Judgment M.L. PENDSE, J.:---The dispute in this petition relates to two plots of lands bearing Nos. 216 and 217 at Backbay Reclamation, Block III and which are at present under sea. The petitioners are a Nationalised Bank and body corporate constituted under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 and carry on business of banking in diverse places in India. By this petition filed under Article 226 of the Constitution of India the principal relief claimed is grant of permission to errect the intended building on these two plots after reclamation and permission to erect building for office purpose by use of floor space index of 3.5. To appreciate the claim made by the petitioner Bank and by Bank of India in the companion petition, it is necessary to exhaustively set out the facts. 2. The State Government concerned at the growing congestion in Greater Bombay in the year 1960 appointed a Committee under the chairmanship of Dr. D.R. Gadgil, who was the Director of Gokhale Institute of Politics and Economics at Poona and subsequently holding the post of Deputy Chairman of Planning Commission, to examine the necessary steps to achieve the plans for the city of Greater Bombay. Based on the recommendations the Government repealed Bombay Town Planning Act, 1954 and brought into force the Maharashtra Regional and Town Planning Act, 1966 (hereinafter referred to as the M.R.T.P. Act), which came into effect from January 11, 1967. The M.R.T.P. Act was enacted to make provisions for planning the development and use of land in regions established for the purpose and to make better provision for the preparation of development plans with a view to ensuring that town planning schemes are made in a proper manner and their execution is made effective. Backbay Reclamation Scheme was originally planned by Government of Bombay in the year 1920 and consisted of eight blocks. Block I and II stretched from Chowpatty to Sachivalaya while Blocks VII and VIII lie at the extreme southern tip at Colaba near defence area. Blocks I, II and VII and VIII were reclaimed upto 1930, and thereafter the reclamation was not carried out. Block I and II stretched from Chowpatty to Sachivalaya while Blocks VII and VIII lie at the extreme southern tip at Colaba near defence area. Blocks I, II and VII and VIII were reclaimed upto 1930, and thereafter the reclamation was not carried out. In the year 1950 in view of the mounting demand for additional space for development in southern Bombay, the Government appointed one-man Committee chaired by Shri S.G. Barve, I.C.C. to examine possibility of revival of the scheme by reclaiming land out of Blocks III and IV admeasuring about 550 acres. After the enactment of M.R.T.P. Act, in the year 1967 the State Government appointed another Committee headed by Shri L.G. Rajwade, I.C.S. to submit a report in respect of difficulties faced by major metropolitan cities in view of urbanisation migration of people to the metropolis and deterioration in condition of sanitation, housing, law and order etc. Rajawade Committee recommended regional plans for Bombay Metropolitan region by accepting the suggestions made earlier by Gadgil Committee. Accepting the recommendations, the State Government constituted the Regional Planning Records for three major regions of Bombay, Pune and Nagpur. The Bombay Metropolitan Region Planning Board after carrying out the extensive exercise and after consideration of various proposals formulated the draft plans for the Bombay region. The Board after scrutinising the plans and examining the suggestions and objections received from public at large, finalised the plan on October 5, 1970. The Planning Board noticed that the problems of Organisation in major metropolitan cities have been complex. The Board realised that if these problems have to be tackled and prevented from further deterioration, then some metropolitan planning must necessarily be undertaken and the fresh approach brought to bear on future expansion. The Planning Board noticed that the development of the large Metro centres will be required and such metro centres should be set up on either side of the Panvel Creek, the Northern portion between Thane Creek and the Parsik Tunnel and high area is commonly known as "Trans-Thana Creek area" and the rest of the area is trans harbour area comprising of Panvel, urban and Nhava-Sheva . The Planning Board noticed that the whole idea of restructuring of the metropolis by constructing a twin city hinges around the office sectors being introduced in large way to locate itself in the new centre. The Planning Board noticed that the whole idea of restructuring of the metropolis by constructing a twin city hinges around the office sectors being introduced in large way to locate itself in the new centre. The Planning Board observed that the Government is at the key position in this sector and the positive and determined land from the Government by shifting its capital to new centre would both act as a catalyst and also induce confidence on the minds of the private sectors about assured prosperity of the new development. The Board realised that the strongest growth pole among the various activities being governing; without government's participation the new metro centres cannot succeed. The Planning Board suggested major policy decision at Government level regarding future development in Bombay, particularly in the offices-sector, and these recommendations which were accepted by the Government are as follows : (a) Not to do anything which will go to perpetuate the north-south development trend and aggravate the structural imbalance in the city. No additional commercial area to be created in the Backbay Reclamation by restricting the commercial area to 20% of the scheme, the remaining 80% reserved for residential user. (b) To plan for eventual location of all offices not connected with Bombay, in the metro centre across the harbour and to undertake the shifting of as manu such offices from the present C.B.D. as possible to the area of the proposed metro centre; and (c) To give a priority to the Bandra-Kurla reclamation and to establish an alternative commercial complex in this area to give immediate relief. To locate or relocate such offices which must essentially exist in Bombay either in this alternative centre or in the area to the north of Belasis Road. 3. A large number of public spirited citizens realising the consequences which would flow from reclamation of a large area from the sea in the Backbay Reclamation, requested the State Government and the Chief Minister not to undertake any reclamation in Blocks III to VI in the Backbay area. Mr. Sudhir Joshi, who was the mayor of Bombay, in the year 1973 requested the Chief Minister not to develop backbay area as it would create circumstances resulting in putting strain on the Municipal services as well as create several traffic hazards. The Government of Maharashtra did not accept the objections and decided to lease plot Nos. Mr. Sudhir Joshi, who was the mayor of Bombay, in the year 1973 requested the Chief Minister not to develop backbay area as it would create circumstances resulting in putting strain on the Municipal services as well as create several traffic hazards. The Government of Maharashtra did not accept the objections and decided to lease plot Nos. 210 to 224 to large number of builders and to Free Press Journal, Central Bank of India. All these plots were under seas and were required to be reclaimed before undertaking construction of office buildings. The petitioner Bank had sought allotment of plots in Block III on November 3, 1971 and in pursuance of the application plots Nos. 216 and 217 were allotted to Central Bank by letter dated April 29, 1974. The letter, inter alia, recites that the plot would be leased on payment of annual groun rent of 16 1/2% on the value thereof at Rs. 5,400/- per sq. metre on the terms and conditions mentioned in the annexed memorandum. The memorandum sets out that the plots to be leased will be shown in the tentative lay our plan prepared by the Director of Town Planning for the Backbay Reclamation area. The memorandum further recites that the plots are completely unreclaimed, and the Bank can commence the work of reclamation only after the permission to that effect is giving by the Chief Engineer, Buildings and Communication Department The memorandum further provides that after the plots are fully reclaimed the Bank shall give a notice to the Collectors of Bombay to that effect and get the boundries of the plot clearly demarcated. The Bank was required to pay the earnest money deposit of Rs. 1 lakh for each plot. 4. On the date of allotment the development of the property was regulated by the Development Control rules for Greater Bombay, which had come into effect from February 9, 1967. These Development Rules were framed under section 22(m) of the M.R.T.P. Act which enables the Planning Authority to prepare Development Control Rules in any area in respect of which the development plan is prepared. The Development Control Rules divides Greater Bombay into four zones (a) residential (b) commercial (c) industrial and (d) green or no-development zone. These Development Rules were framed under section 22(m) of the M.R.T.P. Act which enables the Planning Authority to prepare Development Control Rules in any area in respect of which the development plan is prepared. The Development Control Rules divides Greater Bombay into four zones (a) residential (b) commercial (c) industrial and (d) green or no-development zone. The Rules, inter alia, provide that the floor space index in commercial zones of Backbay Reclamation Blocks III to VI would be 3.5 and in commercial zone it was permissible to erect business offices and exchanges. The letter of allotment issued to the Bank provided for construction of office buildings by use of F.S.I. of 3.5. The Bank as well as the other allottees accepted the offer. 5. On May 22, 1974, that is within one month from the date of allotment of plots by the State Government, the Municipal Corporation passed resolution directing the Commissioner of the Bombay Municipal Corporation not to pass plans for construction of new buildings in the backbay reclamation area. The resolution sets out that when the Mayor alongwith the Corporators approached the Chief Minister requesting not to develop the backbay area as it would create circumstances putting strain on the Municipal services, the Chief Minister declined to accept the request but suggested that the part of the funds that would be made available by developing the backbay area would be used for improving roads in Bombay. The resolution sets out that the backbay development scheme is not only inconsistent but also at variance with the object of the Legislative Assembly to reduce the congestion in the city. The resolution notes that the reclamation would result in putting excessive strain on the population, traffic, supply of water electricity and other services will be required to be made available on a gigantic scale for execution and fulfilment of the scheme and which is bound to create a wide imbalance between the sixty lacks citizens of Bombay on one side and few chosen one in the backbay reclamation area on the other. The Corporation also pointed out in the resolution that the skyscrapers would be raised in the backbay area and in the event of fire it would be very difficult for the Fire Brigade to extinguish the same since the system of distribution of water lacks the capacity of boosting up the water to such height. The Corporation also pointed out in the resolution that the skyscrapers would be raised in the backbay area and in the event of fire it would be very difficult for the Fire Brigade to extinguish the same since the system of distribution of water lacks the capacity of boosting up the water to such height. The Corporation thereupon directed the Municipal Commissioner not to approve the plans for construction of the lands in the reclaimed area except for public purposes, such as National Centre for Performing Arts, Tube Railways, B.E.S.T. Bus Depot, Terminus, Research Centre etc. and the Government should not be allowed to develop the area while giving special concessions. The resolution had no impact upon the State Government and that led to filling of Writ Petition No. 519 of 1974 by Shri Piloo Mody, Mrs. Mrinal Gore, Mr. Shreeram Sabde and Padmakar Samant and Others. Two more petitions, being Writ Petitions Nos. 176 of 1975 and 553 of 1975 were filed by Mr. Madhu Limaye, M.P. and others and by Shri Sudhir Joshi, Mayor of Bombay and others. The petitions impugned the letters of allotment issued by Government of Maharashtra to the allottees and the prayer was for a declaration that the allotment of plots in the backbay reclamation scheme under low-water mark is void and of no legal effect. All the allottees were made party respondents to these petitions in addition to the State Government, the Municipal Corporation, Chief Minister, Revenue Minister etc. The interim relief sought in the petition was to restrain the allottees from reclaiming or proposing plans for construction of buildings on these plots. Both the Central Bank and Bank of India were party respondents to these petitions. The builders, who were allottees claimed that they should be permitted to reclaim the land and erect the building and in case the petitions succeed then they would demolish the buildings at their own costs. The two Banks and Free Press Journal decided to wait till the decisions of the writ petitions. The Municipal Corporation granted building permission to the builder on their furnishing the undertaking to demolish the buildings and thereupon the builders proceeded to reclaim the plots allotted to them and commence construction. The petition were heard before Mr. The two Banks and Free Press Journal decided to wait till the decisions of the writ petitions. The Municipal Corporation granted building permission to the builder on their furnishing the undertaking to demolish the buildings and thereupon the builders proceeded to reclaim the plots allotted to them and commence construction. The petition were heard before Mr. Justice Gandhi and the learned Judge came to the conclusion that allotment of plots was not legal and the disposal of plots under sea was in curreptitious manner. The learned Judge then held that the disposal of the plots was both arbitary and at a gross under valuation. The learned Judge also recorded a finding that the transactions must be held to be mala fide in law because they were done for the benefit of the allottees and not with a view to discharge the public duty of disposing of the State's property for the benefit of the State. After recording this finding, the learned Judge held that normally the allotments would have been cancelled, but applying the equitable principles which the courts of Chancery in England would have exercised, the possession of the allottees should not be disturbed, The learned judge felt that as the allotment were made at under valuation and though transaction were liable to be set aside, in case the allottees pay additional amount on the notional value 33½rd percent more, than the allotment need not be disturbed. 6. The decision of Mr. Justice Gandhi was challenged by builders by filing several appeals before the Divisional Bench of this Court. The grievance of the builders was that the learned Single Judge should not have directed payment of additional amount for protecting their possession. The Central Bank also filed Appeal No. 187 of 1976, while the Bank of India filed Appeal No. 178 of 1976. The appeal were also preferred by all the allottees against the judgement delivered in other petitions filed by Mr. Madhu Limaye, Member of Parliament. These appeals by the allottees were entertained by the Division Bench and were duly admitted. The State Government did not file any appeal, but the original petitioners, that is Mr. Sudhir Joshi, the Mayor of Bombay filed cross-objections to challenge the order of the Single Judge permitting the allottees to retain the allotment orders and reclaim the area. These appeals by the allottees were entertained by the Division Bench and were duly admitted. The State Government did not file any appeal, but the original petitioners, that is Mr. Sudhir Joshi, the Mayor of Bombay filed cross-objections to challenge the order of the Single Judge permitting the allottees to retain the allotment orders and reclaim the area. The cross-objections were filed beyond period of limitation and Notice of Motion were taken out for condonation of delay. The Notions were resisted and the Division Bench consisting of Chief Justice Kantawala, Justice S.K. Desai dismissed the Notice of Motion and refused to condone the delay in filing cross-objections by order dated February 21, 1978. Shri Sudhir Joshi approached the Supreme Court to challenge legality of the order declining to entertain the cross-objections after condonation of delay. The Special Leave Petition (Civil) No. 4083/4084 of 1978 was disposed of by the Supreme Court by order dated October 18, 1978. The Supreme Court did not consider the Special Leave Petition on merits as the Counsel for the builders gave an undertaking that the appeal filed by the builders and Free Press Journal before the Division Bench of this Court will be withdrawn. The two banks, though parties to the appeals, were not served and consequently did not appear or give any undertaking to withdraw the appeal pending before the Division Bench. The appeals preferred by the builders and Free Press Journal were placed before the Division Bench on April 26, 1979 and the parties tendered consent terms and the Court disposed of the appeals in accordance with the consent terms. The consent terms, inter alia, provided that the order of Mr. Justice Gandhi is accepted by the appellants. The consent terms then provides for extension of time for completion period of the buildings. The appeals preferred by the Central Bank and Bank of India were not placed before the Division Bench at the relevant time and remained pending. 7. It is necessary at this juncture to refer to an important event which had occurred during pendency of the appeal before the Division Bench. On January 26, 1975 the Bombay Metropolitan Region Development Authority Act, 1974 came into force. 7. It is necessary at this juncture to refer to an important event which had occurred during pendency of the appeal before the Division Bench. On January 26, 1975 the Bombay Metropolitan Region Development Authority Act, 1974 came into force. The legislature passed the Act for forming Greater Bombay and certain areas around about into Bombay Metropolitan Region, to provide for establishment of an authority for the purpose of planning, co-ordinating and supervising the proper, orderly and rapid development of the areas in the region and of executing plans, projects and schemes for such development. Section 3 of the Act requires the State Government to establish authority to be called the Bombay Metropolitan Region Development Authority or Metropolitan Authority. The composition of the Metropolitan Authority is set out in section 4 of the Act and consists of the Minister for Urban Development. Minister for Housing, Mayor of Bombay, the Chairman of the Planning Committee of the Municipal Corporation, Members of the Maharashtra Legislative Assembly and Legislative Council, Chief Secretary, Municipal Commissioner and the Managing Director of CIDCO. Section 7 prescribes for setting up of an Executive Committee consisting of the Chief Secretary, the Metropolitan Commissioner, the Secretaries of Urban Development Department and Housing Department, Municipal Commissioner and members who are experts in the field of urban planning and development. The powers of the Executive committee are not cut under sub-section (3) of section 7 and includes "grant of permission or refusal of permission on behalf of the Authority under sub-section (5) of section 15". Section 13(1) provides that notwithstanding anything contained in any law for the time being in force, except with the previous permission of the authority, no authority or person shall undertake any development within the metropolitan region, as the authority may from time to time specify, by notification published in the Official Gazette. In exercise of powers conferred under sub-section (1) of section 13, the authority published notification on June 10, 1977. The notification recites that the authority considered it expedient to specify certain types of development which should not be undertaken except with the prior permission of the authority. In exercise of powers conferred under sub-section (1) of section 13, the authority published notification on June 10, 1977. The notification recites that the authority considered it expedient to specify certain types of development which should not be undertaken except with the prior permission of the authority. The notification recites that it is necessary to provide for seeking prior permission on any construction or reconstruction of a building with the floor space index of more than 1.33 within the area of the Municipal Corporation of Bombay is likely to adversely effect the overall development of the Bombay Metropolitan Region. The notification provides that any development consisting of the construction or reconstruction of a building containing office premises should not be undertaken without prior permission of the authority. The notification sets out that the requirement of prior permission for any development or construction is not necessary in cases where commencement certificate has been issued by the Municipal Corporation prior to the date of issuance of notification. In view of the enactment of B.R.M.D.A. Act and the issuance of the notification, it is not permissible to undertake any construction or reconstruction of buildings with a floor space index of more than 1.33 within the area of Municipal Corporation without prior approval of the Authority. 8. As mentioned hereinabove, amongst the allottees were builders like Rahejas, Mittal, Dalamal, Tulsiani, Makers etc. and also included the Free Press Journal Estate Limited and the two Banks. The builders did not wait for the disposal of the writ petitions filed by the public spirited persons and proceeded with the reclamation and erection of buildings. Free Press Journal Estates Limited and the two Banks had not undertaken that exercise. Free Press Journal after disposal of their appeal filed before the Division Bench of this Court, were desirous of constructing building on plot No. 215 for their printing press, newspaper office and other offices with the proposed F.S.I. of 3.49. In view of coming into operation of provisions of B.M.R.D.A. Act and the notification issued under section 15(1) of that Act, it was incubent for any person or authority to obtain prior permission of the authority before undertaking any development or construction of building having floor space index in excess of 1.33. Accordingly, free Press Journal Estate Limited filed application before the Metropolitan Authority on September 5, 1977. Accordingly, free Press Journal Estate Limited filed application before the Metropolitan Authority on September 5, 1977. The application was considered by the Executive Committee constituted under section 7 of the Act and by letter dated October 4, 1977 Free Press Journal was informed that the permission under sub-section (3) of section 15 read with section 7(2)(v) of the B.M.R.D.A. Act stands refused. The letter recites that the Committee found no merit in the justification given for the construction of the building for printing press, newspaper office and other offices with the F.S.I. of 3.49. The letter further recites that the Committee noted that the proposed building would accommodate over 5000 employees and observed that this would lead to additional burden on the transport and other civic services in the southern tip of the city. The letter then states that the committee felt that if the permission is granted then it is likely to adversely affect the overall development of the metropolitan region. Free Press Journal Estates Limited preferred appeal as prescribed under sub-section (4) of section 13 to the State Government and the appeal was heard by Minister for Housing and B.M.R.D.A. and was allowed by order dated February 27, 1978. The Minister held that plot was allotted for the legitimate requirement of constructing a building to Free Press on October 11, 1973 and the construction could not be undertaken in view of the litigation in courts. The Minister felt that the other builders proceeded with the development and constructed buildings with 3.5 F.S.I., while Free Press waited till the Court decision and thereafter the permission was refused by B.M.R.D.A. According to the Minister Free Press was discriminated against and that was against all came of equity and natural justice. The Minister felt that to deny advantage of F.S.I. 3.5 to Free Press would tantamount to the breach of contract not to speak of the discrimination. The Minister observed that refusal of permission would cause untold hardship to Free Press for no fault of theirs. The Minister could not overlook that the notification was issued under section 13(1) of the B.M.R.D.A. Act with the object to decongest and to have a planned development in the city of Bombay and to avoid congestion at the southern tip of Bombay city. The Minister could not overlook that the notification was issued under section 13(1) of the B.M.R.D.A. Act with the object to decongest and to have a planned development in the city of Bombay and to avoid congestion at the southern tip of Bombay city. The Minister observed that grant of permission will defeat to some extent main object by creation of additional burden on traffic and other civic amenities, but to ensure that no injustice is done to Free Press permission should be granted. In accordance with the order of the Minister naturally Free Press Journal reclaimed the land and constructed a sky scrapper in which large offices, including Indian Express were allotted accommodation. 9. The State Government in pursuance of the recommendations made by the Study Group under the Chairmanship of S.G. Barve, I.C.S. and Rajawade, I.C.S. had taken a decision to reclaim 550 acres from Blocks III to VI and had issued allotment letters in the year 1974. The Government was required to re-examine the project in view of the large public discontent and serious criticism by responsible persons against the action of reclaiming land under the sea. The Government thereupon appointed an ad hoc committee to reexamine the lay out of the entire scheme. The ad hoc committee known as Kale Committee forwarded the report to the Government on August 9, 1975 and the report was circulated for eliciting public opinion. The Government thereafter took policy decision on December 1, 1978 and which reads as under : " The reclamation on Backbay area should be frozen at the existing level, except that in case the fisherman can be persuaded to shift to plots 75 and 82 for parking of the boats then the plots 76 and 82 may be reclaimed. All efforts should be made to prevent further encroachments on the already reclaimed area." The Government therefore took a policy decision on December 1, 1978 not to permit any reclamation after that date. The Government of Maharashtra also amended the Development Control Rules for Greater Bombay by notification dated March 19, 1979 issued in exercise of powers conferred by sub-section (2) of section 37 of the M.R.T.P. Act. The Government of Maharashtra also amended the Development Control Rules for Greater Bombay by notification dated March 19, 1979 issued in exercise of powers conferred by sub-section (2) of section 37 of the M.R.T.P. Act. By amendment of Rule 13(b) (ii) it was provided that business offices and exchanges which were permissible in the commercial zones would be permitted only in suburbs and extended suburbs and shall not be allowed in the island city of Bombay comprising of 'A' to 'F/North' and 'G/North' wards. In view of the amendment of the Development Control Rules, the construction of buildings for business offices were prohibited in the island city of Bombay and that includes the area of Backbay Reclamation. 10. The Central Bank on April 1, 1977 addressed letter to the Under Secretary to the Government of Maharashtra conveying that in accordance with the judgement delivered by Mr. Justice Gandhi the allotment of the plots has been approved, provided the allottees agree to pay 33½rd per cent higher base rent then the originally provided rent. The letter recites that though appeals have been filed to challenge direction to pay higher rent, there is no legal bar to the development of the plots and construction thereon. The Central Bank offered to pay the higher base rent as per the judgment and also offered to withdraw the appeals, if the settlement is arrived at between the Government and the Bank. The letter then claims that Central Bank being a nationalised bank is greatly handicapped in the work and activities for want of office accommodation and intend to develop the plots and buildings on them as per the conditions laid down by the State Government. The letter sought queries as to : (a) whether there is a change in the F.S.I. of 3.5 ; (b) whether there is any height restrictions in respect of office buildings; and (c) whether the construction work of office building requires prior permission of B.M.R.D.A. On December 16, 1978 the office of the Executive Engineer, Presidency Division informed the Custodian of the Central Bank that as per the Government policy announced in December 1978 no new reclamation of any land in the backbay reclamation scheme is permitted and therefore the Bank should stop the reclamation of the plots. The Bank protested claiming that being a nationalised institution is in great need of building to house the staff and Government should sympathetically approach the demand for reclamation of the plots and construction thereon. On October 6, 1979 the Assistant Secretary to the Government informed the Central Bank that the request of the Bank for reclamation of the plots and construction thereon cannot be granted. The reasons set out in the letter are : (a) the judgement of Mr. Justice Gandhi protected the allotment on payment of higher base rent and judgment applies only to these allottees who where in actual possession; (b) the Government has taken a policy decision not to permit any further reclamations and (c) construction of office accommodation is not permitted. On December 20, 1979 the Collector of Bombay informed the Central Bank that the amounts paid as earnest money and security deposit should be taken back as the Government has cancelled the allotment orders in respect of plots 216 and 217 in favour of Central Bank. The Central Bank challenged the decision of cancelling the allotment of the plots by adopting the remedies. The Bank filed Writ Petition No. 1120 of 1981 under Article 226 of the Constitution of India on the original side of this Court claiming writ of mandamus directing the Government to withdraw the order of cancellation and further compelling the Government to do all acts and things in order to grant the lease in favour of the Bank in accordance with the terms and conditions prescribed at the date of issuance of the Bank in accordance with the terms and conditions prescribed at the date of issuance of the allotment order in the year 1974. The Central Bank also instituted suit for specific performance of the agreement to lease against the State Government . The suit for specific performance is still pending and before adverting to the fate of the writ petition it is necessary to refer to one more development. 11. As mentioned hereinabove, both the Central Bank and Bank of India had filed appeals to challenge the final order passed by Mr. The suit for specific performance is still pending and before adverting to the fate of the writ petition it is necessary to refer to one more development. 11. As mentioned hereinabove, both the Central Bank and Bank of India had filed appeals to challenge the final order passed by Mr. Justice Gandhi protesting the allotment on condition of payment by the builders and Free Press Journal were disposed of in accordance with the consent terms and because of the assurance of the builders before the Supreme Court that the appeals will be withdrawn, the appeals filed by the two Banks remained pending. The two Banks had not given any undertaking before the Supreme Court to withdraw the appeals and consequently the two appeals were required to be heard on merits. The appeals were placed for disposal before Mr. Justice S.K. Desai and Mr. Justice Kurdukar on February 14, 1986 and the Banks did seriously dispute the conclusion of Mr. Justice Gandhi that the allotment can be upheld provided the allottees agree to pay higher base rent than initially agreed. The Banks complained before the Division Bench that advantage of the judgment of Justice Gandhi was denied to the Banks on the erroneous ground that the Banks were not in physical possession of the plots on the date of the judgment. The Central Bank claimed that the benefit of the judgment cannot be denied to the bank on erroneous reading that the allotment can be protected only if the allottee is in actual possession of the land. The Division Bench accepted the contention and declared that in respect of the two plots allotted each to the Central Bank and Bank of India the two Banks would be entitled to relief on the same footing as granted to other builders and the Government cannot deny the relief on the ground that they were not in physical possession of the plots. Before the Division Bench it was pointed out on behalf of the State Government that after the decision of Mr. Justice Gandhi several circumstances had transpired in the shape of policy decision taken by the State Government, amendments of Development Control Rules and that had rendered allotment in favour of the banks invalid. Before the Division Bench it was pointed out on behalf of the State Government that after the decision of Mr. Justice Gandhi several circumstances had transpired in the shape of policy decision taken by the State Government, amendments of Development Control Rules and that had rendered allotment in favour of the banks invalid. The Division Bench observed : " We are not concerned with these developments which have taken place subsequent to the decision of Gandhi, J., and which, we are told, are the subject matter of the other proceedings. Any observations which we may have made and which we make hereafter and relief which we may grant to the appellants in the Appeals would be without prejudice to the legality, propriety and applicability of the subsequent developments." It is therefore, obvious that the Division Bench did not examine the impact of the developments which have taken place subsequent to the decision of Justice Gandhi and did not record any finding as to whether the banks are entitled to claim the advantage of original allotment order inspite of these developments. Against the order passed by the Division Bench the Government of Maharashtra approached the Supreme Court by filing Special Leave Petitions Nos. 5035 and 4482 of 1987. The Special Leave Petitions were dismissed. While dismissing the Special Leave Petitions the Supreme Court observed: " We are distressed that the State Government on the one hand and such public sector undertakings on the two Nationalised Banks on the other should engage in this unseenly contest against each other which is bound to be detrimental to the public interest. Under the circumstances, some formula to receive such dispute at a higher level deserves to be evolved and a pragmatic and reasonable attitude deserves to be adopted by both the sides. This hint should be enough for both the sides." 12. Writ Petition No. 1120 of 1981 filed by Central Bank to challenge order of cancellation of allotment by letter dated November 20, 1979 came up for hearing before Justice Suresh. The learned Judge felt that in view of the observations contained in the judgement of the Division Bench while disposing of the appeal preferred by the two Banks against the order of Mr. Justice Gandhi the Government should have allotted the plots to the petitioners straightway. The learned Judge felt that in view of the observations contained in the judgement of the Division Bench while disposing of the appeal preferred by the two Banks against the order of Mr. Justice Gandhi the Government should have allotted the plots to the petitioners straightway. The contention of the government that in view of the enactment of B.M.R.D.A. Act and issuance of notification under sub-section (1) of section 13 of the Act prohibiting construction of buildings, the order of cancellation was justified, was repelled by recording a finding that the Government had already acted contrary to the policy decision and the notification while granting permission to Free Press Journal. The learned Judge felt that if the Minister has permitted reclamation of land and construction of building with 3.5 F.S.I. to Free Press Journal, then it is obvious that Government was willing to oblige those who satisfy the whims and fancies of the officers of the Government. The learned Judge felt that as a Nationalised Bank could not notify the whims the permission was refused under section 13(1) of the B.M.R.D.A. Act. The learned Judge then held that the decision of the Government was allotting plots is required to be quashed and the consequence would be that the Bank would be entitled to the allotment of plots and to develop the same just as other allottees, who were all in the same category, have developed their plots. Against the judgement quashing the order of cancellation of allotment the State Government has preferred Appeal No. 171 of 1987 and that appeal is also posted before us for hearing. 13. Before adverting to the order which gave rise to filing of the present petition, it is necessary to make reference to some more vital circumstances, On June 15, 1983 the Government of Maharashtra issued a notification appointing Bombay Metropolitan Region Development Authority as a Special Planning Authority for the area, including Block III. Prior to this date the Municipal Corporation of Greater Bombay was the Planning Authority in respect of the areas covered by city of Bombay and as the planning Authority was required to regulate and control the development in accordance with provisions of the B.M.R.D.A. Act. On March 11, 1985 the B.M.R.D.A. Authority declared its intention to publish fresh development plan and on May 4, 1990 draft development plan was published inviting objections. On March 11, 1985 the B.M.R.D.A. Authority declared its intention to publish fresh development plan and on May 4, 1990 draft development plan was published inviting objections. The draft development plan for Bombay Backbay Reclamation Scheme Blocks III to VI recites that main response to public criticism, the State Government has taken a policy decision to freeze the reclamation in backbay area and it was also decided that all unallotted plots should be used only for public purpose. Subsequently it was realised that abrupt freezing has resulted in certain anomalies, like : (a) formation of a few akward pockets of unreclaimed areas susceptible to siltation by natural process; (b) somewhat truncated profile of the shore line, and (c) unauthorised dumping and reclamation in the area. In order to remove the anomalies and in order to make the area sesthetically pleasant, the Executive committee of B.M.R.D.A. recommended a Scheme to the Government which involved reclamation of 42.68 acres mainly for public and semi public purposes. After the Government appointed B.M.R.D.A. as a Special Planning Authority under provisions of sub-section (1)(c) of section 40 of the M.R.T.P. Act in order to develop the land in a comprehensive manner and to provide necessary amenities, it was decided to recast the reclamation scheme by taking into consideration several circumstances which had transpired from the year 1974 onwards. The report of the draft development plan disclosed that the traffic survey had revealed that there is acute shortage of space in Backbay Reclamation area for parking and turning of buses which has resulted in severe congestion on the roads and serious inconvenience to road users. The traffic survey carried out further revealed that there is a high parking demand in Blocks III of Backbay Reclamation area and on-street parking spaces are fully used up and on certain roads even double parking is observed. The report also disclosed that there is heavy demand of power supply in the area and there are frequent breakdowns of electric supply in southern part of Bombay city. The Bombay Electric Supply and Transport Company demanded a plot for locating sub-station as well as for bus stations. The Government has also proposed the location to erect late Mrs. Indira Gandhi's statue at Nariman Point area. The report also disclosed that there is a great demand for playgrounds and children parks and gardens. The Bombay Electric Supply and Transport Company demanded a plot for locating sub-station as well as for bus stations. The Government has also proposed the location to erect late Mrs. Indira Gandhi's statue at Nariman Point area. The report also disclosed that there is a great demand for playgrounds and children parks and gardens. Taking all these circumstances into consideration the report recommends to the State government that some bare minimum reclamation is inevitable and the minimal reclamation is of about 14.88 hectares. This reclamation is proposed in order to erect a protective sea wall and promenade for preventing unauthorised reclamation and encroachments, for preventing reclamation due to nature process of siltation and for smoothening the reclamation boundary. The details of the reclamation envisaged user of the reclaimed land for (a) sea wall, (b) promenade, (c) road, (d) Indira Gandhi Memorial, (e) garden, (f) parking, (g) transit camp, (h) Tata Electric Company, and (i) land for smoothening the reclamation boundary. The development plan annexed to this report sets out the geographical position of the area in detail and the area proposed to be reclaimed by B.M.R.D.A. authority of the State Government. The proposed area to be reclaimed covers the plots which the Banks are claiming. Copy of the draft development plan submitted by the authority to the State Government is annexed to this judgment to give a clear picture of the area and to appreciate why the Banks are denied the allotment by the State Government. 14. The Central Bank on June 22, 1990 lodged objection with the Metropolitan Commissioner to the proposed draft development plan. After claiming that the Bank was deprived of the advantage of user of the plots and development thereof, a suggestion was made to the following effect : " The proposed land use of these plots for road and promenade with sea wall on East-West road, could in any case be provided for, and we hereby undertake and offer to do so, by reclaiming an additional areas adjacent to the southern boundary of the existing plots 216 and 217 for use of Government and to meet the requirements of the land use now proposed in the draft development plan." After considering the objections and overruling the same the B.M.R.A.D.A. authority published the final development plan on February 1, 1991 and had submitted it to the State Government on October 6, 1991 for approval. The development plan is pending before the Government for approval, and it is not in dispute that in case the Government approves the plan then the bank will not be entitled to claim allotment of the plots nor can reclaim the same and construct 16 stroyed building as desired on the said plot. On February 20, 1991 the Government of Maharashtra published fresh Development Control Regulations in exercise of powers conferred by sub-section (1) of section 31 of the M.R.T.P. Act, and the Regulations are known as "Development Control Regulations for Greater Bombay 1991." The Regulations have come into force with effect from March 25, 1991. Two aspects of these Regulations require reference, first that the floor space index for construction in a commercial zone is fixed at 1.33 in the island city. Secondly, Regulation 59 classifies coastal area and Regulation 59(2) provides that except construction of underground toilets and greening without construction, no development including temporary construction, stalls, advertising signs or outdoor display structures shall be permitted on the beaches/coastal areas proper including the sandy, rocky, craggy, marshy or foreshore portion in the coastal areas in Categories I and II. Category II was comprised of coastal areas of Greater Bombay along the sea front upto a depth of 200 metres from high tide line or upto the first nearest existing or proposed development plan road, whichever is less. The Development Control Regulations 1991 therefore prevents construction of buildings in coastal areas upto a depth of 200 metres from high tide line and construction even beyond that area is limited to only 1.33 F.S.I. On February 20, 1991 the Ministry of Environment and Forests of Central Government had published notification in exercise of powers conferred by Clause (d) of sub-rule (3) of Rule 5 of the Environment (protection) Rules, 1986 declaring the coastal stretches of seas, bays, estuaries, etc. which are influenced by tidal action in the landward side upto 500 metres from high tide line and the land between the low tide line and the high tide line as Coastal Regulation Zone. The notification declares certain activities as prohibited within the Coastal Regulation Zone and under Clause 2(viii) land reclamation is totally prohibited. The Ministry of Environment of the State Government are responsible for monitoring and enforcement of the provisions of the notification under their respective jurisdiction. 15. The notification declares certain activities as prohibited within the Coastal Regulation Zone and under Clause 2(viii) land reclamation is totally prohibited. The Ministry of Environment of the State Government are responsible for monitoring and enforcement of the provisions of the notification under their respective jurisdiction. 15. By letter dated May 21, 1987 addressed to the Metropolitan Commissioner, B.M.R.D.A. the Central Bank sought permission to reclaim plots 216 and 217 under sea and erect buildings to the F.S.I. of 3.5. The permission was sought inaccordance with the notification issued under section 13(1) of the B.M.R.D.A. Act. The application was registered by the authority on July 29, 1987. The application sets out that at the time of allotment of plots the erection of buildings on lands in Backbay Reclamation Block III was regulated by the provisions of the Bombay Municipal Corporation Act and Development Rules which permitted the erection of the building to the floor space index of 3.5. After setting out various stages of litigation in which the Central Bank was involved, it was claimed that the plots were originally intended for constructing a building comprising of safe deposit vaults in the basement, customer banking on the ground floor and rest for the use of the Bank for its banking purposes. The application then demands justice to the Bank granting permission for reclaiming the area for constructing building with the floor space index of 3.5. The application was examined by the Executive Committee and was turned down. On September 24, 1987 the Secretary, Executive Committee by letter informed the Central Bank the reasons for rejection. Three reasons set out are : (a) The application to erect the building intended to contain business offices is in conflict with sub-clause (ii) of Clause (b) of Rule 13 of the Development Control Rules for Greater Bombay which prohibits the erection of buildings of business offices in the island city of Bombay: (b) The Executive Committee does not consider it expedient to permit the establishment of business offices as the same is likely to adversely affect the overall development of the Bombay Metropolitan Region ; and (c) The lands on which the Bank intends to erect building are designated in "No Development Zone." under the Draft Revised Development Plan for Greater Bombay submitted by the Municipal Corporation to the State Government. To challenge the order of rejection, Central Bank filed the present Writ Petition on October 20, 1987 under Article 226 of the Constitution of India. The Writ Petition was filed inspite of the statutory right to file appeal before the State Government prescribed under sub-section (4) of section 13 of the B.M.R.D.A. Act. The Central Bank in addition to filing the Writ Petition, also preferred appeal before the State Government and the appeal was heard on March 13, 1991 by Mr. Sushil Kumar Shinde, Minister for Urban Development, Government of Maharashtra, and was dismissed. The Minister recorded a conclusion that finding of the Executive Committee that the intended erection of the building would be inconsistent with the regional development is without exception. After the dismissal of the appeal, the Central Bank amended the petition and challenged the order passed by the Minister dismissing the appeal. The petition was posted for hearing after amendment before the Division Bench consisting of Mr. Justice Bharucha, (as he then was) and Justice Saldanha. On August 2, 1991 the Division Bench directed the Minister to rehear the appeal and record fresh decision as it was felt that the earlier decision did not set out reasons for disposing the appeal. In accordance with the directions of the Divisions Bench, the Minister reheard the appeal and by order dated November 4, 1991 dismissed the same. The Minister recorded the finding that the State Government discovered the deleterious consequences of the linear development in Greater Bombay and decided to accept the recommendations made by the Chairman, Bombay Metropolitan Regional Planning Authority while recommending regional plan. The twin object of planning was the proper, orderly and rapid development of the areas and of dispersing the offices from the southern part of Greater Bombay and allotting them in the outlined areas in the region or in the words of the Town Planner "Polyscentric Approach to prevent Monocentric Development". The Minister felt that it is imperative to prevent further growth of offices in the southern of Greater Bombay to observe the object of the planned and developed Backbay Reclamation region and therefore it is pre-eminently right to refuse the erection of an office building in the island city of Bombay unless it bears a direct nexus to the Bombay-based activities and is justificable on the touchstone of essentiality. The Minister recorded a clear-cut finding that the intended building will definitely have the eventual and aggregated effect on the overall development of the Bombay Metropolitan Region. The Minister observed that the Town Planning process is dynamic and not static and what was found permissible in 1974 could become inpermissible subsequently by virtue of change in the fact-situation and law situation. The Minister took note of the fact that the draft development plan has been submitted by the B.M.R.D.A. to the State Government for approval and that plan reserved the area for public purpose. The Minister also noticed that the Development Control Regulations 1991 had scaled down the F.S.I. to 1.33 from 3.5. in Block III of Backbay Reclamation, and consequently the erection of buildings as demanded by the Bank cannot be permitted. The Central Bank again amended the petition after order passed by the Minister challenging the said dismissal of the appeal under sub-section (4) of section 13 and after such amendment the petition is now posted before us for final bearing. 16. Shri Nariman, learned Counsel appearing for the petitioner, submitted that the orders passed by the B.M.R.D.A. Authority and the Minister in appeal cannot be sustained in the light of what has transpired right from the year 1974. The learned Counsel urged that both the authorities overlooked that the Bank is a nationalised Bank and a public utility sector and is badly in need of setting up a centralised office in the Backbay Reclamation area. The learned Counsel urged that the Bank is desirous of erecting 16 storeyed building with a view to shift several departments which are spread over at several places and which are hopelessly over crowded. It was contended that the nationalised Bank could not carry out its functions effectively unless the Bank is permitted to erect a building for use and more so, when the Bank desires to use the building for its own purpose and not for commercial benefits. The learned Counsel urged that the two authorities below were in error in assuming that the erection of a building would effect the overall development of the metropolitan region. The learned Counsel urged that the two authorities below were in error in assuming that the erection of a building would effect the overall development of the metropolitan region. It was very vehemently urged that the authorities did not notice that permission was granted to Free Press Journal in February 1978 and the authorities should have borne in mind that there is no distinguishing feature between the case of Free Press Journal and the two Banks. It was urged that the action of the B.M.R.D.A. authority and the Minister in declining the permission is entirely discriminatory and violative of Article 14 of the Constitution of India. It was contended that the subsequent events cannot deprive the benefit of allotment letter and the conditions provided therein because the Bank was innocent and was denied the advantage which was conferred to all other allottees. The learned Counsel urged that the regional plan for Bombay Metropolitan Region, 1970 specifically provided that the commercial area should be restricted to 20% in the Backbay Reclamation and the allotment of plots was within the limits of the 20% and that allotment could not be cancelled by resort to the impact of the overall development. The learned Counsel also urged that even assuming that the subsequent events, both factual and legal, can be taken into consideration while considering the reliefs, there is no reason why the Bank should not be permitted to reclaim the plots which even the report of the Draft Development Plan submitted to the Government proposed to undertake. It was also contended that though the Development Regulations provided for F.S.I. of 1.35 only, the Regulations also prescribe for relaxation of conditions in proper cases and there is no reason to doubt that such relaxation will not be available to the Bank which is a nationalised one and for whose benefit the Central Government had made recommendations to the State Government to consider the application sympathetically. The learned Counsel urged that the circumstances to be considered while examining the grant of permission under section 13 of B.M.R.D.A. Act should be mainly two, and those are (i) that the two Banks are the only allottees left out of the initial allotment in the year 1974 and which allotment was in-conservance with the recommendations reserving 20% area in the Backbay Reclamation for commercial purposes and (ii) Free Press Journal whose case is on par with the Banks was granted permission in February 1978 for reclaiming land as well as erecting the building with F.S.I. of 3.5. Shri Singhvi, learned Counsel appearing on behalf of the respondents, on the other hand submitted that it is futile to suggest that the legal provision as prevalent on the date of the grant of permission should be ignored. The learned Counsel urged that it is well settled that the authority must take into consideration the law as it existed on the date of grant of permission and refusal of the permission by the two authorities constituted under the statute cannot be disturbed (sic) in exercise of writ jurisdiction unless it is established that orders are perverse or have taken into consideration circumstances which are dehors the object to be achieved. Shri Singhvi submitted that there cannot be complaint of discrimination in respect of quasi-judicial orders passed by the authorities and consequently the Banks cannot claim that merely because the permission was granted to Free Press Journal in February 1978 identical permission should be given to the Banks in the year 1987. Shri Singhvi also pointed out that the State Government had taken a decision to freeze further reclamation after the Minister granted permission to Free Press Journal. The Development Control Rules were amended in March 1979 and draft development plan has been submitted to the State Government in the year 1990 and the Development Control Regulations stand amended in the year 1991. Shri Singhvi urged that the authority had taken into consideration the legal provisions as prevalent in the year 1987 and thereafter it is impossible to grant permission to the Banks without doing violence to the said provisions. Shri Singhvi urged that the authority had taken into consideration the legal provisions as prevalent in the year 1987 and thereafter it is impossible to grant permission to the Banks without doing violence to the said provisions. Apart from the legal prohibition for reclaiming the plots and raising construction thereon, Shri Singhvi pointed out that the grant of permission would be detrimental to the public interest as judicial notice can be taken of the chaotic conditions prevalent in the area and erection of sky-scrappers near the sea line would place additional burden on the overburdened municipal services. The learned Counsel highlighted the difficulties faced by the common citizens in view of the traffic congestion and in view of lack of power and water supply and the hardship caused for travelling from one end of the city to the other. It was contended that right from the year 1970 onwards the citizens are desperately complaining that the reclamation in the Backbay area has caused serious consequences not only to the development of the city but pushing back the sea at one place has resulted in the cresies of sea coast at the other places. Shri Singhvi submitted that the Courts cannot ignore the realities of the situation and grant relief sought by the Banks on equitable consideration. Shri Singhvi also submitted that even assuming that the State Government has noted erroneously in granting permission to Free Press Journal to reclaim the land and erect sky-scrappers, the Court should not compel the State Government to perpetuate or repeat the error to the detriment of the common man. It was pointed out that both the Executive Committee constituted under the Act and which comprised of experts and Minister for Urban Development of the State Government were fully conscious of the situation existing in the Backbay Reclamation area and the exercise of the power is perfectly reasonable and valid on the facts and circumstances of the case and is not required to be disturbed in writ jurisdictions. 17. In view of the rival submissions it is necessary to examine whether the refusal of permission sought by the Bank under section 13 of the B.M.R.D.A. Act by the two authorities was in violation of any principles of law or is so unreasonable that it cannot stand the scrutiny in a Court of law. 17. In view of the rival submissions it is necessary to examine whether the refusal of permission sought by the Bank under section 13 of the B.M.R.D.A. Act by the two authorities was in violation of any principles of law or is so unreasonable that it cannot stand the scrutiny in a Court of law. In addition to examining this aspect, it is also necessary to examine whether the action of the State Government in cancelling the allotment of the plots in favour of the Banks was justified and this aspect is necessary to dispose of the appeal preferred by the State Government against the order of Mr. Justice Suresh quashing the order of cancellation. The two aspects are overlapping and the decision on the particular aspect of grant or refusal of permission would also dispose of the contentions urged in the appeal. It is undoubtedly true as urged by Shri Nariman that the two Banks are the only allottees left out of the original allottees who were conferred benefits by the State Government in the year 1974. It is also correct that the State Government had decided to allot the plots under sea to the builders, Free press Journal and the Banks in accordance with the recommendations of the reserving an area of 20% in the Backbay Reclamation for commercial purposes. The Bank was desirous to secure suitable land in the Backbay Reclamation Block III for erection of building to provide for expanding services and growing business needs to accommodate its head office. The Banks had set up departments at various locations in Bombay and were desirous of centralising offices at one place and the proposal was for construction of building consisting of 16 floors. Shri Nariman is right in his contention that all the allottees form a unit and in normal circumstances the two Banks could not have been denied the advantage which was enjoyed by the remaining allottees. It is correct that fault cannot be found with the Banks for not reclaiming the land and commencing construction during the pendency of writ petitions before Mr. Justice Gandhi because Banks could not have taken the risk of spending public money and creating buildings and giving undertaking to demolish it in case the decision in the writ petitions is adverse to the Banks. Justice Gandhi because Banks could not have taken the risk of spending public money and creating buildings and giving undertaking to demolish it in case the decision in the writ petitions is adverse to the Banks. The builders could take the risk of giving such an undertaking and proceeding with the construction of buildings. Though it is undoubtedly true that no fault can be found with the Banks for not being able to commence the reconstruction of the building due to the litigation spread over number of years, the principle question which arises for determination is whether the Banks should be granted permission by putting the clock back and permitting reclamation and building with reference to conditions prevalent in the year 1974. In exercise of writ jurisdiction can the Court ignore the realities of the situation and proceed to grant relief merely on equitable consideration? The answer, in our judgment must be in the negative. 18. Section 13(1) of the B.M.R.D.A. Act prescribes that notwithstanding anything contained in any, law the development should not be undertaken without the prior permission of the metropolitan authority in the area which is notified and where the development is likely to adversely affect the overall development. The legislation was enacted as the legislature realised that in the absence of control or regulations the development is carried out in such a haphazard manner as to adversely affect the metropolitan region. The Metropolitan Authority has constituted an Executive Committee which is a high-powered body consisting of the Chief Secretary to the Government, Metropolitan Commissioner, Secretaries representing Urban Department, Housing Department, Municipal Corporation and in addition members who are experts in the field of urban planning and development. The Executive Committee while considering grant of permission has to take into consideration in the region. It is impossible to set out exhaustively the circumstances which the authority is required to examine. Some of the circumstances may not have immediate impact but the impact will be felt in the course of time, and therefore, the authority is required to take into consideration not only the circumstances prevailing in the immediate present but those which may occur in forceable future. The problems which face the authority in considering grant of permission are many fold and more so, where the permission is sought in area which is thickly populated and is a goldmine. The problems which face the authority in considering grant of permission are many fold and more so, where the permission is sought in area which is thickly populated and is a goldmine. It hardly requires to be stated that the Backbay Reclamation area Block III is a priced area and several sky scrappers have been raised in this narrow area leading to large number of problems. As pointed out in the resolution passed by the Municipal Corporation in the year 1974 it is difficult for the Corporation to provide for essential municipal services like supply of water, maintenance of roads and the requisite electricity power. The authority is bound to take into consideration that erection of sky scrappers by the two Banks will require supply of surplus water, electricity, drainage etc. on a gigantic scale. The Corporation also pointed out even in the year 1974 that it would be very difficult for the Fire Brigade to bring the fire under control and extinguish the same since the system of distribution of water lacks the capacity of boosting up of the water to the height of the sky scrappers. Indeed such problems did arise after the year 1974 when the fire broke out at Oberoi Hotel and Indian Express building etc. The traffic survey undertaken by the Regional Development Authority while preparing draft development plan clearly reveals that there is actuate shortage of space for parking vehicles, for turning of BEST buses leading to severe congestion on the roads and serious inconvenience to the pedestrians. The report made by the Tata Electric Company disclosed that the heavy demand of power supply in the area leads to frequent break-downs of the supply in the southern part of the Bombay city. These facts clearly establish that reclamation of the land for the purposes of erecting sky scrappers leads to imbalance and for the benefit of few large number of population suffer hardships. It is incumbent upon the authorities constituted under section 13 of the B.M.R.D.A. Act to examine various facets prevalent at the time of considering the grant of permission. It would not be correct therefore to suggest that the authority should ignore the circumstances prevailing at the time of grant of the permission and proceed to grant the demand made by the nationalised Banks on the basis that the banks did not get advantage of allotment for no fault of theirs. It would not be correct therefore to suggest that the authority should ignore the circumstances prevailing at the time of grant of the permission and proceed to grant the demand made by the nationalised Banks on the basis that the banks did not get advantage of allotment for no fault of theirs. Shri Singhvi is right in his submission that the authority under section 13 must examine the facts prevalent on the date when the application is considered for permission. The authority cannot be oblivious of the fact of congestion in the area and the pressure on the essential services and lack of available basic amenities. The authority is bound to take into consideration the development of the area on the long term basis and bearing in mind the impact of such development and environmental and pollution problems in city of Bombay and which has reached estaration point causing serious ailment to the population. Sub-section (4) of section 13 of the B.M.R.D.A. Act provides that any person aggrieved by the decision for the authority declining permission can appeal to the State Government. The proviso to the sub-section demands that where the aggrieved authority is under the administrative control of the Central Government, then the appeal shall be decided by the State Government after consultation with the Central Government. Shri Singhvi informs us that the appeals filed by the Banks were decided by the Minister for Urban Development after complying with the requirement of the proviso. The petitioners did not challenge that the requirements of the proviso were not complied with. Both the authorities concurrently held that grant of permission to the Banks would have adverse effect upon the overall development and therefore permission should be refused. The Minister in appeal noticed the consequences of the development could be defeated if further growth of offices in the south of Greater Bombay is permitted. We do not find any infirmity in the conclusion recorded by the two authorities. Shri Singhvi pointed out that the State Government offered area in Bandra-Kurla complex to the Banks for construction of buildings to accommodate the head offices and bring various departments into centralised place. The offer was turned down by the Banks claiming that they are entitled to enforce the right which is vested in them of accruing an allotment in Block III Backbay Reclamation. The offer was turned down by the Banks claiming that they are entitled to enforce the right which is vested in them of accruing an allotment in Block III Backbay Reclamation. Shri Nariman submitted that the issue of congestion or impact of overall development is entirely irrelevant because the allotment of plots to the Banks use within the permissible area of 20% reserved for commercial development. The learned Counsel submitted that in the year 1974 the State Government issued allotment orders by accepting the recommendation for the Regional Authority that 20% area in the Backbay Reclamation can be used for commercial activities. Shri Nariman submitted that all the allottees within the compass of 20% had already secured the advantage and completed the development and construction and only the Banks are left out from the said advantage. It was submitted that when in the year 1974 the State Government accepted the recommendation of reserve area of 20% for commercial development, that must be on the basis that such reservation can have no impact on the overall development of the region. The learned Counsel urged that as the claim made by the Banks falls within the permitted area of 20%, it is not open for the authorities to deny the advantage by asserting that such a development would have adverse impact upon the overall development of the region. It is not possible to accede to the submission of the learned counsel, because the submission overlooks that the situation has dramatically changed by passage of years. It cannot be even debated that the conditions prevalent in the year 1974 have undergone such a change by year 1987 that while considering grant of permission in the year 1987 it is futile even to suggest that there will not be any adverse impact upon the overall development of the region. Both the authorities were fully conscious of the change of circumstances and as rightly submitted by Shri Singhvi the things have gone from bad to worse. The State Government is bound to protect the interest of the common citizen and cannot surrender the discretion conferred by the statutory provisions merely to satisfy the demand of the nationalised banks. In our judgement, no democratically elected Government can forget the duties towards the common citizen and must endeavour to protect the interest of the citizens whose only ambition is to breath ozone near the open sea. In our judgement, no democratically elected Government can forget the duties towards the common citizen and must endeavour to protect the interest of the citizens whose only ambition is to breath ozone near the open sea. In our judgment, on the facts and circumstances prevalent in the year 1987 and problems which have aggrevated even thereafter were sufficient for the authorities to turn down the request for grant of permission to reclaim the area and to construct huge sky scrappers. 19. Shri Nariman submitted that if the State Government was so conscious of the public interest, then there was no reason why permission was granted to Free Press Journal to reclaim the area and erect the building in February 1978. It is undoubtedly true that the case of Free Press Journal was not different from the nationalised Banks. The objection of the Government that Free Press Journal has secured possession while the Banks had not has no relevance whatsoever to examine whether the proposed development would adversely affect the overall development of the region. In the case of Free Press journal the Minister, while exercising appellate powers under sub-section (4) of section 13 of the B.M.R.D.A. Act, reversed the decision of the authority only on the ground that grant of permission to Free Press Journal would advance justice and equity of the case. It is not necessary to examine the correctness of the said view, but we must bear in mind the changes which have taken place subsequent to February 1978. As mentioned hereinabove, the problems in the area have increased many fold and it is almost impossible to even suggest that the situation existing in the year 1978 is identical as in the year 1987. It is therefore, futile to suggest that the notion of the State Government in rejecting the application in the year 1987 is discriminatory in view of the permission granted to Free Press Journal. Apart from several problems which have arisen after the year 1978, it cannot be overlooked that several circumstances have occurred after February 1978 making it impossible for the authorities to grant permission. On December 1, 1978 the State Government took a policy decision to freeze all reclamation and this decision was obviously taken in response to the serious public criticism levelled by responsible citizens of this metropolis. On December 1, 1978 the State Government took a policy decision to freeze all reclamation and this decision was obviously taken in response to the serious public criticism levelled by responsible citizens of this metropolis. The State Government appointed an adhoc Committee known as Kale Committee to re-examine the entire issue of reclamation of land from the sea and on the recommendations of the Committee, took a policy decision not to permit any further reclamation. Shri Nariman submitted that the policy decision had created certain anomalies as revealed in the report of the Draft Development Plan for reclamation of area Block III to VI and thereupon the development authority has recommended to the State Government to reclaim the area of 36.77 acres and this area proposed to be reclaimed would cover the plots allotted to the nationalised Banks. It is undoubtedly true that the report of the Draft Development Plan prepared in the year 1991 recommends reclamation of small area but such a reclamation as mentioned hereinabove, is for the public purpose. The perusal of the plan annexed to the Judgment would indicate that the reclaimed area is to be used for the purposes of sea-wall, promenade, road, Indira Gandhi Memorial, garden, parking etc. and not even an inch of the land is to be used for commercial activities or for construction of sky scrappers. The State Government is not going to use any of the area proposed to be reclaimed for any commercial adventure or even for the purpose of accommodating Government offices. Shri Nariman submitted that though it is undoubtedly true that the proposed reclamation is only for the public purpose, it is possible that some additional area can be permitted to be reclaimed so as to accommodate the nationalised Banks to develop their plots to erect buildings. In our judgment the submission cannot be accepted. The policy decision of the Government for freezing the reclamation does stand and a small area is proposed to be reclaimed only for the public purpose. The perusal of the report clearly establishes that a road is proposed with a view to ease the traffic jams which is a regular occurrence at the junction of Nariman Point. In our judgment the proposed reclamation of a small area cannot be used by the Banks to claim that the allotment of plots should be sustained and erection of buildings should be permitted. In our judgment the proposed reclamation of a small area cannot be used by the Banks to claim that the allotment of plots should be sustained and erection of buildings should be permitted. The claim of the petitioner Banks that their claim should be equated with the Free Press Journal and the same benefits should be granted cannot be accepted. 20. The two authorities below also pointed out that the construction of buildings in the reclaimed area for the commercial purposes are totally prohibited by amendment of Development Control Rule 13(b) (ii) on March 19, 1979. Shri Nariman did not dispute that the amendment of the Development Control Rules prohibits construction of buildings in the reclamation area but submitted that this prohibition is enforced by the Government more in its branch. Shri Nariman pointed out that inspite of prohibition permission was granted for construction of buildings by Mazgoan Dock Limited, Bombay Port Trust, Commissioner of Police etc. The learned Counsel urged that if permission is granted to construct buildings to these authorities in the prohibited zone, then the amendment to the Development Control Rules cannot be used for the purpose of depriving the Banks of the right of allotment. The submission is not correct. Both the authorities pointed out that permission was granted by the Executive Committee under section 13 of the B.M.R.D.A. Act to Bombay Port Trust, Mazgoan Docks Limited and Commissioner of Police, Bombay because the buildings were erected in the industrial zone and in consideration of the distinguishing facts that the activities of these authorities are purely Bombay based and these buildings do not admit of relocation elsewhere. It hardly requires examination to conclude that the buildings of the Bombay Port Trust and Mazgoan Docks Limited cannot be relocated outside Bombay and away from sea shore. The building of the Police Commissioner also requires to be located in the city to maintain law and order. Shri Nariman then referred to the permission granted to Reserve Bank, Oberoi Towers, Sekhar, Karkhana, Stock Exchange Building, Diamond Dourse and the World Trade Centre. The permission to Reserve Bank building was granted in the year 1971 and to the Stock Exchange in the year 1976, while the Oberoi Towers and Sekhar Karkhana in February 1978. The World Trade Centre secured permission in the year 1983. The permission to Reserve Bank building was granted in the year 1971 and to the Stock Exchange in the year 1976, while the Oberoi Towers and Sekhar Karkhana in February 1978. The World Trade Centre secured permission in the year 1983. It is obvious that the permission granted to some of the buildings were long prior to the amendment to the Development Control Rules in March 1979. In case the exception is made in one or two cases, that cannot be used as a principle for grant of permission in every kind of development. It also cannot be overlooked that the 20% area reserved in the reclaimed block for commercial exploitation now possible stands exhausted. In any event the Banks' claim that the Banks' demand falls within 20% of the commercial development and therefore permission be granted losses all its merit in view of the subsequent developments. In our judgement, it is impossible to equate the case of Free Press Journal with the two Banks. The Complaint about discrimination therefore cannot be accepted. Reliance by Shri Singhvi on the decision of the Supreme Court reported in A.I.R. 1960 S.C. page 201 (Premath Nath Mukherjee v. State of West Bengal)1, and (1990)4 S.C. Cases 680 (Eskayef Limited v. Collector of Central Excise)2, to urge that discrimination cannot be complained of in respect of order passed by quasi-judicial authority is appropriate. Even assuming that the claim of the Banks that the State Government is guilty of discrimination in view of the order passed in favour of Free Press Journal is correct, still we decline to exercise out writ jurisdiction because the grant of relief to the Banks would be detrimental to the interest of the citizens and would seriously jeopardise and hamper the planned development of the area. In this connection it would be appropriate to refer to the decision reported in (1991)1 S.C. Cases 212 (Kumari Shrilekha Vidyarthi and ors v. State of U.P. ors)3, where Mr. In this connection it would be appropriate to refer to the decision reported in (1991)1 S.C. Cases 212 (Kumari Shrilekha Vidyarthi and ors v. State of U.P. ors)3, where Mr. Justice Verma speaking for the Bench observed in paragraph 28 : "Ever assuming that it is necessary to import the concept of presence of some public element in a State action to attract Article 14 and permit judicial review, we have no hesitation in saying that the ultimate impact of all sections of the State or a public body being undoubtedly on public interest, the requisite public element for this purpose is present also in constractual matters." It is therefore not permissible for the Banks to claim that while examining the contractual rights between the State on one hand and the nationalised Banks on the other, once there is a complaint or violation of Article 14 of the Constitution, then the Court must grant relief irrespective of the consequences which would be detrimental to the public interest. The public interest, in our judgment, must stand supreme and the Court should be extremely reluctant to grant relief which would lead to defeat the public interest. 21. Shri Singhvi, on behalf of the State Government, is also right in his contention that the case of Free Press Journal cannot be equated with the case of the nationalised Banks, where the application for permission was made in the year 1987. The learned counsel pointed out that on December 1, 1978 the State Government had taken a policy decision to freeze all further reclamations and such decision was not in existence when the Minister granted permission to Free Press Journal while excising appellate powers. In addition to the policy decision taken by the State Government, the Development Control Rules were amended on March 19, 1979 prohibiting construction of buildings for commercial purposes in the reclaimed area. In addition to these obstacles in the way of the Banks, in the year 1991 the Development Authority had submitted draft development plan to the State Government and which provides for reclamation of the area which covers the plot originally allotted to the banks in the year 1974 and which area is to be used purely for the public purposes. In addition to these obstacles in the way of the Banks, in the year 1991 the Development Authority had submitted draft development plan to the State Government and which provides for reclamation of the area which covers the plot originally allotted to the banks in the year 1974 and which area is to be used purely for the public purposes. Shri Singhvi is right in his submission that these subsequent developments must lead to the conclusion that the cases of the petitioner Bank is not on equal footing with that of the Free Press Journal and Violation of Art. 14 cannot be pleaded. The Free Press Journal and the two Banks do not form same class and consequently the complaint of discrimination cannot survive. 22. It is also impossible to accede to the submission that the decision of the two authorities below was unreasonable on the facts and circumstances of the case. We also do not find any infirmity in the decision taken by the State Government in the year 1979 to cancel the allotment in favour of the nationalised Banks in view of the policy decision and in view of the amendment of Development Control Rules. In our judgment, Mr. Justice Suresh was clearly in error in quashing the order passed by the State Government revoking the allotment in favour of the banks. The learned Judge obviously overlooked the subsequent developments after December 20, 1979 when the State Government cancelled the order of allotment. In case the subsequent developments had been taken into consideration then the learned Judge could not have quashed the order of cancellation of the allotment. In these circumstances the appeal is required to be allowed. 23. Shri Nariman submitted that even if there are subsequent changes in Development Control Rule and which prohibit construction of buildings in the reclamation area and also limits F.S.I. to 1.33 only, still that circumstance should not weigh with the Court, as the Development Control Rules prescribe for exception in cases of public utility. Reliance was placed on Regulation 64 which provides that in conformity with the intent and spirit of the Regulations the Commissioner may in specific cases, where a clearly demonstrable hardship is caused, grant special permission after recording reasons in writing. Reliance was placed on Regulation 64 which provides that in conformity with the intent and spirit of the Regulations the Commissioner may in specific cases, where a clearly demonstrable hardship is caused, grant special permission after recording reasons in writing. The learned Counsel urged that such special permission is possible for authorising erection of a building or use of the premises for public service undertaking for authorising erection of a building or use of the premises for public service undertaking for public utility purposes only and the nationalised Banks complies with all the requirements of Regulation 64, being a public service undertaking for the public utility purposes and clearly demonstrable hardship is caused. We decline to compel the authorities to grant permission by reference to the discretionary powers. The discretionary powers are to be exercised provided consequential refusal of the permission leads to serious prejudice to the interest of the Banks. The Banks had already got several premises in the southern part of Bombay and the desire to have a centralised office can be secured by accepting the offer made by the State Government of the plot in Bandra-Kurla complex. Shri Nariman submitted that all the nationalised Banks have their Head Offices in the reclamation area and there is no reason why the two banks should be directed to set up their head offices outside. At present the Head Offices of both the banks are within the city and the centralised building is sought only on the ground that there is overcrowding in such offices. 24. It is true that Regulation 64 confers discretionary powers upon the Commissioner to permit modifications in all the dimensions prescribed by the Regulations, but Regulation 64(b) does not permit the Commissioner to modify the regulation relating to floor space index. Even other modifications are permitted provided it will not affect health, safety, fire safety, structural safety and public safety of the inhabitants of the building and the neighbour-hood. In our judgment, the discretionary powers can be exercised only in exceptional circumstances and not as a matter of course. The Commissioner cannot ignore the decision taken by B.M.R.D.A. authorities in exercise of powers under section 13 and in the guise of exercising the discretionary powers under Regulation 64 nullify the orders passed by the statutory authority. In our judgment, the discretionary powers can be exercised only in exceptional circumstances and not as a matter of course. The Commissioner cannot ignore the decision taken by B.M.R.D.A. authorities in exercise of powers under section 13 and in the guise of exercising the discretionary powers under Regulation 64 nullify the orders passed by the statutory authority. In our judgment, the claim of the Banks that their cases clearly demonstrates hardship and therefore discretionary power could be exercised by the Commissioner do not impress us. It is not permissible for every Government Authority to claim that as they are providing service of public utility the Rules of planning and development should not be made applicable to them or sent to suit their convenience. Indeed the Government Authorities, like nationalised Banks, should be more careful to preserve the environment and ecology of the reclaimed area. We fail to appreciate why the nationalised Banks should continue the litigation and insist that the plots allotted to them in the year 1974 should be released and the Banks should be permitted to reclaim and then construct sky scrappers on these plots. The hope of the Supreme Court that the parties will take a pragmatic and reasonable attitude stands belied by the insistence of the Banks in seeking relief strictly in accordance with the allotment letters which were issued in the year 1974. The Banks cannot ignore the subsequent developments and seek specific performance of these agreements. 25. Shri Nariman made a faint attempt to urge that even if the F.S.I. permissible is only 1.33 still the banks are willing to construct to that extent or in any event the Banks will construct residential premises for Bank's Officers. We are afraid that the argument advanced is one of desperation. Insistence of the Banks for locating centralised offices at the Backbay Reclamation was to accommodate several departments spread over the city and if that is the object which is highlighted all along, then such object cannot be achieved by construction of buildings with the floor space index of 1.35. In our judgment, the petitioner Bank is not entitled to any relief and the petition must fail. 26. Accordingly, petition fails and rule is discharged. In the circumstances of the case there will be no order as to costs. Rule discharged. -----