Hormusji Wadia Vs. Board of Trustees, Port of Mumbai & Anr  Insc 26 (13 January 2004)
Lahoti & Brijesh Kumar .
With C.A. No.5562/2001, C.A.
No.5561/2001, C.A. No.5``563-5564/2001, C.A. No.5565-5566/2001, C.A. No.5567-5568/2001, C.A.
No. _______/2004 (Arising out of SLP (C) 19877/2001), C.A. No. _______/2004
(Arising out of SLP (C) 6064/2002), C.A.
No. 3211/2002, C.A. No. _______/2004 (Arising out of SLP (C) 8657/2002) R.C. Lahoti,
granted in SLP (C) Nos.19877/01, 6064/02 & 8657/02).
Bombay Port Trust (hereinafter 'BPT', for short), presently constituted and
governed by the Major Port Trust Act, 1963, and now known as The Board of
Trustees of the Port of Mumbai, is an 'authority' within the meaning of Article
12 of the Constitution of India. It has been the subject matter of several
legislations governing its constitution, administration, powers and duties,
some of which are The Bombay Port Trust Act, 1873, The Bombay Port Trust Act,
1879 and the Major Port Trust Act, 1963. Bombay, presently known as Mumbai, continues to be the commercial capital of
the country. In spite of the development of several other ports having taken
place along the coasts of India, some of
them being of recent origin, the Bombay port continues to be the Gateway of India for international trade 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.
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.
lessees could broadly be divided into three categories: monthly or annual
lessees, 15 years' term lessees, and 99 years' or long term lessees, with or
without clauses for renewal. In case of monthly or annual leases, the municipal
taxes are borne by the BPT, while in cases of 15 years term and long term leases,
the liability to pay municipal taxes is with the lessees. The BPT Estate cannot
be sold; it is all held out on leases excepting for the land in the use of the
Port and for Port activities i.e. for the self requirement of the BPT. Leases
were created long back, some of which being around a century old. The lease
rents were revised and increased from time to time not as a matter of some
uniform policy decisions but only by way of adhoc arrangements.
year 1962, the World Bank advised BPT that its rate of return on its real
estate was hopelessly inadequate and needed to be reviewed. The Comptroller and
Auditor General of India too, in his report of the year
1979-80, shared the opinion of the World Bank and highlighted the obligation on
the part of the trustees to secure a fair and reasonable revenue for its estate
so as to attend better to its manifold public duties. The trustees felt
convinced that the Port Trust had to perform several functions under the Law
governing it which were in the nature of public duties to fulfill public
objects; that the expenditure on maintenance was gradually increasing and there
was disparity between realised rent and the billed rent; and that a minus rate
on return was actually being secured taking into account the expenditure
incurred by the Board on maintenance. All these factors persuaded the Board to
undertake a massive exercise for the revision of rent as also for the revision
of the terms and conditions of leases, whereunder the different categories of
lessees were holding land and estates from the Board. The Board by inserting
advertisements in all-India newspapers invited proposals from consultancy firms
and practicing valuers for ascertaining the market value of the land of the
Bombay Port Trust, including lands in docks and bunders. Out of the several
offers received, the choice of BPT fell on Kirloskar Consultants Ltd., Pune,
who were entrusted with the task on the following terms of reference:-
To give an estimate of market values of the Bombay Port Trust land (including
the lands in the Docks and Bunders) dividing them into convenient zones or
blocks to be 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
The estimate of market value should indicate values of lands both in vacant and
occupied conditions and for different users.
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
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." 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 the pipeline - proposed
to be filed.
1/3rd of the land of BPT was rented out, and lessees were holding the same on rates of rent
which had remained stationary for long number of years. The gigantic task
entrusted to them was well performed by Kirloskar Consultants Ltd. - the
experts in association with M/s. M.N. Dange & Associates, the government
approved valuers. The BPT(including its trustees, officers and staff) and the
several government departments - all rendered their assistance. A draft report
was submitted on October
18, 1980, and after
discussions with the Estate department and the Chairman of the BPT, the final
report was submitted on December
25, 1980. The report
runs into volumes. The experts in their report explained their approach and
methodology, took into account the factors influencing land prices in Bombay,
the legal aspects relevant to the land of BPT, constraints of BPT estate, blockwise
fair market rates during half a decade preceding the report, future values and
the factors of leasing of land viz. a viz. its need. The experts also carried
out international port studies. In the meeting of BPT held on August 23, 1982, the report of the consultants was
accepted, preceded by serious deliberations. Notices were issued to several
lessees terminating the tenancies but with an option that the lessees would
continue as lessees subject to their agreeing to pay the revised rent fixed in
pursuance of the report submitted by the experts.
of the lessees filed writ petitions under Article 226 of the Constitution of
India complaining that the BPT being an instrumentality of the State within the
meaning of Article 12 of the Constitution, it was bound to be reasonable and
fair in its dealing with the lessees. The increase in rent proposed by the BPT
was exorbitant, for example, the rate of rent which was Rs.66.44 in the year
1948 and which gradually increased to Rs.317.11 in the year 1981, was proposed
to be revised at Rs.4515.86. The petitions were disposed of by a learned single
Judge (S.M. Daud, J.) vide his judgment dated 1/4.10.1990.
learned single Judge dealt with two points around which the controversy had centred.
On the first point, the learned single Judge held that the proposed revision of
rent and the consequent demand of rent did not breach the provisions of the
Major Port Trust Act, 1963. On the second issue, the 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.
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 should
be put to an end and suggested that they would fix a cut-off date and the
number of years upto the expiry of which they would direct the lessees to pay
the increase in rent at a certain percentage to be decided by them, so that at
fixed intervals of years BPT would get permanently an automatic increase in
rent at the percentage fixed by them. The Division Bench called upon the BPT to
suggest some formula to enable them to arrive at a percentage of rent to be
fixed by them. It was also suggested that such formula could be made applicable
to other lessees of the BPT who were not parties in the appeal before the High
Court by giving a public notice under Order 1 Rule 8 of CPC.
Board reconsidered the matter and a fresh exercise was undertaken by the Board
so as to respond to the suggestion of the Court. The Board arrived at a formula
which has been termed as "compromise proposals", approved in the
meeting of the Board held on August 13, 1991,
and submitted to the Court.
not necessary to deal with the exchange of views amongst the trustees which
received consideration in the meeting of the Board. The summary of the
"compromise proposals", which is based on a detailed note submitted
by the office of the BPT for being placed before the Board, is as under:-
Nature of occupations may continue as at present on revised rents. Development
may be in accordance with the Development Plan and the Development Control Regulations
and BPT Master Plan including restructuring from time to time to cater for
port's and city's needs.
Occupations may be classified for the purpose of levy of rents either as 'Non-
Home Occupation' or as 'Home Occupation' as defined in the Development Control
Regulations on the basis of actual use.
Letting rates for 'Non-Home Occupation' per sq. metre of floor space per month
of built up area (as derived from valuation by Kirloskar Consultants) shall be
as under for the period 1.10.1982 to 30.9.1992.
Sassoon Dock Estate: Rs.22.03
Wellington & Apollo Reclamation Estates: Rs.26.91
Ballard and Mody Bay Estates: Rs.24.00
Estates (TPS): Rs.14.44
All other Estates: Rs.12.66 Letting rate for 'Home Occupation' may be at 20 per
cent of the above rates.
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".
the fixation of letting rates for 20 years for good and sufficient reasons,
Board may review and revise the letting rates.
Minimum rent may be for built up area upto 0.5 FSI irrespective of whether the
area is built up or not. Minimum rent from 1.10.1982 to 30.9.1992 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
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
lessee/tenant shall retain 0.5 times the rent and pay to BPT a net rent at
twice the letting rates.
Rent in respect of occupations having mixed use may be in proportion of the
floor space under use for 'Home Occupation' and 'Non-Home Occupation'.
case of change of use from 'Home Occupation' to 'Non-Home Occupation' rents
will be regulated at the letting rate for 'Non-Home Occupation' for the floor
space so changed with effect from date of change of use.
Rents shall be increased by 4 per cent every year over the rent in the previous
year from 1.10.1992.
Arrears for the period from 1.10.1982 upto 30.9.1991 in the case of monthly
tenancies and 15 monthly lease would be recovered respective of the built up
area at a flat rate of Rs.6.33 per sq. metre per month in case of non-hazardous
trade/use or at a rate of Rs.8 per sq. metre per month in case of POL and
hazardous trade/use with simple interest at 8 per cent per annum.
Arrears in respect of structures would be recovered at the applicable rate from
1.10.1987 upto 30.9.1991 with simple interest at 8 per cent per annum.
case of monthly tenancies/15-monthly leases where the pre-revised rent is more
than the rent under above terms or where allotments have been made through
auction/tender at rates higher than the rate applicable under the above terms,
the rents will continue at the earlier rates till the applicable letting rate
for a year exceeds that rate of rent where after the rent will increase to the
applicable letting rate and will further increase at 4 per cent annum.
In case of expired lease, fresh lease on new terms shall be at the sole
discretion of the Board. Grant of fresh lease may be considered taking into
account restructuring requirements for the City's Development Plan, BPT's
Master Plan and the Development Control Regulations.
a fresh lease is granted, arrears may be recovered in the form of premium at
the applicable letting rate for respective use with simple interest at 15 per
cent per annum from the date of expiry of lease till grant of fresh lease.
case of expired leases without a renewal clause, additional premium may be recovered
at 12 months' rent at the applicable letting rate.
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.
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.
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
Subletting, change of user, transfer, occupation through an irrevocable power
of attorney and any other breaches may be regularized by levy of revised rent
at the applicable letting rate at the time of such breach from the date of
lessee/tenant is already paying rent at the prevailing letting rate, such
regularization be permitted on levy of revised rent at 25 per cent over the
applicable letting rate or a levy of premium at 12 months' rent at the
applicable letting rate as may be desired by the lessee/tenant.
In case of hardship where effect of the terms is harsh, such cases may be
brought up before the Board for consideration on merits.
The above proposals are applied to properties failing outside the port limits
which is within the Board's power to sanction. For properties failing within
the port limits, proposals on the above lines may be made to Government for
proposals are made with deference to the suggestions by the Division Bench
consisting of Hon'ble Chief Justice and Hon'ble Justice Sukumaran for
acceptance of the respondents in the pending appeals. As regards the proposals
which do not affect the pending appeals, the Board may, after the result of
these appeals, consider extending the benefit of these proposals to the other
affected tenants. If the present proposals are not accepted, the Board reserves
the right to withdraw them. The proposals are without prejudice to the appeals.
The proposals do not ipso facto create any right in the tenants to the fresh
tenancy/lease but confine to only rents to be charged in the event of grant of
fresh tenancy/lease." Proceedings under Order 1 Rule 8 of the CPC were
initiated putting all the lessees of the Board on notice through publication in
newspapers. Several lessees filed applications for intervention and were
permitted to make submissions in respect of the compromise proposals. It
appears that in spite of the indulgence shown by the Court, the writ
petitioners and the interveners were not agreeable to accept the proposals. The
Division Bench (M.L. Pendse & A.A. Cazi, JJ) heard the Board, the writ
petitioners and the interveners at length. The Division Bench rightly formed an
opinion that the decision by the learned single Judge did not bring to an end
the entire controversy inasmuch as merely striking down the action of the Board
based on Kirloskar Consultants' report was not a solution to the problem.
Division Bench, on a review of the case law, formed an opinion 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 prpoperties 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 was not insistent on levying and recovering rents as was
initially suggested by Kirloskar Consultants and was satisfied with the revised
formula placed before the Court. Taking an overall view of several relevant
factors brought to the notice of the Court on behalf of the Port Trust as also
on behalf of the lessees, the Division Bench formed an opinion that in their
judgment "the revised proposals submitted by the Port Trust are extremely
reasonable and fair".
document entitled "revision of rents of monthly tenancies/15 monthly
leases - compromise proposals" was marked as exhibit 'A' and annexed with
the judgment. The Division Bench put its seal of approval on the compromise
felt satisfied with the judgment of the Division Bench.
the grievances of some of the lessees persisted and resulted in filing of a few
SLPs in this Court. The principal appellant before us namely Jamshed Hormusji Wadia
too was one of the appellants. Mainly three grievances were raised before this
That the High Court was in error in not permitting the individual lessees to
make their submissions about their complaint in the matter of increase in rent
in relation to their particular leases;
That no proper justification has been offered by the Port Trust in support of
the 'compromise proposals'; and (iii) That the Division Bench of the High Court
has not considered the matter of revision of rents on the basis of the report
of the Kirloskar Consultants on merits and there is no consideration of the
reasons that were given by the learned single Judge for setting aside the
enhancement of the rates by the Port Trust on the basis of the Kirloskar
Bench of two learned Judges of this Court granted leave in all the Special
Leave Petitions and disposed of the Civil Appeals by an order of remand dated
31.10.1995. The judgment of the Division Bench was set aside and the case was
remanded for decision afresh in the light of the following direction made by
this Court:- "Having regard to the aforesaid submissions urged on behalf
of the appellants, we are of the view that it is necessary that the 'Compromise
proposals' submitted by the Port Trust are considered by the Division Bench of
the High Court in 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' fo renhancement of rent suffer from
the vice of arbitrariness.
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 welll 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) The matter reached back and has been
disposed of afresh vide the impugned judgment dated 1.8.2000 by a Division
Bench (N.J. Pandya & Dr. D.Y. Chandrachud, JJ). This time the Division
Bench has formed an opinion that so far as the exercise of the Port Trust to
call consultants for determining the fair market rate of that property is
concerned, nothing wrong can be found with that. The subsequent compromise
proposals were only by way of a softening blow to relieve the lessees of the
hardship caused by revision of rent. So far as the question of interest on
arrears is concerned, the Division Bench thought that the rate of interest deserved
to be confined to 6% per annum only. The Division Bench also held that the Kirloskars'
report and the action based thereon was already set aside by the learned single
Judge and in their opinion even the so-called 'compromise proposals' did not
meet with the test of fairness and reasonableness. Then the Division Bench
For granting upwards revision, we will divide the entire period starting from
1981 to 2000 into two parts. ............. the first period will commence from
the year 1981 and end with 31.3.1994. The second period will start on and after
view of the stand of the Port Trust itself before the Supreme Court in S.L.P. upto
31.3.1994 it should be permitted to apply its original norms of proper revision
as it was doing right upto the year 1981, periodically. It may accordingly
revise the same upto 31.3.1994.
to the second period, i.e. on and after 1.4.1994, the revision will have to be
on the basis of 6% of the market rate instead of 15% for non-residential use and
for residential purpose the return shall be worked out at the rate of 4% on the
market value. At this rate the Kirloskars' report has to be worked out on and
from 1994 till 31.3.2000.
and after 1.4.2000, the new Maharashtra Rent Control Act 1999 has come into
force. The Bombay Port Trust has been omitted from the definition of
"local authority". The 1999 Act has received Presidential assent and
the provisions of Article 254 of the Constitution of India will, therefore,
come into play. The appellant-Trust will stand governed by the provisions of
the Maharashtra Rent Control Act, 1999. To the extent permissible therein, the
appellant-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.
appellant-Trust cannot claim any exemption from the provisions of the 1999
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.
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.
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
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 Article 136 of the Constitution has been objected
to, but it has also been submitted that the cross- objections are devoid of any
have heard the learned counsel for the parties, i.e. several appellants, the
BPT as also the interveners. The matters have been argued from very many
angles. On 12.11.2002, when we were almost reaching the end of the hearing, an
offer for settlement was mooted on behalf of the appellants. The terms of the
offer were reduced into writing and tendered "without prejudice" to
the learned Addl. Solicitor General appearing for the BPT. The hearing was
adjourned to enable the learned ASG to obtain instructions from the BPT who
could report if it was inclined to accept the offer or offer its comments or
make counter-offers. On 3.12.2002, the learned ASG filed the response of the
BPT to the terms of settlement proposed on behalf of the appellants. Any mutual
settlement was not possible, it was reported. Further hearing was resumed and
questions arising for decision in these appeals and several intervention
applications can suitably be formulated as under:-
What is the status of the BPT as a landlord? Is it free to charge any rent from
its lessees as it pleases in view of its having been exempted from the
operation of the Rent Control Law or is it only to act in a fair and reasonable
manner in the matter of dealing with its lessees and charging rent from them?
Whether the cross-objections preferred by the BPT are maintainable and, if so,
to what effect?
Can the grievances raised by individual lessees be said to have been
satisfactorily disposed of by the Division Bench of the High Court?
The relief to which the parties are entitled.
Port Trust is an instrumentality of State and hence an 'authority' within the
meaning of Article 12 of the Board of Trustees of the Port of Bombay (1989) 3
amenable to writ jurisdiction of the Court. This position of law has not been disputed
by either party. The consequence which follows is that in all its actions, it
must be governed by Article 14 of the Constitution. It cannot afford to act
with arbitrariness 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.
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
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 the
resources of the Bombay Port Trust and thereby strengthen its hands in
rendering better service to the nation. The learned Addl. Solicitor General
pointed out from facts and figures that most of the tenants were indulging in
such activities as were not expected of them such as sub-letting,
encroachments, unauthorized constructions and so on. They were pocketing huge
sums of money by inducting sub- tenants and collecting premiums and exorbitant
rents while they were not prepared to bear even with a reasonable increase of
rent proposed by the Bombay Port Trust. The Bombay Port Trust was being dragged
into endless litigation by the tenants. It was pointed out that as on 30.9.2002
there were 1900 cases pending in different courts at different levels all based
on landlord-tenant relationship. This litigation was consuming a good chunk of
the Bombay Port Trust's earnings, time and energy, all going waste.
learned Addl. Solicitor General made a very passionate appeal submitting that
the Bombay Port Trust did not intend to indulge in rack-renting, but at the
same time the Court ought not to deny ordinary rights available to any
reasonable landlord under the ordinary law of the land. The Bombay Port Trust
should not be placed in a worse position than that of an ordinary landlord
merely because it happened to be an instrumentality of State. Needless to say,
such submission made by the learned Addl. Solicitor General was only a
defensive response to the vehement attack laid on the Bombay Port Trust's
proposals to enhance the rent paid by the appellants and interveners.
position of law is settled that the State and its authorities including
instrumentalities of States have to be just, fair and reasonable in all their
activities including those in the field of contracts. Even while playing the
role of a landlord or a tenant, the State and its authorities remain so and
cannot be heard or seen causing displeasure or discomfort to Article 14 of the
Constitution of India.
common knowledge that several rent control legislations exist spread around the
country, the emergence whereof was witnessed by the post world war scarcity of
accommodation. Often these legislations exempt from their applicability the
properties owned by the Government, semi- Government or public bodies,
Government-owned corporations, trusts and other instrumentalities of State.
What 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 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 out that the
Government or local authority or the Board would not be actuated by any
profit-making motive so as to unduly enhance the rents or eject the tenants
from their respective properties as private landlords are or are likely to do.
Board - 1954 SCR 572 recognised that the basis of differentiation in favour of
public authorities-like the Bombay Port Trust - was on the ground that they
would not act for their own purpose as private landlords do but would act for
public purposes. The Court held in Dwarkadas Marfatia (supra) that the public
authorities which enjoy the benefit without being hidebound by the requirements
of the Rent Act, must act for public benefit and where they fail to do so they render
themselves amenable to adjudication under civil review jurisdiction of the
Court. A Division Bench of the Bombay High Court presided over by Mrs. Sujata Manohar,
J (as Her Lordship Maharashtra & Ors. - 1992 Bom. L.R. 1356 that the
exemption from the provisions of the rent control law casts an obligation on
the State and its instrumentalities and authorities to comply with the public
policy of ensuring a fair return of investments without charging exorbitant
rates based on the prevailing market price of the land. Thus, a balance has to
be struck between ensuring a fair return on investment and charging exorbitant
rates based on the prevalent market prices of land, which would be of utmost
relevance to any other landlord. The State Government in order to justify a
steep increase in rent, cannot plead exploitative increases in prices of lands.
Reference in this connection may also be made to Ors. - (1991) 1 SCC 212,
wherein this Court held that while acting in the field of contractual rights
the personality of the State does not undergo such a radical change as not to
require regulation of its conduct by Article 14. It is not as if the
requirements of Article 14 and contractual obligations are alien concepts which
cannot co-exist. Our Constitution does not envisage or permit unfairness or
unreasonableness in State action in any sphere of activities contrary to the
professed ideals in the Preamble. Exclusion of Article 14 in contractual
matters is 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.
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 charitable Samaritan. The felt need for expanding or
stimulating its own activities or other activities in the public interest
having once arisen, the State need not hold its hands from seeking eviction of
its lessees. However, the State cannot be seen to be indulging in rack-renting,
profiteering and indulging in whimsical or unreasonable evictions or bargains.
balance has to be struck between the two extremes.
been exempted from the operation of rent control legislation the courts cannot
hold them tied to the same shackles from which the State and its
instrumentalities have been freed by the legislature in their wisdom and
thereby requiring them to be ruled indirectly or by analogy by the same law
from which they are exempt. Otherwise, it would tantamount to defeating the
exemption clause consciously enacted by the Legislature. At the same time the
liberty given to the State and its instrumentalities by the statute enacted
under the Constitution does not exempt them from honouring the Constitution
continue to be ruled by Article 14. The validity of their actions in the field
of landlord-tenant relationship is available to be tested not under the rent
control legislation but under the Constitution. The rent control legislations
are temporary, if not seasonal; the Constitution is permanent and all time law.
backdrop of these principles let us test what the Bombay Port Trust proposed to
do. The learned Addl. Solicitor General has pointed out by filing a chart
incorporating requisite facts in requisite details that a good number of
lessees were running into huge arrears and were not willing to pay the rent
even where the rates were nominal. Sub-letting, encroachments, and unauthorized
constructions were rampant.
observations made and the wise counsel tendered by the World Bank and the
Comptroller and Auditor General of India could not have been ignored as the
Bombay Port Trust as also its Trustees could otherwise be accused of inaction.
In the aforesaid background the Port Trust and its Trustees acted very
reasonably. They invited competitive quotations for providing professional
service to them by inviting financial experts and valuers through an all-India
public invitation. The Kirloskar Consultants Ltd., whose expertise and
competency is not in question, performed the gigantic task entrusted to them
with the assistance of 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 estate and working
out a return on such rates by reference to the market trends, would tantamount
to indulging into profiteering.
Division Bench rightly held out the hope and trust that the Bombay Port Trust
would act reasonably as also that the lessees would be willingly prepared for a
reasonable increase. Another factor which weighed heavily with the Division
Bench was that the lessees whose rent was sought to be revised, were all
continuing on the premises holding the property as tenants for quite some
length of time, and it was not a case where the property was proposed to be let
out for the first time or by way of fresh lease to aspirants bidding with each
other. The Division Bench rightly put the ball in the court of Bombay Port
Trust calling upon it to take the lead and respond with a reasonable proposal,
and also indicated its desire to intervene and find out a solution which would
be acceptable to the Bombay Port Trust as also to all the lessees and bring to
an end the multiple litigation already pending in courts and to avert the
likelihood of further litigation in waiting.
proceedings of the Board reveal the Trustees having fallen on the horns of a
dilemma. Any step in retreat would have a toning down effect on the voluminous
exercise undertaken by them through Kirloskar Consultants and at the same time,
as is writ large, the Court was pressing for a settlement and as an
instrumentality of State they could not afford to be indifferent to the trust
and faith reposed in them by the Division Bench of the High Court. The matter
came up before the Board in several meetings. There were exchanges of views and
dissents. Yet the Board succeeded in arriving at a resolution shaped as
'Compromise Proposals' and submitted the same for the consideration of the
Court. But the lessees would not agree.
Court found the 'Compromise Proposals' reasonable and meeting its approval. The
Compromise Proposals were taken on record and made a part of the Division Bench
judgment dated 11/12.3.1993.
have set out in the earlier part of this judgment, the order of remand dated
31.10.1995 made by this Court. A careful reading of the judgment of the High
Court and the order of remand passed by this Court together significantly reveals
that none has cast any reflection __ much less any adverse one __ on the report
of Kirloskar Consultants and the decision of the Board based thereon. The only
consideration which prevailed with 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 reasons. At the same
time, though all the lessees were to be treated alike so far as laying down of
common standards governing different classes of leases was concerned, care had
also to be taken to redeem the grievances of certain individual lessees who
could make out a case for further legitimate reduction in rates on account of
peculiarities attaching with the land or lease held by them. Later, while
delivering the 2000 judgment, which is impugned herein, the Division Bench
certainly assumed a wider field of jurisdiction than the one which had been
permitted by this Court and entered into examining the whole controversy afresh
and as if all the contentions of all the parties were open before it, which
view of the High Court, in our opinion, cannot be countenanced on a reading as
a whole of the order of remand passed by this Court along with the judgment of
the Division Bench which was impugned then.
opinion, the matter between the parties has to be decided by treating the
Compromise Proposals dated 13th August 1991 as the base. Any going behind would
unsettle the settled issues __ expressly or by necessary implication. We made
this clear to the learned counsel for the parties on 12.11.2002, when we
adjourned the hearing with the earnest hope that the parties would show a fine
gesture of "give a little and take a little" and thereby relieve the
Court from the need of pronouncing its verdict in place of a mutual settlement
by the parties which is always welcome. We may place on record that during the
course of the hearing we suggested to the learned counsel for the parties that
instead of perpetuating the life of the litigation they may advise their
respective clients suitably and persuade them to arrive at a settlement using
their good offices. We place on record our appreciation of the positive gesture
shown by all the learned senior counsel, their assisting counsel and the other
learned counsel appearing for the parties and the interveners.
discussion and exchange of views across the Bar the scope of controversy has
very much narrowed down as stated hereunder:-
was agreed at the Bar that in view of the Maharashtra Rent Control Act 1999,
having been brought into force w.e.f. 31.3.2000, the controversy among the
parties can be treated safely as confined to the period from 1.10.1982 to
31.3.2000. This period is divisible into three parts i.e.
1.10.1982 to 31.3.1994;
1.4.1994 to 31.3.2000; and
period post 31.3.2000.
'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.
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.
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.
rates of 10% and 8% abovesaid are very fair and reasonable and the Bombay Port
Trust ought to accept the same;
above said rates are of general application. Shri Fali S. Nariman, the learned
senior counsel appearing for J.H. Wadia, the appellant, insisted that the piece
of land held by the appellant on lease suffers from several adversities and,
therefore, some exception must be carved out in favour of this appellant.
contentions were advanced by a few other lessees. We find some merit in the
submissions so made as we would illustrate a little after. However still, we
feel that we cannot enter into the factual enquiries referable to individual
lessees and record any findings thereon. A suitable mechanism devised in this
regard would take care of such individual grievances and would also bring the
dispute to an end.
far as the period post 31.3.2000 is concerned there is a controversy. According
to the lessees the Maharashtra Rent Control Act, 1999, applies to Bombay Port
Trust and its premises including land and buildings and the Act would take care
of the rent as well. Shri R.N. Trivedi, the learned Addl. Solicitor General,
has vehemently opposed this contention and submitted that 1999 Act does not
apply to the Board and its estates. He submitted that the question is not free
from difficulty and would need additional pleadings and documents which are not
available on record and it would be safer if that plea is left out from
adjudication insofar as the present appeals are concerned.
appreciate the abovesaid three zones of controversy now surviving, we need to
take note of some additional facts and events, part of which have occurred
during the pendency of these proceedings. Excerpts from the proceedings of the
meeting of the Board of Trustees of the Port of Mumbai held on 14.11.2000 are
available on record. They give an indication of the number of lessees with whom
the terms could be settled and were settled. The status of cases with lessees
as on 31.7.2000 as reflected in the minutes of the meeting dated 14.11.2000 is
as under :-
Total number of cases where compromise can be considered including cases where
suits have not been filed. 2490
Number of cases where applications are received for compromise as on 31.7.2000.
: Applications received but cannot be compromised due to reservations, etc. 37
Eligible applications received for compromise. 1574
Number of cases fully settled as on 31.7.2000 408
Number of eligible cases where parties have not approached for compromise. 916
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 :
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."
Vide para 15 of the Memo of cross objection (the maintainability whereof shall
be dealt with shortly hereinafter) the Bombay Port Trust has stated :
is further submitted that if the impugned judgment were accepted in toto, as a
package, and as it stands today, the Port Trust, would, without prejudice to
its submissions and contentions in law, be willing to implement the impugned
judgment and order." The BPT is rightly happy with the Compromise
Proposals, in the prevailing circumstances and situation.
as the individual grievances are concerned we need not make a detailed
statement thereof by placing on record the cases of several individual lessees.
By way of illustration it would suffice to state the grievance of only one of
them, namely, J.H. Wadia, who has been vigilantly fighting his case craving for
justice accompanied by sympathy and consideration for the circumstances in
which the property held by him is situated. It is pointed out that a storm
water drain flows underground across the full length of the land leased out to
him and thereon no development can take place according to the Municipal Laws.
only development which the appellant has been able to make over the property,
is the construction of sheds wherein only timber business is being run. If Wadias
can neither make use of the entire property nor develop it fully in the same
manner as others can, they legitimately deserve some relaxation over the others
being allowed to them. The status and nature of the land held by the Wadias, as
pointed out by them, finds support from the documentary evidence available and
was noticed by Kirloskar Consultants also in their report.
will take care of the individual grievances in the operative part of the
judgment by making suitable directions in that regard.
agree with the submission of the learned Addl. Solicitor General that in the
absence of adequate material being available on record the question as to the
applicability of the Maharashtra Rent Control Act, 1999, to the Bombay Port
Trust and its premises should not be decided in the present case and should
rather be left open to be taken care of in appropriate proceedings at an
appropriate point of time.
digress a little to deal with the issue as to the maintainability of the cross
objections. For three reasons we find the cross objection not entitled to
consideration on merits :
in an appeal by special leave 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.
first of these three needs elaboration.
has filed cross-objections. A question of significance arises whether a
cross-objection, as contemplated by Order 41 Rule 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.
too is not directly on the point but comes very near to it. A question as to
the admissibility of cross-objections under a local law of Uttar Pradesh arose
for the consideration of this Court.
U.P. Municipal Corporations Adhiniyam, 1959, has constituted a tribunal with
power and functions of the Court to deal with reference arising out of
acquisition of land for U.P.
Corporation under the Land Acquisition Act 1849. The Indian Evidence Act 1872
and the Code of Civil Procedure, 1908, apply to all proceedings before the
Tribunal. Its decisions are final subject to appeal under sub-Section (1) of
Section 381 which reads as under:-
appeal to the High Court shall lie from a decision of the Tribunal, if__
Tribunal grants a certificate that the case is a fit one for appeal, or
High Court grants special leave to appeal, provided that the High Court shall
not grant such special leave unless the Tribunal has refused to grant a
certificate under clause (a). xxx xxxx xxx
Notwithstanding anything contained in the foregoing provisions, no appeal shall
lie under this section unless the appellant has deposited the money which he is
liable to pay under the order from which the appeal is filed.
Subject to the provisions of sub-section (1), the provisions of the Code of
Civil Procedure, 1908, with respect to appeals from original decrees, shall, so
far as may be, apply to appeals under this Act.
An application for the grant of a certificate under clause (a) of sub- section
(1) may be made within thirty days from the date of decision of the Tribunal.
An appeal against the decision of the Tribunal may be preferred within sixty
days from the date of the grant of the said certificate.
An application to the High Court for special leave to appeal under clause (b)
of sub-section (1) may be made within sixty days from the date of the order of
refusal of the said certificate.
xxx A question arose whether cross-objections are maintainable before the High
Court in an appeal under Section 381. This Court held that the provision of
Order 41 Rule 22 of the CPC is inconsistent with the provisions of the said Act
inasmuch as an appeal is admissible only by a certificate or special leave
under Section 381. "It is difficult to contend that a cross-objection is
anything other than an appeal as generally understood in law." The
cross-objection was held to be not maintainable.
overview of the nature of jurisdiction conferred on this Court under Article
136 of the Constitution becomes necessary.
framers of the Constitution visualized 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 & 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 on any party; it confers a discretionary
power on the Supreme Court to interfere in suitable cases. The very conferment
of the discretionary power defies any attempt at exhaustive definition of such
power. When no law confers a statutory right to appeal on a party, Article 136
cannot be called in aid to spell out such a right. (M/s Bengal Chemical &
Pharmaceutical Works Ltd. - 1959 Suppl.(2) SCR 136, The 391 and Basudev Hazra -
(1971) 1 SCC 433. Article 136 cannot be read as conferring a right on anyone to
prefer an appeal to this Court; it only confers a right on a party to file an
application seeking leave to appeal and a discretion on the Court to grant or
not to grant such leave in its wisdom. The discretionary power of this Court is
plenary in the sense that there are no words in Article 136 itself qualifying
power is permitted to be invoked not in a routine fashion but in very
exceptional circumstances as when a question of law of general public
importance arises or a decision sought to be impugned before this Court shocks
overriding and exceptional power has been vested in this Court to be exercised
sparingly and only in furtherance of the 1950 SCR 453 cautioned that the wide
discretionary power vesting in this Court should be exercised sparingly and in
exceptional cases only when special circumstances are shown to exist. In
another Constitution Bench (The Bharat Bank Ltd., Delhi - 1950 SCR 459) Mahajan,
J. (as His Lordship then was) reiterated the caution couching it in a different
phraseology and said that this Court would not under Article 136 constitute
itself into a Tribunal or Court just settling disputes and reduce itself into a
mere Court of error. The power under Article 136 is an extraordinary power to
be exercised in rare and exceptional cases and on well-known principles.
said and done, in spite of the repeated pronouncements made by this Court
declaring the law on Article 136 and repeatedly stating that this Court was a
Court meant for dealing only with substantial questions of law, and in spite of
the clear constitutional overtones that the jurisdiction is intended to 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 remain an extraordinary jurisdiction whether at
the stage of granting leave or at the stage of deciding the appeal itself after
the grant of leave. This Court has never done and would never do injustice nor
allow injustice being perpetuated just for the sake of upholding
decisions were brought to the notice of this Court by the learned Additional
Solicitor General wherein this Court has made a reference to Order 41 Rule 22
of the CPC and permitted the respondent to support the decree or decision under
appeal by laying challenge to a finding recorded or issue decided against him
though the order, judgment or decree was in the end in his favour.
Illustratively, see Ramanbhai Ashabhai Patel (1965) 1 SCR 712; Management of
Northern Railway Co-operative Society Ltd. (1967) 2 SCR 476; Bharat Kala Bhandar
Ltd. - (1965) 3 SCR 499. The learned ASG is right. But we would like to clarify
that this is done not because Order 41 Rule 22 CPC is applicable to appeals
preferred under Article 136 of the Constitution; it is because of a basic principle
of justice applicable to Courts of superior jurisdiction. A person who has
entirely succeeded before a Court or Tribunal below cannot file an appeal
solely for the sake of clearing himself from the effect of an adverse finding
or an adverse decision on one of the issues as he would not be a person falling
within the meaning of the words 'person aggrieved'. In an appeal or revision,
as a matter of general principles, the party, who has an order in his favour,
is entitled to show that even if the order was liable to be set aside on the
grounds decided in his favour, yet the order could be sustained by reversing
the finding on some other ground which was decided against him in the court
below. This position of law is supportable on general principles without having
recourse to Order 41 Rule 22 of the Code of Civil Procedure.
may be had to a recent decision of this Court in 224. This Court being a Court
of plenary jurisdiction, once the matter has come to it in appeal, shall have
power to pass any decree and make any order which ought to have been passed or
made as the facts of the case and law applicable thereto call for.
power is exercised by this Court by virtue of its own 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.
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.
to file cross-objections is the exercise of substantive right of appeal
conferred by law. Cross-objections partake of the right of preferring an
appeal. The procedure is different and so is the rule of limitation (See,
Municipal Corporation of Delhi Subha Reddy (1999) 4 SCC 423). Against a
decision by the High Court or Tribunal which is partly in favour of one and
partly in favour of the other, both the parties are aggrieved and each one of
them has a right to move an application in this Court seeking leave to appeal.
One who does not do so and allows the prescribed period of limitation to lapse,
cannot come up by way of cross-objections on the other party coming up in
appeal, though we must qualify our statement of law by reference to Sri that
case, in an election petition the respondent before this Court had sought to
support the final conclusion of the High Court by challenging a finding
recorded against her which was objected to by the appellant. This Court did not
think it necessary to decide the point and observed that assuming the
respondent should have preferred a petition for special leave to appeal against
the finding of the High Court on the issue in question, yet the application
made by the respondent for leave to urge additional grounds could be converted
into a petition for special leave to appeal against the said finding, and the
delay made in filing the same could be condoned. Suffice it to observe that the
observation so made by this Court takes care of an unusual situation where the
Court feels inclined to relax the bar of limitation by taking a sympathetic
view on condoning of the delay and entertains a belated prayer ex debito justicia
. We cannot close the topic without referring to Vashist Narain p.519). It was
an election appeal and the learned counsel for the respondent attempted to
argue that he could support the decision of the Tribunal on other grounds which
had been found against him and referred to the analogy of the Code of Civil
Procedure which permits a respondent to take that course. The Court held -
"that provision has no application under Article 136.
have no appeal before us on behalf of the respondent and we are unable to 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
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.
application by way of cross-objections has been filed on 31.7.2002. The only
reason assigned in the application seeking condonation of delay is that though
the respondent-Trust had accepted the judgment of the High Court, it was
advised and persuaded to file cross-objections because of the appellants having
filed the application seeking leave to file an appeal and leave having been
granted to them. We do not think such explanation, in the facts and
circumstances of the case, amounts to sufficient cause for condoning the delay.
on merits we do not find any reason to entertain the plea sought to be urged in
cross-objections. As we have already pointed out, the respondents have accepted
the judgment of the High Court and also acted thereon. Merely because the other
party has preferred an appeal, that cannot be a ground for the respondent also
to disown that part of the judgment which was acceptable to it. Further, the issue
which is now sought to be re-agitated stands concluded by the earlier order of
remand passed by this Court. The respondent cannot now, in the second round of
appeal to this Court, be permitted to urge such pleas as it could have urged in
the earlier round or which it urged and was not accepted by this Court.
cross-objections preferred by the respondent-Trust are dismissed as not
maintainable and as also being devoid of any merit.
the appeals are directed to be disposed of in terms of the following directions
this judgment and in these proceedings the controversy as to the rates of rent
applicable to the lessees shall be deemed to have been resolved for the period
1.4.1994 to 31.3.2000;
the 'Compromise Proposals' as approved by the Board of Trustees of the Port of
Mumbai in their meeting held on 13.8.1991 which are very fair, just and
reasonable, subject to the modification that the revision in rent from
1.4.1994, shall be on the basis of rates of return at 10% for non-residential
uses and 8% for residential uses, based on Kirloskar Consultants' report,
instead of 15% and 12% respectively as was suggested in the 'Compromise
Proposals'. The 'Compromise Proposals' so modified shall bind the parties, and
all the lessees even if not parties to these proceedings in view of the
proceedings taken by the High Court under Order 1 Rule 8 of the C.P.C.;
rates of rent for the period upto 31.3.1994 shall remain as suggested in the
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 upto the date of
actual payment shall be calculated at the rate of 6% per annum,
to the abovesaid modifications, all other terms and conditions of 'Compromise
Proposals', shall remained unchanged;
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;
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 representations each
setting out specific grounds and relevant facts precisely in that regard in the
office of the Bombay Port Trust under a written acknowledgement. The Bombay
Port Trust shall maintain a register of all such representations filed. No
representation filed after the expiry of six weeks from today shall be received
We request the High Court to appoint a retired Judge, preferably (and not
necessarily) of the rank of District Judge, as a Sole Adjudicator of the
objections/representations filed in terms of the above decision. The High Court
shall appoint a place of sitting and the amount of remuneration to be paid per
case (and not on per day basis) to the Adjudicator.
fee shall be paid by each lessee filing the representation for decision. The
requisite secretarial and clerical assistance shall be provided by the Bombay
Port Trust or as directed by the High Court.
learned Adjudicator shall commence his proceedings on expiry of eight weeks
from today and on the record of representations being made available to him and
shall conclude the same within a period of 4 months thereafter. The Adjudicator
shall not be bound to record evidence and may determine and dispose of the
representations by summary hearing, receiving such affidavits and documents as
required by him, and/or carrying out inspection of the leased properties, if he
deems fit to do so. The Adjudicator shall examine and decide to what relief in
the rate of rent and/or any other term of lease such representing lessee is
entitled. The decision by the Adjudicator shall be final and binding on the
parties. In case of any difficulty in implementing this procedure directions
may be sought for from the High Court.
The abovesaid procedure is not to be utilised as justification for withholding
the payment of any arrears of rent to be calculated in terms of these
have to be made and made regularly. Any amount becoming due for refund in terms
of any relief granted by the Adjudicator shall be refunded or adjusted
expect the lessees to cooperate in finalisation of the disputes. We also expect
the lessees to desist from preferring immaterial or frivolous objections or
objections just for their sake.
one does so the learned Adjudicator may impose costs on him which shall be
payable to and recoverable under law by the BPT as arrears of rent.
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.
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
The issue as to the applicability of the Maharashtra Rent Control Act, 1999, to
the Port of Mumbai and the property held by it is left open to be decided in
appeals and all the pending applications shall stand disposed of. There shall
be no order as to costs in these proceedings.