Case ID: 6050

Judgment:
ivil Appeal No. 2036 of 1987. From the Judgment and Order dated 19.11.1986 of the Bombay High Court in W.P. No. 710of 1984. Aspi Chinai	 R.F. Nariman	 Miss Darshna Bhogilal	 K.K. Lahiri	 R. Karanjawala	 Ejaz Maqbool and Mrs. Manik Karanja wala for the Appellant. K.K. Singhvi	 Brij Bhushan and Anil Kumar Gupta for the Respondent in C.M.P. No. 19447 of 1988. G. Ramaswamy	 Additional Solicitor General	 U.J. Mukhi ja	 B.S. Basania	 Mrs. A.K. Verma	 Arun Banga and D.N. Misra for the Respondent. The Judgment of the Court was delivered by SABYASACHI MUKHARJI	 J. This is an appeal by special leave from the judgment and order dated 19th November	 1986 of the learned Single Judge of the Bombay High Court. In this appeal this Court has been asked to examine the fron tiers of judicial review of the action of a statutory au thority	 i.e. the Board of Trustees of the Port of Bombay	 in evicting its tenant and granting the land in question to another tenant. However	 in order to appreciate the contro versy it is necessary to have a conspectus of the facts involved. 756 The respondent Board of Trustees of the Port of Bombay is a statutory authority. Vast areas of South Bombay which are completely tenanted	 are owned by the respondent. Being a statutory authority	 the respondent has been exempted from the operation of the relevant Rent Act. The respondent is a statutory corporation constituted under the Major Port Trust Act	 1963 as amended by the Major Port Trust (Amendment) Act	 1974. Between about 1906 and 1932	 one Jhunjhunwala was the lessee of plot No. 6 (which adjoins plot 5B which is the suit plot) and a building was existing on plot No. 6 which was tenanted to M/s Bombay Bharat & Swadeshi Rice Mills	 and the said Mills were desirous of operating a rice mill on plot No. 6 but could not get the licence from the Municipal ity for the operation of the said rice mill unless satisfac tory arrangement was made for the removal and storage of rice husk in a separate chamber/structure. Since about 1932	 the appellant had been the lessee of the respondent in respect of part of the original plot No. 4 (now plot 5B) which adjoins plot No. 6 of the suit plot measuring 113.4 sq. rots. In or about 1933 34	 with a view to acquire the suit plot and using the same for the rice mill/dust room	 M/s Bombay Bharat & Swadeshi Rice Mills took over the appellant. The dust room structure was constructed on the suit plot. The rice mill on plot No. 6 and the dust room on the suit plot had a common wall and were inter connected by ducts. It was stated that the respondent 's inspectors had regularly visited the premises in question but had never objected to the user of the rice mill/dust room. In Decem ber '57	 the Town Planning Scheme No. 1 in Bombay City came into force. The original plot No. 4 was reconstituted into final plot No. 5 but continued to belong to the respondent. The Scheme also stipulated that all rights of lessee/tenants in the original plots stood transferred to the final plots. It may be noted that in December '57 original plot No. 4 comprised of 113.4 sq. let to the appellant	 390 sq. let to M/s Dhanji Mavji	 453 sq. let to two asso ciate firms (M/s Gordhandas Ranchoddas and M/s Chunilal Gupta) and 195 sq. mts. let to M/s Vassanji Hirji. Hence	 of the final plot No. 5	 the appellant and their associates	 it was asserted	 held 569 sq. mts. 	 Dhanji Mavji held 390	 Vassanji Hirji held 195 sq. rots. and the balance 155 sq. was with the respondent/others. Total area of final plot 5 was 1309 sq. mts. From 1957 72	 the respondent	 it is asserted	 continued the tenancies of the appellant and its associate firms. In or about 1963	 however	 the respondent applied for and got final plot No. 5 sub divided into final plot 5A (659 sq. mts.) 757 and final plot 5B (650 sq. mts.). The suit plot and M/s Dhanji Mavji 's plot fell entirely in final plot 5B and as a result of the sub division	 Dhanji Mavji became the tenant/occupant of a major portion of plot 5B. It is assert ed that appellant 's associate firm and Chunilal Gupta fell in plot No. 5A and became the tenants/occupants of a major portion of plot No. 5A. In 197 1 the Municipality renewed the mill licence covering both the structures. It is the case of the appellant that in 1970 71	 the respondent arbitrarily agreed to let the entire plot 5B including the portion which had been let to and in the possession of the appellant since 1933 to M/s. Dhanji Mavji	 and thereby agreed to give him 650.6 sq. mrs. against his existing 390 sq. mts. Also the appellant offered to develop final plot 5B jointly with Dhanji Mavji in 1972 76. The appellant	 however	 asserted that it had offered to pay the revised rent that might be fixed by the respondent. The appellant objected to the offer made to Dhanji Mavji exclu sively and pointed out that the established practice of the respondent was to continue the existing tenants/ occupants on the final plots. The respondent	 however	 asserted that as Dhanji Mavji had been in possession of the major portion of plot No. 5B (390 sq. vis a vis 113.4 sq. mts.)	 they agreed to let the entire plot to Dhanji Mavji and	 there fore	 could not entertain the appellant 's request. In the premises	 by notices issued in 197 1 73	 the respondent purported to terminate the tenancy of the appellant. In 1973 74	 the Municipal Corporation auctioned the right	 title and interest of Jhunjhunwala and the respondent in plot No. 6 for nonpayment of property taxes. An associate firm of the appellant M/s. Natwar Parekh & Sons purchased plot No. 6 and became the owner thereof. The case of the appellant was that the respondent got the Corporation to wrongfully exclude the respondent 's interest from the con veyance. The said Natwar Parekh challenged such exclusion by filing writ petition No. 52/74 in the High Court. On 26.7.1976	 the writ petition was allowed	 and Natwar Parekh are now the owners of plot No. 6. This	 according to the appellant	 caused resentment to the respondent	 and it offered Plot No. 5A to the existing tenants	 i.e. the peti tioner 's associates who held 453 sq. and Vassanji Hirji	 who held 195 sq. The petitioner 's associates who held 70% of the plot 5A	 pointed out that the said Vassanji Hirji was not interested and that the entire plot should accordingly be given to them. The respondents declined and instead commenced eviction proceedings against all the three holders. In or about October 1977	 the respondent issued one month 's notice to the appellant to terminate the tenancy. In December	 1977 the respondent filed suits Nos. 447 & 603/77 against the appellant in the Court of Small Causes	 Bombay. The 758 appellant filed its written statement and pleaded that the proceedings had been instituted mala fide and just to bene fit Dhanji Mavji and to harass the appellant 's associates	 who had acquired the respondent 's title to plot No. 6. Secondly	 it was asserted that the premises had been ac quired and used for rice mill for 40 years and accordingly it could not be terminated by one month notice. The lease was for manufacturing purposes. Thirdly	 it was asserted	 that the notice of termination	 in any event	 had been waived by demanding and recovering rent/ enhanced rent. It is asserted that at the hearing the witnesses of the respondent had admitted that the plot would be given to Dhanji Mavji if the appellant was evicted therefrom. It also agreed that the respondent was under no statutory obligation to give the entire plot to Dhanji Mavji. On or about 31st March	 1981 the Trial Court dismissed the suit	 holding that the appellant was admittedly using the plot for a rice mill for over 50 years to the knowledge of the respondent; and it would be legitimate to infer that the letting was for a manufacturing purpose. Hence	 the notice of termination was bad. The Trial Court did not deal with the question of mala fide. On or about 13th January	 1984 the appellate court reversed that decision and also held that the issue of mala fide or arbitrariness was not relevant on the legality of the eviction proceedings. Ag grieved thereby	 the appellant filed a writ petition No. 710/84 under Article 227 of the Constitution. The High Court dismissed the said writ petition by the judgment under appeal and upheld the order of eviction. The High Court accepted the finding of the appellate court that the notice of ejectment was valid notice and there was no waiver of notice. In our opinion	 the High Court was right on this aspect and in any event under Article 227 of the Constitu tion the High Court could not have gone into this question. We	 in an appeal under Article 136 of the Constitution cannot re appraise that question. The question that survived after the finding of the appellate court and which was urged mainly before the High Court and also in this appeal	 was whether the action of the respondent in evicting the appellant and granting the prem ises in question to M/s Dhanji Mavji was proper and right. It was contended on behalf of the appellant that the action of the respondent in terminating the appellant 's contractual tenancy had a public law character attached to it and was accordingly subject to judicial review. It was asserted that every action of the respondent which was 'State ' within Article 12 of the Constitution	 whether it be in the field of contract	 or any other field	 was subject to Article 14 of the Constitution and must be reasonable and taken only 759 upon lawful and relevant grounds of public interest. In that light	 it was urged that if the eviction of the appellant was not necessary in the public interest and if it had been taken pursuant to any norm or policy which does not permit eviction of the appellant	 then the action is arbitrary and discriminatory and not in accordance with any policy which the respondent was enjoined to follow. In the aforesaid background it was contended that the eviction of the appellant was not necessary in public inter est. It appears that the eviction of the appellant was only in pursuance of a policy of the Port Trust to let out a reconstituted plot to the person who occupied the major portion and who could use it for development. It was urged that the decision of the Port Trust to allot the entire plot to M/s Dhanji Mavji to the exclusion of the appellant (although the appellant was thereof for the past 40 years) was an arbitrary and discriminatory departure from the established policy of the Port Trust	 which was to offer the plot to the existing tenants (where two or more tenants were in occupation of one plot) as joint tenants. It was contend ed that the impugned termination was ultra vires and arbi trary. It was contended that the exclusive allotment of the entire plot 5B to M/s Dhanji Mavji and the consequent termi nation of the appellant 's tenancy was not necessary to enable proper development of the plot as required by the Town Planning Scheme. There was no policy requiring the entire final/reconstituted plot to be allotted exclusively to the person occupying the major portion thereof or requir ing the other existing occupants to be evicted. Nor	 it was submitted	 was the allotment of the entire plot	 pursuant to any such alleged policy. On the other hand	 the appellant contended that the respondent 's established policy was to offer/allot a final/ reconstituted plot for development to the existing occupants thereof as joint tenants. It was contended that this rational policy which	 according to the appellant	 would have fulfilled the public interest of development in accordance with the regulations of the Town Planning Scheme and at the same time would not have required or necessitated the eviction of the existing occupants. Contrary to the established rational policy of accommo dating tenants by offering/allotting a new plot jointly to the existing occupants/tenants	 the respondent arbitrarily	 it was contended	 and discriminatingly did not offer the new plot 5B to M/s Dhanji Mavji and the appellant (both of whom were existing tenants/occupants of the plot) as joint ten ants	 but instead wrongfully decided to give the entire plot to M/s Dhanji Mavji to the exclusion of the appellant. "Our attention was drawn to Section 4 of the Bombay Rents	 Hotel & Lodging House Rates (Control) Act	 1947	 which enjoins that 760 the Act would not apply to the premises belonging to the Govt. or to the local authorities. By the provisions of the said Section 4	 the Port Authorities were exempted from the operation of the Rent Act. This privilege was given to the Port Trust Authorities	 it was submitted	 on the assumption that it would act in public interest	 and would not behave like ordinary landlords. The special privileges	 powers and benefits were statutorily conferred on the Bombay Port Trust by Section (4) of the aforesaid Act. It had those rights due to its statutory or public character	 as a local authority. Our attention was also drawn to the decision in Rampra tap Jaidayal vs Dominion of India	 at 934 where the Chief Justice Chagla observed as follows: "It is not too much to assume	 as the Legisla ture did in this case assume	 that the very Government whose object was to protect the tenants and prevent rent being increased and prevent people being ejected	 would not itself when it was the landlord do those very things which it sought to prohibit its people from doing	 and therefore the underlying assumption of this exemption is that Government would not increase rents and would not eject tenants unless it was absolutely necessary in public interest and unless a particular building was required for a public purpose." This Court in Baburao Shantaram More vs The Bombay Housing Board & Anr.	 [1954] V SCR 572 had to consider Section 4 of the Bombay Rents	 Hotel & Lodging House Rates Control Act	 1947	 and so far as material for our present purposes explained the basis of exemption under Section 4 as that the Govt. 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 proper ties as private landlords are or are likely to be. In other words	 this Court recognised that the basis of differentia tion in favour of the public authorities like the respond ent	 was on the ground that they would not act for their own purpose as private landlords do	 but must act for public purpose. 'Our attention was also drawn by Mr Chinai	 learned counsel for the appellant	 to the observations on 'Adminis trative Law by Wade	 5th Edn. at page 355. It was stated therein as follows: "Statutory power conferred for public pur poses is conferred as it were upon trust	 not absolutely that is to say	 it can validly be used only in the right and proper way which Parliament when conferring it is presumed to have intended. " 761 It	 therefore	 follows that the public authorities which enjoy this benefit without being hidebound by the require ments of the Rent Act must act for public benefit. Hence	 to that extent	 this is liable to be gone into and can be the subject matter of adjudication. Learned Addl. Solicitor General Mr Ramaswami contended that the onus was entirely on the appellant and the burden lay on the defendant to establish that the Bombay Port Trust had terminated the tenancy or taken the proceedings in eviction not in public interest but for a collateral purpose or mala fide or that it had acted in a manner contrary to the provisions of article 14 of the Constitution. He is right so contending. It was further urged by Mr Ramaswamy that public law duties are owed to society at large and the nature of the body performing the functions is not determinative of public law or private law character of the action taken. He con tended that since the provisions of the Bombay Rent Act did not apply to the premises of the Bombay Port Trust in the notice of termination no reason was required to be given either in the notice itself terminating the tenancy or in the plaint for evicting the appellant. He further contended that originally the Bombay Port Trust was constituted as a body corporate under the provisions of the Bombay Port Trust Act	 1889 and is now constituted under the provisions of the Major Port Trusts Acts	 1988. In both these Statutes the object for constituting the Bombay Port Trust was not to provide accommodation to persons and	 therefore	 the object was totally different from the object for which the Bombay Rent Act and similar enactments have been enacted. It was	 therefore	 urged that since there was no obligation or duty cast upon the Bombay Port Trust to provide accommodation	 there could be no question of acting in Government charac ter. It was urged that the respondent did not enjoy any special privileges/powers of benefits vis a vis such activi ties by virtue of its being a local Body or Government character. In the premises	 it was contended that such a body stands on the same footing as any other citizen and will	 in respect of such activity	 not be subjected to public law duty. We are unable to accept the submissions. Being a public body even in respect of its dealing with its tenant	 it must act in public interest	 and an infraction of that duty is amenable to examination either in civil suit or in writ jurisdiction. Our attention was drawn to the observations of this Court in Radhakrishna Agarwal & Ors. vs State of Bihar & Ors. 	 ; Reliance was also placed on the observations of this Court in Life 762 Insurance Corpn. of India vs Escorts Ltd. & Ors.	 ; 	 in support of the contention that the public corporations ' dealing with tenants is a contractual dealing and it is not a matter for public law domain and is not subject to judicial review. However	 it is not the correct position. The Escorts ' decision reiterated that every action of the State 'or an instrumentality of the State	 must be informed by reason. Indubitably	 the respondent is an organ of the State under article 12 of the Constitution. In appropri ate cases	 as was observed in the last mentioned decision	 actions uninformed by reason may be questioned as arbitrary in proceedings under article 226 or article 32 of the Constitu tion. But it has to be remembered that article 14 cannot be construed as a charter for judicial review of State action	 to call upon the State to account for its actions in its manifold activities by stating reasons for such actions. The contractual privileges are made immune from the protection of the Rent Act for the respondent because of the public position occupied by the respondent authority. Hence	 its actions are amenable to judicial review only to the extent that the State must act validly for a discernible reason not whimsically for any ulterior purpose. Where any special right or privilege is granted to any public or statutory body on the presumption that it must act in cer tain manner	 such bodies must make good such presumption while acting by virtue of such privileges. Judicial review to oversee if such bodies are so acting is permissible. The field of letting and eviction of tenants is normally governed by the Rent Act. The Port Trust is statutorily exempted from the operation of Rent Act on the basis of its public/Government character. The legislative assumption or expectation as noted in the observations of Chagla C.J. in Rampratap Jaidayal 's case (supra) cannot make such conduct a matter of contract pure and simple. These corporations must act in accordance with certain constitutional conscience and whether they have so acted	 must be discernible from the conduct of such corporations. In this connection	 reference may be made on the observations of this Court in S.P. Rekhi vs Union of India	 ; 	 reiterated in M.C. Mehta & Anr. vs Union of India & Ors. 	 [1987] 1 SCC 395	 wherein at p. 148	 this Court observed: "It is dangerous to exonerate corporations from the need to have constitutional con science; and so	 that interpretation	 language permitting	 which makes governmental agencies	 whatever their mien amenable to constitutional limitations must be adopted by the court as against the alternative of permitting them to flourish as an imperium in imperio. " 763 Therefore	 Mr Chinai was right in contending that every action activity of the Bombay Port Trust which constituted "State" within article 12 of the Constitution in respect of any right conferred or privilege granted by any Statute is subject to article 14 and must be reasonable and taken only upon lawful and relevant grounds of public interest. Reli ance may be placed on the observations of this Court in E.P. Royappa vs State of Tamil Nadu	 ; ; Maneka Gandhi vs Union .of India	 [1978] 2 SCR 621; R.D. Shetty vs The International Airport Authority of India & Ors.	 ; ; Kasturi Lal Lakshmi Reddy vs State of J & K & Anr.	 ; and Ajay Hasia vs Khalid Mujib Sehravardi & Ors. etc. ; 	 Where there is arbitrariness in State action	 article 14 springs in and judi cial review strikes such an action down. Every action of the Executive Authority must be subject to rule of law and must be informed by reason. So		 whatever be the activity of the public authority	 it should meet the test of article 14. The observations in paras 101 & 102 of the Escorts ' case (supra) read properly do not detract from the aforesaid principles. The High Court had relied on the observations of this Court in Kasturi Lal Lakshrni Reddy vs State of Jammu & Kashmir & Anr.	 (supra) that the State was not totally freed of the duty to act fairly and rationally	 merely because it could do so under a contract. The High Court stated that though it might be accepted that a public body like the respondent should not act unreasonably or unfairly but it did not follow that every time they decided to take action against the contractual tenants	 they had to decide the said action in terms of fairness	 equity and good faith. In support of this proposition	 reliance was placed on the observations of this Court in L.I.C vs Escorts	 (supra). In this connection	 Mr Chinai appearing for the appellant reiterated before us as he did before the High Court	 that the basis of the legitimate assumption or expectation of which the statutory exemption had been granted by the Legis lature to the Bombay Port Trust provided a guideline or touch stone by which the conduct of the public authority which had been granted exemption	 should be judged. And	 according to him	 the necessity of eviction in the instant case	 must have been only in public interest. Reliance was placed on several decisions referred to hereinbefore. We are inclined to accept the submission that every activity of a public authority especially in the background of the assumption on which such authority enjoys immunity from the rigours of the Rent Act	 must be informed by reason and guided by the public interest. All exercise of discre tion or power by public authorities as the respondent	 in respect of dealing with tenants in respect of which they have been treated separately and distinctly from other landlords on the assump 764 tion that they would not act as private landlords must be judged by that standard. If a governmental policy or action even in contractual matters fails to satisfy the test of reasonableness	 it would be unconstitutional. See the obser vations of this Court in Kasturi Lal Lakshrni Reddy	 (supra) and R.D. Shettv vs The International Airport Authoritv of India & Ors.	 ; at 1034. Learned Additional Solicitor General reiterated on behalf of the respondent that no question of mala fide had been alleged or proved in these proceedings. Factually	 he is right. But it has to be borne in mind that governmental policy would be invalid as lacking in public interest	 unreasonable or contrary to the professed standards and this is different from the fact that it was not done bona fide. It is true as learned Addl. Solicitor General contended that there is always a presumption that a governmental action is reasonable and in public interest. It is for the party challenging its validity to show that the action is unrea sonable	 arbitrary or contrary to the professed norms or not informed by public interest	 and the burden is a heavy one. In this background the contention of the appellant has been that its eviction was not necessary in public interest	 and further that the eviction was only in pursuance of an alleged policy on the part of the Port Trust to let out the reconstituted plot to the person who occupied the major portion	 which	 according to the appellant	 was not in consonance with the obligation of the Trust to take action only in public interest. It was contended that eviction for development with least dislocation	 should have been the aim and that would have served the public purpose better. On behalf of the appellant it was contended that before the Trial Court it was established that both the appellant and M/s Dhanji Mavji had been tenants of the Port Trust on the original plot No. 4 since 1932	 and in fact the appellant was older tenant. Our attention was drawn to para 16 of the appellant 's written statement	 Vol. 2 Paper Book	 page 35. In this context	 it was submitted that the decision of the Port Trust was not based on public purpose/interest	 and as such was ultra vires of the powers of the Port Trust. It was contended that such a plea was justiciable in all civil suits. On behalf of the Port Trust authorities	 however	 the submission was that there was no obligation under the Bombay Port Trust Act to provide accommodation. So	 there cannot be any governmental character. This we have already dealt with. Learned Add|. Solicitor General submitted that in evi dence it has been mentioned by Katara (P.W. 1 at page 43	 Vol. II) that the plot had been allotted to Dhanji Mavji since it was the policy of the Bombay Port Trust to allot a re constituted plot to a person occupying 765 a major portion of such plot. There was no challenge to this evidence .in cross examination. On the other hand	 he con tended that there was no evidence on the alleged policy of the Port Trust of giving plots on joint tenancy to all occupants. According to him	 in the letters addressed by the Port Trust at pp. 82	 123	 128 of Vol. 1 and in the letters by and on behalf of the appellant and/or their alleged associate concerns at pp. 14 1 to 147 they have specifically admitted that there was a policy of the Port Trust to allot plots to the occupants of the major portions thereof and in fact a grievance has been made by them that in accordance with the said policy of the Bombay Port Trust	 Plot No. 5A was not being allotted to the associates of the appellant. In that view of the matter even under the scope of judicial review	 it was contended	 whether it should have been given on joint tenancies or not	 is not a matter which could be gone into by the Court. Reliance was placed on the observa tions of Lord Justice Diplock in Council of Civil Service Unions vs Minister for the Civil Service	 at 950	 where the learned Lord Justice classified 8 grounds subject to control of judicial review	 namely	 illegali ty	 irrationality and procedural impropriety. Learned Addl. Solicitor General is right	 in our opinion	 in that we cannot really substitute a decision reached by a fair proce dure keeping the policy of the respondent in mind by a different decision only on the ground that the decision which appeals to the court	 is a better one. Reliance was placed on the observations of Lord Chancellor Lord Hailsham in Chief Constable of the North Wales Police vs Evans	 ; In our opinion	 it is necessary to remem ber that judicial review	 in the words of Lord Brightman in that case	 is not concerned with the decision	 but with the decision making process. As observed by Prof. Dias in 'Juri sprudence ' (5th Edn. at p. 91) unless the restriction on the power of the court is observed	 the court would under the guise of preventing the abuse of power	 be itself guilty of usurping power which does not belong to it. It is therefore necessary to bear in mind the ways and means by which the court can control or supervise the judicial action of any authority which is subject to judicial control. In this connection	 it is necessary to refer to the observations of Lord Justice Templeman in re Preston vs I.R.C.	 and the observations of Lord Justice May in Regina vs Chief Constable of the Merseyside Police	 It is not within the purview of a court to substitute a decision taken by a constituted authority simply because the decision sought to be substituted is a better one. Learned Addl. Solicitor General	 in our opinion	 is therefore right in contending that the appellant should not be allowed to contend that the decision of the Bombay Port Trust to allot the plot to the major holder is not one of the feasible means of achieving the objectives of development. It was not open to the appellant to contend 766 that the Bombay Port Trust could have framed a better policy in a way in which both the goals	 development and non evic tion of existing tenants	 could have been achieved. Furthermore	 we have to bear in mind that joint allot ment for the purpose of development pre supposes coopera tion. In this connection	 it is necessary to remember that Mr Singhvi	 appearing for the intervener	 in C.M.P. No. 19447/88 indicated that the joint development was not possi ble because they were not willing to take it jointly. He also pointed out that the appellant was aware that the decision to allot this plot in his client 's favour had been taken as early as 1973 and that it was within the knowledge of the present appellant that they had also put up construc tions thereon at substantial cost. He urged that	 though it is true that the lease in favour of the petitioner was terminated and the suit filed only in 1977	 the fact is that the appellant took no step earlier to have the allotment in favour of his clients cancelled. This	 he has urged	 is also a ground for non interference at this stage. We are inclined to agree. Our attention was drawn to the fact that Dhanji Mavji had held 80% of the re constituted plot. The plot 5B had been developed inasmuch as a building of ground plus 5 upper storeys had been erected as was the maximum possible not withstanding the fact that the appellant had not yet surren dered their portion. As against this	 on plot 5A where the Bombay Port Trust offered a joint tenancy to the three occupants	 since there was no occupant holding a major portion thereof	 there had been no development whatsoever and in fact there has been litigation going on to remove all the 3 occupants. In that view of the matter the Bombay Port Trust	 perhaps	 was justified in coming to the conclusion that the only possible way to develop the properties of the Bombay Port Trust in compliance with the Town Planning Scheme by allotting plots to holders of major portions thereon. Such a decision cannot be faulted. The Town Planning Scheme came into force in 1957. Plot 5 was divided into Plot 5A and 5B in 1963. The Town Planning Act had been enacted to meet the requirements for planning	 development and use of land. Having regard to Sections 2(7)	 2(13)	 2(17)	 2(18)	 2(21)	 2(22)	 2(27)	 13	 14	 22	 59	 65	 88	 89	 & 159	 it appears that one of the purposes was the extinguishment of the tenancies of the Port Trust	 and as such tenants of plot 5A and 5B were liable to eviction. The Port Trust continued them as monthly tenants for many years before formulating a policy to develop the plots by offering them to major holders. In pursuance to that Scheme	 regulations have been flamed under Section 169 of the Town Planning Act. Our attention was placed on some of these regulations. It is contended that it was viewed that 767 plot of land of less than 500 sq. yards out of the Town Planning Scheme cannot be allotted. In that view of the matter it is a possible view and we need not go beyond this. In that context even though we reiterate that the Port Trust must act reasonably and in adherence to a policy which serves the public purpose on the assumption of which exemp tion was granted to it from the Rent Act	 while dealing with the tenants or occupants	 it cannot be said that the Port Trust has acted improperly. In that light the decision of the High Court must be affirmed though on a different empha sis. In the view that we have taken	 it is not necessary for us to go into the question whether under article 227 of the Constitution	 it was open to the High Court to go into the question of constitutional validity for which reliance was placed on the observations of this Court in Venkatlal G. Pittie & Anr. vs Bright Bros (P) Ltd. ; at 569 and Khalil Ahmed Bashir Ahmed vs Tufelhussein Samasbhai Sarangpurwala	 ; Reliance was also placed by Mr Chinai on the observations of the House of Lords in England in Wandsworth London Borough Council vs Winder	 ; at 505 507. In that case the local authority was under the agreement itself	 required to fix rent under the statutory provision. It committed a breach thereof. Hence	 it was held there that that was a breach of a con tractual obligation enforceable under the Private Law and	 therefore	 justiciable. As we look upon the facts of this case	 there was an implied obligation in respect of dealings with the tenants/occupants of the Port Trust authority to act in public interest/purpose That requirement is fulfilled if it is demonstrated that the Port Trust Authorities have acted in pursuance of a policy which is referable to public pur pose. Once that norm is established whether that policy is the best policy or whether another policy was possible	 is not relevant for consideration. It is	 therefore	 not neces sary for our present purposes to dwell on the question whether the obligation of the Port Trust Authorities to act in pursuance of a public purpose was of public law purpose or a private law purpose. Under the Constitutional scheme of this country the Port Trust Authorities were required by relevant law to act in pursuance of public purpose. We are satisfied that they have proceeded to so act. We must record that learned Addl. Solicitor General made a statement that irrespective of the result of this appeal	 the Port Trust Authorities of Bombay	 will consider reasonably granting of an alternative site to the appellant	 if such an application is made to them. In the view that we have taken this appeal must	 there fore	 fail and is accordingly dismissed. The C.M.P. No. 19447/88 is disposed of 768 by directing that the applicants are permitted to intervene and their submissions have been considered. In the facts and the circumstances of the case	 the parties will pay and bear their own costs. All interim orders are vacated. RANGANATHAN	 J. I respectfully agree with the conclusion of my learned brother Sabyasachi Mukharji	 J. However	 I would like to add a word of reservation. The principal argument which Shri Chinai addressed to us at great length on behalf of appellant was that the relationship between the appellant and the Port Trust was not purely contractual and in the realm of private law. He urged that the Port Trust	 having been granted an exemption from the provisions of the rent control acts on certain public grounds	 is not at liberty to take action to evict the petitioner without being accountable therefore and that its action is in the realm of public law and hence liable to judicial review. He submitted that the decision of this Court in the Escorts case	 	 is not inconsistent with this contention. The learned Additional Solicitor General contested the above proposition on principle and refuted the sugges tion that the Port Trust was under any obligation to show that its action was bona fide	 and not arbitrary or unrea sonable but could be justified on grounds of public inter est. He submitted that on the facts of the present case	 the state of the pleadings at the various stages and its own findings on the facts	 the High Court was not called upon to go into the larger issue at all and that its observations in this regard were purely casual. He submitted	 however	 that	 without prejudice to these contentions	 he would be willing to satisfy us on the facts of the present case that the action of the Port Trust was bona fide and based on policy and reason. He addressed us on this aspect and I agree	 with respect	 with the conclusion of my learned brother Sabyasachi Mukharji	 J. that	 on the facts of the present case	 the action of the Port Trust was not improper and that there are no grounds to interfere with the same. In view of the above conclusion on the merits and in view of my opinion that we have not heard full arguments on both sides on the general propositions contended for by Shri Chinai as to the parameters and scope of judicial review in such matters which are issues of far reaching importance	 I would like to refrain from expressing any final and conclud ed opinion on these aspects though	 prima facie	 I am also inclined to think	 as held by my learned brother that there is considerable force in them. R.S.S. Appeal dismissed.

Summary:
The respondent Board of Trustees of the Port of Bombay is a statutory authority	 and as such has been exempted from the operation of the Bombay Rents	 Hotel & Lodging House Rates (Control) Act	 1947. The appellant has been the lessee of the respondent since about 1932 in respect of part of the original plot No. 4 (now plot 5B) which adjoins plot No. 6 tenanted by M/s Bombay Bharat & Swadeshi Rice Mills. In or about 1933 34	 M/s Bombay Bharat & Swadeshi Rice Mills took over the appellant	 and a rice mill was started on appel lant 's part of plot No. 4 and plot No. 6. In December 1957	 the Town Planning Scheme No. 1 in Bombay City came into force	 and the original plot No. 4 was reconstituted into final plot No. 5. In or about 1963 the respondent sub divided plot No. 5 into final plot 5A and final plot 5B	 and as a result of the sub division M/s Dhanji Mavji became the tenant/occupant of a major portion of plot 5B	 In 1970 71 the respondent agreed to let the entire plot 5B	 including the portion which had been let to and was in possession of the appellant since 1933	 to Dhanji Mavji. The appellant objected to the offer made to Dhanji Mavji but the respondent asserted that as Dhanji Mavji had been in possession of the major portion of plot No. 5B	 it agreed to let the entire plot to them. In the premise	 the respondent purported to terminate the tenancy of the appel lant in respect of its . portion of plot 5B	 and later filed suit for eviction. The Trial Court dismissed the suit hold ing that it would be legitimate to infer that the letting was for a manufacturing purpose and hence the notice of termination was bad. The appellate court reversed that decision. Aggrieved thereby	 the appellant filed a writ petition under Article 227 of the Constitution. The High Court accepted the finding of the appellate court that the notice of ejectment was valid notice and there was no waiver of notice. 752 Before this Court	 it was contended on behalf of the appellant that (1) the exemption from the operation of the Rent Act was given to the Port Trust Authority on the as sumption that it would act in public interest and would not behave like ordinary landlords; (2) the action of the re spondent in terminating the appellant 's contractual tenancy had a public law character attached to it and was according ly subject to judicial review; (3) every action of the respondent which was 'State ' within Article 12 of the Con stitution	 whether it be in the field of contract or any other field	 was subject to Article 14 of the Constitution and must be reasonable and taken only upon lawful and rele vant grounds of public interest; (4) the respondent 's estab lished rational/policy was to offer/allot a final/reconsti tuted plot for development to the existing occupants thereof as joint tenants; and (5) the eviction of the appellant was not necessary in the public interest for the proper develop ment of the plot as required by the Town Planning Scheme. On behalf of the respondent it was contended that (1) the onus was entirely on the appellant to establish that the Bombay Port Trust had terminated the tenancy or taken the proceedings in eviction not in public interest but for a collateral purpose or mala fide or that it had acted in a manner contrary to the provisions of Article 14; (2) since there was no obligation or duty cast upon the Bombay Port Trust to provide accommodation	 there could be no question of acting in governmental character	 and such a body stood on the same footing as any other citizen and would	 in respect of such activity	 not be subjected to public law duty; (3) the respondent 's dealing with tenants was a con tractual dealing and it was not a matter for public law domain and was not subject to judicial review; and (4) it was the policy of the respondent to allot the entire re constituted plot to one person who was occupying the major portion of such plot	 for its proper development. Dismissing the appeal	 it was	 HELD: Per Sabyasachi Mukharji	 J.	 (Kania	 J. agreeing) (1) Bombay Port Trust being a public body	 even in respect of its dealing with its tenants	 it must act in public interest	 and an infraction of that duty is amenable to examination either in civil suit or in writ jurisdiction. [761G] Rampratap Jaidayal vs Dominion of India	 [1952] 54 Bom. L.R. 927; and Baburao Shantaram More vs The Bombay Housing Board	 [1954] V SCR 572	 referred to. 753 (2) Where any special right or privilege is granted to any public or statutory body on the presumption that it must act in a certain manner. such bodies must make good such presumption while acting by virtue of such privilege. Judi cial review to oversee if such bodies are so acting is permissible. ]762D E] Radhakrishna Agarwal & Ors. vs State of Bihar & Ors. 	 ; and Life Insurance Corporation of India vs Escorts Ltd. & Ors.	 [1985] 3 Supp SCR 909	 referred to. (3) The field of letting and eviction of tenants is normally governed by the Rent Act. The Port Trust is statu torily exempted from the operation of the Rent Act on the basis of its public/Governmental character. Every action/activity of the Bombay Port Trust which constituted "State" within Article 12 of the Constitution in respect of any right conferred or privilege granted by any statute is subject to Article 14 and must be reasonable and taken only upon lawful and relevant grounds of public interest. [762E F; 763A B] S.P. Rekhi vs Union of India	 ; and M.C. Mehta & Anr. vs Union of India & Ors. 	 [1987] 1 SCC 395	 referred to. (4) Where there is arbitrariness in State action	 Arti cle 14 springs and judicial review strikes such an action down. Every action of the Executive authority must be sub ject to rule of law and must be informed by reason. So	 whatever be the activity of the public authority	 it should meet the test of Article 14. [763C] All exercise of discretion or power by public authori ties as the respondent	 in respect of dealing with tenants in respect of which they have been treated separately and distinctly from other landlords on the assumption that they would not act as private landlords must be judged by that standard. [763H; 764A] If a governmental policy or action even in contractu al matters fails to satisfy the test of reasonableness	 it would be unconstitutional. [764A B] E.P. Royappa vs State of Tamil Nadu	 ; ; Maneka Gandhi vs Union of India	 [1978] 2 SCR 621; R.D. Shetty vs The International Airport Authority of India & Ors.	 ; ; Kasturi Lal Lakshmi Reddy vs State of J & K	 ; and 754 Ajay Hasia vs Khalid Mujib Sehravardi	 ; 	 referred to. (7) Governmental Policy would be invalid as lacking in public interest	 unreasonable or contrary to the professed standards and this is different from the fact that it was not done bona fide. [764B C] (8) There is always a presumption that a governmental action is reasonable and in public interest. It is for the party challenging its validity to show that the action is unreasonable	 arbitrary or contrary to the professed norms or not informed by public interest	 and the burden is a heavy one. [764C D] (9) Judicial review is not concerned with the decision	 but with the decision making process. Unless this restric tion on 'the power of the court is observed	 the court under the guise of preventing the abuse of power	 would be itself guilty of usurping power which does not belong to it. [765E F] (10) The Court cannot really substitute a decision reached by a fair procedure keeping the policy of the re spondent in mind by a different decision only on the ground that the decision which appeals to the court is a better one. [765G] Council of Civil Service Unions vs Minister for the Civil Service	 ; Chief Constable of the North Wales Police vs Evans	 ; In re Pres ton vs I.R.C.	 and Regina vs Chief Consta ble of the Merseyside Police	 	 referred to. (11) The Bombay Port Trust	 perhaps	 was justified in coming to the conclusion that the only possible way to develop the properties of the Bombay Port Trust in compli ance with the Town Planning Scheme was by allotting plots to holders of major portions thereon. Such a decision cannot be faulted. [766E F] (12) Upon the facts of the instant case	 there was an implied obligation in respect of dealings with the tenants/occupants of the Port Trust Authority to act in public interest/purpose. That requirement is fulfilled if it is demonstrated that the Port Trust authorities have acted in pursuance of a policy which is referable to public pur pose. Once that norm is established whether that policy is the best policy or whether another policy was possible	 is not relevant for consideration. [767E F] 755 (13) Under the constitutional scheme of this country	 the Port Trust Authorities were required by relevant law to act in pursuance of public purpose. This Court is satisfied that they have proceeded to so act. [767G] Per section Ranganathan	 J. (Concurring) On the facts of the instant case	 the action of the Port Trust was not improper and there are no grounds for inter ference. [768F]