ANIL HARISH Vs. CHIEF SECRETARY GOVERMENT OF MAHARASHTRA

JUDGEMENT

(1.) THE petitioners are the owners of commercial units on 5th, 6th, and 7th floor of Arun Chambers, Tardeo, Mumbai. The 1st re-spondent is the State of Maharashtra. In or about 1968 the 1st respondent was in need of accommodation for housing Industrial Court and Labour court and the offices of Wage Board. By letter dated June 1, 1968 of the secretary, Labour and Industrial department addressed to the President of Industrial Court, Mumbai directed him to take from the then owners M/ slshwardas Haridas Bhatia an area of 24,684 sq. ft. in Arun Chambers at the monthly rent of Rs. 1. 60 paise per sq. ft. on the terms and conditions recorded in the said letter. The proposed lease was for a period of 5 years with the option to the Government to renew for another 5 years. However, it is an admitted position that no lease was executed in writing although several drafts of lease deed were exchanged between the parties. The 1st respondent is thus occupying the said premises without any written agree-ment and/or lease deed from the owners of the premises. The original owners of the premises M/s. Ishwardas Haridas Bhatia sold the commercial units to the present petitioners under diverse agreements and they are the assignees and transferees of the said units which are now in occupation of the 1st respondent.

(2.) IT appears that on December 7, 1972 the Registrar of Industrial Court addressed a letter to M/ s. Ishwardas Haridas Bhatia for renewal of the lease of the premises for a further period of five years. No lease was, however, executed pursuant to the said letter. It appears that thereafter drafts of lease deed were exchanged even in 1975 but no lease deed was executed. In 1991 again the Registrar of Industrial Court wrote to the owners for finalizing the draft lease and suggesting additional terms and conditions and inquiring about the names and addresses of the unit holders. No lease was however, finalized. On June 14, 1994 the Registrar of the Industrial Court wrote to the unit holders that the Executive Engineer, Public Works Department, Mumbai by his letter dated May 24, 1994 has issued reasonable rent certificate at Rs. 13. 75 per sq. ft. excluding the electric charges, water charges, and municipal taxes. However, the 1st respondent continued to pay rent at the old rate i. e. Rs. 1. 60 per sq. ft. In or about May 1999 the Industrial Court, Labour Court and Wage Boards were shifted to Bandra, Mumbai and at present the premises are occupied by some other Government departments. We may mention that two of the unit holders filed petitions in 1990 whereas the rest of the unit holders have filed a petition in 1999. The main contention raised on behalf of the petitioners is that under Article 299 (1) of the Constitution the State Government can only make written contract to be executed in the name of the governor of Maharashtra in the manner laid down in Article 299 (1 ). There cannot be implied contract of lease between the essors and the lessee and in the absence of contract in accordance with Article 299 (1), the transaction is void ab initio and therefore State Government is liable to vacate the premises and restore the property to the petitioners. The petitioners are also seeking a direction to the State Government to pay damages/compensation at the rate of Rs. 13. 75 per month per sq. ft. at least from the date of letter of the Executive Engineer dated May 24, 1994.

(3.) ON behalf of the petitioners the learned Counsel Mr. E. P. Bharucha, mr. Cama and Mr. Jagtiani strenuously urged that there is no completed, binding and enforceable contract between the State of Maharashtra and the unit holders. The learned Counsel submitted that the contract for lease was in exercise of executive authority of the State. The contract had therefore under Article 299 (1), (a) to be expressed to be made by the Governor; (b) to be executed on behalf of the Governor; and (c) to be executed by the officers duly appointed in that behalf and in such manner as the Governor may direct or authorize. No formal contract was however, executed by the State Government and the contract is therefore null and void. Consequently the State government is liable to restore the possession of the premises to the unit holders and to pay damages at the rate of Rs. 13. 75 per sq. ft. as fixed by the executive Engineer of the P. W. D. Mumbai from May 1994. The learned Counsel relied upon various decisions of the Supreme Court in support of their case. An alternate contention was also raised that the proposed lease was for a period exceeding one year and, therefore, required registration. In reply Mr. Dixit, learned Counsel appearing for the respondents submitted that it was not a case of oral lease but that there was correspondence between the parties showing concluded written contract of lease. In any event according to mr. Dixit a contract entered into without complying with the requirement of article 299 (1) of the Constitution, is not void for all purposes and it can be taken into consideration and looked into for collateral purpose. The contract can be said to be executed validly for that purpose. The submission of Mr. Dixit is that the tenancy being a monthly tenancy can be oral because section 107 of the Transfer of Property Act permits them to be oral and, therefore Article 299 (1) is not attracted and such a tenancy is protected by the Bombay Rent Act.