- (1.) Leave granted in S. L. P. (C) Nos. 19877/01, 6064/02 and 8657/02).
(2.) The Bombay Port Trust (hereinafter 'BPT,' for short), presently constituted and governed by the Major Port Trusts Act, 1963, and now known as the Board of Trustees of the Port of Mumbai, is an 'authority' within the meaning of Art. 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 Trusts 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.
(3.) The Bombay Port Trust Estate, admeasuring around 720 hectares (1800 acres approx.) of land is a huge stretch from Colaba to Raoji junction, including Pir Pau, Butcherisland, 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. The 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 along 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 ad hoc arrangements. In the 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 fulfil 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 practising 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 :- "i) 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 other islands. ii) The estimate of market value should indicate values of lands both in vacant and occupied conditions and for different users. iii) 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 January, 1980). iv) To 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. Nearly 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 and 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.;