. Subsequent to the said judgment another 79 lessees have settled their disputes and accepted the Compromise Proposals. Thus 487 lessees have already taken advantage of the Compromise Proposals. This figure is very encouraging and shows that other lessees too should have joined in and should not at least now abstain from joining in the stream of settlements. So far as the Bombay Port Trust is concerned its stand is reflected in the following record made by the High Court, vide Para 7 of its Judgment dated 11/12-3-1993 : "It is no longer in dispute that the Port Trust does not wish to levy and recover rents as initially suggested by Kirloskar Consultants Ltd. and the Port Trust desires to levy and recover rent in accordance with the revised formula." 29.Vide Para 15 of the Memo of cross-objection (the maintaina ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e under Article 136 of the Constitution, cross-objections do not lie; secondly, the BPT having given a proposal to the Court though on being prompted by the Court to do so, the Bombay Port Trust should not be permitted to beat a retreat and withdraw from the compromise proposals or lay challenge to it in the facts and circumstances of the case. The compromise proposals have been held to be fair, just and reasonable, and challenge to it is devoid of any merit; and thirdly, the issue as to compromise proposals stands implicitly circumscribed by the order of remand dated 31-10-1995 and cannot be allowed to be reagitated at this stage. The first of these three needs elaboration. 35.BPT has filed cross-objections. A question of significance arises whether a cross-objection, as contemplated by Order 41 Ruse 22 of the Code of Civil Procedure, 1908, is at all maintainable in a civil appeal by special leave under Article 136 of the Constitution in this Court? No decision by this Court squarely dealing with the point has been brought to our notice. Alopi Nath & Ors. v. Collector, Varanasi, 1986 (Supp) SCC 693, too is not directly on the point but comes very near to it. A question as to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was held to be not maintainable. 37.An overview of the nature of jurisdiction conferred on this Court under Article 136 of the Constitution becomes necessary. The framers of the Constitution visualised the Supreme Court as a Court having a final and appellate jurisdiction on questions relating to the constitutional validity of laws. It was to have appellate jurisdiction in all cases involving a substantial question of law as to the interpretation of the Constitution except where an appeal had come to this Court on a Certificate given by the High Court. In spite of the Certificate having been refused, this Court could grant a special leave. (The Framing of India's Constitution, B. Shiva Rao, pp. 483 and 488). Article 136 as framed, opens with a non-obstante clause giving it overriding effect on all other provisions contained in Chapter IV of the Constitution and confers a discretionary jurisdiction on this Court to grant special leave to appeal from any judgment, decree, determination, sentence or order in any cause or matter passed or made by any Court or Tribunal in the territory of India. It is well-settled that Article 136 of the Constitution does not confer a right to appeal o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o settle the law so as to enable the High Courts and the courts subordinate to follow the principles of law propounded and settled by this Court and that this Court was not meant for redeeming injustice in individual cases, the experience shows that such self-imposed restrictions placed as fetters on its own discretionary power under Article 136 have not hindered the Court from leaping into resolution of individual controversies once it has been brought to its notice that the case has failed to deliver substantial justice or has perpetuated grave injustice to parties or is one which shocks the conscience of the Court or suffers on account of disregard to the form of legal process or with violation of the principles of natural justice. Often such are the cases where the judgment or decision or cause or matter brought to its notice has failed to receive the needed care, attention and approach at the hands of the Tribunal or Court below, or even the High Court at times, and the conscience of this Court pricks or its heart bleeds for imparting justice or undoing injustice. The practise and experience apart, the framers of the Constitution did design the jurisdiction of this Court to re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... jurisdiction and not by having recourse to Order 41 Rule 33 of the CPC though in some of the cases observations are available to the effect that this Court can act on the principles deducible from Order 41 Rule 33 of the CPC. It may be added that this Court has jurisdiction to pass such decree or make such order as is necessary for doing complete justice in any cause or matter pending before it. Such jurisdiction is conferred on this Court by Article 142 of the Constitution and this Court is not required to have recourse to any provision of CPC or any principle deducible therefrom. However still, in spite of the wide jurisdiction being available, this Court would not ordinarily make an order, direction or decree placing the party appealing to it in a position more disadvantageous than in what it would have been had it not appealed. 40.The exercise of appellate jurisdiction under Article 136 of the Constitution is not dependent on the provisions of Order 41 of the CPC. The Court may frame rules governing its own procedure and practice. No such rule has been framed by the Court which entitles or permits a respondent to file a cross-objection. 41.Right to file cross-objections is th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... allow that question to be re-agitated". Vashist Narain Sharma's case is a three-Judges Bench decision and though available was not placed before the Court deciding Sri Balu Ram's case, which again is a three-Judges Bench decision. Be that as it may, we are clearly of the opinion that in an appeal under Article 136 of the Constitution, the respondent cannot file cross-objections. If the judgment of the High Court was partly against the respondent, it was for it to have filed an application seeking leave to appeal. That right having been foregone by it and the period of limitation having expired, the cross-objections cannot be entertained. The filing of cross-objections by a respondent in this Court is an attempt at exercising the right of filing an application for special leave to appeal after the expiry of limitation and in a manner not contemplated by Article 136 of the Constitution. The judgment of the High Court was delivered on 1-8-2000. Leave was granted to the appellant on 13-8-2001 in the presence of Counsel for the respondent. Formal notice of lodgment of appeal was served on the respondent on 28-9-2001. The application by way of cross-objections has been filed on 31-7-2002 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; the rates of rent for the period up to 31-3-1994 shall remain as suggested in the 'Compromise Proposals'; (iv) the interest chargeable by the Board of Trustees of the Port of Mumbai in respect of arrears of rent for the period commencing 1-4-1994 up to the date of actual payment shall be calculated at the rate of 6% per annum; (v) subject to the above said modifications, all other terms and conditions of 'Compromise Proposals', shall remained unchanged; (vi) within a period of eight weeks from today lease deeds consistently with the 'Compromise Proposals', subject to the modifications as above said, shall be executed by the lessees and even if lease deeds are not executed the terms of 'Compromise Proposals' shall bind the lessees; (vii) such of the tenants as may wish to contend that there are certain real and material distinguishing features to be considered for the purpose of carving out an exception and relaxing the general terms and entitling them to reduction in the rates of rent applicable as above said, may file represent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... learned Adjudicator may impose costs on him which shall be payable to and recoverable under law by the BPT as arrears of rent. (xi) For the purpose of appointing an Adjudicator and dealing with application, if any, seeking resolution of difficulties, in terms of the preceding direction, we request the learned Chief Justice of the High Court of Bombay at Mumbai to assign this matter for being placed before any learned judge of his Court. We, on our part, suggest in the interest of expeditious disposal, that the matter may be assigned to any one of the Judges available in the High Court out of those who had earlier dealt with the matter (i.e., the learned Single Judge who passed the order dated 1/4-10-1990, the two learned Judges who passed the judgment dated 11/12-3-1993 and the two learned Judges who passed the order dated 1-8-2000). His acquaintance with the facts of the case would accelerate the hearing and disposal. However, this is only a suggestion and is not in any manner intended to fetter the power of the learned Chief Justice to assign the matters for hearing in the High Court. (xii) The issue as to the ap ..... X X X X Extracts X X X X X X X X Extracts X X X X
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