JUDGMENT

S. Mohan, J.

1. The respondent is a company incorporated under the Companies Act. It carries on business of construction of multi-storeyed buildings and selling terments therein on ownership basis in accordance with the provisions of Maharashtra Ownership Flats (Regulation of promotion and construction of sale, management and transfer) Act, 1963.

2. In the year 1968, the Government of Maharashtra started reclamation work in the area known as Backbay Reclamation area abetting Bombay City on the Cuffee Parade and Nariman Point. The object of reclamation was to provide for construction of multi-storeyed buildings. The reclaimed land was divided into five blocks; each was given number; for block No. V, the appellant (State of Maharashtra) issued the invitation to the public to make offers for purchase of plot of land for putting up multi-storeyed buildings. The plots and structures were to be given on 99 years lease at a specified rates.

3. Pursuant to the advertisement, the respondent offered to secure the plot. It made an offer along with the letter dated 15.12.1970 in respect of plot No. 46, block No. V, Backbay Reclamation Estate, measuring 2,500 square metres. The respondent