- (1.) This appeal by special leave is directed against the judgment and order dated 22/2/1989 rendered by the High court of Bombay in WP No. 3682 of 1987. Facts leading to the appeal and relevant for its disposal are as under.
(2.) The appellant is a firm registered under the Partnership Act and carries on business as builders and developers, while Respondent 1 is a government company within the meaning of Section 617 of the Companies Act, 1956. On 23/3/1971 the government of Maharashtra issued a notification under Ss. (1 of Section 113 of the Maharashtra Regional and Town Planning Act, 1966 ('act' for short) delineating and designating certain area for development as a site for a new town to be known as New Bombay. Concurrently, it declared, in accordance with Ss. (3-A) thereof, Respondent 1 to be the New Town Development Authority for that township. Consequent upon such declaration Respondent 1 assumed, by virtue of Ss. (8 of the said section, all the powers and duties of a Planning Authority under the Act including those under Ch. III and IV thereof. In due course Respondent 1 framed, in exercise of powers conferred by Section 159 of the Act and with the previous approval of the State government, a set of Regulations called the General Development Control Regulations for New Bombay, 1975 ('regulations' for short). Regulation 16.3.1 of the said Regulations initially provided that the Floor Space Index ('fsi' for short) for divers land use should not exceed 1. On 24/8/1981 the Board of Directors of Respondent 1 passed a resolution to amend the aboveregulation by fixing different FSIs for divers land uses; and for land use for business and commercial purposes the maximum permissible FSI was fixed at 2. By its letter dated 21/10/1981 Respondent 1 forwarded the resolution to the State government for approval in accordance with Section 159 of the Act. Instead of approving the proposed amendment the State government wrote back to Respondent 1 on 30/11/1982 to resubmit the same after following the procedure laid down in Section 37 of the Act to enable it (the State government) to effectuate the marginal or minor modifications to the final development plan of New Bombay. Pursuant thereto and in compliance thereof Respondent 1 issued and published a notice dated 29/8/1983 in the Official Gazette inviting objections and suggestions with regard to the proposed amendment by way of a minor modification to the final development plan. As no objection was received to the proposed amendment the Board of Directors of Respondent 1 considered and approved of the proposed amendment and authorised its Chief Administrative Officer to resubmit it to the State government. Accordingly, the Chief Administrative Officer wrote a letter to the State government on 5/3/1984 seeking its approval to the amendment as required under Section 37 (1 of the Act.
(3.) While the matter was awaiting final decision of the State government, Respondent 1 issued a public notice in August 1985 inviting offers for lease of commercial plot No. 4 of the District Business Centre in Sector 17 of Vashi, New Bombay on terms and conditions set out in a booklet published for the purpose. In the booklet the maximum permissible limit of FSI for the successful lessee was shown as 2. Amongst others, the appellant responded to the notice and ultimately succeeded in getting allotment of the plot for which a formal lease agreement was entered into by and between the appellant and Respondent 1 on 21/1/1987 for a consideration of Rs. 64,19,250. 00. Clause 3 (aa) (i) of that agreement provides that the maximum permissible FSI as defined by the Regulations shall be 2.;