Judgment:
M.K. Mukherjee, C.J.
1. At all material times Tulsidas Devidayal Property Trust, of which the appellants are the trustees, was the lessee in respect of six plots of land in Mazgaon Reclamation Estate belonging to the Bombay Port Trust (B.P.T. for short), the respondent herein. All the leases, under which the plots were being held, were for a period of 99 years, which expired on 10th December 1978. Before the expiry of the leases, the appellants asked for their renewal in terms of the renewal clause thereof which reads as under :
'Provided always and it is hereby declared that the said lessor his successors or assigns shall at or before the expiration of the term granted by these presents at the request and at the costs of the said Lessees their successors or assigns grant a new or renewed lease of the said lands presses mill buildings, hereditaments and premises hereby demised or any portion of the same to the lessees, their successors and assigns subject to the same conditions contained in these presents together with a power of future renewal.'
2. In reply thereto, the appellants were told by the B.P.T. that since the leasehold plots were in close vicinity of each other, it would be feasible to draw a composite lease of all the plots. Further correspondences ensued between the parties and ultimately by their letter dated May 11, 1984, the appellants, through their Solicitors, called upon the B.P.T. to renew the leases within one month failing which, it was pointed out therein, suit for specific performance of contract would be filed. The B.P.T. was also asked to treat the said letter as a notice under section 120 of the Major Port Trust Act, 1963. In reply thereto the B.P.T. informed the appellants that its Board had decided not to renew the leases. It was also pointed out that existence of renewal clause did not cast on the B.P.T. any obligation to renew the leases.
3. On receipt of the above reply the appellants requested the B.P.T. to reconsider its decision which was however turned down by the latter by its letter dated October 19, 1984, and the appellants were informed that no further correspondence in the matter would be entertained.
4. The appellants then filed a writ petition-out of which the present appeal arises, before a learned Judge of this Court seeking, inter-alia, enforcement of the renewal clause incorporated in the Indentures of lease. Initially the writ petition was dismissed in limine and aggrieved thereby, the appellants filed an appeal before a Division Bench of this Court which allowed the same, set aside the order of the learned Judge, and issued a Rule thereupon.
5. At the time of hearing of the Rule it was contended on behalf of the appellants that the B.P.T.'s refusal to renew the leases was violative not only of the contractual obligation under the leases but also Constitutional obligations as B.P.T. being a 'State' within the meaning of Article 12 of the Constitution of India, was bound to act rationally and responsibly. In elaborating the above contention it was submitted on their behalf that no reason, much less formidable and justifiable, was given by the B.P.T. for non-renewal of the leases.
6. In opposing the Rule the B.P.T. raised a threshold question as to the maintainability of the writ petition on the ground that it was filed to enforce specific performance of a contract and such a relief could be had or obtained in the competent Civil Court and not in the writ jurisdiction of this Court. While on that point it was also contended that, in their notice dated May 11, 1984 the appellants had threatened to file a suit within six months of the accrual of the cause of action in accordance with section 120 of the Major Port Trust Act, 1963 and having failed to file the suit within the statutory period, the appellants could not circumvent the statutory bar of limitation by taking recourse to a writ petition. It was further contended that the impugned decision taken by the Board was neither irrational nor arbitrary. It was lastly contended that disputed questions of facts were involved in the writ petition and those questions could not be effectively answered in writ jurisdiction. After hearing the parties at length the learned Judge dismissed the writ petition and aggrieved thereby the appellants have filed the present appeal.
7. In reiterating the contention raised before the learned Judge it was submitted on behalf of the appellants that as the B.P.T. was an instrumentality of the State, all its actions were to be informed by reasons and when judged in that context, there was no escape from the conclusion that the refusal on the part of the B.P.T. not to renew the leases, was wholly unjustified. Relying upon Article 14 of the Constitution of India it was submitted that the B.P.T. could not act in an arbitrary manner, more particularly when they had not ascribed any reason whatsoever for taking unilateral decision not to renew the leases even though at an earlier point of time they had agreed to do so. In support of their contention that the B.P.T. was required to comply with the requirements of Article 14 of the Constitution of India even in the field of contracts, our attention was drawn to the following passage from the judgment of the Supreme Court in the case of Kumari Shrilekha Vidyarthi etc. v. State of U.P. and others, : AIR1991SC537 :
'Unlike a private party whose acts uniformed by reason and influenced by personal predilections in contractual matters may result in adverse consequences to it alone without affecting the public interest, any such act of the State or a public body even in this field would adversely affect the public interest. Every holder of a public office by virtue of which he acts on behalf of the State or public body is ultimately accountable to the people in whom the sovereignty vests. As such, all powers so vested in him are meant to be exercised for public good and promoting the public interest. This is equally true of all actions even in the field of contract. Thus, every holder of a public office is a trustee whose highest duty is to the people of the country and, therefore, every act of the holder of a public office, irrespective of the label classifying that act, is in discharge of public duty meant ultimately for public good. With the diversification of State activity in a Welfare State requiring the State to discharge its wide-ranging functions even though its several instrumentalities, which requires entering into contracts also, it would be unreal and not pragmatic, apart from being unjustified to exclude contractual matters from the sphere of State actions required to be non-arbitrary and justified on the touch stone of Article 14.'
8. Having considered the facts of the instant case in the light of the above observations of the Supreme Court, we are unable to accept the contention of the appellants. In paragraph 6 of the affidavit-in-reply filed by the B.P.T. it has been stated that it requires the plots in question for its own use and the Board of Trustees of the B.P.T. has passed a resolution to that effect, being No. 341 dated 9th December 1980. It has next been stated therein that a decision was therefore taken to acquire the said plots and for that purpose immediately after the passing of the said resolution, the B.P.T. made a reference to the Ministry of Shipping and Transport in March, 1981 for permission to acquire and also requested that steps be taken for acquisition of the said premises under the provisions of section 32 of the Major Port Trust Act. Lastly, it has been stated therein that over the said proposal of acquisition, there was extensive correspondence with the Ministry concerned and ultimately being convinced of the need of the B.P.T. the Ministry requested the State Government on or about 20th August 1983 to adopt proceedings for acquiring the said premises.
9. Though the Resolution in question was not produced before the learned Single Judge, we have been furnished with a copy of the same, together with the note of the Secretary of the B.P.T. dated 4th December 1980. From the above documents we find that the reasons which weighed with the B.P.T. to pass the resolution were, inter alia, as follows :
'6.2 The present rent for the six plots, with an aggregate area of 29,434.73 sq.meters, amounts to Rs. 583.92 per month. In addition, service charges at 10 paise per sq.metre per month and amounting to Rs. 2,943.47 per month are being recovered. The rate thus works out to 20 paise per sq. metre per annum. As against this, the current letting rate is Rs. 137.50 per sq.metre per annum.
9.1 The plots are situated near Lakri Bunder in the Darukhana area. The Chief Engineer has stated that the plots fall in the Heavy Industrial Zone and constitute a large area (29,434.73 sq.metres in all) ideally suited for construction of warehouses or storages of containers. He has suggested that the plots should be acquired for Port's use.
9.2 The Docks Manager has stated that as the plots are in the vicinity of the docks, they will be very useful for constructing a warehouse. Construction of a bonded warehouse on the plot would enable him to release the existing warehouse in the docks.'
10. From a bare perusal of the above quoted passages it is evident that the proposal for acquisition was made and accepted by the Trustees of the B.P.T. for the larger interest of the public body and not to defeat the claim of the appellants. In other words, the reasons which prompted the B.P.T. to take a decision to acquire the plots - and not to give on private leases - are just, fair and reasonable; and by no stretch of imagination can it be said that such action of the B.P.T. was arbitrary and irrational, so as to suffer from the vice of Article 14 of the Constitution of India.
11. It was, however, submitted on behalf of the appellants, that even though the B.P.T. claimed that the above Resolution was passed in the year 1980, they are not apprised of the same, far less the contents thereof, when it rejected their claim for renewal of leases in the year 1984. Undoubtedly, in the fitness of things the B.P.T., as a responsible public body should have divulged the reasons, for which it was unable to entertain the claim of the appellants, immediately after the same was passed specially when they were corresponding with each other. But then, we do not find any reason to doubt the existence, validity or bona fide of the Resolution on that ground as it is supported by contemporaneous unimpeachable documents which have been produced before us.
12. Since the appeal must fail on the above score alone, we need not deal with and delve into the other reasons which also weighed with the learned Single Judge in dismissing the writ petition.
13. The appeal is, therefore, dismissed, but without any orders as to costs.