JUDGMENT

SABYASACHI MUKHARJI, J. : — This is an appeal by special leave from the judgment and order dated 19th November, 1986 of the learned single Judge of the Bombay High Court. In this appeal this Court has been asked to examine the frontiers of judicial review of the action of a statutory authority, i.e. the Board of Trustees of the Port of Bombay in evicting its tenant and granting the land in question to another tenant. However in order to appreciate the controversy it is necessary to have a conspectus of the facts involved.

2. 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.

3. 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 Municipality for the operation of the said rice mill unless satisfactory arrangement was made for the removal and storage of rice husk in a separate chamber/ structure.

4. 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. mts. 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 interconnected by ducts.

5. It was stated that the respondents inspectors had regularly visited the premises in question but had never objected to the user of the rice mill/dust room. In December 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. mts. let to the appellant 390 sq. mts. let to M/s. Dhanji Mavji, 453 sq. mts. let to two associate 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. mts. and the balance 155 sq. mts. was with the respondent/ others. Total area of final plot 5 was 1,109 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.) and final plot 5B (650 sq. mts.). The suit plot and M/s. Dhanji Mavjis plot fell entirely in final plot 5B and as a result of the subdivision, Dhanji Mavji became the tenant/occupant of a major portion of plot 5B. It is asserted that appellants associate firm and Chunilal Gupta fell in plot No. 5A and became the tenants/ occupants of a major portion of plot No. 5A. In 1971 the Municipality renewed the mill licence covering both the structures.

6. 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. mts. against his