Judgment D. Y. CHANDRACHUD, J. ( 1 ) INDIAN Oil Corporation has moved these proceedings under Article 226 of the Constitution in order to challenge a communication dated 14th March, 2002 of the Collector, Mumbai Suburban district. By the impugned decision the Collector has demanded an amount of rs. 60,44,227/- towards lease renewals for the periods 1974-81, 1981-88 and 1988-95. An amount of Rs. 2. 86 Crores has in addition been demanded as being payable for the period between 1995 to 2002. After giving credit for the amounts which have already been paid, the total demand that has been raised upon the petitioner is in the amount of Rs. 2,71,78,575/ -. ( 2 ) ON 16th May, 1964, the Additional Collector of the Mumbai Suburban district allotted land admeasuring 1382 sq. yds. out of Survey No. 60-A to the petitioner for the purpose of establishing and operating a petrol pump for a period of seven years. The rent was then fixed at 5% of the full market value which was to be communicated to the petitioner subsequently. The letter of allotment provided that the land shall be used for the purpose for which it is granted and for no other purpose. On 22nd June, 1964, the petitioner was informed that the rent payable at the rate of 5% of the full market value of rs. 35/- per sq. yd. was Rs. 2501. 40 per annum. On 25th October, 1968, the additional Collector extended the lease for a further period of 30 years subject to the same terms and conditions. However, there was a stipulation that the lease rent would be revised after each term of seven years. The terms of the lease, it is common ground, expired on 31st July, 1996. ( 3 ) ON 24th July, 2001 the Collector addressed a communication to the petitioner intimating that a Government resolution had been issued on 5th october, 1999 in regard to the renewal of such leases. The communication spelt out that under the terms of the Resolution, Government had decided that in view of the fact that lands which had been leased out in Greater Mumbai were held on restricted tenure, the leases which had expired would be renewed until 31st december, 1998. The communication spelt out that under the terms of the Resolution, Government had decided that in view of the fact that lands which had been leased out in Greater Mumbai were held on restricted tenure, the leases which had expired would be renewed until 31st december, 1998. The market value for determining the lease rent would be taken as of the date of the expiry of the lease and for commercial users, the lease rent woyld be calculated at the rate of 2. 5% of the said market value. Moreover, with effect from 1st January, 1999 the leases would be renewed for a period of 30 years, the lease rent being fixed at 2. 5% of the market value as on 1st January, 1999. The Collector would determine the amount payable by the lessee on these principles under the Maharashtra Land Revenue Code, 1966 and the Regulations of 1971 framed thereunder. The petitioner was called for a hearing before the collector in response to this communication. ( 4 ) ON 19th October, 2001, the Collector addressed a further communication to the petitioner. The Collectors communication adverts to a decision taken by the Government on 1st July, 1996 against which the petitioner had filed a revision under section 247 of the Maharashtra Land Revenue Code, 1966 and to a decision dated 30th March, 1998 of the Additional Commissioner, konkan Division, in pursuance of which the petitioner deposited an amount of rs. 43,07,201/ -. In the meantime, it was stated that though there had been no renewal of the lease after 31st July, 1996, the Tahsildar had by his notice dated 1st June, 1999 demanded a total amount of Rs. 52,25,692/- as arrears for the period 1996-97 to 1998-99 at a yearly rent of Rs. 17,41,480/ -. This demand notice was recalled by the aforesaid communication dated 19th October, 2001 and a fresh decision to renew the lease for a period of thirty years was communicated to the petitioner in terms of the Government Resolution dated 5th october, 1999. The Collector stated that the valuation of the land was to be finally determined by the Town Planning and Valuation Department and would take some time. In the meantime, by an ad hoc determination, the Collector fixed the land value as on 1st August, 1996 at Rs. 24,900/- per. sq. mtr. and on 1st January, 1999 at the rate of Rs. In the meantime, by an ad hoc determination, the Collector fixed the land value as on 1st August, 1996 at Rs. 24,900/- per. sq. mtr. and on 1st January, 1999 at the rate of Rs. 43,000/- per sq. mtr. On this basis a demand at the rate of 2. 5% was made upon the petitioner consistent with the Government resolution dated 5th October, 1999. An amount of Rs. 7,23,276/- was fixed as the yearly premium from 1st August, 1996 to 31st December, 1998 and rs. 12,45,751/- as the yearly premium on and from 1st January, 1999. A total demand of lease rent in the amount of Rs. 62,12,341/- was raised upon the petitioner. The petitioner was informed that in the event that the valuation of the land fixed by the Town Planning Department was at a higher rate than what had been determined by the Collector, the petitioner would be called upon to pay the difference. The letter of the Collector was followed by a demand notice dated 8th november, 2001 in the amount of Rs. 77. 65 lacs inclusive of a penalty of rs. 15. 53 lacs. (The State Government in its affidavit in reply in these proceeding shas now clarified that the penalty was demanded under a mistake and had not been authorized.) The petitioner, it would appear, had informed the government that the amount which was liable to be paid had to be reduced pro rata since a part of the land had been acquired by the Municipal Corporation for the purpose of road widening. On 9th November, 2001 the Collector called upon the petitioner to deposit an amount of Rs. 31,06,170/- being 50% of the total amount due and payable and it was stated that the balance could be paid after the area that was acquired by the Municipal Corporation for road widening was determined. Accordingly, on 23rd November, 2001 the aforesaid amount was paid by the petitioner. ( 5 ) THE petitioner is now aggrieved by a subsequent communication of the collector dated 14th March, 2002. In the aforesaid communication, the Collector has recorded that of the total land admeasuring 1154. 2 sq. mtrs. that was leased out to the petitioner, land admeasuring 261. 6 sq. mtrs has been acquired for the purposes of road widening upon which the balance land in the possession of the petitioner admeasures 892. 6 sq. mtrs. In the aforesaid communication, the Collector has recorded that of the total land admeasuring 1154. 2 sq. mtrs. that was leased out to the petitioner, land admeasuring 261. 6 sq. mtrs has been acquired for the purposes of road widening upon which the balance land in the possession of the petitioner admeasures 892. 6 sq. mtrs. On this aspect of the matter, there is no controversy or dispute. The Collector in his communication has, however, informed the petitioner that for the periods between 1974 to 1981, 1981 to 1988, 1988 to 1995 and from 1995 until 31st July, 1996, the lease rent had been recovered from the petitioner on a provisional basis. Accordingly, a final determination of the lease rent was required to be made on the basis of the valuation of the land as on 1st July, 1974, 1st July, 1981, 1st July, 1988 and 1st july 1995. The Assistant Director of the Town Planning, it is noted, submitted his report dated 6th November, 2001 in pursuance whereof the following demand has been raised on the petitioner :