Andhra HC (Pre-Telangana)
Hindustan Lever Limited And Anr. vs Board Of Trustees, Visakhapatnam Port ... on 16 July, 2002
Equivalent citations: 2003(1)ALD323, AIR 2003 ANDHRA PRADESH 217, (2003) 1 ANDHLD 323
ORDER Ghulam Mohammed, J.
1. The petitioners filed the writ petition seeking for a declaration by way of writ of mandamus that the impugned bill Nos.TM/FH/GB/1 to 4, dated 9th May, 1990 are illegal and arbitrary and also for a direction not to enforce the said bills.
2. It is averred in the affidavit filed in support of the writ petition that the 1st petitioner is a company limited by shares registered under the Companies Act, 1956 whereas the 2nd petitioner is an officer and shareholder of the 1st petitioner-company. The 1st respondent is a Board of Trustees of the Visakhapatnam Port constituted under and governed by the provisions of the Major Port Trusts Act, 1963 (hereinafter referred to as "Act"). The 1st respondent is an authority under the control of Government of India and as such, constitutes State within the meaning of Article 12 of the Constitution of India. The 2nd respondent is an officer of the 1st respondent, who passed the impugned orders.
3. It is further averred that the petitioners seek to challenge the arbitrary increase retrospectively made by the respondents in the rates of licence fee for storage sheds at Visakhapatnam Port and the bills issued on the basis of the revised rates retrospectively for the period between 1st April 1983 to 22nd May, 1990. Since 1978 the petitioners have been carrying on deep sea fishing operations and operating their trawlers from the fishing harbour of Visakhapatnam Port. The 1st respondent is in possession and occupation of storage sheds at the Auction Hall Bays at Fishing Harbour within the limits of Visakhapatnam Port. The 1st respondent from time to time frames a scale of rates under a statement of conditions, under Sections 48 and 49 of the Act.
4. It is further averred that the 1st respondent vide letters dated 17th September, 1979 and 10th April 1982 allowed the petitioners to use a storage shed in the Auction Hall Bays 1 and 2 at Fishing Harbour (East and West) (hereinafter referred to as Eastern Shed and Western Shed) on a licence subject to the terms and conditions mentioned in the memorandum of agreements entered into between the 1st petitioner and the 1st respondent from time to time or for the fees payable at the current rate in force from time to time. The said storage sheds measure about 1000 square meters each.
5. It is further averred that the agreements of licence entered into from time to time as aforesaid provide for payment of fees in terms of the following Clause 3 which is identical in all the agreements:
"The fee shall be payable at the rate in force from time to time, and shall be paid in quarterly instalments for annual licence in advance to the Chief Accountant, Visakhapatnam Port or such other person whom the Licensor shall nominate in this behalf, on or before noon of the third day of month in which the quarterly payment falls due."
6. It is further averred that the rate of Rs. 768/- p.m., or part thereof is stipulated in the schedule of current rates at the time of granting licence, written under the said agreements. The schedule also states the authority in respect of the current rates, namely, the scale of rates fixed by the 1st respondent by G.O.No. Part II Section 3(1), dated 27-12-1958 paragraph 6, 1880 (PAO's) Secretary's letter No.A.T.A/223, dated 8-1-1959 till the year 1985 and thereafter, under Chapter V of the Visakhapatnam Port Trust Scale of Rates, 1985. The 1st petitioner has promptly and regularly paid all the bills raised as aforesaid. The last of such licence agreements were signed by the parties on 28th June, 1988 for a period from 9th May, 1988 for the Eastern shed and 6th May 1988 for the Western shed valid for the period of one year in both the cases. The said licence period accordingly expired on 5th May, 1989 and 8th May, 1989 in case of Eastern and Western sheds respectively.
7. It is further averred that on the application for renewal by its letter dated 5th May, 1989, the 1st respondent vide its letters dated 29th May, 1989 renewed the licence in favour of the 1st petitioner from 23rd May, 1989 to 22nd November, 1989 for eastern and western sheds respectively and also informed that since the licence expired on 5th May, 1989 and 8th May 1989 respectively and since the renewal application was received by the 1st respondent on 23rd May, 1989, the petitioner's occupation of the Eastern and Western sheds was treated as unauthorised till 22nd May, 1989 and penal charges would be debited to the 1st petitioner's account. By its letter dated 23rd November, 1989 and 18th May, 1990, the 1st respondent renewed the petitioner's licence from 23rd May, 1989 to 22nd May, 1990 and from 23rd May, 1990 the 22nd November, 1990 respectively. No formal agreements of licence, were entered into by the parties for the above said period.
8. It is further averred that while so, by its letter dated 9th May, 1990, the 1st respondent informed the petitioners that licence fee for the storage shed in Eastern and Western sheds was respectively fixed at Rs. 2,915 and Rs. 2,930/- with 20% Departmental charges for the period from 1st April 1983 to 31st March, 1988 and issued the revised impugned bills demanding a sum of Rs. 4,32,000/- towards the arrears of rent with retrospective effect from 1st April 1983 to 22nd May, 1990. In spite of a representation to the Chairman of the 1st respondent, no action has been taken. Hence, the writ petition.
9. The respondents have filed the counter. It is inter alia contended that the relationship between the petitioner and the respondent is purely contractual and no writ can lie to enforce the contract. Sections 48 and 49 have nothing to do with fixing licence fee for rooms and as such no writ will lie regarding the collection of licence fee or rates. The licence fee is provisionally fixed subject to verification and ratification by the Revenue Department and in this case, the Collector fixed the land value under fundamental rules. Until the value is fixed, the Port collects the provisional licence fee and that is how they have been collecting from 1983 and agreements were entered into with petitioner. The Port has fixed the fee under FR 45 (B) and after it was fixed, a notice was issued to the petitioners to pay the balance of the amount. Questioning the same, the present writ petition has been field. Penal rent has been charged from 9-5-1989 upto 22-5-1989 by the respondent on the ground, that the petitioners failed to renew the licence in time and the same has been paid by the petitioner. His licence was renewed for six months only from 23-5-1989 to 22-11-1989. It is true that, all the provisional bills have been paid by the petitioner. It is true that on 9-5-1990 the respondent sent letters to the petitioner requesting to pay the revised bills from 1-4-1983 for a sum of Rs. 4,82,064/-. The scale of rates, is not applicable to the petitioner's case and FR 45(B) rates are applicable. It is also the practice in the Port to follow the quinquennial rates given by the RDO. The allegation that issuing of bills is arbitrary and unilateral, is not correct. The petitioner sent a representation to the Chairman on 9th July, 1990 which is still pending for consideration. Meanwhile, the petitioner filed this writ petition. Similar writ petitions challenging the revised rates of quinquennial value, have been dismissed by this Court. The petitioners are questioning the agreement, which cannot be done under Article 226 of the Constitution. The writ petition is liable to be dismissed.
10. Heard Mr. Sridharan, the learned Counsel for the petitioners and Mr. K. Srinivasa Murthy, the learned senior Counsel appearing on behalf of the respondents.
11. The learned Counsel for the petitioners vehemently contended that the impugned order suffers from various legal infirmities viz., (1) it does not reflect the source of powers to demand arrears of licence fee retrospectively for the period long expired and also the powers, on which basis, it is passed; (2) the validity of the impugned order has to be tested with reference to the reasons assigned in the order itself and it should not be supplanted or planted by way of additional affidavit to expand or explain the reasons to justify the same; (3) there is no statutory support under which the Port Trust is authorised or empowered to issue the impugned order; (4) since the Port Trust is a statutory body under the Port Trust Act, it is has to act fairly and honestly, but not arbitrarily and the decision should not be an unilateral one. The Port Trust has to act strictly in adherence to the statute, in which it is constituted, and to travel within its bounds, sphere and should not exceed or expand its limits so as to arbitrarily and raise an unjust and inequitable demand and the alleged demand must be supported by a statutory power, under which they are empowered and authorised.
12. It is further contended that at this stage, the recourse to alternate remedy by way of private law remedy, does not debar this Court from granting the relief to the petitioner, inasmuch as on account of lapse of time, it may result in the foreclosure of all other remedies and as such, at this length of time, the petitioner cannot be driven to file a civil suit. In support of his contention, he relied on a judgment of the Apex Court reported in State of Himachal Pradesh v. Raja Mahendra Pal, , wherein it is held thus:
"The learned Counsel appearing for the appellant has vehemently argued that the writ petition filed was not maintainable as the High Court was not justified in entertaining the same and consequently granting the relief to the respondent No. 1. The rights of respondent No. 1, if any, are stated to be based upon a contract for which he was obliged to avail of the alternative efficacious remedy of filing a suit either for the recovery of the money or for rendition of accounts. It is contended that the discretionary powers vested in the High Court under Article 226 of the Constitution could not have been exercised in the facts and circumstances of the case. Though, we find substance in the submission of the learned Counsel for the appellant, yet we are not inclined to allow the appeal and dismiss the writ petition @ page-SC 1790 of respondent No. 1 only on this ground. It is true that the power conferred upon the High Court under Article 226 of the Constitution are discretionary in nature which can be invoked for the enforcement of any fundamental right or legal right but not for mere contractual rights arising out of an agreement particularly in view of the existence of efficacious alternative remedy. The constitutional Court should insist upon the party to avail of the same instead of invoking the extraordinary writ jurisdiction of the Court. This does not however debar the Court from granting the appropriate relief to a citizen under peculiar and special facts notwithstanding the existence of alternative efficacious remedy. The existence of the special circumstances are required to be noticed before issuance of the direction by the High Court while invoking the jurisdiction under the said Article. In the instant case, the High Court did not notice any special circumstance which could be held to have persuaded it to deviate from the settled proposition of law regarding the exercise of the writ jurisdiction under Article 226 of the Constitution. For exercise of the writ jurisdiction, the High Court pressed into service the alleged fundamental right to livelihood of the respondent which was found to have been violated by not making him the payment of the amounts claimed in the writ petition. It is true that Article 21 of the Constitution is of utmost importance, violation of which, as and when found, directly or indirectly, or even remotely, has to be looked with disfavour. The violation of the right to livelihood is required to be remedied. But the right to livelihood as contemplated under Article 21 of the Constitution cannot be so widely construed which may result in defeating the purpose sought to be achieved by he aforesaid Article. It is also true that the right to livelihood would include all attributes of life but the same cannot be extended to the extent that it may embrace or take within its ambit all sorts of claim relating to the legal or contractual rights of the parties completely ignoring the person approaching the Court and the alleged violation of the said right.
The High Court appears to have adopted a very generous, general and casual approach in applying the right to livelihood to the facts and circumstances of the case apparently for the purpose of clothing itself with the power and jurisdiction under Article 226 of the Constitution. We are sure that if the High Court had considered the argument in the right perspective and in the light of various pronouncements of this Court, it would not have ventured to assume jurisdiction for the purposes of conferring the State largess of public money, upon an unscrupulous litigant who preferred his claim on his proclaimed assumption of being as important as the Government of the State and equal thereto. Despite holding that the High Court had wrongly assumed the jurisdiction in the facts of the case, as earlier noticed, we are not inclined to dismiss the writ petition of the respondent No. 1 on this ground at this stage because that is likely to result in miscarriage of justice on account of the lapse of time which may now result in the for closure of all other remedies which could be availed of by the respondent in the ordinary course. The alternative remedies available to the respondent admittedly not being efficacious at this stage has persuaded us to decide the claim of the respondent on merits."
13. While drawing my attention to Sections 48 and 49 of the Act, it is contended that the respondent is empowered to impose and recover "rates" for the services performed by it at the various scales framed by the Board from time to time. He has also drawn my attention to the expression "rate" defined under Section 2(v) of the Act, which reads as under:
"Rate includes any toll, due, rent, fee or charge leviable under this Act".
14. It is further contended that the statutory functionary constituted under the statute, should act fairly and its action should not be arbitrary, and, this Court can exercise its judicial review, if it is found that such an action or power exercised, is unfair and unjust.
15. It is further contended that having accepted the amount which was paid by the petitioners and having not raised any objection about the amount, so paid and collected, it is not proper on the part of the respondents to raise a demand in question which is arbitrary and apart from that, the backward revision with retrospective effect, is illegal and against law. In support of his contention that unless the terms of a statute expressly so provide or necessarily require it, retrospective operation should not be given to a statute, he relied upon a judgment of the Apex Court reported in Govinddas v. I.T Officer, , wherein it is held thus:
"Now it is a well settled rule of interpretation hallowed by time and sanctified by judicial decision that unless the terms of a statute expressly so provide or necessarily require it, retrospective operation should not be given to a statute so as to take away or impair an existing right or create a new obligation or impose a new liability otherwise than as regards matters of procedure. The general rule as stated by Halsbury in Vol. 36 of the Laws of England (3rd Ed.) and reitereated in several decisions of this Court as well as English Courts is that "all statutes other than those which are merely declaratory or which relate only to matters of procedure or of evidence are prima facie prospective" and retrospective operation should not be given to a statute so as to affect, alter or destroy an existing right or create a new liability or obligation unless that effect cannot be avoided without doing violence to the language of the enactment. If the enactment is expressed in language which is fairly capable of either interpretation, it ought to be construed as prospective only. If we apply this principle of interpretation, it is clear that Sub-section (6) of Section 171 applies only to a situation where the assessment of a Hindu Undivided Family is completed under Section 143 or Section 144 of the new Act. It can have no application where the assessment of a Hindu Undivided Family is completed under the corresponding provisions of the old Act. Such a case would be governed by Section 25A of the old Act which does not impose any personal liability on the members in case of partial partition and to construe Sub-section (6) of Section 171 as applicable in such a case with consequential effect of casting on the members @ page-SC 559 personal liability which did not exist under Section 25A, would be to give retrospective operation to Sub-section (6) of Section 171 which is not warranted either by the express language of that provisions or by necessary implication. Sub-section (6) of Section 171 can be given full effect by interpreting it as applicable only in a case where the assessment of a Hindu Undivided Family is made under Section 143 or Section 144 of the new Act. We cannot, therefore, consistently with the rule of interpretation which denies retrospective operation to a statute which has the effect of creating or imposing a new obligation or liability, construe Sub-section (6) of Section 171 as embracing a case where assessment of a Hindu Undivided Family is made under the provisions of the old Act. Here in the present case, the assessments of the Hindu Undivided Family for the assessment years 1950-51 to 1956-57 were completed in accordance with the provisions of the old Act which included Section 25 and the Income-tax Officer was, therefore, not entitled to avail of the provision enacted in Sub-section (6) read with Sub-section (7) of Section 171 of the new Act for the purpose of recovering the tax or any part thereof personally from any members of the joint family including the petitioners."
16. In Cannanore Spg. and Wvg. Mills v. Customs Collector, Cochin, , the Apex Court has held thus:
"The rule-making authority had not been vested with the power under the Central Excises and Salt Act to make rules with retrospective effect. Therefore, the retrospective effect purported to be given under Exh. P12 was beyond the powers of the rule making authority."
17. In a decision of the Calcutta High Court reported in Arvind Kumar Dhanua v. Board of Trustees and Ors., , it is held thus:
"After giving my anxious consideration to the entire matter, I am of the opinion that the contention of the petitioner should succeed. In other words, it must be held that having prescribed a particular scale of rent for a particular plot in the exercise of its statutory powers, the respondents now have no right, authority or jurisdiction by virtue of notifications or circulars to treat that scale of rent as the reserved rent or minimum rent and invite tenders for higher rents and offer it to the highest bidder. To allow the respondent to do so, in my view, would clearly enable them to deviate from the exercise of statutory powers, which have already been exercised in the present case. This contention of the petitioner therefore succeeds."
18. While drawing my attention to Clause 3 of the agreement which reads as under:
"The fee shall be payable at the rate in force from time to time and shall be paid quarterly instalments for annual licence in advance, xxxxxxx"
It is contended by the learned Counsel for the petitioners that there is no whispher whatsoever of any retrospective revision or the rates fixed under the agreement, and as such, the action of the Port Trust is illegal and arbitrary one in raising the retrospective demand and particularly, the Port Trust has to exercise its powers within its sphere under the Act and it should not travel and exceed and raise an unjust demand for its illegitimate gains. In support of his contention, he relied on a decision reported in State Co-operative Land Development Bank Limited v. Chandra Bhan Dubey and Ors., 1999 (1) LLJ 633, wherein it is held thus:
"When the language of Article 226 is clear, we cannot put shackles on the High Court to limit their jurisdiction by putting an interpretation on the words which would limit their jurisdiction. When any citizen or person is wronged, the High Court will step into protect him, be that wrong be done by State, an instrumentality of the State, a company or a co-operative society or association or body of individuals whether incorporated or not, or even an individual. Right that is infringed may be under Part III of the Constitution or any other right which the law validly made might confer upon him."
19. In a judgment of the Apex Court reported in Union of India v. Kishorilal Gupta and Brothers, , it is held thus :
"We are concerned with the expressed intention of the parties and when the words are clear and unambiguous- they are undoubtedly clear in this case--the is no scope for drawing upon hypothetical considerations or supposed intentions of the parties."
20. In support of his contention that when Clause 3 of the agreement clearly enunciates as to the rates to be fixed form time to time and the terms of the contract are unambiguous, the Port Trust cannot go beyond the powers vested under Sections 48 and 49 of the Act, he relied on a decision of the Apex Court reported in Syed Abdul Khader v. Rami Reddy, , wherein it is held thus:
"When a contract is reduced to writing undoubtedly the Court must look at the terms of the contract and proceed on the assumption that the parties intended what they have said and if the terms are unambiguous the Court must give effect to the terms of the contract. However, it is well established that in considering a contract it is legitimate to take into account the surrounding circumstances for @ page-SC 559 ascertaining the intention of the parties (vide Modi and Company v. Union of India .
21. In a judgment of the Apex Court reported in Pravash Chandra Dalui and Anr. v. Biswanath Banerjee and Anr., 1989 Supp. (1) SCC 487, it is held thus:
"Ex precedenti bus et consequenti bus optima fit interpretatio: The best interpretation is made from the context. Every contract is to be construed with reference to its object and the whole of its terms. The whole context must be considered to ascertain the intention of the parties."
22. On the other hand, Mr. K. Srinivasa Murthy, the learned senior Counsel appearing on behalf of the respondents would contend that the Major Port Trust is no doubt constituted under the Act 38 of 1963. The subject in question is purely a contractual matter and the contract was entered into outside the purview of the Act and as such, the writ petition is not an appropriate remedy questioning the enhancement of rent for giving lease of certain area to the petitioner and it cannot come within the purview of the provisions of Sections 48 and 49 of the Act.
23. In support of his contention, he relied upon a judgment of this Court reported in Vadrevu Lakshmana Rao v. Vadrevu Venkata Ramana Rao, 2000 (3) ALT 462, wherein the petitioners are weavers by profession and they formed a registered society and approached the 4th respondent Bank, which extended the loan of Rs. 10,000/-to the petitioners for purchase of instruments and subsequently, the petitioners failed to repay the amount and they approached this Court claiming waiver of the loan amount under Agricultural and Rural Debt Relief Scheme and having considered the circumstances of the case, this Court has held that the transaction between the parties being purely commercial one, the writ petition is not maintainable.
24. The facts of the above case stand on a different footing with that of the case on hand and as such, the above decision has no application to the present facts of the case.
25. He would further contend that the agreement empowers and authorises the Port to revise the rates and the Collector is empowered to make final determination in the matter. He would further contend that the amount so paid and collected from the petitioner, is merely a provisional and tentative one and as such, the impugned action cannot be termed as arbitrary and unjust. In this context, he has drawn my attention to the provisions of Sections 37, 38 and 42. Section 37 deals with the power of Board to order sea going vessels to use docks, wharves etc. Section 38 deals with all sea going vessels compelled to use docks, wharves etc., if accommodation is sufficient. Whereas Section 42 deals with the power of the Board to undertake the services contemplated under the provision.
26. He would further contend that there are no provisions under the Act giving power to make and allot rooms and as such, storing deep fishing is not a statutory function and it does not fall within the purview of the provisions of Sections 48 and 49 and apart from that, except stating as to the applicability of the provisions of Sections 48 and 49 of the Act in the affidavit, the petitioner has failed to elicit before the Court as to how the agreement falls within the purview of scale of rates contemplated under the provisions of Section 48 of the Act, which deals with the scales of rates for services performed by Board or other person. Since there is no violation of any rules or statutes, the writ petition is misconceived and it is not maintainable.
27. He would further contend that the judicial review is permissible only when there is statutory violation of the Act or the Rules. In support of this contention, he relied on a decision of the Apex Court reported in Asia Foundation and Construction Limited v. Trafalgar House Construction (1) Limited, 1997 (1) SCC 738, wherein it is held thus:
"Though the principle of judicial review cannot be denied so far as exercise of contractual powers of Government bodies are concerned, but it is intended to prevent arbitrariness or favoritism and it is exercise in the larger public interest or if it is brought to the notice of the Court that in the matter of award of a contract power has been exercised for any collateral purpose. It is not within the permissible limits of interference for a Court of law, particularly when there has been no allegation of malice or ulterior motive and particularly when the Court has not found any mala fides or favouritism in the grant of contract in favour of the successful bidder."
28. In Noida Enterpreneurs Association v. U.P. Financial Corporation and Anr., 1994 Supp (2) SCC 108, the Apex Court has held thus:
"We feel on the facts and circumstances of this case that since only the petitioner has come before us, the proper remedy for the petitioner even otherwise is to go to the civil Court and get the matter adjudicated in the suit. This is, however, without prejudice to the right of the petitioner to approach the IDBI by means of representation if they really have power to take action they can take necessary action if it is so desirable under that power against respondent 1."
29. In Food Corporation of India v. Jagannadh Dutta and Ors., , the Apex Court has held thus:
"We are of the view that the High Court was not justified in quashing the impugned notice especially when the terms and conditions of the contract permitted the termination of the agreement by either of the parties. The High Court should not have gone into the question of contractual obligation in its writ jurisdiction under Article 226 of the Constitution. Even otherwise the High Court misread the documents on the record and grossly erred in reaching the conclusion that no policy decision was taken by the FCI to terminate the storage agencies in the State of West Bengal. We may refer to some of the documents on the record."
30. He would further contend that this Act is a Central piece of legislation and the activity undertaken by the Port Trust is not a commercial one and it is rendering services while loading and unloading process at Visakhapatnam and in this connection, he has drawn my attention to the Division Bench judgment of this Court reported in Visakhapatnam Port Trust v. Commercial Tax Officer, Intelligence and Anr.. (2002) 125 STC 294, wherein it is held thus:
"A perusal of the provisions of the Major Port Trusts Act, 1963 would indicate that selling of water to the ships is only an incidental function of the Port Trust and not its dominant or primary activity. Such activity cannot be treated as business within the meaning of that term occurring in the definition of the term "dealer" in Section 2 (e) of the A.P. General Sales Tax Act, 1957. Selling of water to the ships by the Port Trust is not liable to tax."
31. In Kerala State Electricity Board and Anr. v. Kunien E. Kalathil and Ors., , the Apex Court has held thus:
"A contract would not become statutory simply because it is for construction of a public utility and it has been awarded by a statutory body. A statute may expressly or impliedly confer power on a statutory body to enable it to discharge its functions. Dispute arising out of the terms of such contracts or alleged breaches have to be settled by the ordinary principles of law of contract. The fact that one of the parties to the agreement is a statutory or public body will not of itself affect the principles to be applied. The disputes about the meaning of a covenant in a contract or its enforceability have to be determined according to the usual principles of the Contract Act. Every act of a statutory body need not necessarily involve and exercise of statutory power."
32. In State of Bihar v. Hindustan Agencies, 1995 Supp (4) SCC 607, the Apex Court has held thus:
"There was no justification whatsoever for the High Court to have issued the impugned direction to the State Government to proceed to purchase the pipes in execution of the order. In the facts and circumstances of the present case, the State Government within its authority to cancel the supply order. The High Court fell into patent error and acted with material illegality in entertaining and allowing the writ petition."
33. It is further contended that the services mentioned under the provisions of Section 42, do not come under the Major Port Trusts Act. Section 48 deals with the services, but not business. The provisions of Sections 48 and 49 have no application and that the leasing of a land belonging to the Port, does not come within the purview of Sections 48 and 49.
34. In the light of the above rival contentions, the point that arises for consideration is whether the impugned action is exercised in the light of any express provision and the powers vested thereunder and whether the procedure as contemplated under the provisions of Section 49 of the Act is followed or not.
35. I have gone through the material available on record. The impugned order read as under:
"The Chief Engineer, Visakhapatnam Port Trust has accorded sanction to fix the rents for the Public Hall Bays 192 at F.H (East 1 room, West 1 room) at Rs. 2915/- and 2930/-respectively per month and 20% Departmental charges for the period from 1-4-1983 to 31-3-1988.
Hence the revised bills are prepared and sent herewith for arranging early payment."
36. A perusal of the impugned order does not indicate the source of power under which the claim of enhanced rent is made retrospectively. Whenever a demand is raised, it should be supported by some power under which the authority is authorised to do so. The impugned order is devoid of reasons and the validity of the order has to be tested with reference to the reasons assigned and contained therein. Particularly, the Port Trust being a statutory body under the Act, its action must be decided and examined with reference to Article 14 of the Constitution. Article 14 of the Constitution forbids arbitrariness and contemplates equality before law and the public functionary should act fairly and honestly and not arbitrarily and unilaterally.
37. The provisions of Sections 48 and 49, are comprehensives one, which deals with the scales of rates for services performed by Board or other person and scale of rates and statement of conditions for use of property belonging to Board. Under the garb of tentative one, the Port Trust cannot raise a demand retrospectively after a long lapse of period.
38. I have perused the agreement. Clause 3 of the agreement, which is relevant at the crux of the point, discloses that the fee shall be payable at the rate in force from time to time and shall be paid in quarterly instalements for annual licence in advance.
39. Section 49 of the Act is a comprehensive chapter, which deals with scale of rates and statement of conditions for use of property belonging to Board.
40. Neither the agreement nor the provisions of the Act authories the Collector to make a demand for payment of rent retrospectively. Apart from that, Section 49 of the Act contemplates that the authority shall from time to time by notification in the Official Gazette, also frame a scale of rates and statement of conditions. But no such instances have been brought to the notice of this Court that in the instance case, such a procedure has been followed. In Verigamto Naveen v. Government of A.P., , the Apex Court has held thus:
"where the breach of contract involves breach of statutory obligation when the order complained of was made in exercise of statutory power by a statutory authority, though cause of action arises out of or pertains to contract, it falls within the sphere of public law because the power exercised is apart from contract. The freedom of the Government to enter into business with anybody it likes is subject to the condition of reasonableness and fair play as well as public interest. After entering into a contract, in cancelling the contract which is subject to terms of the statutory provisions, as in the present case, it cannot be said that the matter falls purely in a contractual field. Therefore, it would not be appropriate to suggest that the case on hand is a matter arising purely out of a contract and, therefore, interference under Article 226 of the Constitution is not called for."
41. In Dwarkadas Marfatia and Sons v. Board of Trustees, Bombay Port, , the Apex Court has held thus:
"Where there is arbitrariness in State action, Article 14 springs in and judicial 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."
42. In the instant case, the authorities have committed breach of statutory obligation caste upon under the provisions of Section 49 of the Act, and, consequently, it lacks fair play and amounts to arbitrariness, which requires interference by this Court under Article 226 of the Constitution of India. In this regard, the above decisions lend support to the case of the petitioner.
43. As such, the retrospective demand made under the impugned order, is beyond the powers of the rule making authority inasmuch as having a procedure prescribed as to fixation of rate or the rates from time to time under the provisions of the Act and as well as the agreement, the respondent has no right or authority to make a retrospective demand. The legal proposition relied on by the learned Counsel for the petitioner in Cannanore Spg and Wvg. Mills' case (supra) lends support fully to the contention that the authorities cannot act beyond the powers vested under the provisions and the impugned action is in violation of principles of natural justice.
44. With due respect to the principle laid down in the above decisions cited by the learned Counsel for the respondent-Port Trust, the facts and circumstances in the instant case are quite different with that of the decisions and they have no application to the present facts of the case.
45. In the facts and circumstances of the case, I am of the considered view that the impugned demand suffers from various infirmities for the reasons that it is not a speaking order and it does not reflect and indicate the source of power under which it is exercised and the same is arbitrary and is in violation of the principles of natural justice inasmuch as no opportunity was given before passing the final order.
46. In the result, this writ petition is allowed and the impugned order is set aside. However, there will be no order as to costs.