Judgment RADHAKRISHNAN S., J.:—By this petition, the petitioner challenges the revision in rent by respondent No. 1 Life Insurance Corporation of India (LIC) in respect of Flat No. 1, Queens Court, 136, Maharshi Karve Road, Mumbai 400 020 ("the said flat") rented out to the petitioner to be illegal, arbitrary, unfair and unreasonable. The petitioner has been residing in the said flat since 1961 and has been a tenant of LIC in respect of the said flat ever since February, 1974 when the tenancy of the said flat was transferred by LIC in the name of the petitioner. The petitioners family have been tenants of the said flat from about 1938, i.e. just after the said building was constructed in 1937, and even prior to the building being acquired in 1946 by the New India Assurance Company Limited. 2. The learned Senior Counsel Mr. Chagla, appearing for the petitioner pointed out that in February, 1974 the total rent in respect of the said flat was Rs. 189.73 per month (Basic Rent Rs. 148.12 + Municipal Taxes Rs. 41.61). With effect from 1st September, 1997 respondent LIC had unilaterally increased the rent to a total of Rs. 2592/- per month (Basic Rent Rs. 2303/- + Municipal Taxes Rs. 188 + Miscellaneous charges Rs. 101/-). Again in February, 2003 LIC has sought to revise this rent to Rs. 59,984/- per month (Basic Rent Rs. 59,680/- + Municipal Taxes Rs. 203/- (subject to revision) + Miscellaneous charges Rs. 101/-) i.e. an increase of 2591.04%. According to the learned Counsel for the petitioner, the Municipal Taxes of Rs. 203, when revised, are likely to be in the vicinity of about Rs. 60,000/- in view of high revision in the basic rent. This will bring the total monthly outgoing of the petitioner to about Rs. 1,20,000/-. 3. Mr. Chagla, the learned Senior Counsel pointed out that the petitioner and her husband (who are retired senior citizens and whose joint monthly income from all sources is around Rs. 40,000/- per month) will be rendered homeless if the purported rent increase is allowed. 4. The learned Senior Counsel for the petitioner submitted that the rent revision is arbitrary, unfair and unreasonable and violative of the petitioners fundamental rights under Articles 14 and 21 of the Constitution of India. 40,000/- per month) will be rendered homeless if the purported rent increase is allowed. 4. The learned Senior Counsel for the petitioner submitted that the rent revision is arbitrary, unfair and unreasonable and violative of the petitioners fundamental rights under Articles 14 and 21 of the Constitution of India. The purported rent revision is also challenged on the ground that LIC has attempted a pick and choose approach and has demanded increased rent only from selected tenants, there has been no application of mind in fixation of the revised rent, LIC has treated equals unequally as also treated unequals equally and by that process has created a hostile discrimination affecting the petitioner. The learned Senior Counsel for the petitioner also strongly submitted that the aforesaid rent revision to be violative of the mandatory guidelines dated 30th May, 2002 issued by respondent No. 2 Union of India. 5. The petitioner and her husband are both senior citizens (67 and 70 years of age, respectively). The petitioner had retired as a part time lecturer in Nirmala Niketan College of Social Work in 1995. She receives a monthly pension of Rs. 292/- per month. The petitioners husband retired from Air India as Deputy Manager, Cabin Services, In-flight in 1991. He does not receive any pension. The joint aggregate income of the petitioner and her husband from all sources is about Rs. 40,000/- per month. The petitioner has no other property or home apart from the said flat. 6. There is also no dispute that LIC does not maintain either the building or the said flat and has not repaired the same for the last several years. The tenants repair their respective flats at their own expenses. For carrying out of repairs at their own costs, the tenants are required to pay Rs. 10,000/- to LIC as a non refundable deposit as a pre-condition to carry out repairs. About two years ago MHADA undertook some repairs on the said building, on repeated representations of the tenants. 7. It appears that between February 1974 and August, 1997 the aggregate rent in respect of the said flat increased from Rs. 185.73 to Rs. 339/- per month by reason of the increase in Municipal Taxes. Thereafter, with effect from 1st September, 1997 LIC had suddenly and unilaterally increased the rent to Rs. 2592/- per month (comprising a basic rent of Rs. 2303/- + Municipal Taxes of Rs. 185.73 to Rs. 339/- per month by reason of the increase in Municipal Taxes. Thereafter, with effect from 1st September, 1997 LIC had suddenly and unilaterally increased the rent to Rs. 2592/- per month (comprising a basic rent of Rs. 2303/- + Municipal Taxes of Rs. 188/- + a Miscellaneous amount of Rs. 101/-). Respondent LIC has given no basis or explanation for such an increase. The petitioner had complained of the aforesaid increase by her letter dated 17th September, 1997 but had also stated that she would not be averse to paying an increased rent provided the tenants were informed of the basis of such an increase and also keeping in mind that the petitioner was retired person. The petitioner had called upon LIC to review her case and to charge her in accordance with the area of the said flat, on a fair and reasonable basis. 8. The respondent No. 1 by its letter dated 1st October, 1997 had contended that the rent revision was reasonable and that the same has been arrived at after taking into consideration all factors. By her letter dated 10th October, 1997 the petitioner had reiterated her objection to LIC. By its letter of 25th October, 1997 LIC had informed the petitioner that her monthly rent has been revised from Rs. 339/- per month to Rs. 355.10 per month with effect from 1st November, 1997. LIC had stated that "We are entitled to make permissible increase in rent on account of increase in Municipal Taxes and Cesses from our tenants on pro rata based on ratable value of total rent in respect of premises occupied by our tenants under the provisions of the Bombay Rent Control Act, 1947 and Brihan Mumbai Municipal Act". The petitioner forwarded the revised rent of Rs. 355.10 per month in respect of the months of November and December, 1997 and January, 1998. These cheques were however returned by LIC to the petitioner. 9. We have perused the correspondence that had ensued between the petitioner and LIC upto August, 2001. In this correspondence the petitioner had: (i) reiterated her objection to the unilateral and exorbitant rent revision from Rs. 339/- per month to Rs. 2607/- per month; (ii) forwarded cheques to LIC initially at the rate of Rs. 2592/- per month, and thereafter at the rate of Rs. In this correspondence the petitioner had: (i) reiterated her objection to the unilateral and exorbitant rent revision from Rs. 339/- per month to Rs. 2607/- per month; (ii) forwarded cheques to LIC initially at the rate of Rs. 2592/- per month, and thereafter at the rate of Rs. 2607/- per month, under protest and without prejudice to her rights and contentions (since the petitioner had apprehended that LIC would attempt to evict her from the said flat); (iii) requested LIC to reconsider and review the rent revision and brought to its attention the provisions of the Maharashtra Rent Control Act, 1999 as well as the guidelines issued by the Union of India both of which prohibited LIC from making such rent revisions arbitrarily and unreasonably; 10. Thereafter it appears that the respondent No. 1 had invited some of its tenants for discussion regarding rent revision. The petitioner, however, was not told and has never been called for such discussions and therefore, has not received any hearing before the attempt to increase her rent. 11. The respondent No. 1 LIC by its letter dated 8th February, 2003 had purported to revise the petitioners rent from an aggregate of Rs. 2607/- per month in about October, 1997 to Rs. 59,984/- per month (an increase of 2591.04%). This aggregate rent included a basic rent of Rs. 59,680/- per month (computed at the rate of Rs. 40/- per square foot). 12. It appears that though LIC had purported to so revise the rent, the petitioner continued to receive rent bills from LIC in respect of the period January to March 2003 at the rate of Rs. 2607/- per month. The petitioner had paid the said rents to LIC in accordance with the said bills and LIC had also issued rent receipts in respect of the same to the petitioner. The petitioner had made payment at this rate to LIC for the months of April, May, June and July, 2003 and these payments were duly accepted by LIC under a deposit memorandum. All these payments were paid by the petitioner under protest and without prejudice to her rights and contentions. However, the payments made for the months from August, 2003 onwards have been returned back to the petitioner by LIC. 13. Mr. All these payments were paid by the petitioner under protest and without prejudice to her rights and contentions. However, the payments made for the months from August, 2003 onwards have been returned back to the petitioner by LIC. 13. Mr. Chagla, contended that petitioner had objected to the said rent revision on the ground that it was arbitrary, discriminatory, unfair and also in violation of the guidelines of 2002 issued by the Union of India. 14. The respondent No. 1 by its notice of demand dated 20th September, 2003 had reiterated its demand and alleged that the petitioner was in arrears of rent amounting to Rs. 5,27,518/- (including interest @ 12%) with effect from 1st January, 2003. The petitioner was threatened with all legal consequences, if she failed to pay the revised rent, and the arrears thereof. The respondent No. 1 had also stated in the said letter that it would recover interest at the rate of 12% if the rent was not paid by the 5th of every month. The present petition was filed on 10th October, 2003. On 13th October, 2003 a statement was made on behalf of respondent LIC that it would not take any coercive steps against the petitioner. This statement has continued and is in force even as of today. During the pendency of this writ petition, LIC had issued a letter dated 3rd November, 2003 to the petitioner. The said letter purported to record the discussions held at a without prejudice meeting called by LIC with the petitioner. The letter was also marked as "without prejudice" and referred to an offer to the petitioner of a revised rent of Rs. 15/- per square feet per month (excluding taxes) with effect from 1st November, 2003. In the alternative, the petitioner was offered some alternate accommodation at Jeevan Bima Nagar, Borivli, ("at a reasonable rent keeping in view the prevailing market rate"). By her reply dated 6th November, 2003, which letter was also without prejudice, the petitioner had recorded that the said meeting with LIC on 3rd November, 2003, was a without prejudice meeting, but since LIC had chosen to only partially record what happened thereat, the petitioner was addressing the said letter to place the facts on record. The petitioner had recorded that LIC had been requested to disclose the basis for fixing the proposed rent of Rs. The petitioner had recorded that LIC had been requested to disclose the basis for fixing the proposed rent of Rs. 40/- per square foot as well as Rs. 15/- per square foot, but that no such disclosure has been made. It was recorded that even the offer of Rs. 15/- per square foot would come to about Rs. 30/- per square foot if Municipal Taxes were included and would thus come to an aggregate of Rs. 45,000/- per month. Moreover, attention was also drawn to the varying and discriminatory rates of rents being demanded by LIC from buildings in the vicinity and including in the building in which the petitioner resided. 15. Mr. Chagla, the learned Senior Counsel referred to and relied upon the Government Resolution dated 30th May, 2002 (Gazetted on 8th June, 2002) issued by the Ministry of Urban Development, Government of India to be followed by Public Sector Undertakings under the Public Premises (Eviction of Unauthorised Occupants Act, 1971), ("the Public Premises Act") and emphasised the principle that every Government or its instrumentality must act only in a manner informed by reason and free from any trace of arbitrariness and unreasonableness. The learned Senior Counsel for the petitioner briefly traced the history of the above guidelines as under: (a) On 14th January, 1992, the Ministry of Urban Development, Government of India had issued detailed guidelines to be followed by Public Sector Undertakings "so that the provisions of the Public Premises Act are not indiscriminately used by these organisations to the detriment of the genuine tenants interest". (b) The most relevant paragraphs of the said guidelines are reproduced hereunder: "A person in lawful occupation of any premises should not be treated or declared to be an unauthorised occupant merely on service of termination of tenancy, nor should any contractual agreement be wound up by taking advantage of the provisions of the Act. At the same time, it will be open to the public authority to secure periodic revision of rent in terms of the provisions of the Rent Control Act in each State or to move under genuine grounds under the Rent Control Act for resuming possession. In other words, the public authorities would have rights similar to private landlords under the Rent Control Act in dealing with genuine legal tenants. In other words, the public authorities would have rights similar to private landlords under the Rent Control Act in dealing with genuine legal tenants. It is necessary not to give room for allegations that eviction were selectively resorted to for the purpose of securing an unwarranted increase in rent, or that a change in tenancy was permitted in order to benefit particular individual or institutions in order to avoid such imputations or abuses of discretionary powers. The release of premises or change of tenancy should be decided at the level of Board of Directors of the Public Undertaking". (c) The above guidelines indicate that an inter Ministerial meeting of Central Government was held on 28th August, 1991, to discuss in detail the question as to the use of the Public Premises Act by Public Sector Undertakings for the evicting of genuine tenants. It appears that the Union Cabinet had approved the above guidelines. By a letter dated 20th January, 1992 the Government of India had notified inter alia, the Chief Executives of Public Sector Undertakings of the issue of the 1992 guidelines "for information, guidance and strict enforcement of instructions contained therein". (d) Again by its letter dated 5th August, 1992, the Government of India (Ministry of Urban Development) had issued certain clarifications in respect of the 1992 guidelines, which arose in the light of discussions held at an interdepartmental meeting convened by the said Ministry on 19th June, 1992 to review the progress of implementation of the 1992 guidelines. These clarifications appear to have been issued to various Ministries and it was specifically requested "that it may be ensured that the guidelines issued by this Ministry with the approval of the Cabinet in January, 1992 alongwith the above clarifications are scrupulously followed by the Public Sector Undertakings/Government Departments under the control of your Ministry." Clarification No. 3, Clarification No. 6 and Clarification No. 7 are reproduced hereunder, which are relevant : "3. Distinction has to be made The public sector undertakings are not between illegal occupation expected to start eviction proceedings and unauthorised occupation against the genuine tenant merely by and the PSUs should be service of notice declaring him as un- allowed to proceed against authorized occupant so long as he/she unauthorised occupants. does not vitiate any of the tenancy condi- tions. does not vitiate any of the tenancy condi- tions. The Act should be used by the PSUs mainly to evict those in illegal occupation of the premises or unauthor- ised subtenants. Hence there is no confusion in the guidelines as interpreted by certain PSUs like public sector banks/LIC. etc. Where the tenancy is il- legal or where the original tenant has connived at a breach of tenancy condi- tions, the PSU is within its rights to is- sue a notice under the provisions of law. 6. The Banks/PSUs should be Resorting to PPE Act to vacate author- free to evict even authorized ised tenants merely to secure possession tenants if the premises are of the premises to accommodate the required for their own bona PSUs employees, or for the commercial fide use including use by redevelopment or to open a branch can- their employees or redeve- not be agreed as it will be totally against lopmentof the premises or the spirit of the guidelines for protecting business use. interests of genuine authorised tenants. The Model Rent Control Legislation per- mit revision of present rents to the level of market rents over a period of and an- nual indexation of rents. After the State Government enact the Amendments, on the lines of the Model Rent Control Legislation, the PSUs can secure rent revision according to the new formula. As such, there is no justification for seek- ing eviction of original tenants merely to secure higher rents." 7. Whether the guidelines issued Guidelines issued earlier in respect of for the public sector under- public sector undertakings should also takings are uniformally appli- apply in regard to the premises owned cable to premises owned by Central Government Departments. by the Government Departments also. (e) The 1992 guidelines have been followed be various Public Sector Undertakings thereafter. However, some undertakings, such as the first respondent (LIC) had resorted to indiscriminate increases in rent and acted in a manner contrary to the 1992 guidelines. by the Government Departments also. (e) The 1992 guidelines have been followed be various Public Sector Undertakings thereafter. However, some undertakings, such as the first respondent (LIC) had resorted to indiscriminate increases in rent and acted in a manner contrary to the 1992 guidelines. When representations were made to it in that behalf, the respondent LIC by its letter dated 15th October, 1997 had denied that it was resorting to indiscriminate increase in rent and that it had resorted only to enhance the rents "so as to meet the expenses of maintenance atleast" and that "every care is taken to see that the guidelines issued by the Ministry with regard to P.P. Act is strictly adhered to." By its further letter dated 8th May, 1998 (Exhibit O-2/page 137), the Life Insurance Corporation in response to a letter addressed to it by Shri Murli Deora, Member of the Lok Sabha, has categorically stated that "I may, however, state that the matters in regard to increase in rent, transfer of tenancy etc., are being dealt with keeping in mind the very low rent which is being paid by the tenants as compared to the market rent and the return which we except to receive from the state. We do keep in mind the provisions of the Public Premises Act and the Government guidelines issued in this behalf." (f) It appears that by an Office Memorandum dated 7th July, 1993, the Ministry of Urban Development sought to advise all Ministries to issue suitable instructions to the PSUs under their control "clarifying that the guidelines under the P.P. Act are meant for the benefit of genuine non-affluent tenants and these are not applicable to large business houses and commercial enterprises" (Exhibit 4 to LICs Reply.page 18) (g) It is vital to note that the above clarification is marked "Confidential". It was not meant to, and did not, receive publicity and was not intimated to any of the tenants. The learned Senior Counsel for the petitioner Mr. Chagla submitted that the so called clarification is entirely devoid of any force of law; and furthermore, that it cannot possibly derogate from the 1992 guidelines. The purported clarification is therefore entirely irrelevant to the issue for determination before this Honble Court, namely, the applicability of the guidelines and their binding force qua LIC. Chagla submitted that the so called clarification is entirely devoid of any force of law; and furthermore, that it cannot possibly derogate from the 1992 guidelines. The purported clarification is therefore entirely irrelevant to the issue for determination before this Honble Court, namely, the applicability of the guidelines and their binding force qua LIC. (h) A letter dated 29th September, 2000 was addressed by the Ministry of Urban Development seeking the intervention of the Ministry of Finance for the issue of instructions to Life Insurance Corporation/Nationalized banks "to strictly adhere to these guidelines and ensure that the allotment of an accommodation is cancelled and provisions of the Public Premises Act, 1971 resorted to only in genuine and legitimate cases and that no genuine tenant should suffer at the hands of the law." (i) In response to the aforesaid letter, the Ministry of Urban Development passed a Government Resolution dated 30th May, 2002, containing guidelines to prevent the arbitrary use of powers under the Public Premises Act, by the PSUs, and notified them in the Gazette of India on 8th June, 2002. The guidelines are substantially the guidelines of 1992 with certain changes in form and substance which also disclose application of mind. These 2002 guidelines, inter alia, provided as under : "2. The guidelines are substantially the guidelines of 1992 with certain changes in form and substance which also disclose application of mind. These 2002 guidelines, inter alia, provided as under : "2. To prevent arbitrary use of powers to evict genuine tenants from public premises and to limit the use of powers by the Estate Officers appointed under section 3 of the PP(E) Act, 1971, it has been decided by Government to lay down the following guidelines : (i) The provisions of the Public Premises (Eviction of Unauthorised Occupants) Act, 1971 (P.P.(E) Act, 1971) should be used primarily to evict totally unauthorised occupants of the premises of public authorities or sub-letees, or employees who have ceased to be in their service and thus ineligible for occupation of the premises; (ii) The provisions of the P.P.(E) Act, 1971 should not be resorted to either with a commercial motive or to secure vacant possession of the premises in order to accommodate their own employees, where the premises were in occupation of the original tenants to whom the premises were let either by the public authorities or the persons from whom the premises were acquired; (iii) A person in occupation of any premises should not be treated or declared to be an unauthorized occupant merely on service of notice of termination of tenancy, but the fact of unauthorized occupation shall be decided by following the due procedure of law. Further, the contractual agreement shall not be wound up by taking advantage of the provisions of the P.P.(E) Act, 1971. At the same time, it will be open to the public authority to secure periodic revision of rent in terms of the provisions of the Rent Control Act in each State or to move under genuine grounds under the Rent Control Act for resuming possession. In other words, the public authorities would have rights similar to private landlords under the Rent Control Act in dealing with genuine legal tenants; (iv) It is necessary to give no room for allegations that evictions were selectively resorted to for the purpose of securing an unwarranted increase in rent or that a change in tenancy was permitted in order to benefit particular individuals or institutions. In order to avoid such imputations or abuse of discretionary powers, the release of premises or change of tenancy should be decided at the level of Board of Directors of Public Sector Undertakings; (v) All the Public Undertakings should immediately review all pending cases before the Estate Officer or courts with reference to these guidelines, and withdraw eviction proceedings against genuine tenants on grounds otherwise than as provided under these guidelines. The provisions under the P.P.(E) Act, 1971 should be used henceforth only in accordance with these guidelines. 3. These orders take immediate effect." 16. Mr. Chagla pointed out that by notifying the 2002 guidelines, in Government Gazette, the Government was acting transparently, giving the widest publicity to the 2002 guidelines. He also submitted that being conscious of the so called clarification dated 7th July, 1993, the Ministry of Urban Development did not introduce that clarification into the aforesaid 2002 guidelines. This indicates that the Government of India had consciously did not restrict the applicability of the guidelines and on the contrary emphatically reiterated the 1992 guidelines in the year 2002 also. 17. Mr. Chagla also pointed out that by a letter dated 2nd September, 2002 from the Secretary, Urban Development, to all Ministries/Departments, the 1992 and 2002 guidelines were reiterated. There is no mention at all of the clarification restricting the applicability of the guidelines only to "non-affluent" tenants. It was stated that: "4. The underlying intention in issuing these guidelines through a Government Resolution is to impress upon the Public Sector Undertakings and other Government bodies, engaged in the process of evicting of unauthorized occupants from public premises, to adhere to them in letter and spirit and not to invoke the provisions of the P.P.(E) Act, 1971 indiscriminately. 5. I enclose a copy of the Government Resolution dated June 8, 2002. I shall be grateful if you could issue instructions to the Public Sector Undertakings/Banks etc. under your control to observe these guidelines in letter and spirit while resorting to the provisions of the Public Premises (Eviction of Unauthorized Occupants) Act, 1971." 18. Mr. Chagle also brought to our notice that one of the tenants, i.e. M/s. Edward T. Robertson Son (Pvt.) Ltd., had addressed a representation to the Ministry of Urban Development protesting against the misuse of the Public Premises Act and the contravention of the 2002 guidelines by Life Insurance Corporation. Mr. Chagle also brought to our notice that one of the tenants, i.e. M/s. Edward T. Robertson Son (Pvt.) Ltd., had addressed a representation to the Ministry of Urban Development protesting against the misuse of the Public Premises Act and the contravention of the 2002 guidelines by Life Insurance Corporation. Reacting thereto, by a letter dated 23rd July, 2003, the Ministry of Urban Development forwarded the representation to the Ministry of Finance and whilst doing so, referred to the said clarification dated 7th July, 1993. Shri Chagla pointed out that the letter of 23rd July, 2003 does not purport to be and is not a clarification or modification of the 2002 guidelines. It merely refers to the 7th July, 1993 clarification of the 1992 guidelines, which clarification, as stated above, had not been introduced into the 2002 guidelines. 19. Mr. Chagla, the learned Senior Counsel strongly contended that the above guidelines have a statutory force and are binding on respondent No. 1. In that behalf, he referred to section 21 of the Life Insurance Corporation Act, 1956, which reads as under: Section 21 :- "In the discharge of its functions under this Act, the Corporation shall be guided by such directions in matters of policy involving public interest as the Central Government may give to it in writing and if any question arises where a direction relates to a matter of policy involving public interest, the decision of the Central Government thereon shall be final." 20. Mr. Chagla submitted that the aforesaid section 21 requires three conditions to be satisfied viz.: (i) that the directions of the Central Government shall be in writing; (ii) that they are directed to LIC in the discharge of its functions; and (iii) that they shall relate to a matter of policy involving public interest. 21. Hence, the learned Counsel submitted that the 2002 guidelines constitute directions in writing in matters of policy involving public interest and that have been issued by the Central Government to LIC in the discharge of its functions and therefore, it is mandatory for the LIC ("shall be guided by such directions") to follow the said guidelines. 22. Mr. Chagla contended that the 2002 guidelines, have statutory force and cannot be departed from by respondent LIC. 22. Mr. Chagla contended that the 2002 guidelines, have statutory force and cannot be departed from by respondent LIC. In that behalf, the learned Senior Counsel referred to (Real Food Products Ltd. v. A.P. State Electrictiy Board)1, 1995(3) S.C.C. 295 , wherein the Supreme Court has held that similar directions to be having a statutory force. 23. The learned Senior Counsel for the petitioner thereafter referred to section 6(1) and section 6(2)(c) of the LIC Act, 1956 which are reproduced hereunder: (1) Subject to the rules, if any, made by the Central Government in this behalf, it shall be the general duty of the Corporation to carry on life insurance business, whether in or outside India, and the Corporation shall so exercise its powers under this Act as to secure that life insurance business is developed to the best advantage of the community. (2) Without prejudice to the generality of the provisions contained in sub-section (1) but subject to the other provisions contained in this Act, the Corporation shall have power (a) .... (b) .... (c) to acquire, hold and dispose of any property for the purpose of its business." 24. It is very relevant to note that LIC admits that the relationship between it and its tenants, particularly in the matter of revision of rent, forms part of the business and functions of LIC and that revision of rents is necessary in the interests of crores of its policy holders. This is borne out by the statements at paragraph 3(iv) of its Affidavit dated 11th November, 2003 in reply to the petitioner, LIC states that "when LIC asks for increased rent in consonance with its estate policy LIC acts in its capacity as the lessor. It is incumbent on LIC to carry on its business and manage its affairs on sound commercial principles...". 25. In any event, it is clear that the raising of rents by LIC is related to LICs is business and the discharge of its functions under the LIC Act. This is admitted in paragraph 7 of its Affidavit dated 11th November, 2003, in reply to Writ Petition No. 2516/2003, LIC states that "overwhelming public interest and the interest of crores of policy holders requires us to revise rents of our properties". 26. Mr. This is admitted in paragraph 7 of its Affidavit dated 11th November, 2003, in reply to Writ Petition No. 2516/2003, LIC states that "overwhelming public interest and the interest of crores of policy holders requires us to revise rents of our properties". 26. Mr. Chagla, the learned Senior Counsel contended that it is trite to state that the directions issued by the Central Government need not expressly trace their source of power to section 21 of the LIC Act and as long as the directions can be related to the power of the Central Government under section 21, they would be binding and have statutory force. In that behalf, he referred to (P.V. Mani v. Union of India)2, A.I.R. 1986 Ker. 86 (F.B.), wherein paragraph 22 reads as under:-- 22. We are not persuaded to accept the submission of the petitioners that Ext. P. 3 is liable be set aside or declared invalid for the only reason that it was issued on the same day as Ex. P 2 or that the Corporation could not have independently applied its mind to the need for changing the conditions of service as suggested. Nor are we persuaded to go in any further detail into the petitioners submission that the Corporation was acting under the dictates of the Central Government in issuing Ext. P 3 Regulations. We do not think it necessary to consider the decisions reported in (Commr. of Police v. Gordhandas)3, A.I.R. 1952 S.C. 16, and (C.I.T. v. Mahindra Mahindra Ltd.)4, 144 I.T.R. 225 : 1983 Tax.L.R. 1286 (S.C.), referred to in support of that submission. Reference was made to "Judicial Review on Administrative Action" by De Smith, and "Administrative Law" by Prof. HWR Wade. We are afraid that these reference are inapposite, except in afraid that these reference are inapposite, except in a case of administrative or quasi judicial/judicial/judicial discretion is compelled by extraneous authority, including even an Official Superior, whose directives the authority having discretion, was bound to carry out otherwise. It is in disputable that the regulations framed by the Corporation have to be consistent with the Act and Rules made thereunder, and shall be so framed only for purposes of giving effect to the provisions therein. Such regulations can be effective only with previous approval of the Central Government. It is in disputable that the regulations framed by the Corporation have to be consistent with the Act and Rules made thereunder, and shall be so framed only for purposes of giving effect to the provisions therein. Such regulations can be effective only with previous approval of the Central Government. It is of course true, that the regulations have to be framed in the first instance by the Corporation, sent up for approval to the Government, and brought into force by notification, after such approval previous to its publication. There is no doubt that antecedent directions for framing regulations to comply with Ex. P 2 are neither a proper nor a legal manner of exercise of powers by the Central Government, if we are confining our attention only to the provisions of section 49 of the Act. The question then is, whether the illegality or irregularity so vitiates Ext. P 3 as to render it invalid from its inception. Section 21 of the Act provides : "In the discharge of its functions under this Act, the Corporation shall be guided by such directions in matters of policy involving public interests as the Central Government may give to it in writing and if any question arises whether a direction relates to a matter of policy involving public interest the decision of the Central Government thereon shall be final." It cannot be disputed that the directions contained in paragraph 4 of Ex. P2 can be related to the power of the Central Government under section 21. Nor can it be disputed that such policy directions may also comprehend matters covered by the power of the Corporation to make Regulations under section 49 of the Act. It is true that Ext. P2 is issued in exercise of the power under section 11(2) of the Act, section 21 of the Act also could, as well have been mentioned in Ext. P2. Does the absence of mention of section 21 of the Act as the source of power for issue of Ext. P2 invalidate it? It is needless to refer to authorities for the proposition that if the power is in existence, the omission to mention the provision under which the power can be exercised, or the mention of a wrong provision, does not invalidate the exercise of the power. We cannot, therefore, agree that the Corporation, in issuing Ext. P3 simultaneously with Ext. It is needless to refer to authorities for the proposition that if the power is in existence, the omission to mention the provision under which the power can be exercised, or the mention of a wrong provision, does not invalidate the exercise of the power. We cannot, therefore, agree that the Corporation, in issuing Ext. P3 simultaneously with Ext. P2, in apparent conformity with the directions contained in paragraph 4 of Ext. P2, acted illegally or beyond its competence. Non compliance with section 9-A of the I.D. Act." 27. The learned Counsel for the petitioners, submitted that for Guidelines to be binding on LIC, it is not necessary that they must be framed under section 21. Under section 21 any directions of the Central Government involving public interest will bind LIC in the discharge of its functions. It cannot be gainsaid that the Guidelines, which are the subject-matter of the present writ petition are not directions in matters of policy involving public interest. As stated above, while dealing with its tenants in the matter of rent revision, LIC is discharging its functions under the LIC Act. In these circumstances, he submitted that the said Guidelines are squarely covered by section 21 of the LIC Act and are therefore, binding on LIC. 28. The learned Counsel for the petitioner submits that the exemption of the State, from Rent Control Legislation has been constitutionally upheld on the premise that State cannot and will not act in respect of its tenants as would a private landlord and cannot be actuated by profit making motives, but must act only reasonably, fairly, in the public interest and without arbitrariness. The learned Counsel, referred to and relied on the judgment of the Supreme Court in (Baburao Shantaram More v. Bombay Housing Board)5, A.I.R. 1954 S.C. 153, especially paragraph No. 6 of that judgment. "6. Learned Counsel for the petitioner then said that the effect of section 3-A is to extend the benefit of the exemption of section 4 of the Bombay Rent Act to the Board which, in other words implies that the name of the Board has been added in section 4 after the local authority. "6. Learned Counsel for the petitioner then said that the effect of section 3-A is to extend the benefit of the exemption of section 4 of the Bombay Rent Act to the Board which, in other words implies that the name of the Board has been added in section 4 after the local authority. The contention is that section 4 discriminates against the tenants of properties belonging to the Government, local authority or the Board in that these tenants are denied the benefits of the Bombay Rent Act which are available to all other tenants in Bombay. There can be no question that this exemption is given by section 4 to certain classes of tenants and this classification is based on an intelligible differentia which distinguishes them from other tenants and this differentia has a rational relation to the object sought to be achieved by the Act. It is the business of the Government to solve the accommodation problem and satisfy the public need of housing accommodation. It was for the purpose of achieving this object that the board was incorporated and established. It is not to be excepted that the Government or local authority or the Board would be actuated by any profit making motive so as to unduly enhance the rents or eject the tenants from their respective properties as private landlords are or are likely to be. Therefore, the tenants of the Government or local authority or the Board are not in need of such protection as the tenants of the private landlords are and this circumstance is a cogent basis for differentiation. The two classes of tenants are not by force of circumstances placed on an equal footing and the tenants of the Government or local authority or the Board can not, therefore, complain of any denial of equality before the law or of equal protection of the law. There is here no real discrimination, for the two classes are not similarly situated. Neither section 4 of the Bombay Rent Act nor section 3-A of the Bombay Housing Board Act can, therefore, we challenge as unconstitutional on the ground of contravention of the Article 14 of the Constitution." The learned Counsel further referred to and relied on judgment of the Supreme Court in (Ram Pratap Jaidayal v. Dominion of India)6, 1952(54) Bom. L.R. 927. "....... L.R. 927. "....... Now it is clear that in this case the legislature was not in any sense exempting the Government from the operation of the Act in order to permit the Government to do the very thing which the legislature was prohibiting in the case of landlords who were not a local authority or Central or State Government. It is not too much to assume, as the legislature did in this case assumed, that the very Government whose object was to protect the tenants and prevent rent being increased and prevent people being ejected, would not itself when it was landlord do those very things which it sought to prohibit its people from doing, and therefore the underlying assumption of this exemption is that Government would not increase rents and would not eject tenants unless it was absolutely necessary in public interest and unless a particular building was required for public purpose." The learned Counsel also referred to and relied on the judgment of the Supreme Court in (Dwarkadas Marfatia Sons v. Board of Trustees for the Port of Bombay)7, 1990(1) Bom.C.R. (S.C.)405 : 1989(2) Mah.L.R. 1425 : A.I.R. 1989 S.C. 1642 specially paragraph Nos. 11 to 17. "11. In the aforesaid background it was contended that the eviction of the appellant was not necessary in public interest. It appears that the eviction of the appellant was only in pursuance of a policy of the Port Trust to let out a reconstituted plot to the person who occupied the major portion and who could use it for development. It was urged that the decision of the Port Trust to allot the entire plot to M/s. Dhanji Mavji to the exclusion of the appellant (although the appellant was also the existing tenant and in occupation of a portion thereof for the past 40 years) was an arbitrary and discriminatory departure from the established policy of the Port Trust, which was to offer the plots to the existing tenants (where two or more tenants were in occupation of one plot) as joint tenants. It was contended that the impugned termination was ultra vires and arbitrary. It was contended that the exclusive allotment of the entire plot 5-B to M/s. Dhanji Mavji and the consequent termination of the appellants tenancy was not necessary to enable proper development of the plot as required by the Town Planning Scheme. It was contended that the impugned termination was ultra vires and arbitrary. It was contended that the exclusive allotment of the entire plot 5-B to M/s. Dhanji Mavji and the consequent termination of the appellants tenancy was not necessary to enable proper development of the plot as required by the Town Planning Scheme. There was no policy requiring the entire final/reconstituted plot to be allotted exclusively to the person occupying the major portion thereof or requiring the other existing occupants to be evicted. Nor, it was submitted, was the allotment of the entire plot, pursuant to any such alleged policy. On the other hand, the appellant contended that the respondent is established policy was to offer/allot a final/reconstituted plot for development to the existing occupants thereof as joint tenants. It was contended that this rational policy which, according to the appellant, would have fulfilled the public interest of development in accordance with the Regulations of the Town Planning Scheme and at the same time would not have required or necessitated the eviction of the existing occupants. 12. Contrary to the established rational policy of accommodating tenants by offering/allotting a new plot jointly to the existing occupants/tenants, the respondent arbitrarily, it was contended, and discriminatingly did not offer the new plot 5-B to M/s. Dhanji Mavji and the appellant (both of whom were existing tenants/occupants of the plot) as joint tenants, but instead wrongfully decided to give the entire plot to M/s. Dhanji Mavji to the exclusion of the appellant. 13. Our attention was drawn to section 4 of the Bombay Rents, Hotel and Lodging House Rates (Control) Act, 1947, which enjoins that the Act would not apply to the premises belonging to the Government or to the local authorities. By the provisions of the said section 4, the Port Authorities were exempted from the operation of the Rent Act. This privilege was given to the Port Trust Authorities, it was submitted, on the assumption that it would act in public interest, and would not behave like ordinary landlords. The special privileges, powers and benefits were statutorily conferred on the Bombay Port Trust by section 4 of the aforesaid Act. It had those rights due to its statutory or public character, as a local authority. 14. Our attention was also drawn to the decision in Rampratap Jaidayal v. Dominion of India, 1952(54) Bom.L.R. 927 at p. 934 : A.I.R. 1953 Bom. It had those rights due to its statutory or public character, as a local authority. 14. Our attention was also drawn to the decision in Rampratap Jaidayal v. Dominion of India, 1952(54) Bom.L.R. 927 at p. 934 : A.I.R. 1953 Bom. 170 at p. 174 where the Chief Justice Chagla observed as follows :- "It is not too much to assume as the legislature did in this case assume, that the very Government whose object was to protect the tenants and prevent rent being increased and prevent people being ejected would not itself when it was landlord do those very things which it sought to prohibit its people from doing, and therefore the underlying assumption of this exemption is that Government would not increase rents and would not eject tenants and unless it was absolutely necessary in public interest and unless a particular building was required for a public purpose." 15. This Court in Baburao Shantaram More v. Bombay Housing Board, 1954 S.C.R. 572 : A.I.R. 1954 S.C. 153, had to consider section 4 of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947, and so far as material for our present purposes explained the basis of exemption under section 4 as that the Government or the Local Authority or the Board would not be actuated by any profit making motive so as to unduly enhance the rents or eject the tenants from their respective properties as private landlords or are likely to be. In other words, this Court recognised that the basis of differentiation in favour of the public authorities like the respondent, was on the ground that they would not act for their own purpose as private landlords do, but must act for public purpose. 16. Our attention was also drawn by Mr. Chinai, learned Counsel for the appellant to the observations on "Administrative Law" by Wade 5th Edition at page 355. It was stated therein as follows :- "Statutory power conferred for public purposes is conferred as it were upon trust, not absolutely that is to say, it can validly be used only in the right and proper way which parliament when conferring it is presumed to have intended." 17. It, therefore, follows that the public authorities which enjoy this benefit without being hidebound by the requirements of the Rent Act must act for public benefit. It, therefore, follows that the public authorities which enjoy this benefit without being hidebound by the requirements of the Rent Act must act for public benefit. Hence, to that extent, this is liable to be gone into and can be the subject-matter of adjudication." The learned Counsel Mr. Chagla, appearing on behalf of the petitioners, therefore contended that the aforesaid principles of reasonableness and fairness have been extended to the question of renewals of leases and revisions in rent charged by Public Corporations and instrumentalities of the State and referred to and relied upon judgment of our High Court in (Ratti Palonji Kapadia v. State of Maharashtra)8, 1992(Supp.) Bom.C.R. 238 : 1992 Mh.L.J. 1356, specifically paragraph No. 10, and paragraph Nos. 13 to 26, wherein paragraphs read as under :- "13. It is well settled that even when the State exercises contractual rights, the action of the State Government must be fair and informed by reason. The State cannot act arbitrarily or capriciously. As far as private lessors are concerned, we have in this State the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947, which covers, inter alia the right of a landlord to increase lease rent. The public policy underlying the Bombay Rents, Hotel and Lodging House Rates Control Act is that while the landlord is entitled to a reasonable return on his investment he is not entitled to profiteer or take advantage of increase in land prices on account of various market forces. Rent Act is not made applicable to the State Government. But the State Government has been exempted from the application of the Bombay Rents, Hotel and Lodging House Rates Control Act in view of the fact that it is not expected to behave like an ordinary landlord but is expected to behave like an ordinary landlord but is expected to behave fairly and in a reasonable manner. In other words, the State Government must comply with the public policy of ensuring basically, a fair return on investment on and without charging exorbitant charges based on the prevailing market prices of land. 14. In other words, the State Government must comply with the public policy of ensuring basically, a fair return on investment on and without charging exorbitant charges based on the prevailing market prices of land. 14. In the case of (Jayantilal Dharamsi v. Board of Trustees of Port of Bombay)9, reported in 1991(2) Bom.C.R. 283 : 1990(92) Bom.L.R. 596, a learned Judge of this Court was required to consider the action of the Bombay Port Trust which sought to increase substantially the rents which it was charging to lessees of its lands. The increase was on the basis of the prevailing market value of the land belonging to the Bombay Port Trust. The learned Single Judge said that the Bombay Port Trust, in seeking to exact rent which would correspond to the present day market value of the land, was violating the basic assumption underlying the Rent Control legislation. He held that the Rent Control Legislation has been enacted on the basis of the public policy which is thus stated by him : (i) The land owner/landlord is entitled to a reasonable return on his investment/cost. (ii) The landlord/owner is not entitled to profiteer/take advantage of increase in land prices by seeking an increased return demanding higher rent computed on the basis of such increase in land prices. He said that though the underpinnings of the Rent Act may not apply in the strict sense to the Bombay Port Trust or any other local body exempted under section 4(1) of the Rent Act, the Bombay Port Trust was not expected to behave as an ordinary landlord would. An ordinary landlord tries to extract the best possible profit which he can, from his holding. That is why the Legislature had to intervene. And this was done in public interest to make laws to prevent landlords from exploiting tenants by compelling them either to pay exorbitant rents or else face eviction. He had that the Bombay Port Trust, would however, be entitled to get protection against an erosion in the rental as a result of inflationary trends; but no more. This judgment of the learned Single Judge covers a situation which is comparable to the situation before us, and we agree with the reasoning of the learned Single Judge. 15. He had that the Bombay Port Trust, would however, be entitled to get protection against an erosion in the rental as a result of inflationary trends; but no more. This judgment of the learned Single Judge covers a situation which is comparable to the situation before us, and we agree with the reasoning of the learned Single Judge. 15. In the case of M/s. Dwarkadas Marfatia and Sons v. Board of Trustees of the Port of Bombay, reported in A.I.R. 1989 S.C. 1642 the Supreme Court also considered the position of the Bombay Port Trust and its dealing with the lands owned by it in the light of the Bombay Rents, Hotel and Lodging House Rates Control Act. The Supreme Court said : "When the State, the local bodies and public authorities which are State within the meaning of Article 12 are exempted from purview of the Rent legislation, the basis of exemption is that such bodies would not be actuated by any profit making motive so as to unduly enhance the rents or eject the tenants from their respective properties as private landlords are or are likely to be. They would not act for their own purpose as private landlords do, but must act for public purpose..... Where there is arbitrariness in the State action. Article 14 springs in and judicial review strikes such an action down. Every action of the executive authority must be informed by reason. So, whatsoever be the activity of the public authority, it should meet the test of Article 14." In that case the Supreme Court upheld the action of the Bombay Port Trust in evicting certain tenants of minor portions of plots and allotting plots to the holders of major portions of such plots as reasonable and not arbitrary. 16. It was urged by the respondents that in increasing lease rents, they have not acted unreasonably, unfairly or in violation of the principles of Rent Control legislation because they are not seeking to charge rent on the basis of the current market value of the land. They have only charged 25 times the previous rent. 16. It was urged by the respondents that in increasing lease rents, they have not acted unreasonably, unfairly or in violation of the principles of Rent Control legislation because they are not seeking to charge rent on the basis of the current market value of the land. They have only charged 25 times the previous rent. But the respondents do seek to establish that charging 25 times or 50 times the previous rent is reasonable by referring to what they would have charged for the plot, had it been an open plot leased out for the first time now, i.e. by comparing the new proposed rent with the lease rent based on the current market value of the land. The very norm for comparison is a wrong norm. An increase in rent by adopting such standards of comparison would be contrary to the policy underlying Rent Control legislation. Otherwise every landlord can justify rent increases in this manner. 17. It was submitted before us by the respondents that their right to increase the rent flows from section 6 of the indenture of lease set out earlier and similar clauses in the lease deeds in the other petitions. But in exercising this right the State must act fairly and reasonably and in accordance with the public policy as laid down in the Bombay Rent Act, although the Act may not strictly apply to the State Government. The State Government while dealing with the lessees of these lands must act in a fair manner as is observed by the Supreme Court in case of (K.I. Shephard others v. Union of India others)10, reported in A.I.R. 1988 S.C. 686, fair play is a part of public policy and is a guarantee for justice to citizens. In our system of Rule of law, every social agency conferred with power is required to act fairly so that social action should be just and there would be furtherance of the well being of the citizens. Both Article 14 and principles of natural justice require such fair play on the part of the State in exercising its rights. 18. In the case of (Ku. Shreelakha Vidyarthi others v. State of U.P. others)11, reported in 1991(1) S.C.C. 212 , the Supreme Court said that even in matters pertaining to the States contracts with private parties, requirements of Article 14 are attracted. 18. In the case of (Ku. Shreelakha Vidyarthi others v. State of U.P. others)11, reported in 1991(1) S.C.C. 212 , the Supreme Court said that even in matters pertaining to the States contracts with private parties, requirements of Article 14 are attracted. Even while exercising contractual rights the State cannot cast off its personality and exercise unbridled power unfettered by the requirements of Article 14 and claim to be governed therein only by private law principles applicable to private individuals whose rights flow only from the terms of the contract without anything more. The Supreme Court said that it is not as if the requirements of Article 14 and contractual obligations are alien concepts, which cannot coexist. Therefore, total exclusion of Article 14 non arbitrariness which is basic to the rule of law from State actions in contractual field is not justified. 19. In the case of (Mahabir Auto Spares others v. Indian Oil Corporation others)12, reported in 1990(3) S.C.C. 752 , also the Supreme Court said that even in the field of private law the State cannot act arbitrarily or mala fide. That was a case where the respondents had arbitrarily terminated the contract with the petitioners. The Court said that even when the State enters the contractual field, there must be fairness to the party concerned having regard to the nature of the dealing between the parties, the State ought to have taken the appellant into confidence. 20. It was also urged that under Clause 6 of the deed of lease the State Government is entitled to take into account the value of unimproved land similarly situated while increasing rent. In our view this is not correct interpretation of Clause 6. The clause merely provides that improvement effected by the tenant on the land cannot be taken into account by the landlord for increasing rent at the time of renewal of lease. Even otherwise the clause does not give power to State Government to increase rent bearing in mind the increase in the market value of the land. Even if it did, public policy requires that this power is exercised in public interest and in a fair and reasonable manner. The public policy is not to exploit the occupants of lands by charging them exorbitant rents based on the high increase in the prices of the land in urban areas. Even if it did, public policy requires that this power is exercised in public interest and in a fair and reasonable manner. The public policy is not to exploit the occupants of lands by charging them exorbitant rents based on the high increase in the prices of the land in urban areas. The State Government cannot plead such exploitative increases in prices of land so as to justify a steep increase in rent. 21. Undoubtedly in the present case the rent is not based on the market value of the open plots of land similarly situated. But this steep increase in market price of open lands is held up before us as justifying the increase lesser rent which the State is charging. The comparison, in our view, is unwarranted. What we will have to examine is whether increase in lease rent of the magnitude of 25 to 50 times, can be considered as fair and reasonable. One can understand the State taking into account the fall in the value of the rupee over the years, and an adequate return in terms of the changing value of the rupee or increase in maintenance costs and so on. We have however, not been shown any material to indicate any reasonable basis for increasing the existing rent 25 to 50 times. 22. What is worse, although the leases have expired on 1-1-1981, they were not renewed till 1986 or later and the increased rent is being charged retrospectively from 1-1-1981. This, in our view, is also unfair. What is more while the original grant of lease was for a long period of 50 years and it is previously renewed also for a reasonably long period of 30 years, the present leases are renewed only for 10 years. We have not been shown any justification for renewing the leases for this relatively short period. In fact to some of the petitioners in this group of writ petitions, the renewal of lease was communicated in 1991, after even the renewal period came to an end. We have not been shown any justification for renewing the leases for this relatively short period. In fact to some of the petitioners in this group of writ petitions, the renewal of lease was communicated in 1991, after even the renewal period came to an end. Bearing in mind that these are leases which were originally granted for the purpose of development of the land in question, and that on the basis of their long term leasehold rights in these lands, the lessees have constructed buildings on these lands, the renewal for a period of only 10 years also requires some justification and some basis to be disclosed. This is not forthcoming. 23. We were informed that the resolution of 14th March, 1986 was with the full consent of the Finance Ministry as rent less than what would be charged for new leases was to be imposed. But no material has been disclosed which would indicate the factors which weighed with the authorities in arriving at this decision. As set out earlier, the resolution of 14th March, 1986 does not set out any basis for increasing the rent 25 or 50 times. The reasons are disclosed for the first time in the affidavit in reply. We have already discussed these reasons earlier. Moreover, we do not have any material even to show that the reasons which are now set out in the affidavit in reply had, in fact weighed with the authorities when they took the decision. We have not been shown even other comparable instances of rent being charged by other public authorities while granting renewals of a similar kind. 24. It is also urged on behalf of the respondents that there are a series of decisions of our High Court as well as the Supreme Court which lay down that when the State Government enters into a transaction of sale of its properties or leases out its properties, it must ensure that the best possible price is obtained. The monies so fetched can be utilised by the State for its various public activities. These decisions however, cannot have any application to the present case. They deal with a situation where the State is disposing of one of the assets belonging to it to an outsider. The monies so fetched can be utilised by the State for its various public activities. These decisions however, cannot have any application to the present case. They deal with a situation where the State is disposing of one of the assets belonging to it to an outsider. Obviously an attempt must be made to ensure that the asset fetches the best possible price-except in a case where the asset is being given to a backward or handicapped group as a supportive measure or to a charitable organisation. The present case is not such a case. In the present case lands belonging to the State were already leased to the lessees more than 80 years back. These were long term leases for the purpose of development of the plots in question. The leases have been renewed in the past for long terms. When such lease become due for renewal the principles which would be applicable are the principles which govern the Rent Control legislation rather than those principles which would govern the disposal of a property belonging to the State. The ratio of the Supreme Court in the case of M/s. Dwarkadas Marfatia and Sons v. Board of Trustees of the Port of Bombay (supra) is the ratio which would be applicable in a situation like the present one. 25. It was next urged before us that principles of natural justice require that before the State decides to increase rents the affected lessees should be heard. We would not like to go so far. The principles of natural justice and fair play require that persons who are affected by any proposed administrative action are given an adequate notice of what is proposed, or are taken into confidence, so that they may, if they so desire, make representations or bring relevant facts to the notice of the administrative authority. The Supreme Court in the case of K.T. Shephard others v. Union of India others (supra) has said: "Even when a State agency acts administratively, rules of natural justice would apply. The Supreme Court in the case of K.T. Shephard others v. Union of India others (supra) has said: "Even when a State agency acts administratively, rules of natural justice would apply. As stated, natural justice generally requires that persons liable to be directly affected by proposed administrative acts, decisions or proceedings be given adequate notice of what is proposed so that they may be in a position (a) to make representation of their own behalf; (b) or to appear at a hearing or enquiry (if one is held); and (c) effectively to prepare their own case and to answer the case (if any) they have to meet." In the present case the question of holding an enquiry does not arise. But principles of fair play and natural justice do require that the State should disclose to the affected lessees the basis on which the rent is proposed to be increased and reasons for the same, thereby taking them into confidence. In the present case the State has not disclosed so far any satisfactory basis except for pointing out that the market value in the area has gone up substantially. Even in determining the market value the State Government has not taken into account the fact that the plots are already leased to the lessees and are built upon and occupied by owners or tenants. To take hypothetical market value of an open plot of land for calculation of hypothetical lease rent in comparison to which the proposed rent would appear reasonable is, in our view not a justifiable exercise. 26. In these circumstances, the petitioners are entitled to succeed. We set aside the Government Resolution of 14th March, 1986 and the consequent orders and the notice of demand which have been issued on the petitioners herein and direct the respondents to renew leases afresh on the terms and conditions based upon principles set out earlier. Till such time as new lease rents are fixed by the State Government in accordance with law and the leases are renewed for a reasonable period, the petitioners shall continue to pay the existing rent for the period commencing from 1-1-1981 onwards until such time as new lease rent is fixed by the State Government in accordance with law. Till such time as new lease rents are fixed by the State Government in accordance with law and the leases are renewed for a reasonable period, the petitioners shall continue to pay the existing rent for the period commencing from 1-1-1981 onwards until such time as new lease rent is fixed by the State Government in accordance with law. In the order of 14th March, 1986 a special rent has been fixed for Retreat House and we have been informed that similar special low rent is proposed to be fixed for other lessees which are charitable organisations. These cases stand on their own facts and our orders will not affect the action taken by the State Government for the renewal of leases of Retreat House and properties belonging to other charitable organisations. We have not been called upon to consider the fairness or otherwise of the action of the State in that regard. 29. The learned Counsel appearing for the petitioner submits that the aforesaid principles of reasonableness and fairness as an essential requirement of State action, have also been applied in the context of the Public Premises Act and he referred to and relied on judgment of the Supreme Court in (Ashoka Marketing Ltd. v. Punjab National Bank)13, A.I.R. 1991 S.C. 855. The Supreme Court of India in paragraph Nos. 64 and 69 has held as under: "64. It would thus appear that, while the Rent Control Act is intended to deal with the general relationship of landlords and tenants in respect of premises other than Government premises, the Public Premises Act is intended to deal with speedy recovery of possession of premises of public nature, i.e. property belonging to the Central Government has substantial interest or corporations owned or controlled by the Central Government and certain Corporations, Institutions, autonomous bodies and local authorities. The effect of giving overriding effect to the provisions of the Public Premises Act over the Rent Control Act would be that buildings belonging to the Companies, Corporations and autonomous bodies referred to in section 2(e) of the Public Premises Act would be excluded from the ambit of the Rent Control Act in the same manner as properties belonging to the Central Government. The reason underlying the exclusion of property belonging to the Government from the ambit of the Rent Control Act, is that the Government while dealing with the citizens in respect of property belonging to it would not act for its own purpose as a private landlord but would act in public interest. What can be said with regard to Government in relation to property belonging to it can also be said with regard to Companies, Corporations and other statutory bodies mentioned in section 2(e) of the Public Premises Act. In our opinion, therefore, keeping in view the object and purpose underlying both the enactments viz. the Rent Control Act and the Public Premises Act, the provisions of the Public Premises Act, have to be constructed as overriding the provisions contained in the Rent Control Act. "69. It has been urged by the learned Counsel for the petitioners that many of the Corporations referred to in section 2(e) 2(ii) of the Public Premises Act, like the nationalised banks and the Life Insurance Corporation, are trading corporations and under the provisions of the enactments whereby they are constituted these corporations are required to carry on their business with a view to earn profit and that there is nothing to preclude tenants at a low price and after buying such property evict the tenants after terminating the tenancy and thereafter sell the said property at a much higher value because the value of property in possession of tenants is unable to cut down the scope of the provisions of the Public Premises Act on the basis of such an apprehension because as pointed out by this Court in M/s. Dwarkadas Marfatia Sons v. Board of Trustees of the Port of Bombay, 1989(3) S.C.C. 293 : A.I.R. 1989 S.C. 1642 at p. 1649 : "Every activity of a public authority especially in the background of the assumption on which such authority enjoys immunity from the rigous of the Rent Act must be informed by reason and guided by the public interest. All exercise of discretion or power by public authorities as the respondent, in respect of dealing with tenants in respect of which they have been treated separately and distinctly from other landlords on the assumption that they would not act as private landlords must be judged by that standard." These observations were made in the context of the provisions of the Bombay Rents, Hotel and Lodging House Rates (Control) Act, 1947 whereby exemption from the provisions of the Act has been granted to premises belonging to the Bombay Port Trust. The consequence of giving overriding effect to the provisions of the Public Premises Act is that premises belonging to companies and statutory bodies referred to in Clauses (2) and (3) of section 2(e) of the Public Premises Act would be exempted from the provisions of the Rent Control Act. The actions of the companies and statutory bodies mentioned in Clauses (2) and (3) of section 2(e) of the Public Premises Act, while dealing with their properties under the Public Premises Act will therefore, have to be judged by the same standard." 30. The learned Counsel Mr. Chagla submitted that the 2002 guidelines therefore, furnish the standard, upon which, the exercise of power by LIC must be judged. Hence, actions to revise rent or to evict tenants otherwise than in accordance with the prevailing Rent Control statute are ipso facto arbitrary, unfair, unreasonable and illegal as also violative of Article 14 of the Constitution of India. Any action of LIC contrary to the 2002 guidelines would be unconstitutional. 31. The learned Counsel Mr. Chagla therefore submitted that the LIC's actions are discriminatory and operate unequally, and the same is arbitrary, unreasonable and violative of Article 14 of the Constitution of India. In paragraph 11(g) of the petition, the petitioner has challenged the actions of LIC on the ground that a pick and choose approach has been followed, the rent increased sought are discriminatory and arbitrary and hostile discrimination has been adopted as can be seen as under : (a) LIC has demanded a higher rent from the petitioner and lesser rent in respect of larger flats in the same building in which the petitioner resides (and which have balconies which the petitioner's flat does not have) (b) In the year 1997 LIC demanded a basic rent of Rs. 2303/- per month from the petitioner from September, 1997, but Rs. 2303/- per month from the petitioner from September, 1997, but Rs. 2232/- per month from the other tenants of even larger flats in the said building from January, 1998; (c) So also though the aforesaid demand of Rs. 59,984/- per month has been made (aggregate rent) on the petitioner, LIC has not demanded any increased rent from most of the other tenants. (d) Moreover, whereas the other tenants in the LIC owned buildings of M. Karve Road, have been asked to pay increased rent from 1st April, 2003, the petitioner has been asked to pay revised rent from 1st January, 2003. (e) It appears that LIC has only picked certain persons to suffer the increase in rent and has sought to victimise the petitioner who has, more than others, sought to question the arbitrary conduct of the LIC. 32. The learned Counsel for the petitioner submitted that the present circumstances namely justify the enforcement of the 2002 Guidelines against the LIC since as observed by the Supreme Court in Ahluwalia's case, 1975(3) S.C.C. 503 "executive agency must be rigorously held to the standards by which it profess its actions to be Judged and it must scrupulously observe those standards on pain of invalidation of an act in violations of them". 33. The learned Counsel for the petitioner has further contended that the Rent Act does not stand superseded in its entirety by the Public Premises Act and in matters of rent revision the principles of the Rent Act continues to apply to LIC. 34. Mr. Singhvi, the learned Senior Counsel appearing on behalf of the respondents contended that the petition does not disclose any cause of action. The learned Counsel further submitted that by this petition the petitioner has mainly challenged a letter dated 20th September, 2003 addressed by the Regional Manager (E OS), Western Zonal Office of the first respondent to the petitioner inter alia informing the petitioner that the revised rent for the premises would be Rs. 59,984/- per month inclusive of Rs. 203/- as Municipal Taxes and Rs. 101/- as Miscellaneous Charges with effect from 1st January, 2003 with a request to pay the same within 10 days of the receipt of the said letter. 59,984/- per month inclusive of Rs. 203/- as Municipal Taxes and Rs. 101/- as Miscellaneous Charges with effect from 1st January, 2003 with a request to pay the same within 10 days of the receipt of the said letter. It was also mentioned therein that if the petitioner failed to pay the arrears of rent from January 2003 to March, 2003, necessary legal action will be taken against her as deemed fit. 35. The learned Counsel for the respondent submitted firstly, that the said letter does not cause any legal injury to the petitioner. The relation between the petitioner and the First respondent is contractual and governed by the Transfer of Property Act. The respondent No. 1 has the right to unilaterally revise the rent and enforce the same against the petitioner. In case the petitioner does not agree to pay the said amount, the First respondent can evict the petitioner. Mr. Singhvi also made a statement on behalf of the first respondent in the Court that the first respondent does not intend to take any action against the petitioner on the basis of the said letter but however declined to withdraw the said letter. After the filing of the petition, and after holding discussion with the petitioner the first respondent by its letter dated 3rd November, 2003 addressed on behalf of the Zonal Manager to the petitioner, informed that revised rent for the said premises from 1st November, 2003 would be @ Rs. 15/- per sq. ft. per month excluding taxes with effect from 1st November, 2003 i.e. 1492 X Rs. 15/- = Rs. 22,380/- per month. It was also stated in the said letter that the period of Agreement will be for 10 years with escalation of 35% after 5 years. It was further stated therein that if the petitioner was not willing to pay the said rent, the first respondent was willing to offer a Villa type alternative accommodation at Jeevan Bima Nagar, Borivili at a reasonable rate keeping in view the prevailing market rate. The said letter is annexed as Exhibit 1 to the Affidavit of Shri S.B. Damle dated 11th November, 2003. The said letter has been specifically marked "without prejudice". The said letter is annexed as Exhibit 1 to the Affidavit of Shri S.B. Damle dated 11th November, 2003. The said letter has been specifically marked "without prejudice". It was therefore submitted that the letter 20th September, 2003, Exhibit 'L' to the petition, has firstly ceased to exist and secondly, it does not cause any legal injury to the petitioner inasmuch as it is not legally enforceable and L.I.C. has through its Counsel made a statement that no action whatsoever will be taken on the basis of the said letter. The petitioner, therefore, cannot maintain any petition on the basis of the said letter dated 20th September, 2003, Exhibit 'L' to the petition. On a query from the Court, Mr. Singhvi made it clear that LIC is not willing to withdraw the aforesaid letter. 36. Mr. Singhvi, the learned Counsel appearing on behalf of the respondent LIC, further submitted that in prayer (a) of the petition the petitioner has prayed for quashing of revision of rent from Rs. 148.12 to Rs. 2,303/- per month from 1997 but since the petitioner had been paying the said rent regularly since 1997 as a contractual rent, she cannot maintain this petition under Article 226 of the Constitution of India for quashing the said rent contained in first respondent's letter dated 1st October, 1997, being Exhibit 'C' to the petition. 37. In support of these submissions, the learned Senior Counsel for the respondent submitted that the first respondent relied upon the judgment and order of a Division Bench of this Hon'ble Court dated 20th September, 2003 in (Writ Petition No. 2042 of 2003)14, wherein almost similar circumstances the Court rejected the petition with the liberty to the petitioner to take appropriate proceedings including contesting the notice. In that case besides addressing a letter to the tenant (M/s. Akbarallys) for payment of increased rent, notice of termination of tenancy had also been given. It is submitted that if the Division Bench had refused to entertain a petition wherein besides serving notice of increase rent on the tenant, notice of termination of tenancy was also issued, whereas in this petition, wherein only a letter for increase of rent was issued and no notice for termination of tenancy has been given, hence the present petition is different. 38. 38. It was also submitted on behalf of the learned Counsel for the respondent that assuming without admitting that the said letter Exhibit 'L' dated 20th September, 2003 has caused some legal injury to the petitioner and that the LIC might terminate the tenancy on that ground and initiate eviction proceedings under the Public Premises Act, 1971, the petitioner has an alternative and efficacious legal remedy open to her since she will be able to raise all defences before the Estate Officer including her contention that the rent demanded was not reasonable. Mr. Singhvi contended that the Estate Officer has the jurisdiction to decide all the contentions including the contention that the revised rent was not reasonable and therefore she should not be evicted from the premises on that ground. The learned Counsel therefore submitted that in view of such a statutory alternative and efficacious remedy, this petition deserves to be dismissed. In that behalf, Mr. Singhvi relied on two unreported judgments of two Division Benches of this Court. The first one is in (Orient Longman Ltd. v. Oriental Insurance Company Ltd. others)15, Writ Petition No. 2512 of 2002 dated 25th June, 2002. In paragraph 8 of the said judgment it is inter alia stated that it was open for the petitioners in that case to raise all objections before the Estate Officer and it was equally open to the respondent No. 1 to raise the contention that the Notification containing Guidelines has no application. The second unreported judgment relied upon by the first respondent was rendered in Writ Petition No. 2162 of 2002 in the case of (Orient Longman Ltd. v. Oriental Insurance Company Ltd. others)16. In that case proceedings for eviction had been already taken against the petitioner and the petitioner had approached this Court contending that the Estate Officer was bound to follow the Guidelines contained in notification dated 30th May, 2002 and prayed for the proceedings before the Estate Officer be quashed. The Division Bench in the said order observed that petitioners were permitted to raise the plea relating to notification dated 30th May, 2002 (regarding Guidelines) before the Estate Officer in the eviction proceedings pending against them. The Court also observed that it would be also open to respondent No. 1 viz. Oriental Insurance Company Ltd. to respond the said plea before the Estate Officer on all available grounds. The Court also observed that it would be also open to respondent No. 1 viz. Oriental Insurance Company Ltd. to respond the said plea before the Estate Officer on all available grounds. The Court directed the Estate Officer to hear and decide all the contentions of the petitioners in accordance with law as he may deem fit and proper. On the basis of the said judgments of the Division Bench, Mr. Singhvi submitted that the petitioner has a statutory alternative efficacious remedy to contend before the Estate Officer in case any proceedings are taken against her, that the respondent No. 1 was bound by the Guidelines contained in the said notification dated 30th May, 2002 and the Estate Officer had the jurisdiction to decide that issue. Mr. Singhvi therefore contended that this Court ought not to entertain the above petition. 39. The learned Counsel Mr. Singhvi further submitted that the guidelines contained in notification dated 30th May, 2002 and the clarification issued under Memorandum dated 7-7-1993 by the Government of India, Ministry of Urban Development and in the letter dated 23rd July, 2003 written by Assistant Director (Pol.) of Government of India in Ministry of Urban Development and Poverty Alleviation (Director of Estates) have no statutory force and breaches of those guidelines do not furnish any cause of action to a tenant of the first respondent. 40. It is submitted by the learned Counsel appearing on behalf of the respondents that under the Government of India (Allocation of Business) Rules, 1961 framed by the President of India read with the First Schedule thereof, the powers under the Public Premises Act have been allotted to the Department of Urban Development. The Urban Development Department therefore in exercise of its executive power under Article 77 of the Constitution of India has framed the said guidelines for the guidance of the public sector undertakings while initiating eviction proceedings under the Public Premises Act. The Public Premises Act itself does not contain any provision for framing any such guidelines. The guidelines therefore have no statutory backing but at the most constitute administrative instructions. It was submitted by Mr. Singhvi that the guidelines are not justiciable and any breach of the guidelines do not furnish any cause of action to a tenant of the public premises. The guidelines therefore have no statutory backing but at the most constitute administrative instructions. It was submitted by Mr. Singhvi that the guidelines are not justiciable and any breach of the guidelines do not furnish any cause of action to a tenant of the public premises. In this connection the learned Senior Counsel for respondent relied upon the judgment of the Division Bench of this Court in the case of (Sahebrao D. Labde v. Jaisingh Shivaji Patil others)17, 2003(2) Bom.C.R. 614 : 2003(1) Mh.L.J. 358 . In that case, relying on the judgment of the Supreme Court in the case of (Union of India others v. S.L. Abbas)18, A.I.R. 1993 S.C. 244, the Division Bench in paragraph 19 of the said judgment observed that so far as Government Resolutions were concerned, they were administrative guidelines or norms which were to be kept in mind by the Authority in effecting transfer of employees and ordinarily they do not furnish a justiciable right to an employee who is holding a transferable post. In the case of Union of India others v. S.L. Abbas, reported in 1993(4) S.C.C. 357 , on which the Division Bench of this Court had placed reliance, the Supreme Court has in paragraph 7 while dealing with the guidelines issued by the Government to the effect that as far as possible husband and wife must be posted at the same place, observed that the said guidelines however do not confer upon the Government employee a legally enforceable right. 41. Mr. Singhvi, the learned Senior Counsel for the respondent further submitted that the reliance on behalf of the petitioner on the case of (Dr. Amarjit Singh Ahluwalia v. State of Punjab others)19, 1975(3) S.C.C. 503 for the proposition that guidelines have statutory force and even if that is not so, they are still binding on the first respondent is totally misplaced. In that case Government had issued administrative instructions by memorandum dated 25th October, 1965 for fixing seniority. The Supreme Court observed that the administrative instructions have no statutory force but if the Government were to follow the instructions in one case and refuse to follow in the other case without any rational reason, Government would be guilty of violation of Articles 14 and 16. Therefore Mr. The Supreme Court observed that the administrative instructions have no statutory force but if the Government were to follow the instructions in one case and refuse to follow in the other case without any rational reason, Government would be guilty of violation of Articles 14 and 16. Therefore Mr. Singhvi submitted that the said case therefore lays down the ratio that indiscriminate picking and choosing of persons for the purpose of fixing seniority without any rational basis would be violative of Articles 14 and 16 of the Constitution of India. 42. It was further contended by Mr. Singhvi for the respondent that the reliance by the petitioner on the decision of (Secretary, Ministry of Chemicals and Fertilisers, Government of India v. Cipla Ltd. others)20, 2003(7) S.C.C. 1 is also misplaced. In that case the Central Government had issued drug policy document on 15th September, 1994 and set out norms for fixation of drug prices. While dealing with the said norms or policy guidelines the Supreme Court observed that where the Central Government combines the dual role of policy maker and the delegate of legislative power, it cannot at its sweet will give a go-by to the policy guidelines evolved by itself in the matter of selection of drug for price control. The Supreme Court had further observed that it was nobody's case that for any good reason, the policy of norms have been changed or have become impracticable of compliance and that being the case, the Government exercising its delegated legislative power should make a real and earnest attempt to apply the criteria laid down by itself. The Supreme Court had further observed that the delegated legislation that follows the policy formulation should be broadly and substantially in conformity with the policy otherwise it will be vulnerable to attack on the ground of arbitrariness, resulting in violation of Article 14. Mr. Singhvi submitted that this is not an authority for the proposition that guidelines are justiciable and enforceable in a Court of law at the behest of the tenant of LIC. On the contrary, the Supreme Court in this case has observed that the policy or norms can be changed for any good reason or they may become impracticable of compliance. Singhvi submitted that this is not an authority for the proposition that guidelines are justiciable and enforceable in a Court of law at the behest of the tenant of LIC. On the contrary, the Supreme Court in this case has observed that the policy or norms can be changed for any good reason or they may become impracticable of compliance. The learned Counsel submitted all that this case decides is that delegated legislation that follows the policy formulation should be broadly and substantially in conformity with that policy, otherwise it would be vulnerable to attack on the ground of arbitrariness, resulting in violation of Article 14 of the Constitution of India. 43. Mr. Singhvi also contended that (Narendra Kumar Maheshwari v. Union of India others)21, 1990(Supp.) S.C.C. 440 will also not help the petitioner, as can be seen from paragraph 106 of the aforesaid judgment, as under:-- "It may, however be stated that being not statutory in character these guidelines are not enforceable. A policy is not law. The policy is not a prescription of binding criteria, ......... These guidelines are not judicially enforceable. The Competent Authority might depart from these guidelines where the proper exercise of this discussion so warrant. ........" The Senior Counsel therefore, submitted that this case has therefore no authority for the proposition that guidelines have the force of law or otherwise also binding so as to furnish a cause of action for its breach in a Court of law. 44. Mr. Singhvi also contended that the submission that these guidelines can be enforced under section 21 of the Life Insurance Corporation Act is also without any force. Section 21 of the Life Insurance Corporation Act inter alia vests in the Central Government, the power to issue directions in matters of policy involving public interest in the discharge of LIC's function under the Life Insurance Corporation Act, 1956. It was submitted by the learned Counsel that the guidelines issued by the Ministry of Urban Development, Government of India are merely executive instructions regarding eviction under the Public Premises Act, 1971 and have no relation whatsoever with issuance of directions by the Central Government under the said section 21. It was submitted by the learned Counsel that the guidelines issued by the Ministry of Urban Development, Government of India are merely executive instructions regarding eviction under the Public Premises Act, 1971 and have no relation whatsoever with issuance of directions by the Central Government under the said section 21. The said directions have not be issued by the Ministry of Urban Development, Government of India to the LIC in discharge of its functions under the Life Insurance Corporation Act, 1956 but they have been issued by the Ministry of Urban Development for enforcing eviction under the Public Premises Act, 1971, which subject has been allocated to the Ministry of Urban Development by the President of India under Allocation of Business Rules. Mr. Singhvi contended that the 2002 guidelines relating to eviction under the Public Premises Act cannot by any stretch of imagination fall under section 21 of the Life Insurance Corporation Act, 1956. Mr. Singhvi pointed out that it has been so held by a Division Bench of the Calcutta High Court in the case of (Mitra Leena Pvt. Ltd. v. LIC of India others)22, reported in 1999(2) C.L.J. 457. While dealing with the 1992 guidelines the Calcutta High Court in paragraph 12 of the said judgment inter alia observed as under: "....... We have no doubt in our mind that the guidelines in question were neither issued by the Central Government under section 21 of 1956 Act nor did these guidelines relate to matter involving public interest relating to the business of life insurance as conducted by the Corporation. Similarly, we have no doubt that Clause (c) of sub-section (2) of section 6 of the Act has no manner of application to the present case as mentioned in Clause (c) has to be in relation to the purpose of the business of the Corporation. To evict an unauthorised occupant from a shop under 1971 Act is totally alien to the concept of holding, acquiring or disposing any property under Clause (c) of sub-section (2) of section 6 of the Act. These guidelines cannot at all be relating to the term of the 1956 Act and hence the Corporation cannot be held to be bound by these guidelines on that score as well as, particularly when the guidelines have not been issued under 1956 Act." 45. Mr. These guidelines cannot at all be relating to the term of the 1956 Act and hence the Corporation cannot be held to be bound by these guidelines on that score as well as, particularly when the guidelines have not been issued under 1956 Act." 45. Mr. Singhvi pointed out that the same view has been taken by the Division Bench of Delhi High Court in the case of (Uttam Prasad Bansal v. LIC of India others)23, 2002(100) Del.L.T. 497 in paragraph 29 of the report, the Delhi High Court has relied upon the aforesaid judgment of the Division Bench of the Calcutta High Court and came to the conclusion in paragraph 30, that the guidelines, in view of the clear statutory provisions, would not stand as a bar in initiation of proceedings under the said Act. Mr. Singhvi further submitted that directions under section 21 of the Life Insurance Corporation Act, 1956 have to be issued by the Central Government in the Ministry of Finance since under the Allocation of Business Rules, 1961, the administration of the Life Insurance Corporation Act, 1956 has been allotted to the Ministry of Finance and directions under section 21 of the Act have to be issued by the Ministry of Urban Development. It may further be stated that normally such directions state that they have been issued in exercise of powers conferred under section 21 of the Life Insurance Corporation Act, 1956. The learned Counsel pointed out two such directions issued by the Government of India, Ministry of Finance dated 6th November, 1965 and 7th December, 1970. 46. Mr. Singhvi, the learned Counsel for respondent, relied on case of (Malpe Vishwanath Acharya others v. State of Maharashtra others)24, 1998(1) Bom.C.R. (S.C.)321 : 1998(2) S.C.C. 1 wherein the Supreme Court has held that the provisions of the Bombay Rent Act, 1947 relating to the determination and fixation of standard rent were unreasonable and arbitrary. On the ratio laid down by the Supreme Court, Mr. Singhvi submitted that even the provisions relating to standard rent contained in the Maharashtra Rent Control Act, 1999 are also unreasonable and arbitrary. Mr. Singhvi submitted that the said Rent Act does not apply to LIC. and LIC, hence LIC cannot be compelled by any guidelines whatsoever to rely upon the arbitrary and unreasonable provisions of the Rent Act for fixing reasonable rent for its properties. 47. Mr. Mr. Singhvi submitted that the said Rent Act does not apply to LIC. and LIC, hence LIC cannot be compelled by any guidelines whatsoever to rely upon the arbitrary and unreasonable provisions of the Rent Act for fixing reasonable rent for its properties. 47. Mr. Singhvi fairly stated that LIC is bound by the principles contained in Article 14 of the Constitution of India, in the sense LIC is, bound to act in a fair and reasonable manner while fixing the rent of its premises. Mr. Singhvi contended that LIC will of course act in a reasonable way after taking into consideration all the relevant factors such as the provisions contained in section 6 of the Life Insurance Corporation Act, the decisions of the Hon'ble Supreme Court to the effect that Government must try and get maximum price by leasing its property, the fact that the rent was fixed as early as in the year 1938 or thereabout, that there is a steep rise in the cost of living, steep rise in the prices of the property, huge expenditure incurred for maintaining the properties, the market rate at which the property can be let out, the public purpose for which LIC funds are used and such other relevant factors. 48. Mr. Singhvi again submitted that by clarification contained in Office Memorandum dated 7th July, 1993 and the letter of Assistant Director dated 23rd July, 2003 it has been stated that guidelines are meant for genuine, non-affluent tenants and these are not applicable to large business houses and commercial entrepreneurs. According to the LIC. therefore these guidelines do not apply to affluent tenants like the petitioner who claims that her income including that of her husband is about Rs. 40,000/- per month and the flat is admeasuring 1492 sq. ft. carpet area in a posh locality opposite Oval Maidan near Churchgate Railway Station, therefore the respondent LIC was justified in the increase of rent. 49. Mr. Singhvi further submits that in the case of (Jiwan Das v. LIC another)25, 1994 (Supp. 3) S.C.C. 694 the Supreme Court has held that LIC can revise adequate market rent and can evict a tenant on refusal to pay such rent. 49. Mr. Singhvi further submits that in the case of (Jiwan Das v. LIC another)25, 1994 (Supp. 3) S.C.C. 694 the Supreme Court has held that LIC can revise adequate market rent and can evict a tenant on refusal to pay such rent. The Supreme Court has further observed in that case that a Public Authority is equally entitled to use the public property to the best advantage as a commercial venture and an ejectment of a tenant is inevitable. Accordingly, it is submitted that the said judgment is an authority for the proposition that LIC is not bound to continue the unrealistic rent of 1938 but is entitled to fix appropriate market rent on the basis of the rent prevailing in the market for similar premises. 50. Mr. Singhvi also submitted that the Division Bench of this Hon'ble Court has also in the case of the (Board of Trustees of the Port of Bombay v. Jayantilal Dharmsey)26, 2001(1) Bom.C.R. 44 has held that no fault can be found if a public body like Port Trust recovers rent of its premises on the basis of market value. If that be so, Mr. Singhvi contended LIC can also fix the rent of its premises on the basis of market value of the property or on the basis of the rent prevalent in the market for the same premises and it cannot be contended as has been contended d by the petitioner that LIC is not entitled to increase rent which had been fixed at Rs. 148/- as far back as in the year 1938. 51. Thereafter, on 22nd January, 2004, the learned Counsel for the petitioner brought to our notice a very relevant and recent judgment of the Supreme Court in (Jamshed Hormusji Wadia v. Board of Trustees of Port of Bombay)27, (hereinafter Wadia's case), dated 13th January, 2004 reported in 2004(4) Bom.C.R. (S.C.)125. 52. Shri Chagla, the learned Counsel for the petitioners brought to our notice that the guidelines of the Central Government are binding and enforceable (both in view of section 21 of the LIC Act, 1956 and even otherwise). 53. Mr. 52. Shri Chagla, the learned Counsel for the petitioners brought to our notice that the guidelines of the Central Government are binding and enforceable (both in view of section 21 of the LIC Act, 1956 and even otherwise). 53. Mr. Chagla, the learned Counsel for the petitioner contended that even if the guidelines do not have statutory force or are otherwise not binding, LIC is very much bound by the mandate of Article 14 of the Constitution to act reasonably and fairly and that the guidelines constitute the test to Judge the reasonableness or fairness of the proposed revision of rent by LIC. 54. In the aforesaid Wadia's case, before the Supreme Court the question that fell for consideration (and which is material to the present case) is set out at page 20 of the judgment and is reproduced for convenience hereinbelow:- "What is the status of the BPT as a landlord? Is it free to charge any rent from its lessees as it pleases in view of its having been exempted from the operation of the Rent Control Law or is it only to act in a fair and reasonable manner in the matter of dealing with its lessees and charging rent from them?" The judgment of the Supreme Court in Wadia's case reaffirms the law as relied upon by the petitioners on the alternative submission made by them. At page 21 of the judgment in Wadia's case, the Supreme Court has observed as follows :-- "The consequence which follows is that in all its actions, it (the State) must be governed by Article 14 of the Constitution. It cannot afford to act with arbitrariness or capriciousness. It must act within the four corners of the statute which has created and governs it. All its actions must be for the public good, achieving the objects for which it exists, and accompanies by reason and not whim or caprice." 55. In the above Wadia's case, the Supreme Court has in terms reaffirmed the decisions in Baburao Shantaram More, A.I.R. 1954 S.C. 153, Dwarkadas Marfatia, A.I.R. 1989 S.C. 1642, the Division Bench judgments of this Court in Ram Pratap Jaidayal, 54 Bom.L.R. 927 and in Rati Palonji Kapadia, 1992 Mh.L.J. 1356 relied upon by the petitioners. 56. In the above Wadia's case, the Supreme Court has in terms reaffirmed the decisions in Baburao Shantaram More, A.I.R. 1954 S.C. 153, Dwarkadas Marfatia, A.I.R. 1989 S.C. 1642, the Division Bench judgments of this Court in Ram Pratap Jaidayal, 54 Bom.L.R. 927 and in Rati Palonji Kapadia, 1992 Mh.L.J. 1356 relied upon by the petitioners. 56. In the above Wadia's case, the Supreme Court has also observed : "The position of law is settled that the State and its authorities including instrumentalities of States have to be just, fair and reasonable in all their activities including those in the field of contracts. Even while playing the role of a landlord or a tenant, the State and its authorities remain so and cannot be heard or seen causing displeasure or discomfort to Article 14 of the Constitution of India." 57. Mr. Chagla pointed out that in the absence of any guidelines as furnishing a standard of reasonableness (and in LIC such standard exists), the Supreme Court had necessarily to lay down principles that would govern BPT's revision of rent so as to save it from being arbitrary and unreasonable and therefore violative of Article 14. In this context, it was held by Supreme Court in the said Wadia's case at pages 27 and 28, as under : "In our opinion, in the field of contracts the State and its instrumentalities ought to so design their activities as would ensure fair competition and non-discrimination. They can augment their resources but the object should be to serve the public cause and to public good by resorting to fair and reasonable methods. The State and its instrumentalities, as the landlords, have the liberty of revising the rates of rent so as to compensate themselves against loss caused by inflationary tendencies. They can and rather must also save themselves from negative balances caused by the cost of maintenance, and payment of taxes and costs of administration. The State, as landlord, need not necessarily be a benevolent and good charitable Samaritan. The felt need for expanding or stimulating its own activities or other activities in the public interest having once arisen, the State need not hold its hands from seeking eviction of its lessees. However, the State cannot be seen to be indulging in rack renting, profiteering and indulging in whimsical or unreasonable evictions or bargains. A balance has to be struck between the two extremes. However, the State cannot be seen to be indulging in rack renting, profiteering and indulging in whimsical or unreasonable evictions or bargains. A balance has to be struck between the two extremes. Having been exempted from the operation of rent control legislation the Courts cannot hold them tied to the same shackles from which the State and its instrumentalities have been freed by the legislature in their wisdom and thereby requiring them to be Ruled indirectly or by analogy by the same law from which they are exempt. Otherwise, it would tantamount to defeating the exemption clause consciously enacted by the legislature. At the same time the liberty given to the State and its instrumentalities by the statute enacted under the Constitution does not exempt them from honouring the Constitution itself. They continue to be ruled by Article 14. The validity of their actions in the field of landlord tenant relationship is available to be tested not under the rent control legislation but under the Constitution. The rent control legislations are temporary. If not seasonal; the Constitution if permanent and all time law." (Emphasis supplied) 58. Mr. Singhvi conceded that as LIC being "State" it is bound by the injunction contained in Article 14 of the Constitution of India and therefore, bound to act in a fair and reasonable manner in fixing the rent of the premises. Neither the Rent Act is applicable to LIC nor the principles of analogous to Rent Act can be made applicable to the LIC. Mr. Singhvi contended that LIC's contractual powers are subject to the mandate contained in Article 14 of the Constitution of India. 59. Mr. Singhvi for the respondent No. 1 on 10-2-2004 brought to our notice another judgment of the Supreme Court in (Sureshchandra Singh others v. Fetilizer Corpn. of India Ltd. others)28, 2004(1) S.C.C. 592 and contended that the above judgment makes it abundantly clear that the administrative instructions are only to be treated as guidelines and that they do no have any force of law. To the above submissions of the learned Counsel for the respondent No. 1, the learned Counsel for the petitioner also submitted a brief written submission on 12-2-2004 contending that the judgment of the Supreme Court in Sureshchandra's case does not in any manner even suggest that the aforesaid 2002 guidelines are not enforceable. To the above submissions of the learned Counsel for the respondent No. 1, the learned Counsel for the petitioner also submitted a brief written submission on 12-2-2004 contending that the judgment of the Supreme Court in Sureshchandra's case does not in any manner even suggest that the aforesaid 2002 guidelines are not enforceable. On the contrary the said judgment shows that the said guidelines are in fact enforceable. It was also submitted that said judgment is also distinguishable on various grounds. 60. The learned Senior Counsel Shri Chagla, also contended that the material facts of the case before the Supreme Court in Sureshchandra Singh case was pertaining to the issue of enforceability of the Office Memoranda with which the Supreme Court was concerned. 61. In the above circumstances, Mr. Chagla submitted that the judgments cited by the petitioner are more apposite and are applicable to the facts of the instant case and the judgment of the Supreme Court in Sureshchandra's case does not in any manner upset or disturb the principles of law lay down therein. 62. Having heard both the learned Counsel for both the parties, with their able and erudite assistance, following three issues arise for our consideration :- A. Whether the aforesaid 2002 guidelines framed by the Government Resolution dated 30th May, 2002 (gazetted on 8th June, 2002) issued by the Ministry of Urban Development, Government of India, have a statutory force? B. Even if the aforesaid 2002 guidelines do not have a statutory force, whether they are binding on the respondent LIC? C. Whether the increase in the rent as demanded by the LIC of India in the instant case is violative of Article 14 of the Constitution of India, being arbitrary, irrational and capricious? 63. Mr. Singhvi, the learned Counsel for the respondent LIC had referred to and relied upon two unreported judgments of the Division Bench of this Court, viz. the judgment dated 4th October, 2002 passed in Writ Petition No. 2162 of 2002 M/s. Orient Longman Limited v. Oriental Insurance Company Ltd. and others and the another judgment dated 25th June, 2002 passed in Writ Petition No. 2512 of 2002 Orient Longman Limited v. Oriental Insurance Co. Ltd. and the Writ Petition Stamp No. 6270 of 2002, (Book Print India Limited v. Oriental Insurance Co. Limited)29, to contend that this petition ought not to be entertained and this petition should be dismissed. 64. Ltd. and the Writ Petition Stamp No. 6270 of 2002, (Book Print India Limited v. Oriental Insurance Co. Limited)29, to contend that this petition ought not to be entertained and this petition should be dismissed. 64. It may be noted here that in both the above cases, the tenancy was already terminated and the eviction proceedings under the Public Premises (Eviction of Unauthorised Occupants) Act, 1971 had been initiated. Therefore, before the alternate forum being the Estate Officer, this Court had permitted the parties to raise the contentions, whereas in the instant case, there is no termination of tenancy at all and Mr. Sighvi, the learned Counsel has made it clear that the LIC was not willing to withdraw the impugned notice and the petitioner was liable for legal consequences. Hence in the instant case, there is no question of driving the petitioner to raise the above contentions before the Estate Officer. Over and above, both the learned Counsel had agreed that the above petition should be argued finally and hence we are not inclined to dismiss the above petition in limine and drive the petitioner to raise the contentions before the Estate Officer, as there is no termination of tenancy at all, as such the petitioner is not the unauthorised occupant of the premises till date. 65. As far as the first issue is concerned, whether the aforesaid 2002 guidelines have a statutory force or not, the learned Counsel for the respondent LIC has strongly relied upon the judgment of the Calcutta High Court in the case of Mitra Lina Pvt. Ltd. v. LIC of India, 1999(2) C.L.J. 457 and another judgment of the Delhi High Court in the case of Shri Uttam Prakash Bhansal v. LIC of India, 2002(100) Delhi Law Times 497. In fact the Delhi High Court has merely referred to the judgment of the Calcutta High Court and has accepted the view of Calcutta High Court to hold that the aforesaid guidelines do not have a statutory force. It is very relevant to note that in both the above judgments, the respective High Courts were dealing with the unauthorised occupants who were not even protected by either the 1992 guidelines or by 2002 guidelines. It is very relevant to note that in both the above judgments, the respective High Courts were dealing with the unauthorised occupants who were not even protected by either the 1992 guidelines or by 2002 guidelines. As observed hereinable, the Delhi High Court had merely followed the judgment of the Calcutta High Court and there is no separate reasoning as to whether the guidelines have statutory force as per section 21 of the LIC Act. In that context, if one were to analyse the Calcutta High Court judgment, it is clear that the Mitra Lina who was the LIC's tenant had inducted an illegal licensee without consent of LIC into the premises. Therefore, the Calcutta High Court proceeded on the basis that, to evict such an unauthorised occupant under the Public Premises (Eviction) Act, is totally alien to the concept of holding, acquiring or disposing of any property under Clause (c) of sub-section (2) of section 6 of the LIC Act. In both the judgments, i.e. the Calcutta High Court as well as Delhi High Court, it was categorically held that even if the guidelines were binding, the action taken by the LIC was not in derogation of the guidelines, since the action was against the illegal occupants. Therefore, in the present context, we are concerned with the tenant who is an authorised and recorded tenant and there is no termination of tenancy and the issue involved is with regard to the revision and recovery of the rent. 66. As rightly pointed out by Mr. Chagla, section 21 of L.I.C. Act contemplates that the directions by the Central Government should be in writing and such directions should direct the LIC to discharge its functions and the same should relate to the policy involving the public interest. In the present case, the respondent LIC in its affidavit dated 11th November, 2003 in paragraph No. 4 has clearly stated "when LIC asked for increased rent in consonance with State's policy, LIC acts in its capacity as a lessor, it is incumbent on LIC to carry on its business and manage its affairs on sound commercial principles........." Similarly, in paragraph No. 7 in the affidavit dated 11th November, 2003 in Writ Petition No. 2516 of 2003, the LIC has also categorically stated that the "overwhelming public interest and the interests of crores of policy holders requires us to revise rent of our properties". If that be so, the LIC cannot turn around and say that they have no statutory force. It would be rather anomalous when repeatedly the Central Govt. for the last 10 years has been issuing letters, circulars etc. and directing various public sector undertakings to strictly adhere to the aforesaid guidelines and finally the Central Government even thought it fit to issue a Government Resolution on 30th May, 2002 and gazetted it on 8th June, 2002. In the above, the directions from Central Government are in writing. The respondent LIC in its affidavits has admitted that the increase in rent is part of its business and also that there was overwhelming public interest to benefit crores of policy holders. If that be so, all the aforesaid three criterial contained in section 21 of LIC Act have been complied with, then the said Guidelines will have to have statutory force. We do not find any substance in the argument of Mr. Singhvi that the guidelines will have to issue only under section 21 of LIC Act and in the instant case as the guidelines have not been issued under section 21, therefore they do not have statutory force. A bare perusal of section 21 indicates that LIC has to follow the guidelines issued by the Central Government, while LIC is discharging its functions under the Act. The aforesaid section does not mention that the Central Government will be issuing guidelines under that section. What is important is that LIC shall be guided by the directions issued by the Central Government, while LIC is discharging its functions under that Act. We do not find any substance that the guidelines will have to be necessarily issued under section 21. Hence we hold that 2002 guidelines have statutory force. 67. With regard to the second issue, even assuming for the sake of arguments that the guidelines do not have a statutory force, the same are otherwise very clearly binding on the LIC. The aforesaid guidelines reflects the policy of Union of India and any failure to abide by the guidelines would be violative of Article 14 of the Constitution of India. Especially in light of the Supreme Court judgment in the case of Secretary, Ministry of Chemicals Fertilizers, Govt. The aforesaid guidelines reflects the policy of Union of India and any failure to abide by the guidelines would be violative of Article 14 of the Constitution of India. Especially in light of the Supreme Court judgment in the case of Secretary, Ministry of Chemicals Fertilizers, Govt. of India v. Cipla Ltd. others, 2003(7) S.C.C. 1 , wherein it is held as under:- "4.1 It is axiomatic that the contents of a policy document cannot be read and interpreted as statutory provisions. Too much of legalism cannot be imported in understanding the scope and meaning of the clauses contained in policy formulations. At the same time, the Central Government which combines the dual role of policy-maker and the delegate of legislative power, cannot at its sweet will and pleasure give a go-by to the policy guidelines evolved by itself in the matter of selection of drugs for price control. The Government itself stressed on the need to evolve and adopt transparent criteria to be applied across the board so as to minimize the scope for subjective approach and therefore, came forward with specific criteria. It is nobody's case that for any good reasons, the policy or norms have been changed or have become impracticable of compliance. That being the case, the Government exercising its delegated legislative power should make a real and earnest attempt to apply the criteria laid down by itself. The delegated legislation that follows the policy formulation should be broadly and substantially in conformity with that policy, otherwise it would be vulnerable to attack on the ground of arbitrariness resulting in violation of Article 14. 4.2 In Indian Express Newspapers (Bom.) (P.) Ltd. v. Union of India, the grounds on which subordinate legislation can be questioned were outlined by this Court. E.S. Venkataramiah, J., observed thus : "75. A piece of subordinate legislation does not carry the same degree of immunity which is enjoyed by a statute passed by a competent legislature. Subordinate legislation may be questioned on any of the grounds on which plenary legislation is questioned. In addition it may also be questioned on the ground that it does not conform to the statute under which it is made. ..... It may also be questioned on the ground that it is unreasonable, unreasonable not in the sense of not being reasonable, but in the sense that it is manifestly arbitrary. In addition it may also be questioned on the ground that it does not conform to the statute under which it is made. ..... It may also be questioned on the ground that it is unreasonable, unreasonable not in the sense of not being reasonable, but in the sense that it is manifestly arbitrary. In England, the Judges would say Parliament never intended authority to make such Rules. They are unreasonable and ultra vires." 68. It is also well settled that even non-statutory guidelines are enforceable whenever they are deviated from, or deviation is against public interest or undermines public purpose. Such non statutory guidelines can be enforced on the basis of promissory estoppel and legitimate expectation. In this behalf, it is relevant to quote the following judgments of the Supreme Court in Narendra Kumar Maheshwari v. Union of India, 1990 (Supp.) S.C.C. 440. "106. It may, however, be stated that being not statutory in character, these guidelines are not enforceable. See the observations of this Court in G.J. Fernandez v. State of Mysore (Also see R. Abdullan Rowther v. State Transport Appellate Tribunal; Dy. Asstt. Iron Steel Controller v. L. Manekchand, Proprietor; Andhra Industrial Works v. CCI; K.M. Shanmugam v. S.R.V.S. Pvt. Ltd.). A policy is not law. A statement of policy is not a prescription of binding criterion. In this connection, reference may be made to the observations of Sagnata Investments Ltd. v. Norwich Corpn. Also the observations in Bristish Oxygen Co. v. Board of Trade. See also Foulkes Administrative Law, 6th edition at pp. 181-184. In R. v. Secretary of State, ex parte Khan the Court held that a circular or self made rule can become enforceable on the application of persons if it was shown that it had created legitimate expectation in their minds that the authority would abide by such a policy/guideline. However, the doctrine of legitimate expectation applies only when a person had been given reason to believe that the State will abide by the certain policy or guideline on the basis of which such applicant might have been led to take certain actions. This doctrine is akin to the doctrine of promissory estoppel. See also the observations of Lord Wilberforce in IRC v. National Federation. However, it has to be borne in mind that the guidelines on which the petitioners have relied are not statutory in character. These guidelines are not judicially enforceable. This doctrine is akin to the doctrine of promissory estoppel. See also the observations of Lord Wilberforce in IRC v. National Federation. However, it has to be borne in mind that the guidelines on which the petitioners have relied are not statutory in character. These guidelines are not judicially enforceable. The Competent Authority might depart from these guidelines where the proper exercise of his discretion so warrants. In the present case, the statute provided that Rules can be made by the Central Government only. Furthermore, according to section 6(2) of the Act, the Competent Authority has the power and jurisdiction to condone any deviation from even the statutory requirements prescribed under sections 3 and 4 of the Act. In Regina v. Preston Supplementary it had been held that the Act should be administered with as little technicality as possible. Judicial review of these matters, though can always be made where there was arbitrariness and mala fide and where the purpose of an authority in exercising its statutory power and that of legislature in conferring the powers are demonstrably at variance, should be exercised cautiously and soberly. 107. We would also like to refer to one more aspect of the enforceability of the guidelines by persons in the position of the petitioners in these cases. Guidelines are issued by Governments and statutory authorities in various types of situations. Where such guidelines are intended to clarify or implement the conditions and requirements precedent to the exercise of certain rights conferred in favour of citizens or persons and a deviation therefrom directly affects the rights so vested the persons whose rights are affected have a clear right to approach the Court for relief. Sometimes guidelines control the choice of persons competing with one another for the grant of benefits, largeness or favours and, if the guidelines are departed from without rhyme of reason, an arbitrary discrimination may result which may call for judicial review. Sometimes guidelines control the choice of persons competing with one another for the grant of benefits, largeness or favours and, if the guidelines are departed from without rhyme of reason, an arbitrary discrimination may result which may call for judicial review. In some other instances (as in the Ramana Shetty case), the guidelines may prescribe certain standards or norms for the grant of certain benefits and a relaxation of, or departure from, the norms may affect persons, not directly but indirectly, in the sense that though they did not seek the benefit or privilege as they were not eligible for it on the basis of the announced norms, they might also have entered the fray had the relaxed guidelines been made known. In other words, they would have been potential competitors in case any relaxation or departure were to be made. In a case of the present type, however, the guidelines operate in a totally different field. The guidelines do not affect or regulate the right of any person other than the company applying for consent. The manner of application of these guidelines, whether strict or lax, does not either directly or indirectly, affect the rights or potential rights of any others or deprive them, directly or indirectly, of any advantages or benefit to which they were or would have been entitled. In this context, there is only a very limited scope for judicial review on the ground that the guidelines have not been followed or have been deviated from. Any member of the public can perhaps claim that such of the guidelines as impose controls intended to safeguard the interests of members of the public investing in such public issues should be strictly enforced and not departed from; departure therefrom will take away the protection provided to them. The scope for such challenge will necessarily be very narrow and restricted and will depend to a considerable extent on the nature and extent of the deviation. For instance, if debentures were issued which provide no security at all or if the debt equity ratio is 6000-1 (as alleged) as against the permissible 2 : 1 (or thereabouts) a Court may be persuaded to interfere. For instance, if debentures were issued which provide no security at all or if the debt equity ratio is 6000-1 (as alleged) as against the permissible 2 : 1 (or thereabouts) a Court may be persuaded to interfere. A Court, however, would be reluctant to interfere simply because one or more of the guidelines have not been adhered to even where there are substantial deviations, unless such deviations are, by nature and extent such as to prejudice the interests of the public which it is their avowed object to protect. Per contra, the Court would be inclined to perhaps overlook or ignore such deviations, if the object of the statute or public interest warrant, justify or necessitate such deviations in a particular case. This is because guidelines, by their very nature, do not fall into the category of legislation, direct, subordinate or ancillary. They have only an advisory role to play and non adherence to or deviation from them is necessarily and implicitly permissible if the circumstances of any particular fact or law situation warrants the same. Judicial control takes over only where the deviation either involves arbitrariness or discrimination or is so fundamental as to undermine a basic public purpose which the guidelines and the statute under which they are issued are intended to achieve. In Dr. Amarjeet Singh Ahluwalia v. State of Punjab, 1975(3) S.C.C. 503 Supreme Court held as under:- "9...... Now it is true that Clause (2)(ii) of the memorandum dated October 25, 1965 was in the nature of administrative instruction, not having the force of law, but the State Government could not at its own sweet will depart from it without rational justification and fix an artificial date for commencing the length of continuous service in the case of some individual officers only for the purpose of giving them seniority in contravention of that clause. That would be clearly violative of Articles 14 and 16 of the Constitution. The sweep of Articles 14 and 16 is wide and pervasive. These two articles embody the principle of rationality and they are intended to strike against arbitrary and discriminatory action taken by the State. Where the State Government departs from a principle of seniority laid down by it, albeit by administrative instructions, and the departure is without reason and arbitrary, it would directly infringe the guarantee of equality under Articles 14 and 16. Where the State Government departs from a principle of seniority laid down by it, albeit by administrative instructions, and the departure is without reason and arbitrary, it would directly infringe the guarantee of equality under Articles 14 and 16. It is interesting to notice that in the United States it is now well-settled that an executive agency must be rigorously held to the standards by which it professes its actions to be judged and it must scrupulously observe those standards on pain of invalidation of an act in violation of them. Vide the judgment of Mr. Justice Frankfurter in Vitaralli v. Seaton. This view is of course not based on the equality clause of the United States Constitution and it is evolved as a Rule of administrative law. But the principle is the same, namely, that arbitrariness should be eliminated in State action." Hence we hold that the aforesaid 2002 guidelines are in any event clearly binding on L.I.C., and respondent L.I.C. has to follow the same. 69. The last issue whether the LIC's action of increase in rent on exorbitant basis would be violative of Article 14 of the Constitution of India. In fact, the learned Counsel for the petitioner, on a query, brought to our notice that the private landlords in the adjacent buildings to the building with which we are concerned at Oval, charge for a flat admeasuring 2000 sq. ft a sum of Rs. 243 as rent plus Municipal taxes per month, in Swastic Court. Similarly, in Palm Court, for a flat of 2000 sq. ft. the rent is only Rs. 453.46 plus the Municipal taxes per month. In Green Field, for a flat of 3000 sq. ft. the rent is Rs. 238.21 plus taxes per month. Another adjacent building Moonlight for a flat of 3000 sq. ft. the rent is Rs. 440 plus taxes per month. Mr. Chagla has pointed out that even the private landlords governed by the Bombay Rent Act, charge only the aforesaid amounts. Whereas LIC being a public undertaking ought not to have an attitude of profiteering. In any event, the main submission is that the entire increase at the rate of Rs. 40/- per sq. ft. per month has no rational basis whatsoever. The respondent LIC has chosen not to disclose the basis on which the aforesaid amount has been calculated. Mr. Whereas LIC being a public undertaking ought not to have an attitude of profiteering. In any event, the main submission is that the entire increase at the rate of Rs. 40/- per sq. ft. per month has no rational basis whatsoever. The respondent LIC has chosen not to disclose the basis on which the aforesaid amount has been calculated. Mr. Chagla has contended that, as clearly indicated by the aforesaid judgment of the Supreme Court in the Wadia's case, the public undertaking ought to act fairly and reasonably and its action ought to stand the test of reasonableness. Even the affidavit in reply filed on behalf of the LIC does not indicate any explanation for the aforesaid escalation of rent by way of calculations. 70. The observations of the Hon'ble Supreme Court in Wadia's case, quoted hereinabove would very aptly and squarely apply in the instant case. Over and above, the Supreme Court has in the aforesaid Wadia's case, reaffirmed its decision in Baburao Shantaram More, A.I.R. 1954 S.C. 153; Dwarkadas Marfatina, A.I.R. 1989 S.C. 1642; Division Bench judgments of our Court in Ram Pratap Jaidayal, 54 Bom.L.R. 927 and Ratti Palonji Kapadia, 1992 Mh.L.J. 1356 holding such arbitrary, irrational and capricious increase in rent would be clearly violative of Article 14 of the Constitution of India. 71. Under the aforesaid facts and circumstances, even with regard to the third issue, we hold that the aforesaid arbitrary, irrational and capricious increase in rent by LIC to be violative of Article 14 of the Constitution of India. 72. Hence, Rule is made absolute in terms of prayers (a) and (b) with costs. 73. Parties to act on an ordinary copy of this order, duly authenticated by the Associate/Court Stenographer. Rule made absolute in terms of prayers (a) and (b). -----